The Rest of World Sector
California has a large, complex economy that maintains trading relationships with other regional economies in the United States and other countries. In SAM economic activity outside of California is modeled as a single economic unit. Thus, a household in Ohio buying California’s oranges is as foreign as a firm in Osaka buying circuit boards built in San Jose. It is assumed that, like in California, households and firms outside California maximize utility and profits. California exports to Ohio or Osaka compete with local production in those economies and with goods and services produced elsewhere in the world.
Finding reliable data for these exports and for imports from the rest of the United States or the rest of the world is not possible. Foreign trade statistics are notoriously weak. Exports from Pacific ports in California are only partially documented as to their original sources, and transshipments through California for export are frequently identified as exports from California. Imports arriving in California’s ports are documented even more poorly as to their final destination. Trade between California and the rest of the United States attracts no usable documentation for trade analysis purposes. With the advent of the North American Free Trade Agreement (NAFTA), the already limited documentation of trade between California and two of its three largest bilateral trade partners (Mexico and Canada) is deteriorating.
Faced with weak and unreliable data, SAM relies on IMPLAN as the primary source for trade data. The IMPLAN contains estimates of interstate and international trade by 528 sectors. These sectors are aggregated into SAMs industry sectors. Completion of SAM involved ad-hoc balancing or the payments to and from the industry sectors using import and export values. Trade equals production minus consumption.
The levels of imports and exports are singularly the weakest and least supportable data of SAM.