BROWNSVILLE, RGV – Texas state leaders need to be more vocal in support of NAFTA and to push back against all the negative publicity free trade agreements are getting in the presidential debates.
This is the view of state Rep. Rafael Anchia, chair of the Texas House Committee on International Trade and Intergovernmental Affairs. Speaking at UT-Rio Grande Valley in Brownsville on Tuesday, Anchia said his committee plans to hold a hearing in Dallas in the Fall to consider the merits of free trade and whether free trade agreements have been good for the State of Texas.
“We are going to follow up the discussion we have had here in Brownsville with a hearing in Dallas. We will invite the top minds in trade and ask them to assess whether trade agreements like NAFTA, the Trans-Pacific Partnership or TTIP will be good for the State of Texas,” said Anchia, D-Dallas.
“My gut reaction is that it will overwhelmingly be good but I want to get a broad range of views on this. We are going to have people from organized labor, the Dallas Fed, business organizations, all weigh in on the subject.”
NAFTA stands for the North American Free Trade Agreement. The agreement signed by Canada, Mexico, and the United States in 1994 created a trilateral trade bloc in North America. TTIP stands for the Transatlantic Trade and Investment Partnership. It is a proposed trade agreement between the European Union and the United States, with the aim of promoting trade and multilateral economic growth. President Obama touted TTIP while attending the big Hannover Messe trade fair in Germany earlier this week.
‘Flawed data’
Anchia made his remarks about free trade in an exclusive interview with the Rio Grande Guardian at the conclusion of a joint hearing between the House Committee on International Trade and Intergovernmental Affairs and the House Committee on Business & Industry at UT-Rio Grande Valley on Tuesday. The focus of the hearing was expanding Texas’ manufacturing base and increasing Texas exports.
“One of the disappointing things about the presidential debates and the discussion related to trade is how facile it has been,” Anchia told the Rio Grande Guardian. “Today we received detailed information and critical analysis of trade data that shows what a boon it is for states like Texas. We are the No. 1 exporting state in the nation by a long shot and we continue to be very competitive in a number of different sectors. I just wish our national politicians would spend a little bit more time and be a little bit more thoughtful about the discussion on trade because it is really important to Texas.”
The “detailed information and critical analysis of trade data” Anchia was referring to came from Federal Reserve Bank of Dallas economists Michael Sposi and Jesus Cañas. Both gave in-depth presentations at the joint committee hearing on how Texas benefits from international trade and how the U.S. is not alone among industrialized nations in seeing its manufacturing base contract.
“I really loved the presentation from the Dallas Fed that broke down the gross numbers we typically receive on trade deficits. It pointed out very clearly that that data is incredibly flawed. In fact, a more detailed analysis of trade shows how our trade deficits are not as big as we once thought and it underscores the importance of engaging in trade for U.S. companies because it creates a lot of really good paying jobs here in the United States,” Anchia said.
Asked if Texas leaders should be doing more to promote free trade, Anchia said: “The Obama administration continues to offer its full-throated support for the Trans Pacific Partnership and is now setting the table for the TTIP agreement which would be the EU-US agreement that will hopefully be negotiated in the fall and winter of this year.
“Leaders in the U.S. should continue to focus on trade. Ninety-five percent of the consumers in the world are outside of our borders. If our companies are going to be globally competitive we need to open up those markets to our products. We need to have a rules-based level playing field and the way you do that is through agreements. If not it is the wild, wild west and we are at a disadvantage.”
Anchia also spoke strongly in support of trade with Mexico.
“Often times we get sidetracked in the Legislature on issues like militarizing our border or building walls or fences and worrying about immigration. The really important discussion that we miss is the bilateral trading relationship we have with Mexico that is vital to our economy and to theirs. When we move past what I call these side issues and focus on the data, if we can enhance trade with Mexico by making the border more flexible and responsive to companies on both sides of the border, boy that would be a huge win for the Texas economy and the economy of Mexico,” Anchia said.
Asked if there is any specific legislation he is working on to help boost trade with Mexico, Anchia said: “Border wait times is something we have studied at length. There continues to be opportunities to consolidate inspections with the federal government; to do joint inspections so we are not unnecessarily delaying trade. For every minute that northbound cargo waits at the U.S.-Mexico border it costs the United States economy over $100 million in economic activity.”
‘Political football’
The chair of the House Committee on Business & Industry is state Rep. René Oliveira, D-Brownsville. In an interview given to the Rio Grande Guardian at the conclusion of the joint committee hearing, Oliveira made similar comments to Anchia.
“By and large, NAFTA and other trade agreements have been good for Texas. I know it is a political football that people want to kick around and perhaps some of the major industrial states that lost jobs, I can understand the bitterness and disappointment with those good paying jobs that may have been part of a family tradition. But to me the testimony we are getting is that those losses were inevitabilities. I specifically probed (the Federal Reserve Bank of Dallas economists) on that and it is happening in every major industrialized nation in the world.”
While supportive of NAFTA, Oliveira did say U.S. companies should be given incentives to stay in the country.
“I do think we need to have some tax policies that discourage companies from moving overseas. If anything has come out from the presidential debates, that is something we should do. But, the fact of the matter is these other countries, Singapore, Korea, and some of the others are going to take that away. When you see Japan and the United States and other industrialized countries losing those jobs, it is unfortunate but it looks to me like it is part of the evolution of our economy and something that was unavoidable and not completely due to any trade agreement.”
Asked if certain trade deals could be tweaked, Oliveira said: “I am sure those agreements could be fine-tuned. No document or agreement or law is ever written to confront the unintended consequences. So, in general I am supportive of it because I think as a whole the nation benefits and clearly Texas does. Are there parts of the agreement we need to revisit? That is probably true as well. But doing away with it could clearly hurt the national economy and the Texas economy.”
Asked what the best part of Tuesday’s hearing was, Oliveira said: “I think the Federal Reserve’s presentation on where Texas economy is and the nation’s economy is was very important. I had no idea our chemical companies were such a high percentage of the Texas economy. We always knew oil and gas and petroleum products were big but even the numbers we saw today were even staggering.”
