Maritime Trade Contributes to Every State’s Economy

Here is a link to my working paper on international maritime trade through ports and the Economy.

There always remains a question of the value of international trade, especially through maritime ports, to the United States. Contemplating this question led to a recent ITTS working paper on ports and the economy. The paper focuses on the national and state benefits that derive from international trade through U.S. ports and the relationship of ports to inland markets. Tables reflecting each state’s top import and export commodities and international trading partners by vessel movement for 2012 are also included.

 

Frequently, the discussion on global markets, connectivity, and job growth takes place without the recognition that international trade in goods involves a physical shipment of a product. In 2012, international trade in goods accounted for 24% of the U.S. economy, as food, fuels, minerals, manufactured items, textiles, etc., flowed into and out of the United States. International trade is obviously a critical component of the U.S. economy, not just for coastal states, but for all states. Nationwide, maritime facilities accounted for 46% of trade based on value, making maritime trade the predominant mode for most businesses engaging in international trade, especially outside of the Canadian and Mexican (North American Free Trade Agreement) markets.

 

International traffic through a maritime port accounted for 11% of the nation’s GDP. For states without coastal port facilities, the estimated economic share of maritime trade was lower than the national average. For states in the Mountain West, this ranged from 1% to 4%. For most inland states, international trade through ports accounted for 5% to 10% of their economies. The true contribution may be
higher, since the nature of international shipments and global supply chains may negatively skew the value of maritime trade to these inland states. The role of ports is critical to economies in the southeastern U.S., where maritime trade accounts for over 10 percent of most state economies.

 

International trade will remain a critical, and growing, component of the U.S. economy, as highlighted by the National Export Initiative and the push for more trade agreements. Improving
trade, including trade through the nation’s maritime system and its linkages to inland markets, can provide economic opportunities to U.S. firms. However, as with most infrastructure in the United States, this “highway on-ramp” to global prosperity is in need of attention, as “potholes” can disrupt our transportation system and the economy. The nation’s infrastructure requires constant and secure funding, not only for ports and their associated dredging and infrastructure needs, but also for the corridors that link ports with inland markets.

 

Key Points:
1. Every state in the U.S. depends upon maritime trade.
2. As trade grows, so too does the importance of ports to handle this trade, creating jobs in port areas.
3. The growth in ports also requires strong connections to inland markets to ensure that U.S. goods are competitively priced in world markets. This supports/creates jobs for many different industries and modes throughout the nation, just not in port areas.

Some related links that may help in understanding this issue…

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