The New North American Trade Deal Will Be A Relief For Texas Economy 

Uncertainty about the United States-Mexico-Canada Agreement meant Texas businesses were bracing for no trade deal at all.

By Jill AmentJanuary 17, 2020 1:17 pm,

On Thursday, the U.S. Senate approved the United States-Mexico-Canada Agreement, or USMCA, a replacement for the North American Free Trade Agreement, or NAFTA, in a bipartisan vote of 89 to 10. This comes after approval in the House last month. Both Texas senators voted in favor of the trade agreement, as did every Texan in the House. 

“It is a good deal for Texas, in several respects,” says Thomas Fullerton, economics and finance professor at the University of Texas El Paso’s College of Business. “The most important thing is that it removes all the uncertainty associated with a potential cancellation of the North American Free Trade Agreement.” 

The USMCA does have more regulatory obstacles than NAFTA did, Fullerton says. But in some ways, the USMCA is an improvement to NAFTA, especially when it comes to the protection of intellectual property. Fullerton says there is a 70-year copyright on written material and a 10-year protection on clinical data used to develop new biologic drugs, which protects biotech companies from competitors who mean to replicate those drugs. The protection of intellectual property is important because manufacturing these days means a product is often developed in stages, in different countries, and risks being copied when that material crosses borders.

“All of the companies that ship things back and forth across the border in multiple stages of manufacturing processes, they can still continue to do that and that enables them to compete against low-cost imports from, say, Western Europe or Eastern Asia and Southeastern Asia,” Fullerton says.

The USMCA has been approved by the U.S. and Mexico, and awaits approval by Canada’s government.

“It really is very good overall for the manufacturing economy in the United States and especially for Texas,” Fullerton says. 


Written by Morgan Kuehler.