Importing foreign materials and money into Minnesota helps power the state’s economy in ways that are just as significant as exporting local goods and services to other countries, according to a report this week by a pro-business lobbying group.
The Business Roundtable, a collection of CEOs from some of the nation’s largest companies, estimates that international trade supports more than 750,000 jobs in Minnesota, including at factories that convert foreign-supplied components and raw materials into finished products. In addition, products made in lower-cost countries save the average Minnesotan family of four more than $10,000 a year, the group said.
“Imports lower prices and increase choices for Minnesota companies and families,” the Roundtable’s report said. “Lower raw material and input costs help Minnesota companies stay competitive in global markets, while families can stretch paychecks further.”
Discussions of global trade tend to center on the benefits to American companies of selling their products and services in foreign markets. The concept sits especially well in Minnesota where large global companies such as Cargill, Medtronic and 3M generate a sizable portion of annual revenue from international sales.
“We have the big companies and the diversified economy” that benefits from export-based trade, said Ryan Kanne, director of the U.S. Commercial Service office in Minnesota.
That’s one of the reasons why the Obama administration two years ago chose the Twin Cities region to help launch the National Export Initiative, an ambitious campaign to double U.S. exports in five years.
At the same time, Kanne acknowledges, there is little discussion of the value of imports, mostly because of political sensitivities.
“Importing is a more emotional issue in this country,” he said. “It’s a whole different conversation. But we have to look at international trade holistically.”
For example, the idea of foreign companies buying American firms or infrastructure can often stir a nationalistic backlash, said Mark William Toth, a past president of the Midwest Global Trade Association and owner of Logistics Guy consulting firm. “That’s definitely a touchy subject,” he said.
In addition, companies have attracted bad publicity because of labor problems in countries where their products are made. For example, a recent building collapse in Bangladesh killed more than 1,000 people, many of them low-wage garment workers producing shirts and pants for the world’s largest retailers.
Recently, though, pro-trade organizations have started to counterpunch.
The National Retail Federation (NRF), for example, issued a report that says global trade helps lower prices for American consumers, allowing them to enjoy a better lifestyle.
“Imports are not the boogeyman some Americans believe them to be,” the NRF report said. “They constrain inflation. They encourage manufacturers to constantly improve quality and innovate while providing them with needed inputs at lower prices.”
The Business Roundtable report also jumps into the fray, crediting imports for lowering consumer costs for an array of products. From 2002 to 2012, for example, television prices in Minnesota declined 86.5 percent while personal computer prices dropped nearly 75 percent.
The Business Roundtable also praised international companies that set up shop in Minnesota. Direct investment from foreign groups produces 89,300 jobs in Minnesota, the report said, including workers employed by UBS Financial Services of Switzerland, Siemens Energy of Germany, and Tire Plus Store of Japan.
Importing goods also creates jobs since companies need Minnesota ports and financial and legal services to move foreign products to manufacturers and households.
“What people don’t realize is that components come in from other countries and go into American factories,” Toth said. “When you import something, you substantially transform the product into something you can later export.”