Washington State exports through November 2010 totaled $41.8 billion, a 0.6% increase from the same period in 2009. Aerospace exports, which make up over 50% of Washington's total exports, declined 10.9% due to decreases in sales to the UAE and France. Non-aerospace exports increased, with top growth seen in sales of industrial machinery to Canada, China, and Japan. Exports of agricultural products also rose 12.5%, led by increased shipments to the Philippines, Mexico, and China. Overall, Washington exports have recovered since the recession but have been outpaced by national export growth in recent quarters primarily due to declines in aerospace sales.

1. WASHINGTON STATE DEPARTMENT OF COMMERCE
Washington State Export Trends
Update through November 2010 YTD
Spencer Cohen
Research Manager
8 February 2011

2. Data Issues
• We use data provided by WISER Trade, a
wholesale distributor of U.S. Census Bureau data.
• Today we’ll review data through November 2010.
• Data is pretty reliable, but some issues we need to
correct for.
• Services exports not trackable at state level.

3. Merchandise and Commodities Exports by Segment
1996 to November 2010 YTD
60 Largely driven by Chinese
Billions USD
soy bean consumption.
50
Correction of $5.7 billion
40 TOTAL, no corrections
TOTAL, corrected
30
Aerospace
Non-aerospace, non-
20 agriculture
Agriculture and food
10
0
Data source: WISER Trade

4. Washington Quarterly Exports
• Total Washington exports
By segment
dropped at tail-end of
18 “official” U.S. recession
Billions USD
Official period of recession and have since recovered.
16 However, much of this
drop due to decline in
14 aerospace exports.
12
10 Total
Total, corrected
8 Aerospace
Non-aerospace, non-agriculture
6 AGR and FOOD
4
2
0
Data source: WISER Trade

5. • Washington total exports
have been outpaced by the
Year-over-Year (YoY) Changes U.S. the past three quarters,
but this primarily driven by
declines in aerospace
50% exports.
• Non-aerospace exports
40% The “Great Contraction”— have performed much
global trade in manufacturing better.
30%
declined 15.5% in 2009,
20% agriculture trade down 3%
10%
0%
-10%
-20%
-30%
-40%
Washington U.S. Washington non-aerospace exports
Data sources: WISER Trade; World Trade Organization.

6. Composition of Exports
By quarter
70% • Washington’s
distribution of exports
60% by product has been
50.6% fairly consistent, with
50% aerospace constituting
more than 50% of total
40% exports by quarter
Boeing strike (excluding 2008 strike
30% period)
20%
14.6%
10%
11.9%
0%
Q4 2006
Q3 2008
Q2 2010
Q1 2006
Q2 2006
Q3 2006
Q1 2007
Q2 2007
Q3 2007
Q4 2007
Q1 2008
Q2 2008
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Aerospace Top 10 non-aerospace exports, by 6-digit HS Agriculture and food Q3 2010
Data source: WISER Trade

7. Exports through November 2010
Changes and contributions to net change, by 10 largest export products for Nov 2010 YTD
Major Product Category NOV 2009 YTD NOV 2010 YTD CHANGE Contribution to
(2-digit HS Codes) Change*
TOTAL 41,141,985,563 41,779,993,916 638,008,353
--
Aircraft, Spacecraft, and Parts Thereof 23,373,694,941 20,820,804,810 -2,552,890,131 -85.4%
Industrial Machinery, Including Computers 1,469,824,935 1,855,088,797 385,263,862 10.6%
Electric Machinery; Sound Equip; TV Equip; Parts 1,460,519,122 1,681,152,670 220,633,548 6.1%
Mineral Fuel, Oil; Bitumin Substances; Mineral Wax 1,612,606,793 1,644,675,972 32,069,179 0.9%
Optic, Photo; Medical or Surgical Instruments 1,327,782,458 1,489,185,900 161,403,442 4.4%
Wood and Articles of Wood; Wood Charcoal 782,103,320 1,176,349,380 394,246,060 10.9%
Cereals (Wheat and Meslin) 1,070,782,859 1,165,722,723 94,939,864 2.6%
Inorganic Chemicals; Precious & Rare-Earth 751,524,408 1,116,416,203 364,891,795 10.1%
Metals & Radioactive Compounds
Edible Fruit & Nuts; Citrus Fruit or Melon Peel 819,021,202 850,004,478 30,983,276 0.9%
Iron and Steel 516,960,189 805,803,359 288,843,170 8.0%
*Based on share of gross, year-to-year gains or losses,
depending on direction of year-to-year change.
Data source: WISER Trade

