As the world continues to grow in innovation and technology, it continues to shrink in scale. What would be accomplished in weeks or even months a couple of decades ago can sometimes be achieved in a matter of hours. Trade is no exception to this.
Due to innovation in the transportation industry, it is becoming easier and easier for states to benefit from producing and consuming goods from across the globe. Mississippi would do well to continue this trend as it engages in issues of international relevance.
Mississippi has historically benefitted significantly from international trade and investments. For example, in 2013, Mississippi exported $13.2 billion in goods and $2.2 billion in services across 193 countries. As a direct result of this growth, the Mississippi trade sector saw a 154 percent increase in jobs (from 8.6 percent to 21.8 percent). One of the essential elements for this growth came from the existence of free trade agreements which promoted an increase in growth in trade by 469 percent in just ten years (from 2003 to 2013).
Today, while trade is still part of the economy, Mississippi’s export value has slightly dropped. While explaining the reasons behind this decrease are beyond the scope of this article, Mississippi can certainly do more in promoting its engagement in international trade. Today, it ranks 30th in the United States in exports and 28th in the United States in imports.
The Mississippi legislature should keep in mind several key exports that play a role in Mississippi’s international trade scheme: oil & mineral fuels, precision instruments, motor vehicles & parts, industrial machinery, and electrical machinery. These five goods total approximately $8 billion in exported capital and creates and sustains vital parts of the economy.
One way this can be achieved is by promoting Mississippi’s goods across the globe by educating businesses on how to engage in international trade. This can be a daunting task, especially in a small to medium business context. However, the Mississippi Department of Agriculture and Commerce has found success in this area as it has brought $16.7 billion into the state economy by providing support for exporters engaging in international trade. Agriculture is one of the state’s top industries, but imagine if that same engagement occurred on every other major export in the state. Economic growth would certainly be in the future.
Another area that can promote international trade growth is simply decreasing regulation and trade barriers. As mentioned previously, the existence of free trade agreements, minimizing or eliminating the existence of such barriers, played a substantial role in promoting significant growth.
International trade agreements are a little more complicated than a simple “no regulation” principle (it should often operate on a standard of mutual advantage as well). Yet, the idea still stands that governments should encourage companies to engage in trade without penalizing them at same time through high tariffs and regulatory duties.
The greatest element of these free trade agreements is that they encourage competition and innovation -the very things that have placed America in such a strong international trade position to begin with. Mississippi should proactively seek to engage in more international trade and replicate the success the state has seen in the past.