Arizona businesses exported $21.1 billion worth of goods in 2014, and the vast majority came from small business like JWB Manufacturing, a machine shop in Tempe. Photo by Jamie Killian.
Arizona businesses raked in $21.1 billion from exports last year – money that supported 93,354 jobs in the state, according to a report released Thursday by the Obama administration.
The report from the U.S. Trade Representative and the Department of Commerce said the value of Arizona exports has risen 57 percent since 2004. Last year was also the fifth year in a row with record high exports nationally, U.S. Trade Representative Michael Froman said Thursday.
“From coast to coast, exports have played a critical role in growing our economy,” Commerce Secretary Penny Pritzker said during a conference call with Froman to release the report.
Froman said that foreign exports create the kind of jobs Americans want – the kind that come along with “solid paychecks and a sense of purpose.”
“This is not only about creating more jobs, it’s about creating good jobs,” he said.
The report said more than 304,000 U.S. businesses are exporters, with nearly 98 percent of those being small- or medium-sized business with fewer than 500 employees.
One of those companies is Tempe-based JWB Manufacturing, a small machine shop with just “four and a half” employees, in the words of President and CEO Jeff Barth. His company is one of only three aftermarket producers of wire cutting and stripping blades in the world.
Jeff Barth, owner of JWB Manufacturing in Tempe, said exports are “very important” to his company’s profitability. The company, which makes wire cutting and stripping blades, does business with 13 countries, from Australia to Morocco to the EU. Photo Credit by Jamie Killian.
Barth said exports are “very important” to his company’s profitability, making up 25 to 55 percent of his business, depending on the month.
JWB Manufacturing does business with 13 countries including Mexico, Canada, Australia, Morocco, Brazil and countries throughout the EU.
“I find that international business is more profitable,” Barth said.
But he said it could be even more profitable with the establishment of free-trade agreements that would let him expand to other emerging markets.
“As we open up the markets, there’s a lot of other places in the Pacific that I’m sure there will be opportunities that really are prohibitive right now,” Barth said.
Pritzker and Froman agreed, taking the opportunity of the report’s release to push for the Trans-Pacific Partnership, a proposed deal that would ease trade barriers between the U.S. and 11 other countries, which make up 40 percent of the world.s economy.
This agreement will “open up markets with billions of potential customers,” Froman said.
Last year, 61 percent of Arizona’s exports went to countries in the Trans-Pacific Partnership region, the trade report said.
But a deal won’t be reached unless Congress acts quickly to pass trade promotion authority legislation, Froman said. That legislation would let the U.S. “sit down with its trading partners and speak with one voice and make sure that we pave the best possible deal for the United States.”
Not everyone agrees that the Trans-Pacific Partnership is good idea.
The Congressional Progressive Caucus, which is co-chaired by Rep. Raul Grijalva, D-Tucson, has repeatedly raised concerns about the agreement. It released a statement last month after a portion of the Trans-Pacific Partnership was leaked that included language that the caucus said would “allow companies to sue foreign nations whose new policies hurt those companies’ interests.”
“The United States is leading a global race to the bottom that isn’t good for families anywhere,” Grijalva and Rep. Keith Ellison, D-Minn., said in the statement. “Good trade deals should not expose our consumer protections to legal attacks by foreign corporations.”
But Sen. John McCain, R-Ariz., is on record saying the Trans-Pacific Partnership would benefit Arizona workers and businesses.
“In today’s era of globalization, we limit our potential by trying to wall ourselves off to foreign competition,” McCain wrote in an editorial in the Yuma Sun. “Competition makes us stronger and we must continue to compete or we will be left behind.”
Pritzker said the Senate is expected to introduce the trade promotion authority legislation next week, and her department is “anxiously awaiting to see the language.”
“Through these new trade agreements, I’m confident that we keep America ripe for more growth, ready for more progress and open for more business,” she said.
An infographic of Arizona exports by the numbers. Created by Yihyun Jeong.