January 25, 2018
The Honorable Robert Lighthizer
U.S. Trade Representative
Office of the U.S. Trade Representative
600 17th Street, NW
Washington, D.C. 20508
As you continue
negotiations to update the North American Free Trade Agreement (NAFTA), I
write to emphasize the economic importance to our state of trade with
Canada and Mexico and how beneficial NAFTA has been to Texas.
Our state is the nation’s
largest exporter, and NAFTA has been an important trade agreement for
Texas for more than 20 years. We support the administration’s
effort to review and strengthen NAFTA and understand the need to update
the agreement to address innovations and technologies that simply were
not envisioned in 1993. However, while there are many areas in need
of updating, it is important to not attempt to “fix” the parts of the
agreement that are not broken.
As you might expect, Texas’
trade with Mexico is especially robust, but we have considerable trade
relationships with Canada as well:
- Texas exports more than any other state to Mexico
($92.6 Billion, 40 percent of Texas’ total exports) and is second
behind Michigan for exports to Canada ($19.6 Billion, 8.5 percent of
Texas’ total exports).
- 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 last year. That is $1.16 billion per day!
- In 2013, countries with Free Trade Agreements
with the United States purchased $379.09 worth of Texas per
capita. Countries without such agreements purchased only
$16.79 worth of Texas exports per capita. (Source: CDxports
database, Trade Partnership Worldwide)
- 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 our state and national energy industry.
The Business Roundtable
has reported that nearly 1 million Texas jobs depend upon free trade with
our NAFTA partners in varied industries including agriculture, energy,
manufacturing and automotive. 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. 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
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 (the Valley)
which borders Mexico. 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.
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. 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.