Globalization Is a Boon for Rural America

Hancock County, Kentucky, is a quiet place, along the serpentine Ohio River that divides the Bluegrass State from Indiana. It was here that Abraham Lincoln argued his first law case, in his own defense, when he was accused of operating a ferry without a license.

Today this rural patch is one of the most trade-dependent counties in the country, with about 55 percent of its GDP coming from exports. The county is home to one of America’s five aluminum melters, an enterprise that supports hundreds of jobs. More than 20,000 people work at Kentucky’s 182 aluminum facilities, which have helped replace thousands of coal jobs lost in the past decade.

Aluminum produced in places like Hancock County finds its way to other countries, particularly Canada and Mexico, where it is used to produce auto parts and other goods.

Foreign trade is also essential in St. James Parish, located deep in Cajun country. Known for its tradition of lighting Christmas Eve bonfires on the Mississippi River to help guide Santa’s sleigh, this rural corner of Louisiana has a population of 21,567. Over half of the parish’s gross domestic product is due to petroleum and chemical exports. China has been Louisiana’s top export destination for the past four years, with the state sending about $8 billion’s worth of goods there last year. Yuhuang Chemical Inc., a Chinese company, is now investing $1.85 billion in a new methanol manufacturing complex that promises to bring thousands more jobs to St. James Parish. (The Yuhuang investment isn’t purely a product of market forces: More than $11 million in state subsidies are involved too.)

According to Drew Desilver of the Pew Research Center, Hancock County and St. James Parish are just two examples of a broader trend. The places most dependent on access to foreign markets aren’t coastal metropolises. They’re sparsely populated counties that often don’t have the population to fill a mid-sized city. Changes to America’s rules for imports could easily have an impact on what our country exports as well—and that, in turn, could disrupt quiet corners of the country far from the cosmopolitan urban centers or either coast.

Of the 154 U.S. counties where exports account for more than 25 percent of GDP, Desilver found that only 11 had populations over 100,000. For many of these counties, the goods are exported to either Canada or Mexico, both of which are among America’s largest trading partners. The global supply chains facilitated by trade are vital throughout the Rust Belt and the Sun Belt.

Mark J. Perry, an economist at the American Enterprise Institute, has detailed the importance of international trade by looking at the GDP of all 50 states last year and highlighting the total percentage of trade volume—that is, the sum of exports and imports. Michigan is the country’s most globalized state, primarily due to the dominance of the auto industry. But Kentucky and Louisiana are second and third, respectively, with Kentucky boasting a surprisingly robust auto industry and Louisiana’s energy exports poised for growth in the coming years.

Closing markets, Perry writes, “ignores all of the unseen, delayed and hidden costs of trade protectionism that would make many trade-dependent American states weak again, not great again.”