International trade is a primary generator of business growth in Western New York. And a tremendous number of jobs are dependent on it.

How do we know this?

New York state is the third-largest exporter of manufactured goods compared to all other states. Based on U.S. Census Bureau calculations, more than 280,000 New York jobs are directly dependent on merchandise exports, which pay 13 percent to 18 percent more than the national average wage. And a tremendous number of jobs are dependent on New York’s service exports, as well as indirect exports.

Trade is also essential to our region.

In the Buffalo-Niagara Falls metropolitan area, the manufacturing sectors with the largest employment are also among the state’s top merchandise export industries. What does this mean?

Take the local transportation equipment industry for instance. It is Buffalo-Niagara’s largest manufacturing employer and New York’s second largest merchandise export. It stands to reason: As Ontario auto producers (one of our principal customers) buy more auto parts from local manufacturers, we benefit.

Jack Davis, the outspoken trade protectionist who attempted to unseat Rep. Tom Reynolds in the 26th Congressional district last November, has made trade the scapegoat of virtually all our economic problems. Although his intentions are good, his trade policy recommendations, if implemented, would be disastrous for Western New York. If Davis had his way, he would raise import barriers in an attempt to isolate producers from foreign competition. In response, foreign countries would retaliate by keeping U.S. products out. This would have an enormously negative impact on New York State, especially local auto parts producers who heavily rely on Ontario auto factory orders.

Overall, we would lose more jobs than gained.

According to a U.S. International Trade Commission study, if all U.S. trade barriers had been eliminated in 1999, 175,000 full-time American workers would have been displaced (representing only one one-hundredth of 1 percent of the labor force), but 192,400 full-time jobs would have been created. The result: a net gain of nearly 17,400 jobs. Plus, total output would have increased by $58.8 billion.

If trade is not causing manufacturing jobs to decline, what is? New technologies and innovation, which have significantly boosted U.S. productivity, are primarily responsible. This has enabled fewer workers to generate much more output than ever before.

Nevertheless, Mr. Davis advocates protectionism to prop up failing manufacturing industries. This would only make the situation worse. Federal Reserve Chairman Alan Greenspan has repeated that creeping protectionism must be thwarted and reversed.

Consider this: Would we have wanted to stop rising productivity in the U.S. agricultural industry that caused the number of farm jobs to fall from 9.5 million in 1940 to 2.2 million today?

Currently, U.S. agricultural output can virtually feed the world. America did not “lose” 7.3 million farm jobs: They shifted to emerging industries. As a result, we became more efficient and prosperous.

Trade is not the cause of Western New York’s economic ills. It’s one of the few bright spots on our economic horizon.

This article appeared in the Niagara Gazette, March 2, 2005.
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John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the ManzellaReport.com, is a world-recognized speaker, author of several books, and a nationally syndicated columnist on global business, emerging risks and economic trends. His latest book is Global America: Understanding Global and Economic Trends and How To Ensure Competitiveness.




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