Economy

Cruz, O’Rourke are bitter rivals — but not on NAFTA

National flags representing the United States, Canada, and Mexico fly in the breeze in New Orleans where leaders of the North American Free Trade Agreement met.
National flags representing the United States, Canada, and Mexico fly in the breeze in New Orleans where leaders of the North American Free Trade Agreement met. AP

— The politics of NAFTA defy the rules of politics.

Throughout 2018, Sen. Ted Cruz and Rep. Beto O’Rourke plan to slug it out as rivals for a U.S. Senate seat.

But at the moment, Cruz, a conservative firebrand is working closely with the establishment-friendly U.S. Chamber of Commerce. O’Rourke, a staunch Democrat, is seeking help from President Donald Trump’s White House.

Both are defying their own parties’ stances in an effort to save the North American Free Trade Agreement, which draws support from Republicans and Democrats in Texas.

Trade negotiators from the U.S., Mexico, and Canada will meet for the next round of discussions on the 1994 agreement later this month. During the 2016 presidential campaign, Trump threatened to pull out of NAFTA if Canada and Mexico don’t agree to renegotiate the deal under his terms.

Trump repeated that threat at an August rally in Arizona, saying “We’ll end up probably terminating NAFTA at some point.”

In Texas, Cruz, O’Rourke and most other state lawmakers want NAFTA kept largely in place.

“There are 400,000 jobs of Texans that are dependent on NAFTA,” Texas Association of Business president Chris Wallace told the Star-Telegram. “We have the most to lose and the most to gain, because we are the number one exporting state [in the country].”

General Motors' assembly plant in Arlington employs 4,250 people, and spokeswoman Leah Seay called NAFTA "critically important" to the company. GM officials are concerned about "an outright withdrawal of NAFTA" that could hurt its ability to do business globally.

Also pushing hard is the Texas-Mexico Trade Coalition, a group of 4,000 Texas businesses that formed in June to lobby the administration on NAFTA. It has two lobbyists in Washington pressuring the White House to keep most of the agreement.

The conservative Texas Public Policy Foundation estimates that Texas' trade with Mexico accounts for nearly 40 percent of the state’s exports and 35 percent of imports. The agreement touches the state’s biggest industries, including agriculture, manufacturing and energy. NAFTA makes it much easier for goods to move freely across borders.

Cruz, who’s been working closely with the White House on most issues since Trump took office, this time sides with the Trump-wary business community.

In a speech at the U.S. Chamber of Commerce in Washington last week, Cruz said he agreed with Trump’s calls to make improvements to NAFTA. But, he warned that if the White House ended the agreement all together, it would “impose massive costs on Texas and the United States.”

“My hope is that we don’t go down that path,” said Cruz. “We maximize the chances of avoiding that path if there are more and more voices instead encouraging the administration to go in the direction of expanding international trade and opening up foreign markets.”

Cruz said he supported renegotiations aimed at modernizing the agreement and increasing cross-border trade. He opposes any negotiations that decrease trade with Canada and Mexico.

“Texas farmers, Texas ranchers, Texas manufactures, Texas small businesses do well when we have access to foreign markets,” said Cruz.

Rep. Kenny Marchant, R-Texas, who serves on the House Ways and Means Committee, which has jurisdiction over trade, said early proposals from the White House so far have not been encouraging for proponents of expanded international trade.

“The administration was going in a direction that we did not want them going in,” said Marchant.

Cruz’s work on the issue could help ingratiate him with the Texas business community. Republicans in the state once threatened to field a primary challenger from the political middle next year. Cruz scored 100 percent on the U.S. Chamber’s voting scorecard in 2016. His cumulative score since joining the Senate in 2013 is 72 percent.

“We’ve had some differences in the past, but Senator Cruz has certainly been out front on the significance of NAFTA,” said Wallace.

O’Rourke, who represents El Paso, met with Commerce Secretary Wilbur Ross and United States Trade Representative Robert Lighthizer — two Trump appointees — earlier this year to urge them to keep the agreement in place.

“There are certainly improvements to be made in the agreement, but the idea that we would somehow walk away from our most important trading partner… makes no sense at all,” O’Rourke said in an interview with the Star-Telegram last week.

O’Rourke would like to see higher wage standards added for Mexican workers, who he said often spent their paychecks on the Texas side of the border.

“Those who understand how dependent the Texas economy is on trade with Mexico, from chambers of commerce, to the individual businesses, to entire communities… everyone needs to speak up right now,” he added.

National Democrats have taken a different stance when it comes to trade agreements.

Sen. Bernie Sanders, Ind.-Vt., ran for the Democratic presidential nomination pledging to rewrite “disastrous” trade deals, including NAFTA. The Democratic Party platform in 2016 railed against trade deals that it said “boosted the profits of large corporations,” while “failing to protect workers’ rights, labor standards, the environment, and public health.” It did not specifically mention NAFTA.

Sizable opposition remains. The Texas Fair Trade Coalition is a group of unions and environmental groups that says the NAFTA has not lived up to its promises. The coalition wants the agreement renegotiated to include additional environmental and wage provisions, but it doesn’t want NAFTA thrown out completely.

Celeste Drake, a trade and globalization policy specialist for the AFL-CIO, wrote in a blog post last month that “negotiating goals seem to prioritize getting a better deal for corporations that want to offshore jobs and decrease wages.”

Andrea Drusch: 202-383-6056, @AndreaDrusch

Correction: This story has been updated to correct the name of the Texas Public Policy Foundation.

President Donald Trump discusses his desire to change NAFTA in a Feb. 2 meeting with senators at the White House.

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