2nd Quarter 2010


(Click on graph for larger view.)


tennessee's balance of trade




biggest losers: tennessee's biggest trade imbalances

 

Industries Doubling Their Exports over Each 5-Year Period (total = 257*)

 
Number
1996-2001
76
1997-2002
66
1998-2003
67
1999-2004 89
2000-2005 87
2001-2006
107
2002-2007 138
2003-2008 137
2004-2009 99
*4-digit HS code

Expanding Exports I

Can Tennessee Double Its Exports?

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As is often the case, we can spot more hospitable terrain if we break exports out into regions and industries. Perhaps targeting the right regions, and the right industries, is the key to doubling exports? In a number of regions, Tennessee has doubled foreign shipments over at least one five-year period in the past decade. In the case of China, doubling has almost been the rule. In six out of the eight most recent five-year stretches, Tennessee's shipments to China have more than doubled. (The similar statistics for the BRIC—Brazil, Russia, India and China—are mostly due to China). The Middle East has the next best record. The geographical experience suggests that doubled exports are going to have to be built upon emerging markets, and especially China.

The best news for plans to double exports is that, in fact, most specific industries have accomplished this at least once over the past decade. Of the 257 state export industries (measured at the four-digit harmonized system code), only 45 never doubled exports over any five-year period. Over some periods (2002-2007, 2003-2008) more than half of all state industries doubled their exports. With the single exception of the auto-parts industry, the state's major export industries have all doubled their exports repeatedly. The trick is for them to do this at the same time! So far this has not happened. Such a common movement would be unlikely because these exports go to different markets. It is more realistic to expect doubled exports to be built upon several star sectors with tremendous growth. However, these figures also show that these industries would certainly have to be bolstered by solid growth across a large swath of Tennessee's manufacturing economy.

Doubling exports is a very worthy goal. Its economic benefits are obvious. For Tennessee, this goal is not beyond imagination; there is certainly evidence for making the case that it can be done. But history suggests that it will be difficult. Effective but underexploited mechanisms to boost exports are going to have to be found and supported. As yet, we don't have much of a feel for what the Obama administration is actually going to do, but it's going to have to be more than exhortation. That said, this is a case where the effort itself is going to be worth it, even if the goal isn't met. Any additional increase in exports is going to significantly help Tennessee workers and this state's economy. It's not a case of double or nothing.

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