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Texans support, prosper from free trade
By Vance Ginn and Dayal Rajagopalan of the Texas Public Policy Foundation. Excerpt:
"As voluntary exchange within a legal framework benefits people in
U.S. states, an optimal free foreign trade agreement would allow
movement of goods among countries while respecting each countries' laws.
Unfortunately, politics picks winners and losers, evidenced by NAFTA's
1,700 pages of carve outs for privileged sectors.
Regardless, evidence indicates Americans benefit from NAFTA, particularly in states such as Texas.
In 2016, Texas exports totaled $231.1 billion and imports were $229.3
billion, for a foreign trade surplus of $1.8 billion. Instead of
thinking about trade deficits as bad and trade surpluses as good,
consider that people benefit by a remarkable total of more than $460
billion through trade.
Texas' trade with Mexico is almost 40 percent of total exports and 35
percent of imports, resulting in a $10.8 billion trade surplus. Exports
to Canada are 8.6 percent of total exports and 16 percent of imports,
for a $16.6 billion trade deficit.
While NAFTA partially contributes to a $5.8 billion trade deficit in a
$1.4 trillion economy, Texans prosper from each individual transaction
through overall lower prices and a growing economic pie. Research finds
that fewer trade impediments among NAFTA countries helped Texas become
economically diversified and more resilient to oil price shocks over
time.
In the early 1980s, Texas' mining industry, comprised mostly of oil
and natural gas activity, was 21 percent of the state's private economy.
While the oil price collapse in 1986 reshaped Texas' economy, there was
a steady decline in mining's share after the passage of NAFTA. Mining
is now only 8 percent of Texas' private economy as expansions in sectors
like health care, technology, and retail outpaced that of oil and gas
activity. Result: More Texans have prospered from trade with Canadians
and Mexicans. However, foreign trade alone is not wholly responsible for
this growth. Pro-growth policies in Texas have also provided the
institutional framework for Texans to thrive."
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