Ratifying trade deal soon is essential to North America’s competitiveness, says Baker Institute expert


Jeff Falk

Ratifying trade deal soon is essential to North America’s competitiveness, says Baker Institute expert

HOUSTON – (May 15, 2019) – Prompt ratification of the United States-Mexico-Canada Agreement (USMCA) is critical to North America — and Texas in particular — remaining competitive with producers in Europe and Asia, according to an expert at Rice University’s Baker Institute for Public Policy.

Credit: 123RF.com/Rice University

“While (the) USMCA is far from perfect, its approval will maintain most of the advantages of (the) North American Free Trade Agreement (NAFTA) for the continent’s industry, advantages which have generated annual trade of over $1.2 trillion in goods and services,” said David Gantz, the Will Clayton Fellow in Trade and International Economics at the Baker Institute. He is available to discuss the USMCA and related issues with the news media.

The USMCA was signed in late 2018 but has not been ratified by the three countries.

According to the U.S. Department of Commerce, Texas exports to Mexico and Canada totaled nearly $116 billion in 2017 — eight times more than its exports to China — and were responsible for more than 910,000 Texas jobs.

When NAFTA was negotiated more than 25 years ago, one of its most important objectives in eliminating regional tariffs for “originating” goods was to allow American manufacturers of autos, household appliances, machinery and other products to compete effectively with rivals in the European Union and Japan, South Korea and later China, said Gantz, who is also the Samuel M. Fegtly Professor of Law at the University of Arizona’s James E. Rogers College of Law and director emeritus of its international trade and business law program.

“Producers in Western Europe had lower cost labor available in Eastern Europe; Japan and Korea had lower wage cost labor in China and the ASEAN nations to rely upon in forming efficient supply chains in an increasingly global marketplace,” Gantz said. “With NAFTA, Canadian and American manufacturers acquired and have maintained similar advantages in Mexico.

“A quarter of a century later, the revised and modernized version of NAFTA should be submitted to the Canadian Parliament and U.S. and Mexican congresses as soon as possible to assure that the essential competitiveness of North American business and labor is preserved.”


For more information or to schedule an interview with Gantz, contact Jeff Falk, associate director of national media relations at Rice, at jfalk@rice.edu or 713-348-6775.

Related materials:

Gantz bio: www.bakerinstitute.org/experts/david-a-gantz

Follow the Baker Institute via Twitter @BakerInstitute.

Follow the Baker Institute Mexico Center via Twitter @BakerMexicoCtr.

Follow Rice News and Media Relations via Twitter @RiceUNews.

Founded in 1993, Rice University’s Baker Institute ranks among the top three university-affiliated think tanks in the world. As a premier nonpartisan think tank, the institute conducts research on domestic and foreign policy issues with the goal of bridging the gap between the theory and practice of public policy. The institute’s strong track record of achievement reflects the work of its endowed fellows, Rice University faculty scholars and staff, coupled with its outreach to the Rice student body through fellow-taught classes — including a public policy course — and student leadership and internship programs. Learn more about the institute at www.bakerinstitute.org or on the institute’s blog, http://blogs.chron.com/bakerblog.

About Jeff Falk

Jeff Falk is director of national media relations in Rice University's Office of Public Affairs.