SAN ANTONIO, Texas — Texas farmers and ranchers need strong trade relationships, especially during weak economic times, Texas Farm Bureau President Russell Boening said as he testified on the importance of the North American Free Trade Agreement (NAFTA) before the U.S. Senate Finance Subcommittee on International Trade, Customs and Global Competitiveness.
“Due to the current state of the farm economy, a full withdrawal of the U.S. from NAFTA would devastate the entire agricultural community and our nation. We must make certain this does not happen,” Boening said.
Texas agriculture contributes more than $130 billion dollars annually to the state’s economy. Food and fiber products grown in the Lone Star State are traded with neighboring countries—Canada and Mexico—through NAFTA, which was implemented in 1994.
The agreement eliminated or reduced many tariffs on goods traded between the three countries, establishing Mexico and Canada as Texas’ second and third largest agricultural export markets.
Those exports to Canada and Mexico quadrupled from $8.9 billion in 1993 to more than $38 billion today due, in large part, to NAFTA.
“More than 25 percent of all U.S. agricultural production ultimately goes to markets outside of the U.S.,” Boening said. “This is one reason trade agreements, such as NAFTA, are critically important to farmers and ranchers.”
In Texas, trade disruption puts much at risk.
In 2016, Texas agricultural exports to Mexico totaled about $834 million. The top exports included beef and veal valued at $142 million, cotton at $125 million, sweeteners at $65 million and corn at $63 million.
“The thousand-mile border between Texas and Mexico gives us an obvious marketing advantage over other states,” Boening testified. “But it is important that we keep this market strong and work to expand it through the NAFTA renegotiation.”
Agricultural exports to Canada totaled more than $875 million in 2016. The top exports included horticultural products valued at $230 million, beef and veal at $110 million, processed grains at $78 million and food preparations at $77 million.
Free and fair trade is also an economic driver in Texas and the U.S.
According to the Center for North American Studies, U.S. agricultural exports to Canada and Mexico account for more than 509,000 jobs and Texas agricultural exports to these countries employ about 19,000 people.
“There is no doubt that NAFTA has increased demand for U.S. agricultural goods, lowered input and production costs and spurred our economy,” Boening testified. “Leaders involved in NAFTA renegotiations must recognize the gains achieved by American agriculture and assure that trade with Canada and Mexico remains strong.”
Boening noted the trade agreement is more than two decades old. He commended the administration for working to protect the markets while also addressing issues that have limited trade potential for America.
“We welcome any modernizations to NAFTA that will further expand market opportunities for farmers and ranchers,” Boening said.
—Texas Farm Bureau
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