Aug 17, 2016

TPP threatens Texas-Mexico border economy, new report alleges

TPP threatens Texas-Mexico economy, new report alleges

Experts to discuss the findings at a news conference

El Paso, Texas — A new report alleges that the proposed Trans-Pacific Partnership (TPP) trade agreement poses serious threats to the Texas-Mexico border economy.

During a news conference Aug.18, 2016, fair trade advocates and other experts will line up to discuss the findings of the new report by the Texas Fair Trade Coalition "TPP & the Border Economy."

The report warns that the TPP would erode existing preferences for Mexican industries under existing trade agreements, and put at risk both Mexican businesses and the El Paso-area businesses that support them.

The North American Free Trade Agreement (NAFTA) went into effect in 1994, and experts said that since then much of the Texas economy has transitioned from being a hub of production to a center for customs brokerage, logistics, distribution, transportation, accounting and other services that support production operations in Mexico.

According to the report, the TPP would jeopardize these Texan jobs, as well as jobs in the Mexican assembly plants known as maquiladoras.

"The community is leading the charge against the TPP because the majority of border people will be negatively affected by it,” said Lorena Andrade, director of La Mujer Obrera, a nonprofit organization based in El Paso.

“Communities, women and their families never recovered from NAFTA, and the environmental effects from these lax trade deals continue to contaminate and harm our communities.”

Dylan Corbett, executive director of the Hope Border Institute, echoed Andrade's concerns.

"Border communities are well versed in the effects of free trade,” Corbett said. “These agreements are notorious for exacerbating inequality and for their indifference to their negative economic, environmental and human impacts. 

The advocates said they lament that U.S. Rep. Robert "Beto" O'Rourke, D-Texas, has yet to take a stand on the TPP.

Kathy Staudt, a border expert who teaches at the University of Texas at El Paso, said “The U.S.-Mexico border region is among the most unequal in the entire world, measured in GDP per capita and legal minimum-wage terms." 

"Although the rate of trade growth and volume of trade have increased after 20 years of NAFTA, two issues remain unchanged," Staudt said, "the inequality gap between both countries and the Mexican assembly-line workers’ wages in our region which continue at perpetually low levels of approximately $5 (U.S.) per day."

"TPP will not improve those low wages, but TPP will reduce the number of jobs in the region. The risk to shared prosperity in our borderlands is greater with TPP than without it,” Staudt said.

“Trade is good, but that doesn’t mean every trade agreement is a smart deal,” said Bob Cash, director of the Texas Fair Trade Coalition. “The TPP would erode existing preferences for Mexican industry under NAFTA, threatening both Mexican businesses and the Texan businesses set up to service them. This would be a devastating move for the border economy that supports so many working families in our region.”

According to the just-released report, the TPP would diminish preferences for Mexican-made goods imported into the United States under NAFTA, displacing industries located in Mexico with less-expensive Asian-made goods.

“The TPP & the Border Economy” report mentions three specific Mexican industries that the TPP would undermine:

Electronics: One of Mexico’s other largest goods export categories to the United States is computer and electronic products. This sector is threatened by TPP incentives for multinational firms to relocate electronics production to countries such as Malaysia and Vietnam, with their closer proximity to low-cost electronic inputs from China and often more-competitive labor costs.

Apparel: The TPP would likewise eliminate much of the advantage Mexican and Central American nations’ apparel industries have had in accessing the U.S. market. Vietnam, for example, is the second cheapest apparel production country in the world, while Mexico is only the twenty-first. Tariffs are a significant reason why U.S. brands source in Mexico and Central America rather than in less-expensive countries like Vietnam. The TPP tariff reductions would make North American production operations much less competitive.

Automobiles and Auto Parts: Before NAFTA, there were only a handful of auto manufacturers in Mexico. Today, Mexico is the fourth nation in the world for auto exports, behind Germany, South Korea and Japan. Under the TPP, tariffs on Japanese cars imported to the United States will be eliminated and the pact’s weak “rules of origin” would allow for considerably more parts to be sourced from China and elsewhere.

Mexican industry representatives have been issuing the same warnings about the TPP for years, the trade advocates said.

“We’re going to lose what we have gained under NAFTA,” Oscar Albin, executive director of National Auto Parts Industry, Mexico’s industry association, told the Wall Street Journal in September 2015. “We’re going to lose production of auto parts, and the United States is going to lose the prime materials markets. This is a grave danger.”

More than 174,764 Texan jobs have already been certified as lost to offshoring or imports since NAFTA under just one narrow U.S. government program called Trade Adjustment Assistance (TAA). 

The TAA numbers significantly under count trade-related job loss because the program only covers a subset of jobs lost to trade and only counts job losses that are voluntarily reported to the agency. 

The Aug. 18 conference will feature:

Kathy Staudt, UTEP professor, author and border expert
Lorena Andrade, director of La Mujer Obrera
Theodora Simon, Border Hope Institute
The Rev. Bill Morton, Columban Mission Center
Bob Cash, Director of Texas Fair Trade Coalition 

When: 11 a.m., Aug. 18
Where: Cafe Mayapan, 2000 Texas Avenue, El Paso, Texas

Information: Press contact Cemelli de Aztlan; 915-799-2890;

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