Study on the Operation and Effect of the North American Free Trade Agreement

• U.S. automotive products industry (motor vehicles and automotive parts) 46 exports to Mexico grew from $7.5 billion in 1993 to $8.3 billion in 1996, an increase of 11 percent.
  • Total exports during the period would have been considerably higher but for a major drop-off in consumer demand in Mexico during 1995 and 1996 as a result of Mexico's deep recession.

• U.S. exports of motor vehicles to Mexico rose by more than five-fold.
  • Increased U.S. exports of cars and light trucks to Mexico were directly attributable to reductions in Mexican trade balancing requirements and lower Mexican tariffs brought about by NAFTA.

• Imports of automotive products from Mexico grew from $11.1 billion in 1993 to $22.9 billion in 1996. Among the factors responsible for this import growth are:
  • heightened U.S. demand for sport utility and light truck models, which were already under production in Mexico when NAFTA took effect;

  • full utilization of existing U.S. manufacturing capacity for these types of vehicles;

  • strong overall U.S. sales;

  • U.S. tariff reductions on light truck imports from Mexico; and

  • growing demand for parts imports for use in U.S. domestic assembly operations.

• Imports of vehicles assembled in Mexico include a high percentage of automotive parts made in the United States.
  • The NAFTA gradually eliminates Mexican requirements for auto assemblers to build vehicles in Mexico from Mexican-made parts. Therefore, more U.S.-made parts are being used by Mexican auto assemblers than before NAFTA.

  • The NAFTA has increased integration in the North American automotive industry, making U.S. parts and vehicle manufacturers more efficient and competitive in North America and worldwide. For example, NAFTA has enabled Ford to make its established plants in Mexico more efficient. Ford decided to consolidate all production of Ford Thunderbirds and Mercury Cougars at its Lorain, Ohio assembly plant, discontinuing low volume production of these two models at its Cuautitlan plant in Mexico. Similarly, between 1993 and 1995, Chrysler produced its Ram pick-up at one U.S. plant and two Mexican plants. Demand for these vehicles exceeded capacity. As a result, Chrysler started assembling Rams at a St. Louis, Missouri plant in 1995.

• This strong growth in two-way trade between 1993 and 1996 took place against the backdrop of record profits and production levels by U.S. manufacturers, strong sales in the U.S., and rapidly expanding exports of U.S.-made automotive products. The increase in U.S. auto exports to Mexico coincides with the resurgence of the U.S. automotive industry. In 1994, for the first time in fifteen years, the United States produced more motor vehicles than any other country in the world, a feat repeated in 1995 and 1996.
  • U.S. employment in the automotive industry grew by 14.1 percent overall, with an increase of 16.1 percent in the auto parts sector and of 10.1 percent in the motor vehicle assembly sector.

  • U.S. productivity in the automotive industry grew by 7 percent between 1993 and 1995 (latest figure available).

  • Hourly earnings for production workers grew by 5.6 percent between 1993 and 1996 (latest figure available).

• The Big Three U.S. automobile manufacturers invested $39.1 billion from 1993 to 1996 in new manufacturing plants and equipment in the United States, while investing only $3 billion in Mexico over the same period.

Background

While U.S.-Canada trade in automotive products has long been virtually barrier-free, the majority of U.S. motor vehicle exports to Mexico faced restrictive trade balancing and local content requirements, as well as tariffs of 20 percent prior to NAFTA. By contrast, Mexico's exports enjoyed largely open access to the United States market. The NAFTA redresses that imbalance and provides an opportunity to create an even more robust U.S. industry within the context of a globally competitive North American automotive industry.

General Motors, Ford and Chrysler (the Big Three) began investing in Mexican production facilities in the 1930s and were followed by Nissan and Volkswagen in the 1960s. In 1965, Mexico began implementing a series of automotive decrees intended to increase Mexican employment, encourage investment in Mexico, and control foreign debt.

In the early 1980s, U.S. motor vehicle and auto parts producers established maquiladora parts operations in Mexico to reduce U.S. manufacturing costs in the face of stiff competition from Japan. U.S. auto parts were shipped to Mexico duty free and assembled into components that then reentered the United States for use in the final assembly of motor vehicles. Duties were assessed only on the Mexican value added.

