| Perspectives on Texas

“We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada. Both being very difficult, may have to terminate?” — President Donald Trump

Tweets like this have drastically changed the tone of negotiations between the U.S. and Mexico, which — coupled with continued political strain from the proposed border wall, NAFTA and other issues — may seriously affect Texans.

Texas shares 1,254 miles of common border with Mexico, and in 2016 Mexico was the state’s top trading partner —with exports 4.5 times the size of the state’s exports to its next highest trading partner. Relations between the U.S. and Mexico heavily impact the lives of Texans, and as tempers flare regarding NAFTA renegotiations, we may see Texas suffer relatively immediate security issues and serious complications in efforts to grow refineries with Mexican petroleum.

Security

In the struggle to combat drug trafficking organizations on both sides of the border, very few initiatives have been more helpful than efforts made to increase intelligence sharing between U.S. and Mexican agencies. Cooperation between agencies on both sides of the border has led to the capture and extradition of many large players in drug trafficking organizations, but those intelligence sharing relationships are built on trust and mutual respect.

As bad blood from worsening trade negotiations seeps into other areas that feature heavy collaboration with Mexico, we may notice an erosion in the informal cross-border relationships between local law enforcement agencies. For example, extradition understandings between the U.S. and Mexico are relatively formal and transparent, and therefore are less likely to be affected by a changing political landscape. However, understandings between state and local law enforcement with their international equivalents are less public, less formal and may be in serious jeopardy of being quietly undone as tensions rise.

Since state and local law enforcement often have the most experience on what is happening on the ground, a lapse in this vital intelligence sharing relationship may make states that share large borders with Mexico — like Texas — more exposed to run-ins with Mexican drug trafficking organizations.

Repealing Mexico’s energy reform

In 2013, the Mexican government decided to effectively end the decades-long monopoly PEMEX and CFE had over the country’s energy sector by signing amendments into law that would invite foreign investment. This announcement was so promising that it led two U.S. private equity firms, Blackrock and First Reserve, to buy a “45 percent equity interest in two planned natural gas pipelines — called Los Ramones I and II — that will link natural gas from Texas’ Eagle Ford shale fields to manufacturing facilities in central Mexico.”

The news of energy reform in Mexico seemed particularly promising for Texas refineries since the top export from Texas to Mexico up until 2016 was refined oil products and a new surge of Mexican crude oil into Texas refineries would likely lead to a spike in business. Especially following a publication of the Texas Comptroller which stated:

“Mexico refines relatively little of its own crude, and experts think its refining activity is unlikely to expand anytime soon.”

Unfortunately, plans for foreign energy growth in Mexico have come to a halt as the frontrunner in the Mexican presidential election, Andres Manuel López Obrador, has promised to undo the energy reform if it is not supported by a majority of Mexicans in a referendum. López Obrador is known as the populist candidate in Mexico’s presidential election, and is very likely aware that any move he makes to support Mexican jobs and frustrate Trump’s agenda will be well received by the Mexican people — even if it is not the best long-term move for Mexico. If Trump continues using inflammatory rhetoric against Mexico and López Obrador wins the Mexican presidential election, Texas refineries and the Texans employed by them could pay the price.

The Dallas Morning News reported that from 2009 to 2015, Texas accounted for 200,000 of the 900,000 new jobs created nationwide, and much of that growth was linked to growth in exports. Because Mexico is Texas’ largest trading partner, López Obrador’s repeal of Mexico’s energy reform, which promised so much growth, is clearly not good for Texas jobs.

It is becoming clear that affairs in Texas are significantly affected by the health of relations between the U.S. and Mexico. As negotiations with Mexico continue, it may fall on Texans to demand better relations with Mexico in order to maintain the state’s security and robust job growth.