International Business in Utah: Brief Overview and Considerations far Utah Attorneys.
By Jordan E. Toone.
Recent efforts by political, business, and civic leaders to promote international business in Utah - such as approval of the Salt Lake Inland Port initiative, the $3.3 billion expansion and modernization of the Salt Lake International Airport, and the reorganization of Salt Lake Qty's Foreign Trade Zone #30 under the "Alternative Site Framework" - have brought the topic of international business in Utah to the forefront of public awareness. Utah attorneys - both transactional attorneys and litigators - have played and will continue to play an important role in shaping the public policy debates over how best to attract foreign investment and enable Utah business to compete in the global marketplace. As international business continues to expand in the Utah market, Utah attorneys must also continue to stay at the forefront of legal and market developments relevant to the cross-border transactional and international dispute resolution needs of their clients.
This article (I) provides a brief overview of the state of international business in Utah, highlighting recent international trade and foreign investment statistics relevant to the Utah market, (II) highlights key governmental, civic and business organizations in Utah that provide valuable resources and assistance to Utah businesses seeking to engage in international trade and to foreign investors seeking to enter the Utah market, (III) provides a brief overview of recent governmental initiatives designed to promote international business in Utah, and (IV) provides some general concluding observations with respect to the role of Utah attorneys in the continued growth of international business in Utah.
Data from the U.S. Department of Commerce, International Trade Administration, indicated that in 2017 Utah companies exported roughly $11.6 billion in goods, putting Utah sixteenth among states for exports as a percentage of GDP. State Export Data, http://tse.export.gov/tse/MapDisplay.aspx (last visited Aug. 2,2018). Although Utah's exports have decreased by roughly 5% since 2014, Utah exports doubled between 2005 and 2015. Id. Business Roundtable estimates that Utah's goods exports grew nearly three times faster than Utah's GDP between 2003 and 2013. How Utah's Economy Benefits from International Trade & Investment, https://tradepartnership.com/wp-content/uploads/2015/01/ UT_TRADE_20B.pdf (last visited Aug. 2,2018). The top five export markets for Utah companies in 2017 were the United Kingdom (roughly 20% of the dollar value of Utah exports), Hong Kong (13.97%), Canada (10.39%), China (6.33%), and Mexico (5.90%). The top five categories of Utah exports in 2017 were primary metals (approximately 33.52% of the dollar value of Utah exports), computer electronics and products (15.92%), chemicals (9-83%), transportation equipment (8.14%), and processed foods (7.86%). According to the International Trade Administration, exports by Utah companies supported 51,267 jobs in the United States in 2016, representing an increase in roughly 12,000 jobs since 2006. Between 2004 and 2013, jobs related to international trade grew 2.2 times faster than total employment in Utah. Business Roundtable. It is estimated that approximately 374,963 Utah jobs - more than one in five jobs in Utah - is tied currently, directly or indirectly, to international trade. In 1992, only roughly one in ten jobs in Utah was tied to international trade.
The International Trade Administration estimates that 3,466 Utah companies exported goods in 2015, of which 2,917 (roughly 84% of all Utah exporters) were small and medium-sized businesses (SMEs). International Trade Administration. Of the 51,267 jobs supported by goods exports from Utah in 2016,97% of such jobs were supported by exports involving manufactured goods. In addition, as noted by Governor Herbert in his recent Annual Economic Summit address in April of this year, since 2008, Utah's value-added exports have grown 75%.
Bilateral and multilateral free trade agreements have played an important role in the expansion of international trade in Utah. Since 2007, exports from Utah to FTA markets have risen by 75%. In 2017, 27% of Utah exports were to countries that were parties to free trade agreements with the United States. It is unclear at this point the extent to which current political discussions in the United States regarding tariffs and trade imbalances will impact international trade in Utah.
In addition to international trade, Utah has seen an increase in foreign direct investment (FDI). The U.S. Department of Commerce, Bureau of Economic Analysis, estimates that FDI in Utah in 2017 directly supported 42,200 jobs in Utah. Foreign Direct Investment in the United States (FDIUS), https://www.bea.gov/international/ di1fdiop.htm (last visited Aug. 2, 2018). Although scholars have debated the extent to which FDI directly promotes economic growth, there are several factors that indicate that FDI in Utah has had a positive correlation with economic growth. For example, the Utah Division of Workforce Services has noted that in 2016, foreign-owned companies in Salt Lake...