In Texas, Trade is Not a Dirty Word
"The bottom line is that trade isn't a dirty word in the Texas vernacular. Rather, it's an essential piece of our economy and way of life."
by John Cornyn on August 29, 2016 at 9:00 AM
Free trade has taken a lot of hits this campaign season. Candidates from both parties have argued that this core tenet of capitalism should be completely rewritten, if not entirely erased. The reasoning goes something like this: If we open up our economy and cut trade deals with other countries, we run the risk of sending American jobs overseas. That may sound convincing, but those claims are often exaggerated and ignore the tremendous benefits trade provides folks here at home. And it flies in the face of what we've experienced here in Texas and across the United States.
With about 95 percent of the world's consumers outside of our country, in today's globalized world, staying competitive means looking beyond our borders. As the country's No. 1 exporter, our state's producers do that remarkably well. More than 40,000 companies in Texas sell their goods and services abroad. And of those, more than 90 percent are small and medium-sized businesses. In other words, it's not just major companies that benefit from trade agreements but also small and family-owned businesses - the backbone of our communities. Texas is blessed with a diverse economy and a wide array of innovative industries. In fact, our greatest comparative advantage is found in innovation and agriculture, allowing the Lone Star State to export everything from cotton and beef to chemicals, petroleum and computers - to more than 180 international markets.
But trade benefits more than companies' bottom lines - it boosts the pocketbooks of families by creating well-paying jobs. In fact, trade is estimated to support almost 1 in 5 Texas jobs. And international trade doesn't just benefit the exporters. Foreign-owned companies invest and build facilities here too, and importantly, they hire Texans. The Department of Commerce estimates that more than a half million Texans are employed by foreign firms.
One of the best examples of trade gone right is our longstanding economic partnership with Mexico - by far the state's largest export market. According to recent data, Texas sent more than $94 billion in merchandise to Mexico - over a third of our total exports - last year. Our state's trade with Mexico alone supports hundreds of thousands of Texas jobs. In other words, Texas-Mexico trade is essential to the well-being of both economies.
Because of our strategic location and expansive border, Texas also serves as a gateway for trade between Latin America and the entire United States. Texas boasts three of the five busiest land ports of entry, and about half of all U.S.-Mexico trade moves through Texas. That's why it's imperative we have the safest, strongest and most efficient infrastructure available. One report calculated that for every minute trucks sit idle at the U.S.-Mexico border, we forfeit more than $110 million in economic output. Clearly, moving people and goods across our southern border isn't just key to the local communities there. It's necessary to keep our national economy running, too.
History has taught us that the kind of protectionist policies now advocated by some are counter-productive, and lead to retaliatory measures that can escalate into trade wars. Ultimately, the domestic businesses and workers these policies intend to support are instead devastated by higher costs and fewer international markets to sell their goods and services. But we can see the benefits of free trade - whether it's helping our companies, adding more jobs to the economy, or stretching our dollars to go further - across the entire country. On top of all the economic advantages, trade helps the United States build alliances and hone strategic partnerships to make the world a safer, more stable place. That's why we should do more - not less - to help cement relationships with our strongest trading partners, including Mexico.
The bottom line is that trade isn't a dirty word in the Texas vernacular. Rather, it's an essential piece of our economy and way of life. Certainly, there are ways we can improve trade agreements in the future for American businesses and consumers. And that's why legislation that provides strong enforcement of our trade laws and assistance to better prepare American workers with the skills to compete in a global economy is so important. But we can do that without losing sight of the main point: Trade is good for Texas.