Trade in Tennessee by the numbers
› 806,100: Number of Tennessee jobs supported by exports and imports, or one in five of all jobs› 6,961: Number of Tennessee businesses that exported goods or services› 206: Number of countries and territories that buy Tennessee-made goods and servicesSource: Business Rountable study by Trade Partnership Worldwide
One of every five jobs in Tennessee is supported by international trade and, despite concerns about Mexican or Canadian imports taking U.S. jobs, the share of jobs supported by trade has more than doubled in the 27 years since the North American Free Trade Agreement (NAFTA) was adopted, a new study shows.
The study prepared by Trade Partnership Worldwide for the pro-trade Business Roundtable estimates that international trade supports 806,100 jobs in Tennessee and nearly 39 million jobs nationwide.
"Going back before NAFTA was adopted, we saw about one in 10 jobs were dependent then upon international trade and today that is about one in five jobs so we've seen a real dramatic increase in jobs and in the share of jobs that relate to international trade," said Paul DeLaney, vice president for trade and international at the Business Roundtable. "There were a number of international agreements that opened up more free trade and contributed to these gains, but NAFTA was certainly key."
Top Tennessee export countries
1. Canada, $9 billion of goods and $868 million in services2. Mexico, $4.7 billion of goods and $586 million in services3. China, $2.7 billion of goods and $789 million in services4. Germany, $1.1 billion of goods and $459 million in services5. Japan, $2 billion of goods and $583 million of servicesSource: Business Rountable study by Trade Partnership Worldwide
Since the free trade agreement was reached with Mexico and Canada, exports to those countries from Tennessee have jumped 470 percent and jobs related to trade have grown five times faster than the overall job market. The new study found that exports of goods and services from the Volunteer State to Canada and Mexico totaled $15.2 billion in in 2017.
The Business Roundtable, which represents businesses that collectively employ more than 15 million U.S. workers, is highlighting the advantages of trade to the U.S. Congress as it prepares to consider the first change to NAFTA since its adoption in 1992.
At the urging of President Trump, NAFTA was revamped and is being replaced with the U.S. Mexico, Canada (UMC) trade agreement. The new pact preserves most of the original NAFTA provisions, but does include new requirements for North American sourcing of automobiles for free trade among the countries and also has some wage requirements and changes in dairy exports for U.S. farmers.
The agreement was signed last November and the details are being finalized to present to the Congress for its ratification this year.
"It's not NAFTA redone. It's a brand-new deal," Trump said last fall after the deal was struck with Canada and Mexico.
But organized labor opposed the adoption of NAFTA in 1992 and is fighting to make additional changes to the revised pact when it goes before Congress later this year. AFL-CIO President Richard Trumka recently denounced NAFTA as "a windfall for corporations.
"For North American workers, it has been nothing short of catastrophic," Trumka said. "NAFTA put big business in charge of economic strategy with the goal of moving production to places where labor is cheap and workers are exploited. And look what happened: Millions of American and Canadian jobs were lost to Mexico and other low-wage countries."
Trumka said while overall employment may be up in the United States, wages have not risen with the overall economy and agreements like NAFTA are one of the reasons. AFL-CIO says it isn't against free trade, as long as the agreements are fair to workers.
"Of course, we should open up new markets for our products and do business with people all over the world," Trumka said. "The real challenge is to advance trade policy that creates shared prosperity and makes the world stronger and safer. Bring us a deal like that, and we'll support it."
Despite concerns about foreign imports displacing U.S. jobs or cutting wages, the Business Roundtable study said imports have grown along with U.S. economy over the past two decades, spurred by periods of strong economic growth and curtailed by the 2001-2002 and 2008-09 recessions.
"In general, there is a positive correlation between changes in imports and changes in U.S. economic growth," the study found. "This correlation makes sense given that approximately 60 percent of U.S. merchandise imports are raw materials, capital goods and industrial products used by U.S. manufacturers and farmers to produce goods in the United States."
When U.S. manufacturing or agricultural output slows or contracts, producers' and farmers' need for imported raw materials and other inputs declines. Likewise, when household income drops as it does during a recession, families put off buying expensive consumer goods, including consumer goods imports which constitute 40 percent of total goods imports.
"We stand united to preserve and modernize North American trade, which supports over 12 million jobs and a strong U.S. economy," said Tom Linebarger, chairman and CEO of Cummins Inc. and chair of the Business Roundtable Trade & International Committee.
Contact Dave Flessner at email@example.com or at 757-6340.