McALLEN — Gov. Greg Abbott emphasized the importance the North American Free Trade Agreement has had on Texas and the Rio Grande Valley in a Thursday letter to the top United States trade official.
As the sixth round of NAFTA negotiations began in Montreal earlier this week, Abbott wrote U.S. Trade Representative Robert Lighthizer Thursday, not only pointing to the significance the pact has on the state, but especially the Valley.
“While NAFTA has been an incredible boon for all of Texas, perhaps nowhere else in the country encapsulates the success of NAFTA as the Rio Grande Valley, which borders Mexico,” Abbott wrote. “According to data from the Texas Workforce Commission, since NAFTA was signed in 1993, unemployment has decreased in the Valley from 21.1 percent to 6.2 percent. Over that same time, the labor force has increased by 87 percent, and per capita income has increased 229 percent –– significantly closing the income gap relative to the rest of the nation.”
While Abbott acknowledged the need to update the two-decade old treaty, he said, “It is important to not attempt to ‘fix’ the parts of the agreement that are not broken.”
Abbott listed the following points:
>> Texas exports more than any other state to Mexico ($92.6 billion, 40 percent of Texas’ total exports in 2016) and is second behind Michigan for exports to Canada ($19.6 billion, 8.5 percent of Texas’ total exports, also in 2016).
>> Since NAFTA took effect, Texas exports to Mexico have increased by 13 percent annually, a 350 percent increase in total. Texas enjoys a trade surplus with Mexico.
>> Texas’ imports valued at $81 billion from Mexico and $15.2 billion from Canada in 2016, accounting for nearly 42 percent of all of Texas’ imports.
>> Texas accounts for about 16 percent of all U.S. exports, and nearly half of Texas exports are to NAFTA partners.
>> U.S. Customs Districts in Texas were on pace to process nearly $425 billion in trade with NAFTA partners as of November 2017, which equates to $1.16 billion per day.
>> In 2013, countries with free trade agreements with the U.S. purchased $379.09 worth of Texas per capita. Countries without such agreements purchased only $16.79 worth of Texas exports per capita.
>> Texas’ energy sector is a leading trade partner with both Canada and Mexico. High tariffs on this industry in the absence of NAFTA could have substantially negative repercussions to the state and national energy industry.
Abbott has stayed fairly quiet publicly throughout the NAFTA negotiations, prompting questions from local officials. But he has reportedly been in communication with the White House regularly during the process.
The impact trade has on the state is profound, as U.S. Sen. John Cornyn said during a Valley visit earlier this month. Nearly 1 million Texas jobs depend on trade with Mexico and Canada, Abbott wrote in the letter, from the manufacturing and automotive sectors to energy and agriculture.
“In fact, the increased economic diversity that Texas has achieved in part due to expanded trade relationships has provided Texas with economic resiliency in the face of recent oil price shocks,” the letter states. “But these economic drivers face a devastating increase in tariffs should NAFTA cease to exist, jeopardizing the jobs of Texans and other Americans. The U.S. Chamber of Commerce has found that nearly 6 million jobs nationally depend on trade with Mexico.”
The governor concluded with an urge not to damage the years of success that have come from the agreement.
“NAFTA has enabled growth and economic stability not only for our state, but also for the nation as a whole, and for our neighbors to the north and south as well,” Abbott said. “As you continue the work of modernizing this mutually beneficial trade agreement, I hope you will continue to recognize the true value of the decades of trade relationships we have built with Mexico and Canada.”