US High Tech Trade Tops $1 Trillion: White Paper
Los Angeles, CA – The trade in US-produced technology goods and services currently tops more than $1 trillion, according to a new industry white paper published by the TechAmerica Foundation (TAF).
Tech imports totaled $351 billion compared to $205 billion in exports in 2013, while tech service exports exceeded imports $303 billion to $161 billion in imports in 2011, the most recent year complete data are available, the group said.
Many of the goods imported into the US “are part of a global supply chain, where US multinational companies create and design tech products in the US and produce the finalized product overseas,” according to the paper.
In these cases, “the bulk of the profit from the products is accrued to the US firm. Often the importation of a technology good represents an ‘intra-company’ transfer as US firms brings their products into the United States for sale from their overseas production facilities,” it added.
The US currently has a tech trade surplus of nearly $5 billion when both tech goods and services are combined, with $501 billion in exports compared with $496 billion in imports. Goods exports and imports have been fairly flat for the last three years after rebounding as a result of the 2009 global market crash.
“The largest destinations for tech goods go to our closest trading partners, Mexico and Canada, which is a testament to the importance of free trade agreements to the American technology industry,” said Burak Guvensoylar, manager of government affairs at the TAF.
The US has free trade agreements with 20 countries, and is looking to create two new large scale agreements – the proposed Trans-Pacific Partnership (TPP) and the Transatlantic Trade & Investment Partnership (TTIP).
These new agreements, in addition to the Trade in Services Agreement, and the expansion of the Information Technology Agreement, could expand US free trade markets to 53 countries, “creating significant opportunities for US technology companies” by “increasing market access, eliminating tariffs, strengthening intellectual property rights, and ensuring the movement of data across the globe,” said Guvensoylar.
Telecommunications, Texas Lead the Way
According to the white paper , the US telecommunications sector, in particular, feeds the rate of tech goods and services exports, noted by the 9 percent increase in telecommunications services from 2011-2012 and the 6.6 percent increase in communications goods from 2012-2013.
Other key tech services include systems design, software, research and development, testing, and Internet services such as cloud computing and mobility strategy, it said.
From a state-by-state perspective, Texas continued to build on its status as the leading state by tech goods exports, growing from $45.1 billion in 2012 to $48.2 billion in 2013, a 6.7 percent growth rate, compared to a national growth rate of 0.8 percent.
California is a close second to Texas in revenue of exports, but the state saw a 5.1 percent decline in year-to-year exports. Texas and California combine to account for 44 percent of the country’s overall volume of tech good exports.
The TechAmerica Foundation is a non-profit technology industry research group headquartered in Washington, DC.