The Benefits of the Trans-Pacific Partnership and the Border States

By Amrietha Nellan

This past Sunday, John Cook, Executive Director of the U.S.-Mexico Border Mayors Association and former mayor of El Paso, wrote an op-ed in the El Paso Times highlighting the critical importance of international trade, particularly with Mexico, and how the Trans-Pacific Partnership (TPP) will help drive economic growth, strengthen communities, and support good-paying jobs throughout the border region.

As former mayor of El Paso, Cook knows that more than one-in-five jobs in our southern border states, California, Arizona, New Mexico, and Texas, are supported by international trade, with Mexico the top trade partner, accounting for almost 22% of exports. These trade-related jobs are already driving growth; on average these jobs have been created two and a half times faster than non trade-related jobs. And for workers looking for jobs to better support their families, this is huge, because export-related jobs pay 18% more than average.

This thriving economic partnership is made possible by the geography and unique cultural relationship between the border states and Mexico, but we shouldn’t ignore the role played by U.S. trade policy. With American exporters burdened by foreign taxes that dampen their sales to Mexico, like the 254% tariff on turkey, 20% tariff on lemons, and the 15% tariff on wind engines, we have significant room for improvement. But it’s not just turkey, lemons, and engines. The TPP levels the playing field for Made-in-America exports across the board by eliminating over 18,000 of these tariffs. What does that mean for border-state workers and businesses? Well, let's look at cotton.

In Arizona, the fabric of our lives isn't just a catchy slogan accompanying the vision of a painfully unattainable celebrity closet. The advent of Pima cotton in central Arizona was the lynchpin of its economic boom of the early 1900s and the establishment of a young Western state. The once historic crop is still important to Arizona today. Cotton is one of Arizona’s top 20 exports, bringing in $153 million in foreign sales in 2014. However, our trade policy currently allows tariffs as high as 15%, which depresses foreign demand, hampers Arizona cotton sales, and hurts Arizona workers.

The TPP reduces tariffs on cotton down to zero. If an Arizona exporter sells its cotton to Mexico, they no longer have to pass along the costs of this foreign tax. The lower cost means Arizona cotton is more competitive, spurring demand and ultimately increasing revenue for Arizona exporters. This doesn’t just benefit the business owners’ bottom line. Revenue growth enables these businesses to invest and grow in their own communities, hiring more workers and supporting good paying jobs.

This is just one example of how the TPP helps working Americans and their families. The TPP’s thousands of tariff cuts directly benefit American businesses and workers. By breaking down barriers for exports, our trade policy levels the playing field for businesses and workers in border states. As Mayor Cook said, “trade with our neighbor to the south can strengthen our communities, support good-paying jobs, and improve our security here at home… [And] under the TPP, this two-way trade relationship has real potential to grow even further.”