NCPA - National Center for Policy Analysis

Looking at Florida as an Example of Free Trade

February 9, 2015

With a new Congress comes the possibility of new free trade deals. Florida provides a particularly good example of the benefits of free trade, say Bryan Riley of the Heritage Foundation. For example, in the state of Florida:

  • More than 275,000 jobs are supported by exports, including 18.3 percent of Florida's manufacturing jobs.
  • Florida exported $3.6 billion in agricultural products in 2010 (almost 40 percent of the state's agricultural output). And exports of goods have increased 10.7 percent since 2010, an increase of $5.9 billion.
  • One-third of Florida's exports go to countries with whom the United States has a free trade agreement. These agreements have increased exports - for example, Florida's exports to Chile are up a whopping 320 percent since the U.S.-Chile free trade agreement of 2004.

Free trade is often criticized for causing job losses, but Riley says the notion is false -- while free trade may lead to a shift in the type of jobs that are available, it doesn't destroy jobs. Riley notes that since NAFTA took effect in 1994, Florida has added 1.6 million private-sector jobs. Additionally, Florida's manufacturing output is higher today than in 1994.

Unfortunately, Riley cites two major policies that are preventing the full benefits of free trade: the Jones Act and the U.S. Sugar Program.  The Jones Act is a 1920 law that dramatically increases domestic shipping costs by requiring ships transporting goods between American ports to be American-built and largely American-owned and crewed. The mandate raises prices on everything that relies upon cargo transportation, and Riley notes that Florida drivers could be paying 20 to 30 cents less for gasoline if foreign ships were allowed to transport gasoline.

The U.S. sugar program imposes quotas on the amount of foreign sugar that can be imported -- this protectionist policy aimed at helping the American sugar industry only raises the price of sugar for American consumers. In fact, Americans paid 85 percent more for sugar from 2000 to 2014 than did consumers in other nations.

Source: Bryan Riley, "Trade and Prosperity in the States: The Case of Florida," Heritage Foundation, February 4, 2015.

 

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