4th Quarter 2010

(Click on graph for larger view.)

engine of growth: auto sector in Middle East Exports

imports from Middle East countries

Middle East imports



Significant Links to the Middle East? [continued]

Cars basically go to the Gulf (though there are some sales in Lebanon and Jordan). Few go to North Africa. Trade with the latter region, though, is also predominately packed into one sector, that of apparel. Cotton, yarns and fibers, and apparel products constitute $31 million of Tennessee's $75 million in 2010 exports to the North African countries. The rest of the state's trade is concentrated in a handful of other products: medical instruments, medicaments, and telephone set parts. Exceptionally, Iraq has become a major destination for the state's exports of chicken meat.

The countries currently most affected by political events are generally among Tennessee's smaller markets in the region. There are essentially no exports to Libya or Yemen ($2.5 and $0.5 million, respectively, last year), while the Tunisian market is only about $8 million. Sales to Bahrain, almost all cars, are larger ($41 million), as are sales to Egypt ($46 million), but both are still rather modest figures.

What of Imports?

Tennessee, as it turns out, directly imports very little from the Middle East. In 2010, less than a quarter of 1% of the state's imports came from the region. And that percentage has been falling. Generally the state is not the destination of Middle East oil or gas imports (though there are occasional exceptions, such as a sizable purchase of Algerian natural gas in 2008). Since the region does not feature suppliers or intermediary manufacturers for much of anything produced in Tennessee, it simply is not a factor in the state's global purchases. Apparels are the largest import from the region and make up about 40% of its total imports to Tennessee. The only other product of much importance is natural calcium, all of which comes from Morocco. In 2010, some $30 million of calcium was shipped into the state.

This survey indicates that economic connections between Tennessee and the Arab Middle East remain rather thin. One exported good (autos) is the difference between a small but growing market and virtually no market at all. Imports are all but nonexistent. Of course we are bracketing oil, which will obviously have a major impact on the state even though it is not directly shipped here. But absent that link, the trade picture suggests that while the Arab Middle East may be a promising market in the future, especially if reformist, democratic regimes are able to take power, the region today is of little economic significance to Tennessee beyond that oil. For this state, the economic repercussions of the events that are unfolding in the region appear limited to that one all-important product.

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