Colorado sees sharp increase in exports

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High-tech products dominate Colorado’s export business. Foreign sales of semiconductors – Colorado’s No. 1 export product – experienced a 59 percent increase from 2002 to 2003, from $654 million to $1.03 billion. The total amount of Colorado exports was $6.1 billion in 2003, an increase of 10.6 percent from 2002, according to the Colorado Office of Economic Development and International Trade and the Massachusetts Institute for Social and Economic Research.

The Colorado Office of Economic Development and International Trade said that, “exports from Colorado increased at a much higher rate than the 4.4 percent rise of U.S. exports as a whole. & The second largest export category (Colorado), computers and peripherals, grew from $850 million to $909 million, a 7 percent increase (since 2002). Other major product categories, in descending order, included office machine components, fresh or chilled beef, scientific/measuring instruments, medical instruments, animal hides, aircraft/spacecraft and photographic plates and film.”

Laurel Alpert, senior deputy director with the Colorado Office of Economic Development and International Trade, said Colorado is ninth in the country in increased percentages of exported goods. Alpert works with the owners of small- and medium-size business who want to expand or initiate exporting.

There are 1,000 companies statewide exporting products, Alpert said. “We help them identify good markets and answer their questions concerning the documentation and all that they have to do to cross borders.”

Canada is Colorado’s largest export market, accounting for 23 percent of Colorado foreign sales. “If the product is successful in the United States, it will be successful in Canada,” Alpert said. The No. 1 product exported to Canada is automatic data processing machines, which account for $343 million in sales. Computer components and office machines are next in line.

Mexico is Colorado’s second largest export market, and beef tops sales, even though Mexico banned the export of U.S. beef on Dec. 23. The ban will be lifted soon, Alpert said. In 2003, beef exports to Mexico increased by 21 percent. Parts for typewriters and other office machines shipped to Mexico increased by 4,000 percent, rising from $2 million to $90 million. Alpert said automatic data processing equipment sent to Mexico accounted for a 1,567 percent increase – from $3.2 million to $54 million. Overall, Colorado exports to Mexico reached more than $570 million in sales, a 54 percent increase from 2002.

Japan is Colorado’s third largest market and the largest overseas market at $443 million. Computers and peripherals led the way as the dominant export ($74 million), and beef was second at $61.5 million, Alpert said.

Korea is the No. 1 recipient of Colorado’s lead export – semiconductors. Korean-bound semiconductor sales increased by 91percent, totaling $259 million in sales.

Alpert said the unofficial percentage of total goods manufactured in the United States and sent to other countries is between 22 percent and 25 percent. Other Architectural, financial and environmental services, and software products, are not included in the statistics, Alpert said.

“Another important piece to the level of foreign investments is the foreign-student study program,” she said. “And foreign-owned companies and subsidiaries are another major piece in the foreign market.”

The most recent U.S. Bureau of Economic Analysis data shows that in 2001 there were 865 foreign-owned affiliate companies, employing 93,400 people, in Colorado.

Tariffs could stifle one segment of the exporting business.

The United States has not eliminated a tax break, which the World Trade Organization has ruled is an illegal export subsidy, worth $5 billion a year to U.S. exporters. A 5 percent penalty tariff imposed on U.S. exports, such as certain vegetables and fruits, bed linens, jewelry, leather goods, refrigerators and hand tools, is looming over the export business.

According to the Associated Press, lawmakers agree they must repeal the tax break; however, “The House and Senate disagree about tax cuts that will replace the old ones. & Presidential politics, combined with worries about the loss of jobs to other nations, make any congressional debate about tax cuts a dicey proposition.”

Gov. Bill Owens said in a news release that “the growth of Colorado exports during 2003 is another indication of the increasing strength of many companies and industries in the state during the past several months and demonstrates the importance of international trade to Colorado’s economy.”

- Editorial@csjb.com