Trade Creates Jobs for Montana

Transcription

1 Trade Creates Jobs for Montana Creating and preserving quality U.S. jobs is a goal shared by all Americans. With 95 percent of the world s consumers living outside of the United States, it makes sense for small and large businesses to partner to build stronger trade ties with countries seeking U.S. goods and services. Trade creates jobs for Montanans. Export growth increases jobs by generating new business for Montana s manufacturers, services providers and farmers. Imports support jobs and keep costs low, helping Montana businesses compete and saving Montana families real dollars at the cash register. Foreign investment in Montana creates good jobs across a range of sectors. MORE THAN 1 IN 5 MONTANA JOBS DEPENDS ON TRADE Montana workers need trade to maintain and create jobs. Today, 133,800 jobs in Montana depend on trade. In 2008, 20.6 percent of jobs in Montana depended on trade, up from 11.3 percent in Montana s trade-related employment grew more than twice as fast as total employment from 2004 to Montana Jobs Tied to Trade, 2008 Wholesale & Retail Trade 22,200 Prof., Sci., & Tech. Services 5,500 Finance & Insurance 5,000 Transp. & Warehousing 4,700 Information 2,800 Manufacturing 1,700 Small and Large Employers Partner to Export Small and medium-sized enterprises (SME) and workers in Montana supply goods and services to large U.S. companies in and out of the State. Those bigger companies use the SME goods and services to make other products and services that they, in turn, export to customers around the world. Jobs in exporting plants pay on average up to 18 percent more than similar jobs in nonexporting plants. Newly exporting firms increase employment almost four times faster than non-exporting firms.

2 MONTANA S INDUSTRIES, SMALL BUSINESSES AND FARMERS GROW WITH EXPORTS According to the U.S. Department of Commerce, Montana s exports totaled $1.4 billion in Chemicals was Montana s leading export category in 2008 accounting for 25.3 percent of total exports. One of the fastest growing export categories for Montana is primary metal manufacturing, increasing at an average annual rate of 79.1 percent since In 2008, Montana companies sold their products in over 120 foreign markets. The top export market is Canada ($700.5 million). Other leading markets include Japan ($130.8 million) and the Taiwan ($75.0 million). Korea is one of Montana s fastest growing trading partners. In 2008, Montana companies exported $67.4 million worth of goods to Korea, an increase of 71 percent since In 2008, exports accounted for approximately 3.9 percent of Montana s state gross domestic product (state GDP). Since 2002, exports have increased five times faster than state GDP. Services exports are also important to Montana, including port services and spending by foreign visitors to tourist destinations in Montana, including the Battle of Little Bighorn site and Glacier and Yellowstone National Parks. Services companies employ 430,200 workers in Montana. In 2008, 101,900 Montana services jobs depended on trade. Montana is a leading exporter of agricultural products. Important markets are Canada, Mexico, India, Pakistan, and Sudan. The State is the third largest exporter of wheat in the United States, accounting for nearly 6 percent of total U.S. wheat exports. Montana s other leading export products include feeds and fodders, feed grains, vegetables and vegetable products. These exports directly benefit Montana s farmers in north central and northeastern Montana.

3 MONTANA S SMALL AND MEDIUM BUSINESSES PARTNER WITH LARGE BUSINESSES TO EXPORT Exports particularly benefit workers at Montana s small- and mid-size companies. In 2007, percent of Montana s exporting companies were small- or mid-sized companies. Larger Montana companies are also important exporters. For the United States generally, half of U.S. exports are generated by U.S. multinationals. Small and medium-sized Montana companies also indirectly export when they supply goods and services to larger Montana exporters. Every job at a Montana worldwide company supports nearly two others at companies that are part of its supply chain. Leading Montana Exporters Company Products Foreign Markets Fox Lumber Sales (Hamilton) Construction materials Panama Montana Antler & Designs (Gallatin Gateway) Dried elk, deer antlers Hong Kong Montana Resources (Butte) Copper products China Rec Advanced Silicon Materials (Silverbow) Silicon, gases Japan, Taiwan, Korea, China Stillwater Mining Refinery (Columbus) Nickel sulfates Brazil Tresbro Manufacturing (Billings) Tractors, turf harvestors Belgium, UK, Germany Towhaul Corp. (Belgrade) Mining equipment parts Namibia, Australia WYO Ben Inc. (Billings) Sodium bentonite products Australia, Philippines

