Hurd on the Hill: NAFTA Fuels the Texas Economy

January 22, 2018
Hurd on the Hill: Local Columns
The U.S., Mexico and Canada build things together

What do you call the facilitation of $2 million of goods and services across our borders every minute? In Texas, we call it NAFTA. 

In Texas, more than one million jobs, and fourteen million nationwide, depend on trade with Mexico and Canada.  Many of these Texas jobs are in the 23rd Congressional District. These jobs feed families in El Paso, San Antonio and everywhere in between. They include manufacturing, logistics, agriculture and energy. They fuel our local economies in West Texas, along the Rio Grande and all the way up I-35’s NAFTA superhighway.

Many folks don’t realize the magnitude of the impact that NAFTA has had on our economy. Since it was signed into law in San Antonio 24 years ago, America’s trade with Mexico and Canada has more than tripled. US-Mexico trade alone increased more than 280 percent between 1993 and 2016. In 2015, Texas-Mexico trade amounted to approximately $94.5 billion, making Mexico Texas’ largest trading partner, surpassing the next four largest combined – Canada, Brazil, China and South Korea. And it’s paid off. With a $1.6 trillion GDP, if Texas was its own country, we’d have the tenth largest economy in the world.

But exports are only one piece of the pie. Imports create jobs too. In the last decade and a half, over 70 percent of imports from Mexico were intermediate goods, meaning, they weren’t finished and ready for market when they came into our country. They still required additional parts, assembly, transportation, and packaging. Sometimes we think of imports and exports as static numbers, when in fact, goods often go back and forth across the border multiple times as they are produced. Another example of this is that forty percent of U.S. imports from Mexico were originally made in the U.S. – demonstrating further that the U.S., Mexico and Canada are actually building things together.

Lately, NAFTA has gotten a bad rap, because like all other 24-year-old business deals, it needs to be modernized to keep pace with policy changes, evolving industries and emerging technology. For example, in 1994, commercial use of the internet was not taken into account during negotiations. Neither was the ability for the U.S. to export crude oil or the natural gas discoveries in the Eagle Ford, Permian and Delaware Basins in Texas. These are opportunities for us – and all Americans – to win big with NAFTA 2.0.    

NAFTA is the lifeblood of many communities across TX-23 but there are areas where we can strengthen it. This week, I’ll be spending time with business owners and operators in Del Rio, Ciudad Acuña and Eagle Pass before heading up to Montreal for the next round of NAFTA discussions. I look forward to witnessing how modern-day goods are jointly-produced, transported and eventually available to consumers worldwide. As we enter the next round of renegotiations, I will be there to remind our neighbors to the North and South about the tremendous impact that NAFTA has had on South and West Texas communities, and what we have to lose if negotiations fall flat.

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