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How Imports Boost Employment

According to today’s populists, “good jobs” in US manufacturing have been “lost” to competition from imports and preferential trading arrangements. But this narrative does not fit the facts: imports actually create jobs, and trade agreements bear little blame for the decline in manufacturing employment.

MEXICO CITY – According to today’s populists, “good jobs” in US manufacturing have been “lost” to competition from imports and preferential trading arrangements. But this narrative does not fit the facts, because imports create jobs, too.

For starters, many jobs are directly connected to trade. Think of the longshoremen who load and unload cargo, the pilots and crews who transport goods by air, the truckers who do so by land, and the wholesale and retail workers who stock and sell those goods.

Second, imports often provide cheaper inputs than what is available in the United States, which enables American manufacturers to compete better with foreign firms in export markets, and to maintain their share of domestic markets. Third, foreign direct investment (FDI) helps American companies acquire some inputs at less cost, while engaging in more research and development and other activities.

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