The relative success of President Trump’s speech Tuesday night — he sounded like a president, not a shock jock — will only matter if he can keep up the gravitas as he moves from asking Congress to confirm his appointees to asking it to pass legislation on his agenda. That goes double for those parts of his agenda that make the GOP majorities nervous, including trade.
So I thought it was noteworthy to see an op-ed in Politico from Sen. John Cornyn, No. 2 in the Senate Republican hierarchy, describing both NAFTA’s benefits to Texas and the ways the trade deal might be tweaked in America’s favor.
“As our largest export market, Mexico has an extraordinary economic relationship with Texas. Trade with our southern neighbor supports hundreds of thousands of jobs in my state and provides more goods at a better price for Texas families. More than a third of all Texas merchandise is exported to Mexico — meaning our farmers, ranchers and small businesses have found no shortage of customers south of the border too.
“This explosion in trade for our state has catapulted Texas to the top of exporting states in the country for more than a decade now. Thanks to trade pacts like the North American Free Trade Agreement (NAFTA), goods and services flow more freely among the three North American countries, growing jobs across Texas and stretching paychecks further. This isn’t just true for Texas. A majority of exports coming from Michigan and Ohio, for example, are bound for our NAFTA partners too.
“Trade in Texas — specifically along our Southern border with Mexico — doesn’t just work in theory. It’s the reality on the ground too. Last week I led a congressional delegation to the border to see this economy in action. We visited the Pharr International Bridge in the Rio Grande Valley — a bridge that facilitates about $30 billion in trade a year. We also visited Laredo, a port that handles about a third of all international trade in Texas, with 14,000 trucks passing through daily. In other words, the Texas border serves as a major gateway for agriculture and manufactured goods trade. It moves more freight along its 1,200-plus miles of southern border than any other border state. And this trade in turn fuels economic growth and vitality across the region and the entire country.”
All the talk about what we import needs to be balanced by these and other facts about what we export. (Not to mention what the flip-side of a trade deficit is — namely, a capital surplus that also creates jobs.) That’s true here in Georgia as well, given the role Savannah’s port plays in sending American-made goods and crops to the world. Tearing up NAFTA is a dubious way to bring jobs back to America, but it’s a certain way to harm the many Americans working in the export business.
That doesn’t mean we can’t strike better trade deals — though Trump’s pledge to strike a lot of smaller, bilateral deals rather than larger, multilateral deals is one way to make trade more of a burden on U.S. companies, not less of one. And it doesn’t mean we can’t improve upon the ones we have. On that score, Cornyn has a few suggestions to enhance NAFTA:
“Consider the nation’s energy landscape. It has changed dramatically since the trade deal was hammered out in the 1990s. With the recent lifting of the U.S. crude oil export ban and Mexico’s energy reforms, a renegotiated deal should account for regulatory cooperation and capacity-building provisions that promote investment and the free flow of American energy, particularly a streamlined approval process for LNG exports. There’s room to bring the services trade into the 21st century, strengthen intellectual property rights and eliminate non-science barriers to trade, too.”
That’s all true, and to the extent the Trump administration focuses on these areas, it will make trade freer to our benefit.
Interestingly, Cornyn also tied the trade question to the immigration question:
“The president has made no secret of rightly prioritizing our country’s safety. Securing the border is an essential part of that equation. But as we do, we must be quick to engage community leaders and business-owners along the border. Yes, they want security and protection. But they also know that key to the success of Texas and the nation has been the cultivation of an environment that can manage the demands of high-volume trade. That means keeping legitimate trade and travel flowing, while simultaneously screening criminal elements and contraband to keep them out. In other words, the border ecosystem demands a careful balance.”
Perhaps this will be another one of those areas that Trump finds to be harder once in office than he thought while he was just campaigning. If so, he’d be wise to heed Cornyn’s advice.