Trump’s NAFTA threats test Texas clout in Washington
by Andrea Drusch (feat. Eric Miller)
April 4, 2018
Texas’ normally powerful business interests are struggling to influence their most pressing Washington policy battle: protecting the North American Free Trade Agreement.
Renegotiating the agreement is the No. 1 concern of the state’s business community, which calls NAFTA critical to the Texas economy.
But for all of Texas’ clout in Washington — including the Senate’s No. 2 leadership role, seven House committee chairmanships and Fortune 500 companies with strong lobbying firepower — the state’s influence at the White House is limited.
President Donald Trump can make major changes to NAFTA unilaterally, and he campaigned on a promise to end the deal if it can’t be renegotiated and improved.
He rattled Texas business leaders Wednesday by linking those negotiations to an immigration dispute on the southern border. Trump tweeted that NAFTA would be “in play” if Mexico did not stop a caravan of Latin American immigrants headed to the Texas border.
The threat comes as Trump’s base has ratcheted up pressure on him to deliver on campaign promises, including trade deals and border security.
That’s causing fresh angst among Texas business interests that count precious few options when it comes to influencing the president.
Eric Miller, a trade lobbyist working on NAFTA, said Texas’ best leverage could be in its pocketbook — withholding re-election funds unless Trump reaches a deal that’s favorable to the state.
Texas business leaders plan to trek to Capitol Hill this month to meet with lawmakers who can stop some changes to NAFTA and who wield power over the president’s future trade negotiating authority.
Another option, touted by Jeff Moseley, CEO of the Texas Association of Business, is working with the Mexican government, which retains a close working relationship with business leaders in Texas.
“There is one person and one person only that matters, and that is President Trump,” said Moseley, who estimates that 1 million U.S. jobs are tied to the trade agreement.
“There needs to be a real concerted effort of Texas businesses showing [Trump and White House trade representatives] the value of the jobs to the U.S. economy,” he added.
Trade representatives from the U.S., Mexico and Canada have met seven times to discuss changes to NAFTA, and Moseley said an eighth round of negotiations is expected to take place.
The White House wants a framework for the renegotiation complete by the April 13-14 Summit of the Americas in Peru.
Moseley, who also leads a NAFTA-focused business group called the Texas-Mexico Trade Coalition, plans to meet with the Mexican trade officials with whom Trump is playing hardball. He’ll sit down with Mexico’s undersecretary for North America, Carlos Sada, on Thursday in Austin.
The trade coalition was formed last year with the support of the Mexican government to represent the interests of 4,000 Texas businesses. It has its own Washington lobbyists.
“We are very committed to keeping the dialogue open with our Mexican trading partners,” said Moseley. “For NAFTA 2.0 to have success, it must be a win-win for Texas as well as our trading partners in Mexico.”
The Texas business association and the Fort Worth Chamber of Commerce are taking their case to Capitol Hill. Adjustments to the trade agreement could require the Senate’s approval if they require changes to U.S. law.
“It’s important that we stay in close contact with the negotiators so that if they negotiate something, it actually has a chance of being passed by Congress,” Sen. John Cornyn said last year.
Senators also hold power over Trump’s authority to negotiate future deals if he doesn’t listen to them on NAFTA.
Cornyn, an ally of the Texas business community, chairs the Senate subcommittee on international trade. He’ll be instrumental in whether the Senate reapproves Trump’s “fast track” negotiating authority after it expires July 1.
Cornyn “is in a great position to use the renewal of [that authority] as a bargaining chip with the administration to really get some concessions in terms of what he’d like to see in a renegotiated NAFTA,” said Tim Meyer, a Vanderbilt University law professor and former State Department legal adviser.
Yet, NAFTA allies concede, the biggest challenge is persuading Trump to take their concerns into account.
Miller, the trade lobbyist, said that effort could lean heavily on Trump’s Texas supporters — many of whom are outspoken NAFTA supporters.
Texas donors gave more than $19 million to Trump’s campaign and support groups in 2016 — more than in any state except New York, California and Florida — according to Open Secrets, a nonpartisan research group. Among metro areas, Houston led the nation in contributions to Trump.
Mosley said he met with close Trump allies on trade: Vice President Mike Pence and U.S. Trade Representative Robert Lighthizer, who is leading the NAFTA renegotiation effort.
“Texas has some heft,” said Miller. “There are a number of financial institutions and certainly agricultural interests that sell an awful lot of product to Mexico.”
“They need to be out there reminding the administration [that] you can’t count on their votes and financial contributions if they’re not taking into account their fundamental interests,” he added.