4 MORE OF A GOOD THING FOR MONTANA TRADE AGREEMENTS LEVEL THE PLAYING FIELD The United States has some of the lowest trade barriers in the world. Trade agreements level the playing field by lowering other nations trade barriers and opening up foreign markets to U.S. exports. Montana has increased its exports to partner countries following the implementation of the U.S. bilateral and regional free trade agreements (FTAs). Exports to Bahrain experienced the strongest growth, increasing by 1,924 percent since the FTA s implementation. With the implementation of the U.S. Singapore Free Trade Agreement, exports to Singapore increased at an average annual rate of 73 percent, more than twice as fast as Montana s exports to the world. After the implementation of the U.S. Australia Free Trade Agreement, exports of machinery, one of Montana s top export categories, have increased by 164 percent. Since 2002, exports of chemicals, Montana s top export category, to Mexico have increased 1,129 percent, more than twice as fast as chemicals exports to the world. The United States enjoys a trade surplus in manufactured goods with its FTA partners.* U.S. Trade Balance, 2008 Services Agricultural Products Manufactured Goods: 15 FTA Partners Oil Products Manufactured Goods: Other Countries $ billions * State-specific data are not available for imports, so this chart cannot be prepared for Montana

5 FOREIGN INVESTMENT IN MONTANA CREATES JOBS Foreign-owned companies invest significant amounts of capital to open or expand facilities in Montana every year. These companies employ 6,800 workers, nearly 2 percent of all Montana employees in the private sector. The number of workers employed by foreign subsidiaries in Montana has increased by 19 percent in the last five years. Foreign-owned manufacturing accounts for 1,200 jobs, representing nearly 6 percent of all manufacturing jobs in Montana. U.S. subsidiaries of foreign companies pay an average compensation of $68,317 per year, 32 percent higher than U.S. companies. Selected Multinational Corporations Employing Workers in Montana Company Industry Country Advanced Silicon Materials Electrical Equipment Norway GlaxoSmithKline Pharmaceuticals United Kingdom Luzenac America Mining Australia Oldcastle Inc. Construction Materials Ireland Rio Tinto Mining United Kingdom Sodexho Food Service France MONTANA COMPANIES AND WORKERS USE IMPORTS TO STAY COMPETITVE In 2008, 58.5 percent of the products we imported were used by U.S. workers to manufacture goods in the United States. Lower cost inputs keep U.S. manufacturing competitive in international markets. Imports frequently contain components (like cotton or semiconductors) and services (like design) sourced from U.S. companies and farmers, including companies and farmers in Montana. Services, especially transportation, finance and insurance, marketing and legal services, are needed to bring imported goods to American manufacturers and households. These importing-related services industries are vital to Montana s growth, and account for 34.5 percent of state GDP, nearly nine times as much as manufacturing.

6 EXPORTS AND IMPORTS HELP MONTANA FAMILIES ENJOY A HIGHER STANDARD OF LIVING Exports and imports support family incomes. Jobs in exporting plants pay on average up to 18 percent more than similar jobs in nonexporting plants. Imports help keep prices for Montana families down while increasing their choices for goods and services. Prices for imported consumer goods tend to drop year after year. Imports Keep Inflation Low ( ) Price Change Toys -45% Clothing -10% Household Appliances -9% Footwear -3% JOBS Trade and investment liberalization policies are worth over $10,000 per year to an average Montana family of four. SOURCES Laura Baughman and Joseph Francois, Trade Partnership Worldwide, LLC ( U.S. Department of Labor ( U.S. Department of Commerce ( ( ( EXPORTS U.S. Department of Agriculture ( U.S. Department of Commerce ( ( ( ( Andrew B. Bernard, J. Bradford Jensen, and Peter K. Schott ( PIERS Trade Intelligence database ( FOREIGN INVESTMENT Organization for International Investment ( IMPORTS U.S. Department of Labor ( U.S. Department of Commerce ( STANDARD OF LIVING Council of Economic Advisers ( U.S. Department of Labor ( U.S. Department of Commerce ( TRADE LIBERALIZATION U.S. Department of Commerce ( Contact: David Thomas Director, Public Policy Business Roundtable dthomas@businessroundtable.org January 2010