Prior to NAFTA, a majority of Mexican-made automotive parts entered the United States duty-free under the Generalized System of Preferences program (GSP). In addition, a majority of Mexican-made vehicles entered the United States with duties applied on only a portion of the total value of the vehicle. This was possible because of U.S. customs rules that allowed duties to be collected only on the value of non-U.S. materials and labor. It is estimated that more than 50 percent of the value of parts in these vehicles came from the United States. Moreover, with the exception of duties on light trucks, applied U.S. tariffs on most Mexican-built vehicles and automotive parts were very low or non-existent prior to NAFTA.

The last pre-NAFTA Mexican automotive decrees, implemented in 1990, were designed to increase investment in and purchases from independent parts suppliers (i.e., those not owned by the Big Three, Nissan, or VW) in Mexico. The decrees also provided a limited opening for vehicle imports through complicated trade balancing formulas, which sought to ensure that U.S.- and other foreign-owned vehicle assemblers would export more vehicles or parts than they imported. Elimination of the Mexican automotive decrees, with their trade- and investment-distorting effects, was a key goal for U.S. NAFTA negotiators.

Developments since NAFTA

Highlights of NAFTA Implementation: Tariff Cuts

As required by NAFTA, Mexico reduced its car and light truck tariffs from 20 percent to 10 percent at the beginning of 1994. The remaining duties on light trucks will be phased out by January 1, 1998; duties on cars will be eliminated by January 1, 2003. By January 1, 1998, 75 percent of U.S. automotive parts exports will enter Mexico duty free, with the remaining duties eliminated by January 1, 2003.

The United States eliminated its 2.5 percent tariff on Mexican-built passenger vehicles in 1994. At the same time, the United States cut its 25 percent tariff on Mexican light (pick-up) trucks to 10 percent. The remaining tariff will be eliminated by January 1, 1998. The U.S. 4 percent tariff on cab chasses and the 25 percent tariff on other completed trucks are being phased out over ten years. The majority of Mexican automotive parts entered the United States duty free before NAFTA and remained duty free; remaining duties were either eliminated immediately or will be phased out over five or ten years.

The NAFTA also established stronger North American rules of origin to ensure that automotive products benefitting from tariff reductions are substantially manufactured within the region.

Highlights of NAFTA Implementation: Elimination of Non-Tariff Barriers

On implementation of NAFTA, Mexico immediately eliminated or reduced significant trade restrictions which had previously served as incentives to investment in Mexico. For example, Mexico eliminated its trade balancing requirement (from $1.75 of exports for every $1.00 of imports to $0.80 of exports for every $1.00 imported), lowered its local content requirement, and eliminated import quotas on new cars and light trucks. The NAFTA established two transitional import quotas for heavy trucks and buses, one for manufacturers in Mexico and one for companies not manufacturing in Mexico; this sector of the vehicle market will be totally open by January 1, 1998.

Trade Flows: U.S. Exports to Mexico

Intra-company shipments by the Big Three and U.S. parts suppliers account for most of U.S.-Mexican trade. Between 1993 and 1996, the dollar value of U.S. exports of motor vehicles to Mexico increased by 548.7 percent, to $1.3 billion. Exports grew from roughly 17,000 units in 1993 to about 91,000 units in 1996. Had the peso devaluation and resulting dramatic drop in Mexican economic output and domestic consumption not caused the Mexican automotive market to collapse in 1995, it is likely that U.S. exports to Mexico in that year alone would have reached 87,000 units and might have reached well over 100,000 units, with even greater volumes in 1996. Export volume is up 40 percent to a total of 28,721 units for the first quarter of 1997 compared to the first quarter of 1996. The increase in U.S. motor vehicle exports to Mexico reflected the gradual elimination of Mexican tariff and non-tariff trade restrictions, as required by NAFTA, that had previously limited vehicle imports.

U.S. exports of automotive parts to Mexico fell by 3.5 percent from 1993 to 1996. The decline was directly attributable to the sharp retraction of the Mexican economy in 1995. As the Mexican market improves, U.S. parts exports should continue the recovery that began in 1996. Indeed, first quarter 1997 exports of U.S. auto parts grew to $2.2 billion, a 25 percent increase over first quarter 1993. Moreover, with the growth in U.S.-made vehicle sales to Mexico, the opportunities for sales of U.S. aftermarket parts in Mexico should rise.

The U.S. share of the Mexican imported parts market rose 2.4 percentage points 47 in 1994 to 68.7 percent, and rose again in 1995 to 71.2 percent, and increased slightly in 1996 to 71.7 percent. The increases over the first two years were largely due to NAFTA provisions permitting U.S.-assemblers to source a greater percentage of automotive parts from outside Mexico.

