May
10

Florida as an Example of Free Trade

I confess, I am still getting caught up with “things” since returning from my recent vacation and am not able to complete my planned article for tonight. (For one thing, it’s Mother’s Day, and I have to pick up my mother at the airport.) So, instead, I would like to share a few facts about free trade in Florida from an article I have been holding onto (h/t NCPA).

Free trade often gets a bad rap (rep?) for causing job losses, but what really happens is a shift in the type of jobs that are available. In fact, since the North American Free Trade Agreement (NAFTA) came into force at the beginning of 1994, a couple of interesting things have happened in Florida. First, 1.6 million private-sector jobs have been added. Second, the state’s manufacturing output has increased.

Cargo ship docked at Jaxport (Jacksonville, FL)

Here are a few more facts:

More than 275,000 jobs are supported by exports, including 18.3% of Florida’s manufacturing jobs.
In 2010, Florida exported $3.6 billion in agricultural products — almost 40% of its agricultural output.
Since 2010, exports of goods overall have increased 10.7%, to the tune of $5.9 billion.
One-third of Florida’s exports go to countries with whom the U.S. has a free trade agreement. These agreements have increased exports — e.g., Florida’s exports to Chile are up 320% since the U.S.-Chile free trade agreement of 2004.

These encouraging facts are noted by Bryan Riley, a Senior Analyst in Trade Policy for The Heritage Foundation, in his article, “Trade and Prosperity in the States: The Case of Florida“. Riley believes that free trade benefits could be even better for Florida if not for two federal policies: the U.S. Sugar Program and the Jones Act of 1920.

The former is a protectionist measure that requires quotas on foreign sugar imports. While intended to help the American sugar industry, all it really does is raise the price of sugar for Americans. (Yup. From 2000 to 2014, we paid 85% more than consumers in other nations.) The Jones Act mandates that only American-made (and predominantly American-owned and -crewed) ships can transport goods between American ports. This keeps domestic shipping costs “dramatically” higher than necessary. If foreign ships were allowed to transport gasoline to American ports, Riley says Floridians could be paying 20-30 cents less per gallon.

Still, despite these misguided federal policies, Florida is benefiting immensely from free trade agreements. Riley’s concluding remarks follow:

“Florida is positioned to prosper from continued growth in trade with Latin America and the rest of the world as trade barriers are reduced. Physical barriers, such as limits imposed by canals and ports that cannot handle modern cargo ships, and government barriers, such as limits on shipping and the use of imported inputs, are falling around the globe. Florida’s congressional delegation should take the lead in making sure U.S. government impediments to trade and prosperity fall as well.”