Minnesota's export record shows the value of trade

Opinion editor's note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.

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A healthy debate about Minnesota's business climate continues amid the din of an unusually active legislative session in St. Paul.

Through it all — and despite a worldwide pandemic and war — Minnesota's manufacturers, miners, farmers, ranchers and others connected to the export sector delivered a record $27 billion in exports last year, according to Minnesota Department of Employment and Economic Development data released last week.

It's good news for the state, its businesses and workers. And the numbers also reveal the diversity of Minnesota's economy.

State exports grew 16% over 2021, with particular strength in neighboring nations. Trade with Canada rose 36% to nearly $9 billion, while exports to Mexico jumped 14% to nearly $2.8 billion. Overall exports to North America were up 30%, and trade with the rest of the hemisphere showed impressive growth, too, with gains of 22% in the Caribbean, Central America and South America.

Impressive gains in exports to the European Union and the Middle East (up 26% and 30%, respectively) helped offset losses in Asia (down 2%), Africa (down 7%) and the Australia-Pacific region (down 1%).

The top three export categories were optic and medical ($3.9 billion, up 6%), machinery ($3.8 billion, down 8%) and electrical equipment ($3.8 billion, up 22%). The fourth, mineral fuel and oil, nearly doubled to $3.6 billion. Highlights from the agricultural sector include a 138% growth in the exports of cereals to $1.1 billion.

Most importantly, trade means jobs. Directly, for about 118,000 Minnesotans, according to DEED. And indirectly, throughout the economy, which should be emphasized as politicians from both parties continue to demagogue free-trade agreements that have helped make everyday goods more affordable (crucial amid an inflationary cycle), jobs more available, and the state flush with a record revenue surplus. The fact that it was done in a challenging geopolitical and global health environment is even more testament to Minnesota business leaders and workers.

"It's a significant achievement," interim DEED Commissioner Kevin McKinnon told an editorial writer. "The global demand for products that are made here and exported from here are an important component of not only our economic development strategy from a state-level perspective but also from a strength of our economy."

Chief among those strengths is the breadth and depth of the export sector. What's "absolutely impressive is the diversity of the economy," Gabrielle Gerbaud, executive director of the Minnesota Trade Office, told an editorial writer. "Very different sectors are growing every single year in Minnesota, and that's what makes it so incredible."

Indeed, there are clear "upsides" to the report, said Tyler Schipper, an associate professor of economics at the University of St. Thomas. "Anytime you're breaking a record for exports it means that we're developing relationships with countries and have new markets for our products."

However impressive the growth, it slightly trailed the 18% jump in overall U.S. exports, although some of that, Schipper said, may be due to oil-price spikes skewing the total.

It remains to be seen if Minnesota's export rebound is durable, but the results reflect a business climate that is healthier and more dynamic than the one often mischaracterized.

"The premise that Minnesota doesn't have a good business environment, I think is hard to support with the data," Schipper said, adding that while there are always considerations of changing tax rates, zoning, regulations and other key components of the business sector, "the fact that the economy is so diversified and is relatively strong compared to the rest of the country speaks to a pretty pro-business environment."

Improvements always can and should be made to Minnesota's business climate. But as the 2022 export record attests, it's important to acknowledge what's working, too.