Trade Flows: U.S. Imports from Mexico

U.S. imports of motor vehicles from Mexico increased from $3.7 billion in 1993 to $11.3 billion in 1996. On average over 50 percent of the content of vehicles exported to the United States from Mexico is U.S.-made, according to industry analysts. Increased U.S. demand for popular sport utility vehicles and pick-up truck models (made in both Mexico and the United States) contributed to the surge in imports during the period. Increased demand for these products generated capacity constraints in the United States that were relieved through increased imports.

U.S. automotive parts imports from Mexico increased from $7.4 billion in 1993 to $11.6 billion in 1996, an increase of 58.4 percent. The growth in imports was largely due to a 6.8 percent increase in U.S. motor vehicle production between 1993 and 1996 reflecting strong U.S. domestic demand for automobiles.

Trade Flows: U.S. Trade with Canada

Trade patterns between the United States and Canada have not changed discernibly over the last three years. Remaining duties between the United States and Canada will be eliminated on January 1, 1998 under the pre-existing CFTA schedule. Canada accounts for the lion's share of total U.S. automotive exports and imports.

Total U.S. automotive exports to Canada were $27.5 billion in 1993, rising to $34.4 billion in 1996, an increase of 24.9 percent. Total U.S. automotive imports from Canada were $37.1 billion in 1993 and $46.3 billion in 1996, an increase of 25 percent. The U.S. dollar value of parts exports to Canada grew 20.7 percent from 1993 to 1996. Parts imports from Canada grew 22.4 percent during the period. The value of U.S. motor vehicle exports to Canada grew 33.1 percent from 1993 to 1996, while the value of motor vehicle imports grew 25.9 percent.

Investment

Big Three major manufacturing plant investments in the United States from 1993 to 1996 totaled $39.1 billion. During the same time, the Big Three invested $3 billion in Mexican facilities.

Big Three passenger vehicle and light truck operating capacity grew by 490,000 units between 1993 and 1996 to a total of 11,037,000 units. 48 In the same period, their capacity in Mexico grew by 241,000 units, reaching a total of 838,000 units. (Operating capacity is a factor of both plant investment and employment levels.) The three companies added 394,000 units to their combined U.S. pick-up truck capacity during the period, compared with 144,000 units in Mexico -- even though NAFTA reduces and then eliminates the U.S. 25 percent duty rate on pick-up trucks imported from Mexico.

The U.S. continues to be an alternative market for investment in the automotive sector. Foreign investment in the automotive sector continues to flow into the United States, including: BMW's investment in South Carolina to assemble passenger vehicles; Chrysler's reopening of its St. Louis, Missouri plant to produce minivans; GM's conversion of its Arlington, Texas plant to produce sport utility vehicles; the Mercedes plant in Alabama to assemble vehicles; Nissan's relocation of the production of its Altima engines from Mexico to a new plant in Decherd, Tennessee; and Toyota's construction of a new plant in Princeton, Indiana to build full-size pickups and a new plant in Buffalo, West Virginia to build engines.

While the vast majority of investment in North America is in the United States, some auto manufacturers have invested in Mexico prior to and following the implementation of NAFTA. This investment in Mexico reflects a number of factors. Expanded investments in Mexico by Nissan and VW were aimed at accommodating increased sales in Mexico as well as the addition of new model production. In 1994, BMW and Honda began construction of plants in Mexico to serve the growing Mexican market because Mexican automotive decrees effectively require the two companies to produce in Mexico if they want to sell there. The NAFTA requires Mexico to eliminate this local manufacturing requirement by January 1, 2004.

The NAFTA has created synergies in the North American automotive market that will help ensure a globally competitive U.S. automotive industry. U.S. parts manufacturers have been restructuring their investments in order to rationalize their production in all three countries. Most major parts producers now have plants in all three NAFTA countries. By lowering Mexican local content and trade balancing requirements during the period, NAFTA automotive provisions have stimulated investment in the U.S. market that might otherwise have gone to Mexico.

Employment, Earnings, and Productivity

During 1994-1996, overall employment in the U.S. automotive industry increased by 14.1 percent. Over the same period, U.S. employment in the automotive parts sector increased by 16.1 percent and employment in the motor vehicle assembly sector increased by 10.6 percent. U.S. productivity in the sector grew by 7 percent between 1993 and 1995 (latest figure available). In addition, hourly earnings for production workers grew by 5.6 percent between 1993 and 1996.

