Trade = Development

When I’m out in the community speaking on international trade, I always use my patented line that “international business = international trade,” and I list the examples of industries that folks may not think of when they think of trade: architecture, tourism…and global health and development.

That last example usually gives people pause, because global health and development organizations are usually nonprofits that are focused on helping people, not making money off of them. But think about it. The global health sector alone in our state employs over 3,000 people with $4.1 billion in economic impact, which is all created because of the work that they do in and on behalf of people overseas. If that’s not part of the trade economy, I don’t know what is.

But there’s another side to the relationship that’s not just related to how many jobs there are in this state because of these activities. It’s the fact that trade and global development activities are essential complements to each other.

At the end of the day, business is about markets. If you can get your product into as many markets as possible, then you sell more goods. And increasingly, the “developing world” is synonymous with the “developing market.” Someone just sent me a link to this event, now past, on that exact topic with regard to Africa. I love the quote in the introductory paragraph: “We know that effective programs which fight against poverty and disease, like HIV/AIDS, promote vaccines and agriculture are delivering results, but we also know the key to promoting sustainable economic development on the African continent is to enable Africans to trade with us, increase their incomes and grow their economies.” Or perhaps even more dramatic:

Economic growth, driven by trade and investment, is critical to ending poverty in sub-Saharan Africa. Even small increases in the share of global trade can make a big difference. In 2009, 1% of global trade was worth $155 billion, more than 4 times the development assistance sub-Saharan Africa received that same year… [sub-Saharan Africa’s] share…[is] 3.5%. (emphasis added)

Again, this is not just a question of charity and humanitarian aid. The result of all of that market growth in Africa is that US exports to Africa have increased from $5.9 billion in 2001 to $18.5 billion in 2008 (specifically thanks to AGOA, the African Growth and Opportunity Act). Can we sell a lot of Washington state products to poor people? No. But as these countries develop, hundreds of millions of Africans will be entering the market economy. Five of the 10 fastest growing economies in the world in 2011 were in Africa, with Ghana being number one (the others are Liberia, Angola, Ethopia and Mozambique).

So, in summary, it’s great that we have a large global health and development sector here both because 1) it creates jobs in Washington through “international activity” (which I call international trade) and 2) it helps Washington companies sell to new markets by helping to grow and develop those markets. And conversely, the global health and development sector are key advocates for supportive trade policy because trade contributes more to the economies of the developing world than direct aid, and in a more sustainable way. And that’s what we call a symbiotic relationship!

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