Last week the Commerce Department’s International Trade Administration (ITA) released the second installment of its Top Markets Reports. The reports–nineteen different industries are highlighted in total–do an excellent job highlighting growing export markets for American businesses and provide a lot of useful insight into the United States’ position in the global economy. Top export industries include auto parts ($81 billion), aircraft parts ($56.2 billion), pharmaceuticals ($47 billion), medical devices ($43 billion), building products and sustainable construction ($35.2 billion), construction equipment ($32.6 billion), and smart grid technology ($30 billion).

Automotive Parts ($81 billion)
The automotive parts industry had the largest dollar value of exports of the industries surveyed. Although most countries that manufacture automobiles continue to make most of their own parts, foreign auto manufacturers do continue to rely on United States manufacturers for sophisticated, expensive, and light-weight original equipment parts (e.g., computer modules and light-weight alloy wheels). In addition, the United States remains a large supplier of expensive aftermarket parts in countries that do not manufacture their own parts. These aftermarket parts include replacement parts, as well as luxury or specialty performance-enhancing parts.

Aircraft Parts ($56.2 billion)
Exports of the aircraft parts industry increased over ten percent between 2014 and 2015, making it one of the fastest-growing export industries. Top markets include Asian and European countries despite efforts in some markets to subsidize their own domestic industries. A recent agreement concluded between the Federal Aviation Administration (FAA) and European Aviation Safety Agency (EASA) should overcome some existing regulatory hurdles to make exporting to Europe even easier.  Further, a new FAA rule approved in October of last year makes it easier for Production Approval Holders (PAHs) to attain export certificates of airworthiness. The WTO Agreement on Trade in Civil Aircraft also helps U.S. exporters since it allows duty-free entry of several parts into the EU, Canada, and Japan. In addition to parts covered by the WTO agreement, an even greater number of parts now may exported from the U.S. to EU countries thanks to an EU duty suspension.

Pharmaceuticals ($47 billion)
Western Europe, East Asia, and North America remain top export markets for new and generic drugs as the worldwide market for drugs continues to increase thanks to aging populations, per capita pharmaceutical spending, and growing personal incomes in developing countries like China. Although there is pressure on the export potential of U.S. manufacturers due to the increasing use of low cost manufacturing bases in other countries and patent expiries for high value drugs, research and development and increased penetration into emerging markets will keep the industry strong.

Medical Devices ($43 billion)
The United States continues to retain its competitive advantage in manufacturing medical devices largely due to its position as the world’s largest innovator of medical technology. Although the EU, Japan, and Canada remain top export markets for U.S. manufacturers, growth of the medical device industry in these countries is just three to five percent. However, developing countries are experiencing double digit growth. As a result, the ITA is encouraging medical device manufacturers to explore these emerging markets. Efforts to harmonize medical device regulations through organizations like the Global Harmonization Task Force and the International Medical Device Regulators Forum should  open foreign markets for U.S. manufacturers. In addition, if the TPP is approved by Congress, it will remove tariffs on American medical devices in all of the other eleven countries participating. It also encourages regulatory harmonization among these TPP member states, which will quicken approvals for medical devices.

Building Products and Sustainable Construction ($35.2 billion)
United States exports of building products and sustainable construction materials totaled $35.2 billion in 2015 and are expected to increase in all sub-sectors (HVACR, lighting, plumbing, wood products, insulation, doors/windows, and glass) with the exception of plumbing. The driving force behind this growth is global urbanization. In addition, there is increased global demand for water and energy efficient materials that are safe and environmentally friendly due to government regulation and consumer preferences in many export markets. United States manufacturers are particularly competitive when it comes to producing green materials.

Construction Equipment ($32.6 billion)
Although exports of construction equipment have declined more than twenty-five percent in the past five years as a result of competition from Western Europe and Asia, the industry remains a significant contributor to the total value of U.S. exports. One of the major hurdles for exports of construction equipment continue to be high tariffs that often render U.S. exports less  competitive than Chinese equipment. Both the TPP and T-TIP should reduce the tariffs on U.S. equipment. Further, global demand is expected to increase as countries continue to invest in infrastructure development.

Smart Grid Technology ($30 billion)
Efforts to reduce greenhouse gases, enhance cybersecurity, and develop smart cities all drive global demand for smart grid technology. In addition, the digitalization of processes and services using cloud computing, data analytics, and other ICT advancements to create an Internet of Things has become another driver. The United States has a competitive advantage when it comes to supplying the technology and innovation required to meet this demand. Top markets include countries that are planning major reform of their utility sectors, in addition to developing countries that are looking to jumpstart their development by going straight to smart grid technology.

Each individual report has a lot to say about the specific industry it analyzes. Reports also include specific details on particular export opportunities. Kudos to the ITA for producing such informative and compelling reporting.