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Maine's Role in the Global Economy

By KARL DORNISH, 9 Warren Terrace, Winslow, ME 04901
(June 15, 2000)

Perry B. Newman, the first and now outgoing President of the Maine International Trade Center, addressed a joint meeting of Rotary and the Global Forum at the Manor on June 12.

His speech was entitled "Navigating the Roiling Waters of the Global Economy: Maine in the 21st Century." In his work at the Center, a public-private partnership at the center of Maine's export growth strategy, Mr. Newman has seen first-hand the challenges, opportunities, risks and successes with global trade from a Maine perspective.

The world economy has changed drastically in recent years to one of hypercompetitveness, instability and fast, continuous change with fuller but more tenuous employment. In this economy exports are important to Maine and the state has had some success with the value of exports almost doubling between 1993 and 1998, from $1.14 billion to $2.17 billion. In addition, export sales are growing faster than domestic and becoming a larger percentage of Maine's Gross Product. Historically the lion's share of Maine's exports have gone to the key markets of Japan, the EU, and Canada; during the five-year period 1993-1998, exports to Japan and the EU have been flat while our exports to Canada are growing well. Exports to Canada are our more traditional natural resource based products: lumber, paper, fish. The emerging markets of Brazil, Mexico, Malaysia, Singapore and China are becoming more important with most of the exports to those markets in technology-based products such as semiconductors and transportation equipment. China is the country to watch with the recent normalization of trade as Maine's exports were growing there despite a 20% tariff barrier.

Mr. Newman stated that each $1 billion of exports creates 40,000 jobs and showed some statistics indicating a nice correlation between export growth and decline in unemployment. However, behind that are decreases in employment for some of our major exporting industries corresponding to increases in export dollars per employee indicating the effects of technological improvements. In response to a question, Mr. Newman stated that he felt that most jobs associated with exports are higher paying because they tend to be manufacturing jobs, but of the 65,000 new jobs created in the state during the five-year period, 49% pay less than $20,000 and 70% pay less than $30,000.

We are in a roiling, dynamic economy facilitated by globalization (described as the increased mobility of goods, people, and money), technology, privatization, and deregulation. This economy is characterized by rapidly evolving new industries, more instability, but great opportunity. Maine, whether it likes it or not, is in this economy. Fortunately, we have some good assets to compete: we have good people, we have invested in infrastructure, there is a commitment to participate, and Governor King and the state leadership understands that Maine has to be a player to prosper and is supporting increasing our global markets.