Commentary: Keep Texas economy strong by updating — not replacing — NAFTA

You may have heard the adage, “As Texas goes, so goes the nation.”

It often refers to the state’s ability to set the national agenda thanks to our size, unique way of doing business and bold politics. However, this saying might now serve as a cautionary tale as our nation’s leaders test the important relationship we share with Mexico.

In recent months, harsh rhetoric in Washington, D.C., has painted Mexico as a competitor rather than an ally — a trade foe rather than a partner. These characterizations are wrong and threaten Texas and national interests.

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The financial ties that connect us with Mexico are symbiotic, not parasitic. After all, Mexico is Texas’ top trading partner with about $173 billion in trade a year. Additionally, trade with Mexico supports about 463,000 jobs and thousands of small businesses and manufacturers in Texas.

We not only sell to each other, we build things together. Roughly 40 percent of all goods imported from Mexico consist of parts that originated in the United States. By comparison, only 4 percent of products imported from China have U.S. origin.

Studies show that when U.S. companies grow their workforce in Mexico, they also grow their American workforce, increase their exports and spend more domestically on research and development. For those of us who live, work and do business along the U.S.-Mexico border, we see these benefits firsthand.

These realities are often lost in less-nuanced political rhetoric. Short-term thinking on U.S.-Mexico relations will lead to long-term negative consequences for American workers and businesses. The recent pivoting on the North America Free Trade Agreement by President Donald Trump exemplifies the importance of our economic relationship with Mexico.

While Trump has called NAFTA the worst trade deal in history, we must acknowledge the benefits it has brought to states like Texas and the nation as a whole. NAFTA supports 5 million jobs across the U.S. — and by one economist’s estimate, it enriches the U.S. by $127 billion anually. Texas’ exports to Mexico have grown by 354 percent since NAFTA, far outpacing export growth in other states and the nation as a whole. Texas also enjoys a $12 billion trade surplus with Mexico.

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There are certainly ways in which NAFTA could be updated — the original agreement predated much of the technological advances of the last quarter century — but this should be done in the spirit of cooperation, not antagonism. In fact, if we focus on the growing energy and technology markets as a region, we could become stronger competitors in the global economy.

The administration’s latest signaling not to terminate NAFTA is a move in the right direction and an opportunity for business and elected leaders in Texas. Our state sees the benefits of collaborating with our southern neighbor by building regional supply chains and innovating together to compete globally. We can shape the national agenda once again by influencing the outcomes of an updated trade agreement and how we define our economic relationship with Mexico.

Barela is chief executive officer of the Borderplex Alliance, a binational economic development agency promoting the economic growth of El Paso, Ciudad Juarez and Southern New Mexico.

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