By contrast, Mexican employment in the automotive industry declined by 8.4 percent from 1993 to 1995. 49 This reflects the steep drop in Mexican demand due to the Mexican recession, combined with restructuring due in part to the liberalization of the auto decrees.

Canadian employment increased by 5 percent from 1993 to 1996. Employment in the automotive parts sector increased by 5.2 percent over the same period, and by 4.8 percent in the vehicle assembly sector.

• Between 1993 and 1996, U.S. chemicals 50 exports to Mexico rose from $3.4 to $5.1 billion, an increase of 50 percent. By comparison, U.S. exports to non-NAFTA countries grew by 37 percent.
  • U.S. petrochemical exports to Mexico grew by over 75 percent, to $1.2 billion. As a result of NAFTA, Mexico opened its petrochemical sector for the first time to direct competition from U.S. firms, which helped to spur the growth of exports.

  • U.S. exports increased their share of Mexico's import market from 64 percent to 67 percent over the period.

• The NAFTA immediately eliminated Mexican tariffs on 31 percent of U.S. chemical exports previously subject to duty. Average Mexican tariffs on U.S. chemicals dropped from 10 to 4 percent over the period.
  • U.S. export growth is at least partly attributable to Mexican tariff and non-tariff barrier reduction under NAFTA.

  • Mexico immediately eliminated tariffs as high as 20 percent on close to half of U.S. pharmaceutical exports to Mexico.

• U.S. employment for production workers, hourly earnings, and productivity all increased modestly from 1993 to 1995.

• Imports from Mexico increased by $0.6 billion, to $1.4 billion from 1993 to 1996.
  • The NAFTA played virtually no role in the increase -- U.S. tariffs on chemicals prior to 1994 averaged only 1.0 percent.

  • Mexico served as a major source of plastic resins during a period of shortage in the United States. Many of the resins were converted into plastic parts in the United States and reexported.

• The NAFTA served to integrate further the Mexican and U.S. petrochemical industries, with Mexico supplying basic and primary products for manufacture in the United States into high value-added secondary petrochemicals.

Background

The NAFTA created the world's largest open market for trade and investment in chemical products. North American chemical shipments in 1995 reached $406.9 billion and are projected to exceed $475 billion by the year 2000. U.S. production accounts for over 90 percent of these shipments. Mexico is the third largest market for U.S. chemicals and allied products, purchasing between 2 and 16 percent of U.S. chemical exports across all product categories in 1996.

Developments since NAFTA

Highlights of NAFTA Implementation: Tariff Cuts

Average Mexican tariffs on U.S. chemicals prior to NAFTA were 10.2 percent, including the 27 percent of U.S. exports to Mexico in the chemicals, rubber, and miscellaneous plastics sector which entered Mexico duty free. Tariffs on certain pharmaceutical products, however, were as high as 20 percent. The NAFTA immediately eliminated Mexican duties on another 31 percent of U.S. chemical products, reducing Mexican tariffs to an average of 4.0 percent. Tariffs on the remaining 41 percent of U.S. exports to Mexico in this sector are being phased out over five or ten year periods. By contrast, U.S. tariff rates on Mexican chemicals immediately prior to NAFTA averaged only 1.0 percent, thirty percent entered duty-free. The NAFTA immediately eliminated tariffs on most Mexican petrochemicals, inorganic and agricultural chemicals, as well as plastic and rubber products. Remaining U.S. tariffs on Mexican chemical products will be phased out over five to ten years.

Highlights of NAFTA Implementation: Elimination of Non-Tariff Barriers

Prior to NAFTA, the Mexican Government exercised virtual monopoly control over the production, sale, and pricing of basic and secondary petrochemicals in Mexico. The NAFTA required Mexico to open petrochemical production and sales to U.S. and Canadian firms for all products of trade significance. That change has permitted American producers to sell high value-added petrochemical products directly to Mexican end-users for the first time.

The NAFTA also guaranteed the elimination of virtually all import licenses on chemicals, rubber and plastics, and pharmaceuticals.

The NAFTA's rules protecting intellectual property rights have been especially critical for the chemicals industry, which relies heavily on patent and trade secret protection to safeguard formulas and processes. The NAFTA ensures that Mexico will protect patents on production methods (so-called process patents), and places strict limits on subject matter that cannot be patented. These protections are particularly important for the chemical industry because process technology is critical to the manufacture of many chemical products. The NAFTA also guarantees strong product patent protection.

