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An International Economy

No state has benefited more from the 1994 approval of the North American Free Trade Agreement (NAFTA) than Texas. Since the mid 1990s, exports to Mexico and Canada have climbed, while imports from Mexico and Latin American nations have also risen. In fact, Interstate 35, which runs from Laredo through San Antonio, Austin and Dallas-Fort Worth on its way to Canada, has been nicknamed the "NAFTA Highway" because of the boom in truck-carried freight. Texas also has five major rail gateways into Mexico, serving its industrialized northern communities.

Texas border communities are also enjoying the job-creating benefits of the maquiladora or twin-plant program that allows U.S. manufacturers to locate their production facilities in Mexico. These plants import materials duty free for assembly into finished products that are exported to their country of origin, or to a third country, duty free. Once a product enters the U.S. market, duty is payable only on the product's new value-added content.

More than 350 maquiladora plants now operate in Mexico, including subsidiaries of many Fortune 500 companies. This has spurred the growth of U.S.-based suppliers and distributors, along with internationally oriented professional service firms.

Texas is also the nation's second largest exporting state behind California. Total exports rose 4.8 percent in 1999 to $91 billion. "While Texas accounts for roughly 7 percent of the U.S. population and 7 percent of U.S. employment, the state's share of U.S. exports is just over 13 percent," says Judge Jeff Moseley, executive director of the Texas Dept. of Economic Development. Texas shipments to its largest trading partner, Mexico, increased by 14 percent in 1999, growing to a record $41.4 billion. Exports to the state's other NAFTA partner, Canada, increased by 3.5 percent to $10.7 billion.

Dallas/Fort Worth International (DFW) and Houston's George Bush Intercontinental (IAH) handled more than 93 million passengers and more than 1 million metric tons of cargo in 1999, with direct service to Europe, Asia, and North, South and Central America.

The 29 Texas seaports on the Gulf Coast -- including 13 deepwater ports -- handle more than 375 million tons of cargo each year. The Port of Houston is among the busiest foreign commerce ports in the nation. Texas also has a busy barge transportation system along the Gulf Intracoastal Waterway for grain, lumber, minerals, petrochemicals and other bulk commodities.

An additional incentive to international commerce is the state's 28 foreign trade zones, the highest in the nation, that enhance Texas' appeal as an international distribution, warehousing and manufacturing site.