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Comment: Look to international trade to boost the Texas economy



TX – It’s been a rough year for Texans. An unprecedented winter storm left millions stranded without power in freezing temperatures. The COVID-19 recession caused demand for oil and gas to plummet, sending shockwaves through the energy sector. And the virus itself has claimed the lives of more than 43,000 Texans and destroyed more than 680,000 jobs.

But better days are ahead, thanks largely to Texas’ outsize role in international trade. Trade supports an estimated 3.5 million Texas jobs and accounted for 33 percent of the state’s GDP in 2019. And as long as the federal government ensures a fair playing field for Texas firms, trade will rejuvenate the economy and put people back to work.

The old adage “Everything is bigger in Texas” is especially true when it comes to the sheer scale of goods and services that local firms sell abroad. Texas is the largest exporter of goods in the United States — with goods exports eclipsing $315 billion in 2018. Of Texas’ nearly 41,000 exporting firms, the overwhelming majority — fully 93 percent — are businesses with fewer than 500 employees. These small and mid-sized companies are responsible for nearly 40 percent of the state’s annual goods exports.

International trade tangibly benefits Texas workers. Job growth in trade-dependent industries has risen three times faster than the rate of total job creation over the past three decades. And these jobs tend to come with better wages and benefits. According to the Office of the United States Trade Representative, trade-related jobs “pay up to an estimated 18 percent above the national average.”

Consider how trade supports the state’s energy sector. Long Texas’ bread-and-butter industry, the oil and gas industry supports one in six jobs in the state. Texas exported over $113 billion worth of oil, gas, petroleum and coal products in 2018 alone.

Energy firms send many of their goods to Mexico — Texas’ largest trading partner and the largest export market for U.S. petroleum products. And when the U.S.-Mexico-Canada Agreement (USMCA) entered into force last July, many predicted energy exports to Mexico would only grow — to the benefit of Texas’ workers and the state’s economy.

Unfortunately, the Mexican government has been boxing U.S. energy companies out of operating in Mexico by giving preference to its state-owned petroleum company. As Senators John Cornyn and Ted Cruz said in a recent letter co-signed by 41 other members of Congress: “These efforts violate and contradict the spirit, if not the letter, of the USMCA, an agreement among whose primary objectives are to promote growth among the participant countries.”

These members urged then-President Trump to work with the Mexican government to resolve this USMCA violation. For the sake of Texas energy workers, the Biden administration would be smart to carry that request over the finish line.

Though energy comprises the largest component of Texas’ economy, tech could soon give the sector a run for its money. In recent years, Silicon Valley behemoths have invested heavily in campuses in the state and created jobs for Texans at a breakneck pace. The growth of this industry in Texas, of course, depends on expanding tech trade beyond U.S. borders — which hinges on robust intellectual property protections and strong enforcement of USMCA.

IP protections and enforcement are just as integral to the biopharmaceutical industry, which supports more than 196,000 Texas jobs and generates nearly $54 billion for the state’s economy. To expand the Lone Star state’s 4,000 life science companies in the coming years, lawmakers ought to crack down on unfair actions by foreign governments that threaten this industry. Too many nations undervalue American innovation — and some countries even steal our scientists’ intellectual property to create jobs in their market that should be created here in the United States.

No question, it has been a tough year for Texans. But thanks in no small part to international trade, the state is on track to emerge from the pandemic stronger than before. Ensuring that trading partners treat local companies fairly will drive Texas’ economy forward.