World Trade Center Arkansas: Trade strongly supports Arkansas economy

by Kim Souza (ksouza@talkbusiness.net) 354 views 

Arkansas is a small state in terms of land mass and population density. It’s one of the reasons international trade is so important to the state economy.

Total exports of goods for Arkansas increased by nearly 11% during 2017 to $6.3 billion, one of the highest percentage increases in the history of the state, according to the recent Arkansas International Trade Summary released by the World Trade Center Arkansas (WTCA) in Rogers.

Melvin Torres, director of Western Hemisphere trade at the WTCA, said trade across the state supported nearly 350,000 jobs, exporting to 181 countries representing about 26% of the total employed labor force as of June.

With trade barriers in the form of tariffs levied by China and Canada on U.S. goods, as well as the North American Free Trade Agreement (NAFTA) also being re-negotiated, there is still plenty of concern over U.S. trade policy, and ultimately Arkansas trade.

Torres has repeatedly said NAFTA was good for Arkansas and his position on the reboot is still “do no harm.” The WTCA reports trade-related jobs grew six times faster than total employment across the state. The job growth came from large and small companies, farms, factories and the headquarters of Arkansas’ global firms, according to a report from Business Roundtable.

WTCA also states in the report new exporting firms increased employment four times faster than non-exporting firms. Salaries for jobs in exporting companies also pay up to 18% more than similar jobs in non-exporting businesses across the state.

Torres said with tenuous trade issues with Canada, there is rightful concern for Arkansas. Canada has been Arkansas’ largest export market followed by Mexico. Nearly half (46%) of the state’s exports are with countries in the Western Hemisphere. Over one-third of the state’s exports go to NAFTA countries, according to another WTCA report.

Last year, Arkansas exports to Canada and Mexico totaled $2.1 billion in goods. In 2016, the state exported $281 million in services to Mexico and Canada. The WTCA reports 69,000 jobs around the state are supported by trade with Canada, which amounts to roughly $1.3 billion annually. Another 51,000 jobs are supported by direct trade exports to Mexico, which amounts to roughly $851 million annually, according to the WTCA data.

Torres said Arkansas exports nearly twice as many goods as it imports from Canada and Mexico combined. Year-over-year exports to Mexico (goods) grew by nearly 24% from $685 million to $851 million, and have soared over 710% since 1993, the report states.

The Economic Department of Mexico and U.S. Census Bureau report Arkansas exports to Mexico reached a high point in 2017. Arkansas exports increased 2.3 times — 3.5 times faster than exports to any other country depending on the year.

Since 1994, Arkansas agricultural commodity exports to Mexico have increased by 911%. Compared with the rest of the world, the growth rate is 167%. The report said agricultural exports to Mexico are growing 5.46 times more than exports elsewhere.

The four largest markets for agricultural exports from Arkansas are Mexico (27%), Canada (16%), Haiti (10%), Hong Kong (6%) and Guatemala (5%), according to Agriculture & Agri-Food Canada.

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