Renegotiating NAFTA could have a big impact on the Texas economy

President Donald Trump has agreed to renegotiate the North American Free Trade Agreement rather than withdraw from it.
The goal of NAFTA was to make trade between the U.S., Canada and Mexico more accessible, but the president said multiple times during his campaign that he was considering getting rid of NAFTA altogether.

The number one land port in the United States relies heavily on trade agreements with their neighbor to the south.

“We do close to $200 billion worth of trade here in Laredo, Texas,” said Laredo Mayor Pete Saenz.

While President Trump renegotiates NAFTA between the U.S., Mexico and Canada, there is no place in the country that will be impacted more than Laredo.

“We wouldn't be Laredo, Texas and the success that we've had as a trade port without NAFTA,” said Saenz.

Since the NAFTA agreement in 1994, trade between the U.S. and Mexico has increased by 540 percent.

“So any disruption to reducing what we have had for the last 23 years is something we should pull back and really analyze very closely before we support it. We do agree that it should be modernized, we should update it,” said Gerry Schwebel, executive vice president of the corporate international division of the International Bank of Commerce

While Laredo sees the most action, what happens there will have effects far and wide.
“What impacts us down here impacts the entire country. It's not just a border problem, it's basically a global problem,” Schwebel said.

In fact, nearly five million U.S. jobs depend on trade with Mexico.

“We’re all connected. Mexico is very much a part of our economy,” said Saenz.

The International Bank of Commerce, which has a majority of customers involved in international trade, does support changes to the NAFTA agreement. They want any negotiations to focus on expanding NAFTA benefits to all regions of all three countries as well as working to make border management more efficient.

“We all need to pull back and really talk about what are the better solutions, instead of finding the perfect solution, let’s focus on what is a better solution,” Schwebel said.

Any disruption to the NAFTA agreement would upset the U.S. economy, and more specifically the Texas economy. In 2016, trade between Texas and Mexico climbed above $174 billion.
“So, we're proud of that and this is why this relationship with Mexico is so vital and crucial for us,” said Saenz.

Currently, Mexico provides 80 percent of avocados, half of all squashes and tomatoes and 90 percent of limes and papayas consumed in the U.S..

“We have close to 14,000 trucks that traverse our bridges; one in particular, the World Trade Bridge, daily,” Saenz said.

While both the mayor of Laredo and the CEO of IBC supported Trump during his campaign, they are encouraged that his campaign promise to withdraw from the trade pact with Mexico and Canada has fizzled out.

“I'm glad to see too that president trump is willing to negotiate NAFTA,” said Saenz.

Now they hope negotiations will be beneficial for all three countries. So the Texas economy can keep steadily growing for years to come.