Texas economy

Turning to international trade to boost the Texas economy

It was a tough year for the Texans. An unprecedented winter storm has left millions of people without power in freezing temperatures. The COVID-19 recession has 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 in large part to Texas’ outsized role in international trade. Trade supports approximately 3.5 million jobs in Texas and accounted for 33% of the state’s GDP in 2019. And as long as the federal government ensures a level playing field for Texas businesses, trade will rejuvenate the economy and put people back at work.

The old adage “Everything is bigger in Texas” is especially true when it comes to the scale of goods and services that local businesses sell overseas. Texas is the largest exporter of goods to the United States — with goods exports exceeding $315 billion in 2018. Of Texas’ nearly 41,000 exporting businesses, the overwhelming majority — 93% — are businesses under of 500 employees. These small and medium enterprises are responsible for nearly 40% of the state’s annual merchandise exports.

International trade has tangible benefits for workers in Texas. Employment growth in trade-dependent industries has grown three times faster than the rate of total job creation over the past three decades. And those jobs tend to come with better pay and benefits. According to the Office of the U.S. Trade Representative, trade-related jobs “pay up to about 18% more than 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 more than $113 billion worth of oil, gas, petroleum products and coal in 2018 alone.

Energy companies send much of their goods to Mexico, Texas’ biggest trading partner and the biggest export market for US petroleum products. And when the United States-Mexico-Canada Agreement (USMCA) went into effect last July, many predicted that energy exports to Mexico would only increase, benefiting workers in Texas and the United States. state economy.

Unfortunately, the Mexican government has blocked US energy companies from operating in Mexico by giving preference to its state oil 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 whose primary objectives are to promote growth. among the participating 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 wise to take this demand to the finish line.

Although energy is the largest component of the Texas economy, technology could soon give the sector a hard time. In recent years, Silicon Valley giants have been investing heavily in campuses across the state and creating jobs for Texans at a breakneck pace. The growth of this industry in Texas is of course dependent on the expansion of technology trade beyond US borders – which relies on strong intellectual property protections and strict USMCA enforcement.

Intellectual property protections and enforcement are equally integral to the biopharmaceutical industry, which supports more than 196,000 jobs in Texas and generates nearly $54 billion for the state’s economy. To grow the Lone Star State’s 4,000 life sciences companies in the coming years, lawmakers should crack down on unjust actions by foreign governments that threaten this industry. Too many nations underestimate American innovation – and some countries are even stealing the intellectual property of our scientists to create jobs in their market that should be created here in the United States.

No doubt, it’s been a tough year for the Texans. But thanks in large part to international trade, the state is on track to emerge from the pandemic stronger than before. Ensuring business partners treat local businesses fairly will boost the Texas economy.

Brian Pomper is executive director of the Alliance for Trade Enforcement.