Based on her Wall Street Journal article yesterday, it’s hard to know who understands less about Ohio’s economy and its critical stake in smarter U.S. trade policies – reporter Siobhan Hughes or the state’s Republican Senator, Rob Portman.
According to Portman, Ohio’s experience still validates “the virtues of trade” provided that existing agreements are enforced more effectively. And he insists that “the U.S. can’t give up on new export opportunities while it tries to do a better job ensuring compliance with trade deals.” Hence he hopes that the bill granting fast track negotiating authority for President Obama will contain “tough currency provisions.” (All this phrasing is Hughes’.)
And according to Hughes, “the complex politics of Ohio” (which presumably reflect an equally complex economy) make Portman’s position reasonable. As she dutifully reports, the Senator’s “prime example is soybeans, which as of 2013 were Ohio’s fifth-biggest export, generating some $1.2 billion, after accounting for no share of the export market just three years earlier, according to the Census Bureau.”
But here’s what neither Hughes nor Portman apparently realize: The manufacturing losses suffered by the state under current trade policies are not even remotely offset by “big gains in agricultural exports, which could be enhanced by new trade deals.” Nor can they possibly be in the foreseeable future. And there’s no need to look at the indicator Hughes seems to favor – manufacturing employment – whose relationship to trade is controversial because it is also powerfully affected by developments in areas like productivity. All you need to do is look at the makeup of the state’s economy and trade flows.
The Commerce Department’s last detailed data is for 2012, but it shows that, after inflation, “farms” like those that cultivate soybeans represented 0.48 percent of Ohio’s output. Manufacturing represented 17.31 percent. Ahem.
It’s true that Ohio’s tiny agriculture sector has been a trade winner lately. According to the official data – also from the Commerce Department, between 2009, when the current national recovery began, through last year, it’s increased its exports by nearly 350 percent, to just under $2 billion. Even better its trade surplus skyrocketed by more than 1,400 percent – to $1.745 billion. So agriculture, as per Portman and Hughes, has contributed on net to Ohio’s growth.
But here’s what’s happened to Ohio manufacturing during this period. Its exports increased by more than 50 percent – to $48.57 billion. That’s more than 24 times Ohio agricultural exports. Yet its imports surged by just under 68 percent – to nearly $61 billion. That’s about 35 times more than Ohio farm exports.
As a result, the state manufacturing trade deficit more than tripled, to $12.29 billion. In other words, this shortfall’s increase of $8.37 billion – which subtracts from state growth – was more than five times greater than the $1.63 billion rise of the agricultural trade surplus. Therefore, the recent increase of Ohio’s manufacturing trade deficit has slowed the state’s growth by more than five times more than the increase in its manufacturing surplus. This produces a “complex” economic choice?
And here’s the kicker: Looking up these dispositive statistics – which can be found here, here, and here – and doing the math took about ten minutes. But it seems like that was too difficult for a Big Media reporter assigned to write about trade and Ohio’s economy, and for a state political leader charged with ensuring that trade policy benefits Ohio voters.