8. Aerospace Exports
Top Markets
Largest Markets, Nov 2010 YTD
China
Japan
Ireland
November 2010 YTD
Indonesia
November 2009 YTD
Qatar
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
Billions USD
Largest Absolute Increases,
November 2010 YTD • Overall aerospace exports down
Indonesia
Turkey
10.9%, driven by declines of
Qatar 69.2% UAE (21.5% of total
Germany
Malaysia decline) and 92.3% to France
Japan
Ethiopia (New) (17.1% of total decline).
Norway
Egypt
• Sales to Indonesia grew 236.2%.
China
0 500 1,000 1,500
Millions USD
Data source: WISER Trade

9. Five Largest Markets for Washington Exports
Total exports
$6.1
• In any given year, Washington’s Canada
top 10 largest markets $6.3
combined have averaged
$5.1
roughly 2/3 of all state goods China
exports. $5.9
• All top five markets have shown $4.2
Japan
growth over 2009, though some $4.9
of these mainly due to
aerospace (e.g. Indonesia) $1.4
Korea, Republic of
• Exports to China grew at per $1.8
annum rate of 14.0% from 2000-
$0.7
2009. Indonesia
$1.8 Billions USD
November 2009 YTD November 2010 YTD
Data source: WISER Trade

10. Non-aerospace, Non-agriculture Exports
NOV 2010 YTD compared with NOV 2009 YTD
• 46% of ALL GROWTH from
$4.3
Canada three countries: Canada
$4.8 (contributed 16.7%), China
(16.6%), and Japan
$1.4
China (12.7%).
$1.9
• Exports to China grew at
$1.2 per annum rate of 14.0%
Japan from 2000-2009.
$1.6
• Exports to China have
$0.6 grown more than 500%
Korea, Republic of
$0.7 from 2000 to 2009—an
average annual rate of
$0.4 22%.
Taiwan
$0.7
Billions USD
November 2009 YTD November 2010 YTD
Data source: WISER Trade

11. Washington’s Top Five Agriculture and Food
Export Markets
• Overall food and agriculture
$1,138 exports grew 12.5% through
Japan November 2010 over same
$1,251
period in 2009, and 8.0% per
$944 year from 2000-2009.
Canada
$1,012 • Among top five markets,
Philippines led with 27.7%
$225 growth , followed by Mexico
Philippines (11.1%).
$288
• China was sixth largest market,
$276 and grew 41.9% (averaged
Taiwan
$283 15.8% growth per year 2000-
2009).
$246
Mexico
$274 Billions USD
November 2009 YTD November 2010 YTD
Data source: WISER Trade

12. Non-Aerospace Exports by Product and Market
Largest absolute increases, NOV 2010 YTD compared with NOV 2009 YTD
Country Product (6-digit HS Code) Change, 2010-2011 Absolute Increase
CHINA Coniferous Wood in the Rough, Not Treated 831.9% 233,293,828
CHINA Silicon Contain by Weight Nt < 99.99% Of Silicon 357.9% 112,888,315
JAPAN Medicaments Nesoi, Measured Doses, Retail Packaged Nesoi No Exports in 2010 105,844,876
SINGAPORE Silicon Contain By Wt Nt < 99.99% Of Silicon 6481.4% 90,221,702
CHINA Copper Ores and Concentrates 74.7% 87,493,877
TAIWAN Ferrous Waste & Scrap Nesoi 581.6% 81,704,378
JAPAN Uranium Enriched in U235; Plutonium 42.4% 66,679,440
CAN Light Oils& Prep (Not Crude) from Petrol & Bitum 49.8% 66,394,060
TAIWAN Machines for Man. Semicondutor Devices/Elec IC 371.4% 58,580,554
CHINA Mink Furskins, Raw, Whole 63.4% 56,696,018
• Of Washington’s top 50 non-aerospace product-
markets, 14 were in Canada.
• Ultrasound equipment sales to China grew 22% over
first 11 months of 2009 ($90.2 million YTD)
Data source: WISER Trade

