- The Washington Times - Wednesday, October 9, 2002

ASSOCIATED PRESS
Thousands of Barbie and Ken dolls held captive in container ships unable to dock. Automakers chartering expensive cargo planes to airlift parts to stalled assembly lines. Millions of dollars worth of U.S. crops, meat and poultry in danger of spoiling on the docks or in trucks and railroad cars idled across the country.
Those wide-ranging problems in 10 days of a West Coast dock shutdown left President Bush little choice but to seek a court injunction to keep the work stoppage from derailing the U.S. economy, analysts said yesterday.
"If this work stoppage lasted another two weeks, the disruptions could be enough to push us back into recession," said Mark Zandi, chief economist at Economy.com.
Mr. Bush announced yesterday that he would seek a court injunction to force the reopening of the docks for 80 days under the Taft-Hartley Act.
"The work stoppage is hurting our entire economy," said Mr. Bush, who is facing a barrage of Democratic complaints in the month before the congressional elections about the lackluster recovery from last year's recession.
The fast-spreading fallout from this work stoppage underscored just how enmeshed the U.S. economy has become in the world economy in the three decades since an American president last intervened to halt a coastwide dock dispute.
In 1971, President Nixon waited three months before obtaining a Taft-Hartley injunction to get West Coast ports reopened. But that was before the popularity of huge container ships revolutionized global trade, turning what was then a trickle of imports and exports into a flood.
The U.S. trade deficit for merchandise stood at $2.26 billion in 1971. Last year, that deficit had swelled to $427 billion with three times as much of the U.S. economy tied up in trade as was the case in 1971.
"The 1971 strike was before the era of globalization, before the global economy really mattered," said Stephen Cohen, a professor of regional economics at the University of California at Berkeley. "Now we have a global supply chain."
This port shutdown occurred in a critical month, October, when imports are generally at their highest as American retailers rush to obtain deliveries for the Christmas sales season. The October-December period typically accounts for 40 percent of retailers' annual sales.
More and more of the consumer goods that Americans crave, such as toys and clothing, come from overseas. Ninety percent of toys and shoes sold in the United States are foreign-made.
Retailers, worried about potential supply disruptions, ordered earlier this year, pushing the country's trade deficit to a record high of $37.7 billion in May. But even with that speeded- up pace, retailers are likely to be caught without enough inventory to meet demand because of the work stoppage and the bottlenecks in the supply chain that could take a month to unwind.
"I think you will still see shortages in coming weeks of popular goods, whether they be toys, consumer electronics, shoes, clothing," said Eric Autor of the National Retail Federation. "This could not have come at a worse time for us."
The West Coast ports, which handle more than $300 billion in trade annually, account for more than half of all containerized cargo moving in and out of the country, reflecting the burgeoning trade with Pacific Rim countries.
The United States' biggest trade deficit is with China, thanks to more than $100 billion in annual imports from that country including Christmas tree lights, sneakers, computers and electronic gear.
The giant West Coast dock facilities were built to handle a flood of trade from China, Japan and other Asian nations, which gets loaded onto trucks and rail cars for movement throughout the country because the current generation of container ships is too large to squeeze through the Panama Canal.
And it's not just U.S. consumers who are dependent on foreign products. U.S. manufacturers of everything including cars and computers depend on foreign-made parts to keep their assembly lines running.
Ford Motor Co. has 12 U.S. plants including factories in Atlanta; Chicago; Edison, N.J.; and Cleveland that depend on parts shipped through West Coast ports.
A joint venture of General Motors and Toyota in Fremont, Calif., was forced to suspend production last week because of parts shortages. To reopen, the factory chartered two 747 cargo planes to deliver auto transmissions and other parts.
U.S. farmers producing a variety of crops such as wheat, apples and California almonds have seen their perishable goods stack up on loading docks. Labor Secretary Elaine L. Chao warned that millions, if not billions, of dollars worth of produce, meat and poultry was in danger of spoiling unless the ports reopened.
The most often cited study puts harm to the economy at from $1 billion to $2 billion a day. That study, by Martin Associates of Lancaster, Pa., was prepared for the Pacific Maritime Association, the group that represents West Coast terminal operators and shipping companies.
The Martin study estimated the cost of a work stoppage lasting five days at $4.7 billion and one lasting 10 days at $19 billion, producing the $1 billion to $2 billion daily damage estimate.
Study author John Martin said those figures could be on the low side because plant shutdowns were occurring more quickly than his computer model had estimated.
"We are seeing an accelerated impact. We did not expect plant closings until 20 to 30 days out," he said.


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