As President Donald Trump prepares - in the words of his chief of staff - “a buffet of options” for dealing with Mexico, trade and immigration, it’s time for the Texas congressional delegation to make a strong statement in support of the North American Free Trade Agreement.
Though much of Trump’s focus last week was on the border wall (and ways to make Mexico pay for it), his focus next week is expected to be on trade.
“President Trump has taken his first steps toward an ‘America first’ approach to international trade, pulling out of the Trans-Pacific Partnership on Monday and reaffirming his intent to renegotiate NAFTA, the North American Free Trade Agreement,” the Boston Globe reports. “What does this mean for U.S. companies and American workers? Trump’s executive order to withdraw from the TPP is anticlimactic. That agreement was already a dead-letter, having been disclaimed by both presidential candidates and never ratified by Congress. But a new NAFTA could upend U.S.-Mexican relations and disrupt whole sectors of the US economy.”
And that would be disastrous for Texas.
Texas companies, big and small, export a total of $92.5 billion worth of goods to Mexico each year. That figure dwarfs second-place California, which exports just $26.8 billion of goods.
“From the booming border city of Laredo to the bustling trading hub of Dallas-Fort Worth, Texas has become the nation’s top exporter of goods, according to the Federal Reserve Bank of Dallas, and Mexico is its biggest customer,” the Wall Street Journal explains. “Some 382,000 jobs in Texas alone depend on trade with Mexico, according to 2014 data released this month by the Woodrow Wilson International Center for Scholars, a nonpartisan global research group. Goods exported from Texas help support more than a million jobs across the U.S., according to the U.S. Commerce Department.”
Texas’ top exports to Mexico are computer and electronic products, petroleum and coal products, chemicals, machinery and transportation equipment.
As University of Oregon economist Mark Thoma points out, “NAFTA isn't the problem, and tariffs aren’t the answer.”
He says Trump believes that NAFTA is the reason the U.S. has lost manufacturing jobs. But that’s not the case, he explains.
“Domestic manufacturing’s employment decline began long before NAFTA came along,” Thoma wrote for CBS News. “According to University of California Berkeley professor Brad DeLong’s calculations, ‘A sector of the economy that provided three out of 10 nonfarm jobs at the start of the 1950s and one in four nonfarm jobs at the start of the 1970s now provides fewer than one in 11 nonfarm jobs today. Proportionally, the United States has shed almost two-thirds of relative manufacturing employment since 1971.’ In addition, much of that drop can be attributed to technological change - the rise of robots and digital technology - rather than globalization. Renegotiating trade agreements can’t change this.”
It’s time for the Texas delegation to Washington to stand up and say they won’t support Trump’s short-sighted attempts to kill NAFTA. Ditching NAFTA would be a mistake.