13. Texas 27.0%
State Exports California 19.8%
Year-over-year change (YoY) Illinois 19.3%
Florida 17.9%
• November 2010 YTD (RHS) New York 15.5%
• Note: Washington exports are Washington… 1.6%
corrected here, but Illinois data is …
raw and undercounts exports of TOTAL ALL STATES 21.3%
soy.
Texas 23.6%
28.3%
• Non-aerospace, non-agriculture
TOTAL ALL STATES 22.5%
24.5% (LHS)
Illinois 27.0%
23.0% • Top 5 states (by total exports),
21.0%
California 22.4% plus U.S. and Washington.
Florida 22.9%
19.2%
New York 19.1%
17.1%
Q3 2010 YoY
…
November 2010 YTD
Washington 11.5% YoY change
20.1%
Data sources: WISER Trade; U.S. Census Bureau.

14. Role of Exports in Washington
As percentage of gross business revenue
45%
• The long-term trend
40%
38.8% is a continuing and
35%
growing reliance on
exports in the
30%
28.8% manufacturing
25%
sector.
22.7%
20%
15.4%
15%
GOODS SECTOR
MFG SECTOR
10%
MFG minus aerospace
Linear (MFG SECTOR)
5%
0%
2005 Q1
2005 Q2
2005 Q4
2006 Q1
2006 Q3
2006 Q4
2007 Q1
2007 Q2
2007 Q3
2007 Q4
2008 Q1
2008 Q2
2008 Q3
2008 Q4
2009 Q1
2009 Q2
2009 Q3
2009 Q4
2010 Q1
2010 Q2
2005 Q3
2006 Q2
Data sources: WISER Trade; Washington State Dept. of Revenue.

15. Possible Future Scenarios That Could Impact
Washington Exports
• China allows the RMB to float (+, but unlikely)
• Though the government could still counteract this measure by lowering
domestic interest rates to support tradable goods sector, and maintain under
pricing of many other inputs, e.g. land and energy (-)
• U.S.-South Korea FTA (+, though not clear yet to what extent)
• Fed slow to contract U.S. money supply post-recovery, lets dollar
depreciate, boon to exporters (+)
• Series of “trade wars” and wave of currency depreciations (especially if
China continues to keep RMB undervalued), pushing adjustment from one
country to the next (“beggar they neighbor” scenario) (-)
• More 787 delays (-)

16. Commerce Quarterly Trade Bulletin
• Quarterly publication that reviews
most recent export trends,
downloadable from Commerce
website.
• Interviews with companies and
stakeholders, e.g. CEO of
Expeditors International
(December/January issue),
exporting SMEs (all issues), and
CEOs of Ports of Seattle and
Tacoma (March 2011 issue).
• More than 8,000 direct recipients,
and growing.

17. Appendix

18. Overview of Data
• We use data provided by WISER Trade, a wholesale distributor of U.S. Census
Bureau data.
• Full 2010 not yet available, so today we’ll work with November year-to-date
data.
• Data is state-of-origin, based on filing of exporter in customs declaration
form.
• In theory, above definition excludes all goods that originate elsewhere in the
U.S. and only pass through Washington, and includes goods from Washington
that ship from ports outside the state.
• But, definition of “state-of-origin” includes where product is consolidated prior to
export, so includes soy beans, corn, and rice, which are not grown in Washington
• Magnitude of distortion: Washington was credited with $3.7 billion in soy bean exports
in 2009, equal to 34% of total agriculture exports, and more than ten times amount
credited to Iowa and three times Illinois.
• In the Commerce Quarterly Trade Bulletin, and throughout this presentation, we
attempt to correct for this distortion

19. Services Exports
• Data is only for merchandise and commodities—it does not include services
(e.g. Microsoft products, online sales, legal services, royalties, expenditures
by foreign nationals, foreign students, architecture services, etc.).
• 2002 Input-Output Model estimates state services exports of $16.9 billion, but we think
this number has increased since then.
• Problem—no method/data that enables us to track services exports
annually
• Input-Output Model every five years, with significant time lag (e.g. 2002 model not
released until 2008, due to breadth of survey, data source triangulation, and timing of U.S.
Economic Census).
• U.S. national services exports data not very good right now (only simple breakdown by
type)
• Nonetheless, services exports critical to state economy.