Fresh analysis reveals that international trade has been a vital factor in the economic growth that has occurred in New York. And now, due to global trends, international trade is even more important to the future well-being of the state.

In addition to being a primary generator of business and job growth in the Buffalo-Niagara, Rochester, Syracuse, New York City, and Long Island regions, international trade also affords consumers greater disposable income, improving their standard of living.

But due to a massive dissemination of misinformation, many believe that international trade has contributed to New York’s economic difficulties. In turn, this has led to the belief that erecting trade barriers is a panacea for a variety of economic problems. Nothing could be further from the truth. For example:

  • U.S. exports account for almost one-third of real U.S. economic growth — and a very large portion of New York’s economic development. Consequently, the income of local workers and farmers, and the growth prospects of an increasing number of New York-based businesses are pegged to globalization.
  • Every year for almost three decades the U.S. service sector has enjoyed a significant trade surplus. And since 1980, U.S. exports of services have grown 130% faster than exports of goods.
  • New York is the third largest merchandise exporting state in the United States. And, if state service export data were available and added, total exports would be considerably higher.
  • In 1998, private service-producing industries in New York accounted for 75% of the total gross state product, a larger percentage than any other state.
  • Not surprisingly, the highest employment sectors in most of New York’s metro areas are also among the state’s top merchandise export industries.
  • Imports offer American consumers greater choices at attractive prices and help keep inflation down, one of the most important factors in raising our standard of living. Plus, due to lower-cost imported inputs, such as components and materials, U.S. producers are much more competitive worldwide.
  • International trade sometimes causes employment to increase in some sectors while decrease in others. But exaggerated fears of massive job losses due to imports are misplaced. Contrary to public belief, less than 2% of non-farm workers are at risk from imports.
  • What distinguishes the fastest growing developing countries from the slowest is their openness to trade. In the 1970s and 1980s, developing countries with open economies grew by 4.5% annually, while those with closed economies grew by 0.7% a year. At this rate, open economies double in size every 16 years, while closed economies double every 100 years.
  • From 1993, the year prior to NAFTA’s implementation, through 1999, New York State’s merchandise exports to NAFTA partners increased by 52%. In comparison, New York State’s merchandise exports to the world increased by 6.4%. NAFTA has generated a significant net increase in jobs in the United States and in New York State.
  • To the disadvantage of New York, Trade Promotion Authority (formerly known as Fast Track Authority) has not been renewed in several years. As a result, the United States has not been able to successfully negotiate new multilateral trade accords and is losing out to countries that have.

In order for New York State to prosper in the 21st century, and seize the benefits presented by globalization, it’s imperative that local companies begin or expand exporting efforts. And, it’s essential that elected officials establish policies designed to encourage exports, while passing trade legislation that further opens foreign markets.

Our Goal Is Clear

New York State has significantly benefited from international trade. However, as we enter this new and more competitive era of globalization, international trade is becoming even more important to the well-being of local companies and their workers. In order to improve the standard of living for all New Yorkers, more local companies must enter the global economy and penetrate new markets. In turn, this will help them to grow, increase productivity, and create high-wage jobs.

According to data from the Exporter Data Base, growth of the exporter population has accelerated. From 1992 to 1997, the number of U.S. exporters surged by 86% — but much more needs to be done.

Elected officials need to establish policies designed to encourage local companies to expand internationally, while passing trade legislation that further opening foreign markets.

This section appeared in the report International Trade Benefits New York, published on behalf of goTRADE New York and the Business Roundtable, 2001.

John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.

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