Trade Creates Jobs for Oklahoma

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1 Trade Creates Jobs for Oklahoma 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 Oklahomans. Export growth increases jobs by generating new business for Oklahoma s manufacturers, services providers and farmers. Imports support jobs and keep costs low, helping Oklahoma businesses compete and saving Oklahoma families real dollars at the cash register. Foreign investment in Oklahoma creates good jobs across a range of sectors. NEARLY 1 IN 5 OKLAHOMA JOBS DEPENDS ON TRADE Oklahoma workers need trade to maintain and create jobs. Today, 423,300 jobs in Oklahoma depend on trade. In 2008, 19.2 percent of jobs in Oklahoma depended on trade, up from 11.3 percent in Oklahoma s trade-related employment grew 1.3 times faster than total employment from 2004 to Oklahoma Jobs Tied to Trade, 2008 Wholesale & Retail Trade 67,000 Finance & Insurance 18,700 Prof., Sci., & Tech. Services 16,600 Transp. & Warehousing 16,300 Manufacturing 12,400 Information 10,000 Small and Large Employers Partner to Export Small and medium-sized enterprises (SME) and workers in Oklahoma 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 OKLAHOMA S INDUSTRIES, SMALL BUSINESSES AND FARMERS GROW WITH EXPORTS According to the U.S. Department of Commerce, Oklahoma ranked 37 th in the United States with total exports valued at $5.1 billion in Machinery was Oklahoma s leading export category in 2008 accounting for 27.2 percent of total exports. One of the fastest growing export categories for Oklahoma is primary metal manufacturing, increasing at an average annual rate of 31.1 percent since In 2008, Oklahoma companies sold their products in over 170 foreign markets. Processed Foods 7% Computers/ Electronics 8% Fabr. Metals 9% Leading Export Products Other 35% The top export market is Canada ($1.8 billion). Other leading markets include Mexico ($358.8 million) and Japan ($289.1 million). Transport. Equip. 14% Machinery 27% Leading Export Markets China is one of Oklahoma s fastest growing trading partners. In 2008, Oklahoma companies exported $198.2 million worth of goods to China, an increase of 305 percent since In 2008, exports accounted for approximately 3.5 percent of Oklahoma s state gross domestic product (state GDP). Since 2002, exports have increased more than twice as fast as state GDP. Singapore 3% China 4% Japan 6% Mexico 7% Other 46% Canada 34% Services exports are also important to Oklahoma, including education of foreign students at Oklahoma colleges and universities, and spending by foreign visitors to tourist destinations in Tulsa and Oklahoma City. Services companies employ 1.3 million workers in Oklahoma. In 2008, 312,600 Oklahoma services jobs depended on trade. Oklahoma is a leading exporter of agricultural products. The State is the fourth largest exporter of wheat products in the United States, accounting for nearly 6 percent of total U.S. wheat exports. Oklahoma s other important exports products include live animals and meat, cotton, poultry products, and feed grains. Key markets are Mexico, China, and Russia. These exports directly benefit Oklahoma s farmers in southeastern part of the State and the Panhandle.

3 OKLAHOMA S SMALL AND MEDIUM BUSINESSES PARTNER WITH LARGE BUSINESSES TO EXPORT Exports particularly benefit workers at Oklahoma s small- and mid-size companies. In 2007, 2, percent of Oklahoma s exporting companies were small- or mid-sized companies. Larger Oklahoma 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 Oklahoma companies also indirectly export when they supply goods and services to larger Oklahoma exporters. Every job at an Oklahoma worldwide company supports nearly two others at companies that are part of its supply chain. Leading Oklahoma Exporters Company Products Foreign Markets Tronox LLC (Oklahoma City) Titanium dioxide pigments Singapore, Brazil, China Ecogy Biofuels (Tulsa) Fatty acids Netherlands, Malaysia AG Equipment (Broken Arrow) Compressors & parts Pakistan, Singapore Holly Refining & Marketing (Tulsa) Rubber process oils Japan ConocoPhillips (Bartlesville) Jet fuels Spain, South Africa, UK Baker Hughes (Claremore) Oilfield supplies Russia, Congo, Colombia Solae LLC (Pryor) Soy proteins Japan, Belgium, India, Thailand Wood Groop (Oklahoma City) Oilfield supplies Venezuela, Argentina, Colombia Helmerich & Payne (Tulsa) Oilfield supplies Mozambique, Colombia, Ecuador Exterran Energy (Broken Arrow) Heating & cooling pumps Bangladesh, Russia

4 MORE OF A GOOD THING FOR OKLAHOMA 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. Oklahoma has increased its exports to partner countries following the implementation of the U.S. bilateral and regional free trade agreements (FTAs). Exports to Jordan experienced the strongest growth, increasing by 973 percent since the FTA s implementation. Since the North American Free Trade Agreement went into effect in 1994, Oklahoma s exports to Canada have increased $1.1 billion (172 percent), while exports to Mexico have increased $194 million (161 percent). Since 2002, exports of transportation equipment one of Oklahoma s top export categories processed foods to new FTA partners have increased at an average annual rate of 31.1 percent, more than twice as fast as exports to the rest of the world. After Congress passed the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), Oklahoma s exports of fabricated metal products to DR-CAFTA countries grew from $500,000 in 2005 to $7.1 million in 2008, an increase of more than 1,300 percent. 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 Oklahoma

5 FOREIGN INVESTMENT IN OKLAHOMA CREATES JOBS Foreign-owned companies invest significant amounts of capital to open or expand facilities in Oklahoma every year. These companies employ 35,900 workers, nearly 3 percent of all Oklahoma employees in the private sector. Foreign-owned manufacturing accounts for 11,800 jobs, representing almost 8 percent of all manufacturing jobs in Oklahoma. 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 Oklahoma Company Industry Country BP Petroleum/Chemicals United Kingdom Bridgestone Americas Rubber Products Japan Deutsche Telekom Telecommunications Germany GlaxoSmithKline Pharmaceuticals United Kingdom HSBC Financial Services United Kingdom Lafarge North America Building Materials France Michelin Rubber Products France Nestle USA, Inc. Food Products Switzerland Oldcastle Inc. Building Materials Ireland Saint-Gobain Glass & Engineered Materials France Siemens Machinery Germany Sigma Alimentos Food Products Mexico OKLAHOMA 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 Oklahoma. 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 Oklahoma s growth, and account for 33.4 percent of state GDP, more than three times as much as manufacturing.

6 EXPORTS AND IMPORTS HELP OKLAHOMA 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 Oklahoma 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 Oklahoma 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