Trade Flows: U.S. Exports to Mexico

U.S. exports to Mexico rose for nearly all chemical products between 1993 and 1996, growing from $3.4 to $5.1 billion, an increase of 50 percent. For the same period, U.S. chemical exports to countries outside North America increased by 37 percent, to $45.3 billion. The 50 percent increase in U.S. chemical exports to Mexico was particularly impressive given that U.S. exports fell more than 3 percent in 1995 during the height of Mexico's recession.

During 1993-1996, the U.S. share of the Mexican chemical import market rose from 64 percent to 67 percent. In the first quarter of 1997, U.S. exports to Mexico were 71 percent greater than they were during the same period in 1993.

One sector that particularly benefitted following the entry into force of NAFTA was petrochemicals. Between 1993 and 1996, U.S. petrochemical exports to Mexico grew over 75 percent, to $1.2 billion. U.S. exports to Mexico of plastics, synthetic resins, and rubber and industrial organic chemicals, in particular, also increased dramatically during the period.

Trade Flows: U.S. Imports from Mexico

Mexican exports of chemical products to the United States rose from $0.77 billion in 1993 to $1.4 billion in 1996. Mexico's exports to the United States were mostly of primary and basic petrochemicals, such as plastic resins, of which there was a shortage in the United States. Mexico became a primary supplier of the resins, which were converted into plastic parts in the United States and reexported.

Investment

Foreign-owned chemical firms continue to make very substantial investments in U.S. production plants, which they use to manufacture products for sale in the United States and abroad. At the same time, U.S. companies have continued to invest heavily both in the United States and abroad. In 1995, total investments by U.S. firms in chemical production outside the United States were $68.1 billion, while foreign direct investment in the United States reached $76.6 billion.

Simultaneous with this significant investment in U.S. chemical manufacturing, total U.S. direct investment in Mexico in the chemicals sector declined 47 percent from 1993 to 1995.

U.S. Employment, Earnings, and Productivity

Overall U.S. employment in the chemicals industry during from 1993-1995 remained stable, with employment levels for production workers up 3 percent. Between 1993 and 1995 (the latest year available), productivity increased by 3.6 percent. Hourly earnings in the industry were up, by 2.1 percent.

The U.S. computer equipment and software 51 sector has experienced strong growth over recent years. Worldwide, the computer equipment market (systems, peripherals, and parts) exceeded $300 billion in 1996 and is projected to grow 10 percent per year through 2000. 52 U.S. companies and their overseas subsidiaries supply almost 70 percent of the global market, based on their strength in research and development, systems production, software development, marketing, and computer services. Computer equipment shipments from U.S.-based companies have grown 9.6 percent annually since 1990.

Software and computer services (consulting, operations management, training, and other services) are among the fastest growing industry sectors in the United States. Worldwide sales reached $300 billion in 1996 and are expected to grow 11 percent annually over the next five years. U.S. packaged software vendors, with revenues of $75 billion in 1995, supply almost 80 percent of the world market. Most software used around the world is developed in the United States.

Developments since NAFTA

Highlights of NAFTA Implementation: Tariff Cuts

Prior to NAFTA, almost 70 percent of U.S. imports of computer equipment and software from Mexico entered the United States duty-free. By contrast, Mexican tariffs on U.S. computer equipment and software ranged from 5 to 20 percent. Under NAFTA, Mexico is required to eliminate its tariffs on U.S. computers and software by January 1, 1998 on products that qualify under NAFTA rules-of-origin criteria. Mexico eliminated its duties on most computer equipment and on all software products on January 1, 1994 and is phasing out the duties on computer systems, impact printers, and certain other peripherals over a five-year period.

The NAFTA's rules-of-origin and duty drawback provisions work to encourage both domestic and foreign companies to produce computer products in North America. To qualify for NAFTA's preferential tariffs, products must be "substantially transformed" within the region. For example, personal computers must contain locally-made motherboards and be fully assembled in North America to benefit from NAFTA's preferential tariffs.

Highlights of NAFTA Implementation: Elimination of Non-Tariff Barriers

The NAFTA contains a number of other provisions that help U.S. computer and software suppliers gain access to the Mexican market and compete against third-country products. Significant improvements in the areas of customs harmonization, government procurement, duty drawback, and standards have provided immediate benefits to both large and small U.S. computer businesses by reducing costs, making U.S. products more competitive in the Mexican market. The improved intellectual property protection guarantees included in NAFTA are particularly important to the U.S. computer equipment and software industries to guard against copyright and patent infringements.

