U.S. international trade supports 39 million American jobs, about one of every five. The proportion has doubled since the original North American Free Trade Agreement (NAFTA) was signed in 1992 by Canada, Mexico and the United States.
The two U.S. partners in NAFTA alone support some 12 million American jobs, according to a new study by Trade Partnership Worldwide and issued Monday by the Business Roundtable. Every U.S. state has realized net employment gains directly attributable to trade and international trade has a net positive impact on both U.S. services and manufacturing jobs.
In 2017, according to the study, trade with Canada, America’s largest trading partner, accounted for a net 7.2 million U.S. jobs, while trade with Mexico drove 4.9 million jobs. Trade with the European Union (5.7 million U.S. jobs), China (7.3 million), Japan (1.3 million), South Korea (1.0 million) and the United Kingdom (1.0 million) round out the top seven countries that create the most U.S. jobs.
U.S. exports have risen by an annual average of 5.5% over more than the past two decades and now contribute about 27% of total U.S. gross domestic product. Goods exports account for nearly 70% of the total and services account for the rest.
Among the U.S.-made goods exports the leading categories are aerospace products and parts ($131.2 billion in 2017), oil and gas and petroleum and coal products ($138 billion) and motor vehicles and parts ($53.6 billion). Goods exports totaled $1.55 trillion in 2017 and an estimated $1.67 trillion in 2018.
Top services exports include business, professional and technical services ($197.5 billion in 2017), royalties and license fees ($128.4 billion) and financial services ($109.6 billion). Services exports totaled $797.7 billion in 2017 and rose to an estimated $828.1 billion in 2018.
These totals do not include U.S. weapons and military exports. The United States supplies arms to at least 98 nations and is the largest supplier to 20 of the 40 largest arms importers in the world. In 2017, total U.S. arms exports rang up $12.49 billion in sales. See our report on the 25 leading buyers of U.S. arms over the past decade.
What about jobs? According to the study released this morning, assessing the impact of trade on U.S. jobs should account for “the direct and indirect effects of exports, the direct and indirect effects of imports, and the effects of additional trade-induced spending on U.S. output and consumption and, consequently, on jobs.”
Using that definition, jobs related to U.S. trade supported a net increase of 34.95 million jobs in the services sector and 1.78 million manufacturing jobs in 2017. Trade also supported a net increase of 1.5 million U.S. jobs in agriculture, forestry and fishing. The only sector showing a net decrease was energy (mining and utilities), with a net loss of 547,000 jobs primarily due to continued imports of crude oil and petroleum products.
Looking at America’s seven largest trading partners, here’s how many trade-related jobs each contributed to specific sectors in 2017 expressed as increases since 1992.
Canada
> Total jobs: 7.20 million
> Services: 6.55 million
> Manufacturing: 533,900
> Share of all U.S. jobs: 3.7%
> Share of trade-related U.S. jobs: 18.5%
Mexico
> Total jobs: 487 million
> Services: 4.47 million
> Manufacturing: 75,700
> Share of all U.S. jobs: 2.5%
> Share of trade-related U.S. jobs: 12.5%
China
> Total jobs: 7.33 million
> Services: 6.39 million
> Manufacturing: −530,700
> Share of all U.S. jobs: 3.7%
> Share of trade-related U.S. jobs: 18.8%
Japan
> Total jobs: 1.34 million
> Services: 1.22 million
> Manufacturing: −181,100
> Share of all U.S. jobs: 0.7%
> Share of trade-related U.S. jobs: 3.4%
South Korea
> Total jobs: 1.04 million
> Services: 934,200
> Manufacturing: −48,100
> Share of all U.S. jobs: 0.5%
> Share of trade-related U.S. jobs: 2.7%
European Union (27 countries)
> Total jobs: 5.71 million
> Services: 5.35 million
> Manufacturing: −118,200
> Share of all U.S. jobs: 2.9%
> Share of trade-related U.S. jobs: 14.7%
United Kingdom
> Total jobs: 1.20 million
> Services: 1.09 million
> Manufacturing: 51,500
> Share of all U.S. jobs: 0.6%
> Share of trade-related U.S. jobs: 3.1%
The full report is available at the Business Roundtable website.
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