By: Jeff Quyle, President and CEO
Earlier this year, the 11 countries who continued to negotiate the Trans-Pacific Partnership announced plans to move on without the United States. Those countries’ government and business leaders concluded that increased trade among their nations would promote positive economic growth among the nations that border the Pacific Ocean.
That part of the globe is one of the fastest growing regions on the planet and a major source of new business investment into communities in the United States. It is also a group of nations that buy a great deal of valuable goods from companies in the United States, including many here in Indiana.
According to the latest data, more than 8,000 Indiana firms exported nearly $47 billion of goods and services to customers around the world—making Indiana the 15th largest exporting state in the nation. Asian countries account for two out of our four largest export markets, and Japan sits alone as the top foreign investor in Indiana.
Currently, trade supports more than 800,000 jobs in Indiana, about one in four, and Indiana’s dependence on global trade continues to grow. Since 2009, Indiana goods exports—led by our world-class pharmaceutical, agriculture, and manufacturing industries—have spiked by 54 percent.
At the same time, more and more foreign firms are choosing to do business in Indiana. Since 2010, global businesses have invested here and grown their Hoosier-employment by more than 40 percent, reaching nearly 200,000 jobs, most of which are in the manufacturing sector. The average salary at a foreign company invested in Indiana is $80,000.
That is why Radius Indiana is heading to Japan for our first foreign trade mission this fall to highlight investment opportunities across the eight counties we represent. It is an exciting development made possible by global trade and the trade agreements that regulate it.
While complex, trade agreements serve a dual purpose—keeping our exports competitive and also making America an attractive destination for investment. Toyota’s Camry plant is the perfect example of this phenomenon—the carmaker built a factory in Indiana to manufacture cars for export around the globe.
However, America’s absence from the new standard for the Asia-pacific region risks disadvantaging our companies, goods, and workers by exposing products to higher tariffs than those produced elsewhere. Over time, increased costs could force companies to realign supply chains and reallocate resources to countries that qualify for the preferential treatment provided by these deals.
In short—jobs will move elsewhere to make products in places that can do so more efficiently, making Indiana and Hoosier-made products less competitive and undermining Radius’ efforts to attract investment and jobs.
If America is going to remain a competitive destination for global investment, we need to ensure that American-made products and know-how are on a level playing field.
To this end, the United States should continue to seek high-standard trade agreements that protect our workers and boast strong, enforceable rules. It’s good to see our leaders in Washington acknowledging this fact. In February, Senator Young joined with two dozen of his colleagues to urge President Trump to think about America’s involvement in the Trans-Pacific Partnership. America should reevaluate the deal and consider reentering it—on our terms.
Developments from recent weeks have made it clear that if Indiana wants to continue to attract investment—and the associated jobs—America must remain engaged on international trade.
Radius Indiana is proud to be working proactively at seeking foreign direct investment for our communities. We believe that diversifying the investment and the economy here will make our communities stronger and more resilient through future economic cycles.