The Benefits of International Trade
Learn more about how trade benefits the U.S.
America cannot have a growing economy or lift the wages and incomes of our citizensunless we continue to reach beyond our borders and sell products, produce, and services to the 95% of the world's population that lives outside the United States.
Exports support millions of American jobs. More than 50 million Americans work for companies that engage in international trade, according to the U.S. Department of the Treasury.
Trade is critical to the success of many sectors of the U.S. economy. Manufacturing is the sector that exports the most, with more than $1 trillion worth of exports in 2010. The White House reports that one in three manufacturing jobs depends on exports. Just as manufacturing is leading the U.S. economic recovery, exports are powering the resurgence in the U.S. manufacturing sector.
The strong export performance of U.S. manufacturers was one factor allowing them boost their output by 81% between 1988 and 2008, according to the U.S. Department of Commerce. Major productivity gains relating to increased use of automation and information technologies have helped U.S. manufacturers retain and in many areas enhance their global competitiveness in recent years.
In fact, the United States remains the world's largest manufacturer. U.S. factories account for about one-fifth of the world's manufacturing value added — or 50% more than China, the second largest manufacturer — according to the UN Industrial Development Organization. The U.S. share of global manufacturing has held roughly steady for nearly four decades.
U.S. exports of services are also booming, surpassing $500 billion in 2010. The United States achieved a trade surplus in services of more than $100 million, according to the U.S. Department of Commerce. The United States is by far the world's largest exporter of services, and America's globally competitive service industries — which range from insurance and retail to telecommunications and express delivery — benefit immensely from opportunities abroad.
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 broke the $100 billion mark for the first time in 2008 and set new records in 2010.
Amid a renewed focus on boosting U.S. exports, it is important to bear in mind that imports benefit Americans as well. They bring lower prices for American families as they try to stretch their budgets. They expand choices and competition in the marketplace. Imports give us access to products that would not otherwise be available — such as fresh fruit in the winter. According to the Office of the U.S. Trade Representative, tariff reductions on imports brought about by trade agreements in the 1990s increased the typical American family's purchasing power by $1,300 to $2,000 per year.
Indeed, tremendous benefits have flowed from U.S. FTAs, which cover 17 countries. These countries represent approximately 7% of global GDP outside the United States, and yet last year these markets purchased more than 41% of U.S. exports, according to the U.S. Department of Commerce. In other words, U.S. FTAs do an outstanding job making big markets even out of small economies.
Also overlooked in the U.S. trade debate is the fact that more than 97% of the 275,000 U.S. companies that export are 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.