Whether it’s called NAFTA or “the United States-Mexico trade agreement,” some Texas business and political leaders are just happy that 387,000 Texas jobs and $97 billion in annual state exports no longer appear to be at risk after the Trump administration Monday announced a preliminary deal with Mexico, the state’s top trading partner.
But they’re hoping that Canada — the No. 2 market for Texas exports — isn’t left out as President Donald Trump continues trying to rewrite the North American Free Trade Agreement, which has governed trade among the United States, Mexico and Canada for nearly 25 years.
“We’re still looking to see what the details look like, but it does appear that this (preliminary agreement with Mexico) could even be a much better agreement for Texas” than the existing NAFTA terms, said Jeff Moseley, chief executive of the Texas Association of Business, the top business advocacy group in the state. “We’re very, very pleased today.”
Trump called NAFTA “the worst trade deal in history” during his election campaign, and he said Monday that the name has “bad connotations” and he plans to scrap it as he attempts to strike better trade deals with U.S. neighbors. He also said he will terminate NAFTA altogether as he completes the new trade deals, although such a move would require congressional approval.
Moseley, who has disagreed with some of Trump’s views on trade, said NAFTA “really was operating very well and exceeding expectations.”
Still, Moseley said aspects of the new preliminary deal with Mexico could be more of a boon to Texas, citing in particular the potential for increased promotion and export of agricultural products.
“That has Texas written all over it, because we are a primary producer of ag,” he said.
But Moseley and others also said it’s important for the Texas economy that Canada be part of a final deal or that it reach its own bilateral agreement with the United States.
Texas exports about $22.8 billion of goods to Canada annually — well below its exports to Mexico but still enough to rank Canada as the state’s second-largest export market. In addition, about 400,000 jobs are linked to trade with Canada, according to the Texas Association of Business, slightly more than the number linked to trade with Mexico.
The Trump administration’s preliminary agreement with Mexico “is a positive step, and now we need to ensure the final agreement brings Canada in to the fold and has bipartisan support,” U.S. Sen. John Cornyn, R-Texas, said in a written statement. “A trilateral agreement is the best path forward, and any modernized agreement should do no harm to states like Texas whose economy has seen the benefits of cross-border commerce.”
Gov. Greg Abbott issued a statement calling the preliminary deal “a step in the right direction” that he wants to see repeated. “Canada is our second largest trade partner, and I remain hopeful that negotiations with Canada will be equally productive,” said Abbott, who also is a Republican.
But U.S. Rep. Lloyd Doggett, D-Austin, blasted Trump on Monday, saying the president has abandoned “his unhinged threats to abolish NAFTA” and instead is settling for merely abolishing its name.
“This is typical Trump — planning to tweet and tell his rallies he did something that he did not in fact do,” Doggett said.
He said the avoidance of a trade war with Mexico is clearly good for the state, but “we cannot secure a complete, improved North American agreement without Canada, our No. 2 trading partner.”