How Important Are Exports, Really?
I wonder how many people are aware that May is World Trade Month in the United States? Not as many as those who know that May is also National Hamburger Month. Now that’s a month you can sink your teeth into!
Despite things like President Obama’s National Export Initiative, and occasional Congressional fulminations against trade, relatively few Americans think about international trade on a regular basis. That is probably due to the sheer size of the American domestic market, where we have much of a continent to play with. A shipment from Utah to Ohio is not an export, while a far shorter shipment from Denmark to Norway is. Gives one a different perspective. Here in Hawaii, if I approach a local company to talk about exporting, they often think I mean selling in California. California can seem foreign at times, I’ll admit, but those sales don’t show up in our export statistics. While many U.S. manufacturers do export and do it well, the average factory worker may not know where that day’s production is going – and likely doesn’t care.
Americans are far more conscious of imports, but often for the wrong reasons. They hear commentators shout that other countries are taking advantage of us, and neo-mercantilists argue that we need to protect against imports (and subsidize exports). Despite the billions spent on imported consumer goods at Wal-Mart or Costco, there is rarely much understanding that imports bring variety and help keep prices down. There is even less consciousness about the role of imported materials and equipment in keeping American manufacturing going.
So, how important are exports to the United States, really? Absolutely critical, whether our citizens appreciate it or not. The big picture is that, using 2008 data, U.S. exports supported 10.3 million American jobs (6.9% of total U.S. employment) and accounted for 12.7% of U.S. GDP. Between 1993 and 2008, exports chalked up 40% of job growth in the United States. There’s a lot more detail in a recent article published by the U.S. Department of Commerce. You can bet exports are critical to the 288,747 U.S. firms, mostly small businesses, known to be exporting.
Source: U.S. Department of Commerce
Commerce’s data on the sectoral distribution of export trade caught my eye. In manufacturing, the sector that mainstream media, many labor unions and most politicians think has been killed by trade and outsourcing, exports provide nearly 3.7 million jobs (27% of total manufacturing employment). And, while manufacturing is still very important, the pie chart shows how important our exports of services have become. Take a look, too, at my earlier post that detailed U.S. services trade.
***********
There are World Trade Month events all over the country. If you are going to be in Honolulu on May 19, come join us at the Foreign trade zone from 9:00 AM to 1:00 PM for informative talks and a chance to meet people in the export business. That afternoon, Governor Lingle is scheduled to present special awards to some of Hawaii’s outstanding exporters.
