Myth vs. Reality | Trade Edition | 11-02-16

MYTH: Economic ties between nations revolve around the importation and exportation of goods and services.

REALITY: Maintaining good economic relationships with other countries has benefits beyond imports and exports. It also gives foreign businesses confidence to invest in the United States. In 2014, U.S. affiliates of foreign companies employed more than 6.6 million workers in the United States. Prior work by the International Trade Administration estimates that an additional 2 million jobs are supported by these relationships. In 2015, newly established U.S. affiliates of foreign companies planned on adding over 30 thousand jobs when they were fully operational.

Cumulatively, Europe is the largest regional investor in the United States. It accounted for nearly 70 percent of all foreign investment through 2014. These figures include the 28 European Union (EU) countries and other European nations with an investment stake in the United States. One non-EU member, Switzerland, accounted for 11 percent of cumulative investment from Europe by the end of 2014. The Asia and Pacific region ranked second, accounting for 18 percent of FDIUS stock through 2014, while Canada held nine percent. The Caribbean countries represented the fourth-largest investment region at $100 billion as of year-end 2014. The British Islands accounted for nearly all the investment from the Caribbean region. The stock of direct investment from South and Central America, the Middle East, and Africa remains tiny. By the end of 2014, each represented less than one percent of cumulative FDIUS. Among these regions, the largest cumulative inward investment from a single country was Mexico at $18 billion, followed by Israel at $9 billion. SOURCE