Transcript US Export Growth with Recent FTA

Free Trade Agreements:
Helping U.S.
Businesses Export
A Proactive Trade Policy Grows the U.S.
Economy
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The U.S. is already the most open major economy in the world but we must
knock down barriers to our goods and services abroad
Reducing trade barriers will give our farmers, workers and service providers
better access to the 95% of the world’s customers living outside our borders
Trade liberalization raises productivity and real wages while expanding
consumer choice and purchasing power
In 2005, the U.S. goods and services accounted for 10.4% of its GDP. Goods
and services exports also accounted for 20% of overall growth in the U.S.
economy in 2005
Benefits by Sector:
Manufacturing – Manufactured exports have increased 82% since the end of the
last multilateral round a decade ago.
• Manufacturing exports support an estimated 7.4 million jobs in the U.S.
(estimate for 2001), including 1 in 5 manufacturing jobs
• U.S. jobs supported by goods exports pay an estimated 13% to 18% more
than the U.S. national average.
Agriculture – Exports account for 27% of farm income
Services – U.S. had a $56 billion surplus in 2005 on exports totaling $379 billion,
and these exports have nearly doubled in the past 11 years.
Trade Opportunities
• Removing all remaining barriers to trade in services
would amount to an estimated $520 billion for the U.S.
($7,000 for family of 4) - University of Michigan
• Removing all remaining tariff barriers in manufacturing
and agriculture would amount to an estimated $16
billion for the U.S. ($220 for family of 4) - The World Bank
• Removing all remaining non-tariff barriers in
manufactured goods and agriculture would far outweigh
the gains from tariff liberalization alone and would
amount to an estimated $297 billion for the U.S. ($4,000
for family of 4) - Scott Bradford, Institute of International Economics
Benefits of Free and Fair
Trade
• First half of 2005, U.S. exports accounted for 30%
of overall growth in the U.S. economy. (Department of
Commerce )
• U.S. annual incomes are $1 trillion higher, or
$9,000 per household, due to increased trade
liberalization since 1945. (Institute for International
Economics Study)
• Elimination of global trade barriers could lift 300500 million of the world’s poor out of poverty over
the next 15 years. (World Bank/Institute for International
Economics Study)
Non-Tariff Barriers and Trade
“…opening international markets to our goods and services is critical for
our economy. My Administration will continue to work tirelessly to open
markets and knock down barriers to free and fair trade so American
farmers and workers can compete on a level playing field worldwide.”
- 2006 Economic Report of the President
Different Types of Non-Tariff Barriers (NTBs)
Trade Facilitation (w/out customs)
Customs
Regulatory Environment
IPR Protection and Piracy
Sanitary and Phytosanitary Measures
Services
Investment
Gov’t Procurement
Standards
National Treatment
U.S. Free Trade Agreement Partners
in the Global Economy
Percent of World GDP, 2005
Percent of U.S. Exports, 2005
FTA Countries
7.0%
FTA
Countries
42.4%
Non-FTA
Countries
57.6%
Non-FTA
Countries
93.0%
Notes: World Gross Domestic Product excludes the GDP value for the United States. GDP percentage shares are based on GDP figures on a
Purchasing Power Parity (PPP) basis. Export figures are for U.S. Total Exports. FTA Countries include all countries with Free Trade Agreements
Effective through 2005 (Australia, Canada, Chile, Israel, Jordan, Mexico, and Singapore).
Source: International Monetary Fund, World Economic Outlook Database, September 2005 and the Trade Policy Information System (TPIS),
U.S. Department of Commerce.
Trade and the U.S. Economy
Exports of goods and services are only a small
• U.S. Export Growth with Recent FTA
part of the U.S. economy…
…But still worth almost $900 billion a year in 2005
Exports as a % of GDP in 2005
93%
9%
Trade and the U.S. Economy
A third of our exports go to only two countriesCanada and Mexico
320
91%
Can./Mex.
Total U.S. Exports
In Billions of $
9%
U.S. Econom y
660
Total GDP
U.S. Exports - Rest of world
U.S. Exports to Canada and
Mexico
FTAs = Increased Exports
U.S. Exports to FTA Partners Grow Faster
25.0%
 Promote our
Overall Agenda of
Spreading
Economic and
Political Freedom
20.9%
20.0%
Ann'l Growth Rate U.S.
Goods Exports
FTAs Also:
15.0%
10.0%
10.0%
 Strengthen Support
for our Position in
WTO (Doha) Talks
 Help Resolve
Bilateral Trade
Disputes
5.0%
0.0%
* Jordan, Chile, Singapore and Australia
4 Implemented FTAs since 2001
Rest of World
U.S. Export Growth with Recent
FTA Partners
Chile
 $5.2 billion or 91% (2005)
Singapore
 $20.6 billion or 25% (2005)
Australia
 $15.8 billion or 11% (2005)
Jordan
 $643 million or 90% (2005)
What MAC Does
• Casework – Helping U.S. Firms
Export
• Trade Policy Development
• Analysis of Trade Trends
• Support Trade Negotiations
• Country and Issue Experts for the
Administration