Trade has taken center stage in recent months, from imposing steel and aluminum tariffs to reevaluating free trade deals. It’s safe to say the U.S. is taking a hard look at many of its trade relationships. As we embark upon the eighth round of renegotiations of the North American Free Trade Agreement (NAFTA), it’s time to set the record straight: Free trade supports American jobs, industry and ingenuity, and it directly impacts our nation’s economic prosperity.
The facts are clear: When we break down trade barriers, American trade and American jobs surge. Between 2009 and 2015, U.S. exports grew by 22 percent to our free trade partner countries, according to the U.S. Department of Commerce. In the two decades after NAFTA was signed, trade between the U.S., Canada and Mexico tripled. In the U.S. alone, NAFTA supports more than 14 million jobs. Not surprisingly, Canada and Mexico are now America’s largest export markets.
In Texas, trade is a lifeblood. Nearly 1 million jobs are supported by trade, and Texas has reigned as the top exporting state in the U.S. for 14 consecutive years. With negotiations underway, a lot is at stake for our home state, particularly for small and mid-sized businesses. In fact, the overwhelming majority of Texas exporters — 93 percent — are small-and medium-sized businesses. These negotiations matter, and Texans are watching closely. As one Texas business owner recently told my subcommittee, “I can beat the competition, but I can’t beat the tariffs.”
Free trade unleashes American industry, opening opportunities for our workers and businesses to compete internationally. If we put up trade barriers, the rest of the world will simply look elsewhere to do business. And aside from its economic importance, trade is also an effective foreign policy tool that gives our country leverage diplomatically and ensures stability abroad. Free trade agreements open markets and increase prosperity in partner countries, pulling people out of poverty, where extremism takes root and repressive regimes thrive. It can serve as an alternative to U.S. foreign assistance and development aid: with trade barriers removed, access to U.S. investment and the American market replaces the need for costly foreign assistance packages that come at the taxpayer’s expense.
Mexico is a proven example of the power of free trade as a U.S. foreign policy tool. Before NAFTA, our southern neighbor was a developing country with one of the most closed economies in the world. Mexico still has a host of problems, but thanks in part to the market-liberalizing provisions of NAFTA, Mexico has an open economy valued at $2.2 trillion. This growth has made Mexico a more stable neighbor and deepened our bilateral ties. Today, the Mexican government is an important national security partner combatting shared threats, such as the fight against organized crime and drug trafficking.
To the north, our relationship with Canada has been strengthened through NAFTA. Canada is a key NATO ally, contributing to the North American Aerospace Defense Command (NORAD) and the fight against ISIS. With a strong economy, Canada can spend more on defense — such as the 70 percent increase announced just last year — which means even more opportunities for U.S. industry and a partner who can shoulder more of the burden internationally.
However, even good things must evolve with the times. Over the past 24 years, technology has changed the way we conduct business and meet consumer demands. These shifts and advancements are largely not reflected in NAFTA. Renegotiation offers a unique opportunity to update and strengthen what has become the cornerstone of cooperation and business in North America.
As we update the rules of North American trade, we must not underestimate the dramatic and enduring effects this renegotiation will have on the U.S. economy and our global relationships. American citizens have a lot to lose if the U.S. withdraws from NAFTA. Instead, we must strive to strengthen and modernize this important agreement. Free trade has been a cornerstone of our economy’s success, and it is a philosophy that has proven time and again to be beneficial to our country and broader region. We would be wise to remember that.
And that’s just the way it is.