Trade Flows: U.S. Exports to Mexico

Following implementation of NAFTA, computer hardware exports to Mexico rose an average of 16.7 percent per year, reaching $1.9 billion in 1996. These figures include a 14 percent decline in exports during 1995 due to a fall-off in Mexican demand as a result of Mexico's recession. U.S. computer makers shipped almost 112,000 personal computers to Mexico during the first quarter of 1996, almost twice the number shipped during the same time period in 1995. In 1996, Mexico became the seventh largest market for U.S. computer hardware exports, exceeding France for the first time. First quarter 1997 exports to Mexico were almost double first quarter exports in 1993.

While there are no official trade figures on U.S. software exports, sales to Mexico have been growing. Mexico's software market is forecast to grow 26 percent a year through 2000, twice the global average.

The United States continues to be the dominant source of computer systems and peripheral imports in Mexico. The U.S. maintained approximately 65 percent of the Mexican computer import market from 1993 to 1996, while Japan, South Korea, and Taiwan lost ground during the period.

Trade Flows: U.S. Imports from Mexico

U.S. computer hardware imports from Mexico increased from $0.9 to $2.9 billion, from 1993 to 1996. A significant volume of these imports from Mexico are produced in assembly operations using complex components manufactured in the United States. For example, almost one-third of computer equipment imports entered the United States under special Mexican customs provisions that allow for duty-free entry of components into Mexico for use in the final assembly of products that are subsequently re-exported. When these goods re-enter the United States, special U.S. customs provisions assess duty only on the value added in Mexico. It appears that some of these imports displaced imports of products manufactured entirely outside the free trade area, and thus increased production in both Mexico and the United States.

Investment

Capital expenditures on new plant and equipment by U.S.-based computer manufacturers, as well as overseas investments by these companies, have remained relatively steady during the 1990s. A significant amount of domestic spending has been directed toward automating production facilities to raise labor productivity, lower production costs, and accelerate time-to-market for new products. Overseas investment has been directed primarily to the European Union and to establishing offshore plants and distribution facilities in Asia. There has been no major increase in U.S. investment in Mexico's computer sector.

Employment, Earnings, and Productivity

From 1994 to 1996, employment in the computer equipment industry rose 9 percent to an estimated 218,000, reflecting the entry of new suppliers in certain high growth areas such as personal computers, networking, and multimedia applications. The number of production workers also increased 8 percent to 82,200, reflecting the expansion of some producers' U.S. manufacturing capacity to meet strong demand. U.S. manufacturers added 17,000 employees during the 1994-1996 period following the implementation of NAFTA. More than a third of these new hires were production workers.

Employment in the U.S. software industry has been rising 9 percent per year on average since 1990, reaching 616,000 in 1996. The recent gains have been due to growth in hiring by packaged software and programming services companies. From 1993 to 1995 (the latest year available), productivity was up by 67.8 percent while hourly earnings for production workers in the sector were up by 6.2 percent.

Footnotes:

46. The SIC categories included in this section are: motor vehicles (SIC 3711), trucks and bus bodies (SIC 3713), motor vehicle parts and accessories (SIC 3714), automotive stamping (SIC 3465), carburetors, pistons, piston rings, and valves (SIC 3592), vehicular lighting equipment (SIC 3647), storage batteries (SIC 3691), and electrical equipment for internal combustion engines (SIC 3694).

47. Import shares are based on Mexican import data. U.S. and Mexican definitions of what comprises the automotive parts industry are not harmonized.

48. Source: Autofacts, Inc.

49. Data for 1995 are estimated; 1996 employment data are not currently available.

50. The term "chemicals" as employed in this section means products produced in the chemicals and allied products sector, as defined in Standard Industrial Trade Classification (SITC) 5, rev. 3, including inorganic and organic chemicals (SITC 51), dyeing, tanning and coloring materials (SITC 53), medicinal and pharmaceutical products (SITC 54), fertilizers (SITC 56), plastics and plastic products (SITC 57 & 58), essential oils, toilet and polishing preparations (SITC 55), and chemical materials and products (SITC 59).

51. This section includes electronic computers (SIC 3571), computer storage devices (SIC 3572), computer terminals (SIC 3575), computer peripheral equipment (SIC 3577), computer programming services (SIC 7371), prepackaged software (SIC 7372), computer integrated systems design (SIC 7373), and computer processing and data preparation services (SIC 7374).

52. Source: International Data Corporation, December 1996.

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