Texas' Republican Gov. Greg Abbott warned the Trump administration not to change the North American Free Trade Agreement in a way that would inhibit trade with Mexico, arguing that the trade deal has been a major boon to his state and it faces a "devastating increase in tariffs" should the U.S. drop out.
The White House is engaged this week in the sixth round of talks with Mexico and Canada to renegotiate the 1993 deal.
"Our state is the nation’s largest exporter, and NAFTA has been an important trade agreement for Texas for more than 20 years. We support the administration’s effort to review and strengthen NAFTA and understand the need to update the agreement to address innovations and technologies that simply were not envisioned in 1993. However, while there are many areas in need of updating, it is important to not attempt to 'fix' the parts of the agreement that are not broken," Abbott said in a letter Thursday to U.S. Trade Representative Robert Lighthizer.
Abbott noted that Texas exports $92 billion in goods to Mexico annually. He added that Texas has "considerable" trading relationships with Canada as well, exporting $19.6 billion in goods to it, second only to Michigan among the 50 states. He said a million jobs depended on that trade.
"As you continue the work of modernizing this mutually beneficial trade agreement, I hope you will continue to recognize the true value of the decades of trade relationships we have built with Mexico and Canada," Abbott said.
President Trump, a longtime critic of NAFTA, has repeatedly threatened to pull the U.S. out of NAFTA if he cannot get Canada and Mexico to agree to changes he wants. The current round of talks, being held in Montreal, are scheduled to conclude over the weekend. Further talks are likely through the summer.
The renegotiations have been strained. Canadian and Mexican officials rejected U.S. demands to change the rules for determining when a product can be labeled as "made in America" or "made in the USA," arguing that the changes would damage the auto industry, whose supply chain is spread throughout the continent, according to an official with knowledge of the talks. The administration also is pushing to add an end clause to NAFTA and to allow countries to opt out of its investment dispute settlement system, changes the trading partners also object to.