Georgia could benefit from $5.7 billion of new foreign investment in the state and 43,830 related jobs if trade agreements with countries across both the Atlanta and Pacific oceans are passed by Congress, a Washington think tank announced Monday.
The Organization for International Investment held a conference call announcing the results of its study with Ernst & Young Global Ltd, the multinational professional services firm detailing the results for all states should the Trans-Atlantic Trade and Investment Partnership (T-TIP) and Trans-Pacific Partnership (TPP) agreements take effect.
The study includes FDI and job figures for each of the 50 states. Minnesota, New Mexico, Maryland, Vermont and Washington are slated to benefit most from new jobs; California, New York, Texas, Pennsylvania and Illinois are to benefit most from new foreign direct investment (FDI).
Nancy McLemon, president and CEO of the organization, called the study “the first-of-its kind,” which she said shows that the U.S. would receive an estimated increase of $173 billion in global investment should the two trade agreements be fully implemented.
Should the agreements not be passed, the U.S. could continue to slide in its percentage of the world’s FDI. In 2000, America received 37 percent of the world’s FDI, but last year only 19 percent.
According to the study preliminary figures for 2014 show the lowest level of FDI in the U.S. in more than a decade. More FDI flowed into China in 2014 than any other economy, it added, citing a report of the United Nations’ Conference on Trade and Development, pushing the U.S. to the third position, behind Hong Kong.
Jake Jones, executive director for external affairs and public policy at Daimler AG, said on the conference call that the company supported both trade deals but would benefit most from T-TIP.
U.S. consumers, he said, would enjoy a 10 percent cost reduction in the price of its vehicles if the company wasn’t forced to abide by both U.S. and European regulations requiring different standards.
Daimler manufactures Mercedes-Benz cars as well as Daimler trucks and vans and owns a financial services arm. The Mercedes’ Americas headquarters is in the process of moving from New Jersey to Atlanta.
Mr. Jones cited a competitor, which he declined to name, that has set up a manufacturing facility in Mexico to benefit from reduced tariffs in comparison to those that the company would endure in the U.S.
According to J. Muir Macpherson, a senior economist at Ernst & Young’s Quest group, underscored Mr. Jones’ assertion that improving regulatory cooperation would make global value chains more effective and help reduce costs.
In addition he said that such cooperation would lead to greater economic growth, which in turn would result in more FDI. Should both agreements as they stand today go into effect , the report claims that the U.S. would received an increase of $173 billion in global investment.
Although he alluded to the secrecy surrounding the negotiations and the possibility of amendments, he said that the available information indicates inbound companies to the U.S. would increase their direct employment of U.S. workers by 400,000 in response to T-TIP and TPP.
The report also claims that an additional 1,030,000 workers would be employed by U.S. suppliers to these insourcing companies. Global investment in the U.S. already exceeds $2.6 trillion, of which $2.3 trillion is attributable to member countries of T-TIP and TPP.
The ninth round of TTIP negotiations between the European Union and the United States are taking place in New York this week. Groups opposed to the agreements also have issued statements with the opening of the negotiations including the International Brotherhood of Electrical Workers.
For the entire Organization for International Invesment report, click here.
On Tuesday, April 21, the National Retail Federaltion released its state-by-state report on the importance of international trade. Click here for the report.