Changes in trade tariffs, COVID-19 regulations and the country’s top leadership have Arkansas international export officials keeping a close eye on 2021.
The state has always had a diverse export base, ranging from aerospace and defense technology, agriculture, mechanics, steel and wind energy products. Arkansas now exports $6.2 billion annually with Canada, Mexico and France as the top three customers this year, said Dan Hendrix, CEO of the World Trade Center of Arkansas, an organization based in Rogers that oversees moving products to 167 countries. As of December 2019, Hendrix said, international trade in the state supports nearly 350,000 jobs.
Because of the coronavirus and changes in transporting goods, the state’s exporters invariably will see somewhat less export revenue in 2020 than last year, said Melvin Torres, the World Trade Center of Arkansas’ director of Western Hemisphere trade. But they are prepared.
“We’re very fortunate to have the diverse economy in the manufacturing side and agriculture,” he said. “When one sector is down, others step up.”
Aircraft, including engines and parts, is the largest Arkansas export. Lockheed Martin, which located to Camden in 2007, is home to the high mobility artillery-rocket system and the Patriot Advanced Capability-3 hit-to-kill air defense missile. It employs 650 people in its 1.9-million-square-foot facility at the Highland Industrial Park.
In 2018, Saudi Arabia leapfrogged traditional trading partners with Arkansas when it bought $397 million worth of the state’s military commodities.
“Lockheed really moved the needle,” Torres said. “Agriculture used to be the largest export, but now defense and aerospace is our largest industry to export.”
Along with military aircraft, the state’s top exports include civilian aircraft parts, railcars, chemicals, soybeans, wind turbine fans and rice.
Last year, the top 10 export markets were, in order, Canada, Mexico, France, Japan, China, Belgium, Hong Kong, United Kingdom, Brazil and South Korea.
This year, the virus changed things, Hendrix said. “People spent the first two to three months hunkered down in their basements when the virus hit. Exports were affected as a result. We expected that would have a considerable effect due to COVID. We’re not expecting a lot of sudden movement. People are just trying to survive to stay open.”
The World Trade Center of Arkansas doesn’t only focus on exporting products. It also provides support for local small businesses and works toward opening new markets for a variety of businesses. One export is “tourism,’ Hendrix said. His agency promotes the state; more than 40,000 people visit Arkansas from Canada yearly, he noted.
Hendrix said trade tariffs imposed by President Donald Trump in 2018 also hurt Arkansas’ farmers and steel producers, but stimulus packages for farmers did offset losses. Many of those tariffs are loosened now.
“We’re seeing resurgence,” he added. “We anticipate a new trade policy change with the incoming new administration. It will take time to see how that plays out. Stay tuned.”