Executive Summary
As the global pandemic took hold around the world at the beginning of 2020, economic growth, global trade, and national employment collapsed. Declines in demand and economic growth are triggering a stall in trade; the stall in trade is boomeranging back to further slow economic growth. This cycle results in lost American jobs that depend on trade. Restoring trade, for example with policies that support the free and fair exchange of goods and services, can help more Americans get back to work and accelerate a U.S. economic recovery. To spur hiring dependent on trade, it is important to understand first how important trade is to economies and jobs under “normal” circumstances. This report reviews the data of these benefits for U.S. workers before the global pandemic took hold. By looking at this relationship prior to the pandemic, one can better appreciate what has been lost and see the importance of adopting trade-enhancing policies that will help American workers, farmers, and families get back on their feet through the pandemic and beyond.
Based on the latest available data for this assessment (2018) and taking into account both the gains and the losses (i.e., a net estimate), trade supported over 40 million U.S. jobs in 2018. One in every five U.S. jobs was linked to exports and imports of goods and services. Two times as many jobs were supported by trade in 2018 as in 1992 – before the accelerated wave of trade liberalization that began with the implementation of the North American Free Trade Agreement (NAFTA) in 1994 – when our earlier research found that trade supported 14.5 million net jobs, or one in every ten U.S. jobs.
• U.S. trade – both exports and imports – has grown over the past two decades, caused in part by trade liberalizing international agreements as well as increasing demand, purchasing power, and growth outside the U.S. This led to the growth of the number of U.S. jobs tied to trade. Indeed, trade-dependent U.S. jobs grew four times as fast as U.S. jobs generally.
• Every U.S. state realized net employment gains directly attributable to trade in 2018. • Trade had a positive net impact on U.S. jobs in both the services and manufacturing sectors.
• U.S. trade with our North American partners, as well as with Europe, Japan, Korea, China, and India, among others, accounted for important shares of this trade related employment. In 2018, trade with Canada supported, on net, 7.8 million jobs; Mexico, 5.0 million jobs; European Union (27), 6.2 million jobs; 3 China, 7.7 million jobs; Japan, 2.0 million jobs; and Korea, the UK and India, each over 1 million jobs.
In 2018, tens of millions of American jobs and U.S. economic growth depended on trade. Today, as the United States faces dual public health and economic crises, trade can be a critical driver of job restoration and economic recovery
Trade_and_American_Jobs_2020Laura M. Baughman is President of Trade Partnership Worldwide, LLC (TPW, www.tradepartnership.com).
Dr. Joseph Francois is Managing Director of Trade Partnership Worldwide, LLC, and Professor of Economics, University of Bern, Department of Economics and Managing Director, World Trade Institute.
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