By virtually any measure, the economy of Texas performs at a world-class level. Consider the evidence:
- In 2016, Texas exported $232 billion in goods to locations around the world, leading every state in the nation for the 15th year in a row.
- Visitors spent $67.5 billion on travel in Texas alone last year — the third largest share of domestic travel revenue.
- 51 Fortune 500 companies base their headquarters in Texas.
- Texas is the 10th largest economy in the world based on GDP, ahead of Australia, Mexico, Spain, South Korea and many others.
- Based on number of jobs, Texas ranks No.1 in the nation for foreign and domestic investment.
With so much going right for Texas, why try any harder? Well, don’t try telling that to Rolando Pablos, the Secretary of State for Texas. Not one to rest on laurels, Pablos says that Texas can and will do even better in the years to come. This publication recently caught up with Secretary Pablos for a frank conversation on trade and FDI.
What is Texas doing now to promote and encourage more foreign direct investment in the state?
PABLOS: Texas is always exploring new ways to foster an even more attractive environment for foreign direct investment. In addition to our incentive programs, we are actively organizing inbound and outbound trade delegations so that we can educate potential investors and industry stakeholders on the tremendous benefits of doing business in and with the State of Texas. It is crucial for business leaders across the nation and the globe to understand the qualities that make the Lone Star State an ideal environment for businesses, their CEOs, their employees and their families. Our quality of life, place, workforce and industry are truly unmatched anywhere in the world, and this powerful business-friendly formula is what continues to attract more and more foreign investors to the State of Texas.
How is your office working to increase FDI from Mexico and grow trade with Mexico?
PABLOS: As Texas’ largest trade partner, Mexico is extremely important to our state’s continued economic success. Earlier this year, I took my first international trip as Secretary of State to Mexico City, where I met with private and public sector leaders to begin identifying areas of potential collaboration that will further strengthen the Texas-Mexico trade relationship. Our conversations were very fruitful, and we were able to begin organizing trade and energy delegations to start building cross-border partnerships that will create jobs and investment in Texas. In the coming months, I am confident we will begin to see even greater optimism about the future of our relationship which, in turn, will result in increased FDI from Mexico as their business leaders learn more about the opportunities available to them in Texas.
Are you implementing any new programs to spur rural economic development? If so, can you describe them?
PABLOS: Rural economic development in Texas is a top priority for my office and for Governor Abbott. When we discuss rural economic development, there is a tendency to focus exclusively on agriculture. Our rural communities are truly the backbone of our great state, and our farmers and ranchers give so much of themselves and their bounty to strengthen the Texas economy. And while agriculture remains a main driver of our state’s economic success, it is also important to recognize that the Texas economy is increasingly diverse and offers an incredible array of opportunities for other industries to invest and create jobs in rural communities. I am working closely with the Governor’s Office of Economic Development, as well as rural economic development organizations, to help drive home this message to potential investors. Ultimately, we want to expose the hidden gems throughout our state that exist outside the major metropolitan areas. In hosting rural economic development summits, we are bringing stakeholders together to begin the process of asset mapping, focusing on economic development in regional terms so that we can utilize the strengths and resources of each rural community to maximize their competitiveness. At the end of March, I traveled to Longview, Texas to meet with a group of local officials and business leaders for the first in a series of summits focusing on regional economic development. I hope to continue building relationships with private sector leaders in rural Texas to implement this model of regional economic dialogue throughout the state.
What are some pockets of rural economic development success in Texas?
PABLOS: We have witnessed tremendous job growth in South and Central Texas, particularly along the I-10 and I-35 corridors, as a result of expanded projects in communities that have access to the resources of both urban and rural areas. Additionally, throughout the Gulf Coast region all the way down to the Rio Grande Valley, we have seen communities benefit from expansions in the petrochemical industry. East Texas is benefitting from a boost in manufacturing and the service industry while West Texas continues to show strong growth in the agricultural sector.
Who are Texas’ largest trade partners?
PABLOS: We are proud that the State of Texas does business all over the world. Mexico, Canada and China are our top three trade partners in terms of imports and exports. Brazil, South Korea, Japan, and the Netherlands are among the top 10 export destinations for Texas products, while Germany, Vietnam and Saudi Arabia are among the top 10 origin nations for imports to the State of Texas. In my time as Secretary of State, I have been truly amazed at the level of interest companies from across the globe have shown in the Lone Star State. Everyone I’ve spoken to wants to do business in Texas and with Texas.
Do you plan to open more trade offices in the future? If so, where?
PABLOS: Building off 15 years of success with our Texas-Mexico trade office, we are always exploring opportunities to open additional trade offices through the Governor’s Office of Economic Development. We continue to utilize our partnerships with U.S. Commercial Services and Select USA to establish a presence in nations where Texas has a significant economic presence. We hope to continue working with our federal partners to identify opportunities to expand Texas’ footprint across the globe, especially in major markets like Japan, Australia and the European Union.
What incentive programs are available to help foreign investors in Texas?
PABLOS: The incentives for opening and operating a business in Texas are built into the DNA of our state. For foreign investors, the biggest incentive for doing business in the world’s 10th largest economy is our favorable regulatory climate, low taxes, tort reform and access to global markets. Additionally, Texas’ incentive programs allow us to compete on a larger scale and help make our state attractive for both domestic and international investors. The Texas Enterprise Fund is a “deal closer” that helps secure businesses, jobs and investment in the Lone Star State. Additionally, Texas leads the nation with 32 Foreign Trade Zones, which allow assembly plants, warehouses, manufacturers, and other businesses to operate without incurring customs duty payments or property taxes. Texas also offers an in-state tuition incentive to qualified businesses, allowing employees and family members to pay in-state tuition fees at Texas public universities — a benefit that normally requires a student to reside in the state for a 12-month period to be entitled to pay the tuition fees of a Texas resident. These incentives and others are part and parcel of the qualities that make Texas the place to be for businesses.
