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From the Yukon to the Yucatan: The Importance of USMCA for the Texas Economy

From the Yukon to the Yucatan: The Importance of USMCA for the Texas Economy

Ratification of USMCA is critically needed to provide certainty for the many business sectors in Texas that rely on trade with Canada and Mexico, while in turn contributing to the U.S. economy.

It is clear that a trade deal such as USMCA is beneficial for the continued economic growth of Texas. To voice our support, the Lubbock Chamber signed onto a letter with more than 100 other business and agriculture organizations that was sent to House and Senate leadership. The Texas Association of Business and U.S. Chamber of Commerce are among those who signed the letter, as they both recognize the importance of trade for the Texas economy.

Texas exports more than any other state to Mexico and is second only behind Michigan for exports to Canada. More than 950,000 Texas jobs are supported by trade with Mexico and Canada. In 2018, Texas exported more than $137 billion worth of products to our North American partners, accounting for 43 percent of Texas’ total exports to the world. These are staggering numbers that will only grow with the implementation of USMCA. 

According to a recent independent International Trade Commission (ITC) report, USMCA will create more than 176,000 additional jobs and raise annual U.S. gross domestic product by $68.2 billion. It will increase U.S. exports to Canada by $19.1 billion and to Mexico by $14.2 billion. It is obvious USMCA will greatly benefit the Texas economy by spurring job growth and opening more trade access.  

The manufacturing community in Texas heavily relies on passage of USMCA. In fact, Mexico and Canada purchase half of Texas’ total global manufacturing exports. The Lone Star State’s top exports to Mexico and Canada are petroleum and coal products, computer equipment, chemicals, motor vehicle parts, electrical equipment, semiconductors and electric components, fabricated metal products, plastics, engine, turbine and power transmission equipment and food and beverages. These exports totaled more than $120 billion in 2018 and are responsible for more than 114,000 Texas jobs. Passage of USMCA will help Texas manufacturers be more competitive and create many more jobs in Texas and the U.S. 

USMCA would also create much needed certainty for Texas farm and ranch families who contribute to the economy and feed and clothe millions worldwide. Over 60,400 Texas jobs are supported by exporting agricultural products to Mexico and Canada. The annual value of Texas’ agricultural exports to our North American neighbors totals more than $7.2 billion. USMCA would only build on these achievements by breaking down existing trade barriers and opening more market access for products like beef, dairy, corn, wheat and pork.

USMCA also includes new provisions to strengthen and fully enforce environmental and labor obligations. The agreement requires parties to adopt and maintain in law and practice labor rights as recognized by the International Labor Organization. It requires worker representation in collective bargaining in Mexico, new provisions to take measures to prohibit the importation of goods produced by forced labor and to address violence against workers exercising their labor rights. These provisions make strides in leveling the playing field for Texas and U.S. workers and businesses.

USMCA also provides a strong framework to support North American energy trade. It will bolster North American competitiveness and help lower our reliance on energy imports from outside the region. It also maintains the free flow of energy across borders in North America through the continued zero-tariff treatment of U.S. energy exports to Mexico and Canada.

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