When the North American Free Trade Agreement was enacted 23 years ago, an economic surge in Texas ensued thanks, in part, to a significant boost in trade with our neighbor to the south. Today, more than 380,000 Texas jobs hinge on free trade with Mexico. Agreements like NAFTA have strengthened our state’s economy as a whole, too. More than a third of total goods, worth $92 billion, are exported from Texas to Mexico annually.
But as our economy has expanded, it has matured and diversified. In 1994, when NAFTA went into effect, floppy disks were the norm and streaming videos over the internet was fantasy. The past 20 years has introduced the internet into our everyday lives, which in turn has developed industries like information technology and digital trade.
It’s time NAFTA is updated to reflect the modern economy that characterizes Texas and the nation today. The Trump Administration recently announced its intent to renegotiate the agreement, and fortunately our experience means we play a unique and critical role in this process. As Congress provides input during the 90-day window before formal negotiations, we must take great care to advocate for smart policies that drive growth here at home, look out for hardworking American workers, consumers and businesses small and large, and enhance our partnerships abroad. A new NAFTA must also improve — not diminish — the trade relationship that the U.S., Mexico and Canada share.
Consider agriculture alone: Texas provides nearly half of all U.S. meat and poultry exports to Mexico. Our farmers and ranchers have tremendously expanded their businesses thanks to NAFTA. But in the decades since NAFTA’s enactment, agricultural product standards and classifications have varied among the three countries, resulting in non-tariff barriers that make trade more costly. When we renegotiate, we should insist on science-based measures to eliminate artificial barriers and align the current hodgepodge of classifications among American, Mexican and Canadian agricultural products. That will benefit farmers, ranchers and consumers alike.
Our energy sector, another vital Texas industry, has also undergone a renaissance. Mexico’s hydrocarbon sector has opened up to foreign investment, and the U.S. has the expertise and the capital to take full advantage of this new market. While this is welcome news, the transition created regulatory barriers that are preventing the U.S. energy industry from reaching its full investment potential. In NAFTA renegotiations, we have the opportunity to reduce unnecessary regulations that will help strengthen our economy, and all of North America can move closer toward energy independence.
Industries like health care, finance and hospitality have become more digitized, fostering information sharing between our North American neighbors. Since its advent 20 years ago, the digital economy now employs almost a third of all U.S. workers. But despite this vast reach, there are no clear and enforceable rules on cross-border data flow or intellectual property rights, something a renegotiated NAFTA should address.
As Texans know firsthand, increasing trade requires more than renegotiating NAFTA. We must also recognize the critical roles our infrastructure and ports of entry play in making trade possible in the first place. Since we’ve opened up trade with Mexico, communities along the more than 1,200 miles of our southern border have benefited from cross-border commerce. Three out of the five busiest land ports of entry in America are in Texas. Improving them creates a more efficient customs and transportation process, an important step in increasing trade and encouraging economic growth throughout our state and country.
NAFTA has undoubtedly encouraged economic growth for not only our country, but our neighbors as well. There’s no need to abandon an agreement that has led to increased trade and relationships, but we would all benefit from an update. The past 20 years has unveiled an entirely new realm of trade and technology, and NAFTA should reflect that. As we modernize this vital trade agreement, negotiators should use the needs and experiences of the Lone Star State as their North Star.
By: Senator John Cornyn & Senator Ted Cruz