International trade is, unfortunately, taking a beating in the presidential election, with the top four candidates raising various levels of opposition to free trade agreements.
But despite the increase in anti-trade sentiment nationally, international trade has been very good to land-locked Utah. Utah’s economy wouldn’t be nearly as strong if we didn’t engage in robust international trade.
At the recent Thought Leader Symposium presented by World Trade Center Utah (WTCU) and Zions Bank, Derek Miller, the president & CEO of WTCU presented some compelling statistics about the value of international trade.
While some states may run a trade deficit, that is not true for Utah. Utah is a trade surplus state — to the tune of a whopping $4 billion a year. Trade is very good for Utah.
22% of Utah jobs are supported directly or indirectly by international business.
Exports are an important part of Utah’s very diverse economy. In fact, Utah’s exports grew from $12.3 billion in 2014 to $13.4 billion in 2015, an 8 percent increase in just one year. “That is an astounding number when you consider the slowdown in the global economy, turmoil and violence around the world, and a strong U.S. dollar that has a dampening effect on U.S. exports generally,” said Miller. “All of this puts Utah as the 9th best state for export growth.”
Utah businesses are taking advantage of international markets as a means to grow their business like never before. Large businesses like Lifetime Products in Clearfield; outdoor recreation companies like Black Diamond, which manufactures in Salt Lake City; agri-businesses like Ten Plus Hay in Washington County; foreign companies like Fresenius that makes the majority of the world’s dialysis machines right here in Utah; and small companies like Butchers Bunches which sells organic jams from Cache Valley around the world.
However, the anti-trade sentiment communicated in the both the Democratic and Republican presidential primaries is highly concerning to businesses engaging in international trade.
Miller noted that, besides dealing with very serious foreign affairs challenges, the next president will have the power to significantly influence international business and the U.S. position in the global economy.
Other key points:
The Trans-Pacific Partnership (TPP) is the largest free trade deal since NAFTA, and is poised to be accepted or rejected by the Congress. The next president will have a significant role in how the debate plays out.
TPP reduces almost all foreign trade barriers for U.S. companies in the products and services where Utah exports the most – information technology, chemicals, transportation products, and food products. The TPP markets represent over one-third of Utah’s exports.
Utah exports over $4 billion annually to the countries included in the TPP agreement.
After TPP, the next trade deal on the docket is the T-TIP (Transatlantic Trade and Investment Partnership). Europe is America’s longest standing and largest trading partner. Reduced barriers to entry to these markets would be particularly important to Utah’s medical device and nutraceutical companies.
Countries included in these two trade agreements account for 64 percent of the world’s GDP. This is important for the U.S. and important for Utah, which has a competitive advantage in many of the industries that could become more accessible to Utah companies.
World Trade Center Utah is proving to be a valuable resource to Utah businesses that want to export or import products and services to and from foreign countries. The mission of the WTC Utah is to help Utah companies think, act and succeed globally.
Miller notes that 95 percent of the world’s consumers live outside of the United States. Some 85 percent of economic growth comes from outside the U.S. And 70 percent of the world’s purchasing power is located outside of the U.S.
WTCUtah provides a wide variety of international trade services, in addition to education and networking.