Trade and investment are crucial to Virginia’s and America’s economic recovery, job creation, and future growth. This is because more than 96% of the world’s population and 75% of its purchasing power live outside the United States. In 2020, the worldwide spread of the COVID-19 pandemic caused severe problems in public health and the economy. For Virginia to recover, commerce must be restored, and trade-dependent jobs must be supported if the state faces either of these difficulties.
Small & Large Employers Collaborate for Export Success
Corporations of all sizes work together to expand exports. Thousands of U.S. small and medium-sized enterprises (SMEs) sell products and services to U.S. exporters, thereby expanding their own export markets. More than 40% of U.S. exports are generated by small and medium-sized enterprises (SMEs) through indirect and direct export activity. Virginia exports are the number
- One in furniture-related products ($44 million)
- Three in crowns, closures, and seals ($67 million)
- Four in petroleum and coal gases ($1.1 billion)
- Six in fabrics ($382 million)
With regard to agricultural exports, Virginia is in the top 25 states in the United States. It ranks sixth in the export of aquaculture, eighth in the export of various crops, thirteenth in the export of cattle, and nineteenth in the export of nuts and fruits. They are one of the top 10 exporting states in 15 different industries. One of Virginia’s largest rising export sectors is medical supplies and equipment, which have increased by 10% since 2009. The total value of 2018 exports of these goods was $334 million.
Foreign Investment Sparks Job Creation
The incorporation of foreign-owned businesses aids in the expansion of the American economy and the creation of new jobs. Around $60 billion was spent on research and development in 2017, contributing to foreign-owned companies’ total contribution of nearly $1 trillion to the U.S. GDP in 2017.
In Virginia, foreign-owned corporations spend millions of dollars annually on new or expanded facilities, making them significant consumers for local businesses. In 2017, over 190,000 Virginians were employed by the subsidiaries of foreign-owned companies. The top five countries of origin for these subsidiaries were the United Kingdom (35,800), the Netherlands (31,600), Germany (21,000), Canada (15,700), and France (15,300).
Hidden Benefits of Imports for Virginia’s Families & Firms
There are several ways in which imports assist businesses and households in Virginia. Families in Virginia benefit from lower pricing and more options because of the importation of consumer goods. Virginia’s manufacturing sector relies on imports to stay competitive in both domestic and global markets, while many of the components and design services exported from the state are re-imported.
To effectively face the difficulties of COVID-19, trade policy should guarantee that American households and companies continue to have access to the domestic and foreign inputs, supplies, and services they require at affordable rates. Consumer products made up 39% of Virginia’s total imports in 2018. As a result of trade and investment liberalization policies, a standard Virginia family of four saves over $10,000 per year. This is due to lower costs and greater specialization in imported consumer goods. It raises more funds for locally supplied goods and services like housing, education, and healthcare.
Virginia’s exports and imports are connected through global value chains. There were 7,172 importers in Virginia in 2018, bringing in items from 176 different countries. In 2018, raw materials, components, and parts comprised 61% of Virginia’s imports. Over eighty-seven percent of importers had fewer than twenty workers, and only three percent had more than five hundred.
Trade Goes Both Ways: Virginia’s Employment Boost
Future economic development and job creation in the United States depend on open markets abroad. This is because more than 96% of the world’s population and 75% of the world’s purchasing power are located outside of the United States. All United States citizens should work towards creating and maintaining high-quality employment opportunities here at home.
Beginning in 2020, the global pandemic severely slowed trade, halted economic growth, and eliminated millions of American jobs, including many in Virginia. Trade liberalization policies can speed Virginia’s economic recovery by creating new employment possibilities.
There are more jobs in Virginia because of trade. Export increases benefit the economy by giving Virginia’s manufacturers, service providers, and farmers more opportunities to earn income. Imports maintain employment and keep prices low, benefiting Virginia’s economy by supporting local firms and providing actual savings to residents. In Virginia, exports and imports account for more than 1 in 5 jobs.
From 1992 to 2018, trade-related jobs in Virginia increased by a factor of four compared to the state’s overall job market. The average wage for a position in an export-reliant industry is 16% higher than for a job in an export-light industry. The rate at which U.S. factories that export add workers is between 2% and 4% higher than those at which factories that don’t export workers.
Jobs facilitated by international trade are not limited to the export and import sectors. Employees benefit from increased pay, and businesses and consumers save money because of cheaper expenses from more trade. Increased employment in industries like the arts, academia, and the building trades are all beneficiaries of this spending pattern in the United States.
Virginia’s Key to Job Creation & Sustainability
More than one-fifth, 1,107,900 employment in Virginia was sustained in 2018 by exports and imports related to international commerce. These trade-related jobs are located all over Virginia, in large and small businesses, farms, factories, and even at the headquarters of Virginia’s globally engaged firms, and they grew 4 times faster from 1992 to 2018.
Job losses in the trade sector were incurred in Virginia due to the pandemic, but a recovery in commerce will help restore those positions. There are 7,274 exporters in Virginia, 85 percent of which are small and medium-sized businesses with fewer than 500 employees. Virginia’s exports bring in billions of dollars yearly from major markets like Canada, the United Kingdom, and China and are purchased by customers in nearly 212 countries and territories.
Since 2009, Virginia’s exports of goods have grown by about 15% faster than the state’s GDP. Policy initiatives that restore international trade and commerce for Virginia’s companies, farmers, and workers are a key component of any successful economic and employment revival in the state. Business owners and families in the Commonwealth of Virginia benefit from imports because they reduce costs and expand available options.
Trade agreements lower the price of products by removing costly barriers to trade, which helps Virginia businesses remain profitable in international markets and allows families to stretch their incomes further. Virginia’s exports to FTA countries have increased rapidly. Virginia shipped $6.7 billion worth of goods to FTA countries in 2018, an increase of 41% from 2009.
Trade and investment play a significant role in Virginia’s and America’s economic recovery, job creation, and future growth. By expanding export markets through collaboration between small and large businesses, attracting foreign investment, and benefitting from imports, Virginia has become a hub for international trade. Such trade policies can boost employment opportunities. For further updates by check out the Trade Finance Advice (https://tradefinanceadvice.com/ ) website to gain further insight into Virginia’s trade and investment opportunities.