The idea of Global Chamber® started eight years ago when Barry Goldwater, Jr. stood up in a crowded public meeting in Phoenix and declared “foreigners need to be kept out of Arizona because they take our jobs.”
It was a wrong idea then, and it’s wrong now. We want foreign investment, because while foreign companies employ 5 percent of the U.S. workforce, they account for 8 percent of compensation, 15 percent of R&D and 20 percent of U.S. exports. Foreign investment is a vital ingredient in any metro’s financial success, and Phoenix needs more.
Amidst the noise of the upcoming election, the presumptive Republican presidential candidate has railed against trade. So has the No. 2 Democratic candidate, although for different reasons.
Is it politically incorrect to be for trade? Either way, the political positions espoused by those candidates when taken at face value are counterproductive and contrary to real-world facts.
Significant benefits have flowed from U.S. free-trade agreements (FTAs), which have covered 20 countries. Those countries represent approximately 6 percent of the world’s population outside the United States, and yet those markets purchase nearly half of all U.S. exports. The United States has recorded a trade surplus in manufactured goods with its FTA partner countries for each of the past five years, according to the U.S. Department of Commerce. This surplus currently exceeds $50 billion per year.
Overall, more than 38 million Americans jobs depend on trade. The United States is the world’s largest exporter of goods and services. U.S. exports of goods and services are more than $2.5 trillion per year and rising. Trade is critical to the success of many sectors of the U.S. economy. One in four manufacturing jobs depends on exports.
American farmers and ranchers also depend on exports. The U.S. Department of Agriculture reports that one in every three acres on American farms is planted for export markets. Agricultural exports are at record levels, more than $150 billion per year.
There’s also a benefit from imports. For the U.S. they bring lower prices and more choices for American families trying to stretch their budgets. Companies also depend on imports for raw materials and competitively priced inputs. Imports give consumers access to products that would not otherwise be available — such as fresh fruit in the winter. Access to imports boosts the purchasing power of the average American household by about $10,000 annually.
More than 98 percent of the roughly 300,000 U.S. companies that export is small and medium-sized enterprises (SMEs), and they account for one-third of U.S. merchandise exports, according to the U.S. Department of Commerce. That’s less than 1 percent of companies — so there’s plenty more potential for exports and job creation.
Last month, U.K. Trade & Investment (UKTI) reported that 40 percent of UK SMEs wish to be global within five years. What happens when U.S. companies see the light? That 1 percent of enlightened companies will increase.
International trade provides a path to jobs and prosperity, if we can overcome misinformation and fear. The conversation should continue on how to optimize trade. But we should all understand the very real benefits.
All of us who are involved every day know the direct and indirect benefits of international trade. And for companies looking to grow globally and extend our trade success, we’re here to help!
Doug Bruhnke is CEO/Founder at Global Chamber®