In Navistar, free trade’s value clear
There are many reasons to celebrate Navistar International’s decision to build a $250 million truck plant here, most likely on the South Side. There is the promise of 600 new jobs and the potential synergy with Toyota, which recently announced a significant expansion of its own South Side truck manufacturing plant. There is the continued optimism that is reshaping the city’s South Side. Not just in these welcome developments on the manufacturing front, but in the continued growth at Brooks, University of the Incarnate Word’s new medical school and the enriching presence of Texas A&M University-San Antonio.
No doubt, the South Side has been on a winning streak. But perhaps the most important takeaway from Navistar International’s investment in San Antonio is an endorsement of the supply lines and free trade that have connected the United States, and Texas in particular, with Mexico and Canada. While Navistar officials haven’t specified the plant’s exact location, they did say in a statement the site will be at “a critical corridor along Interstate 35 which links Navistar’s southern United States and Mexico supply bases, allowing for significant logistic improvements resulting in lower cost and enhanced profitability.”
OK, not the most exciting language, but in our view, this statement underscores the importance of the North American Free Trade Agreement and the need for Congress to approve the United States-Mexico-Canada Agreement, or NAFTA 2.0. Goods move back and forth across the U.S.-Mexico border. Manufacturing there supports manufacturing here, and vice versa.
NAFTA has been given a bad rap in the political sphere. Rather than taking away jobs, research has suggested NAFTA probably has kept jobs in the United States and North America that otherwise would have been moved to Asia. Rather than serving as a drag on the economy, NAFTA has provided a fairly modest boost to gross domestic product, about 0.5 percent, according to the Congressional Research Service.
Perhaps most important, through supply lines, it has connected the United States, Canada and Mexico economically and politically. And in Texas, NAFTA has been a big deal. The Lone Star State exported $315 billion in goods in 2018, according to the International Trade Administration. Mexico and Canada were our top export markets.
If anything then, Navistar’s investment in San Antonio is yet another statement as to why the entire Texas delegation, Democrat and Republican, should support the USMCA.
Of course, the story isn’t just NAFTA. Local and state officials got it right back in 2003 when they convinced Toyota to build trucks here, offering state and local incentives totaling $133 million. It was money well spent. Today, that factory employs 3,200 workers and manufactures Tundra and Tacoma pickups, and Toyota recently announced a $391 million expansion. Toyota’s presence in San Antonio has opened a whole new sector of industry beyond our traditional bread and butter of tourism. “Without Toyota, I do not believe we would’ve attracted Navistar,” Bexar County Judge Nelson Wolff said.
And who knows just what might follow Navistar in the form of suppliers, additional manufacturers and support services in San Antonio? But part of that growth is inextricably tied to supply chains in Mexico. This announcement is as much an endorsement of Toyota’s decision to invest here as it is for free trade under NAFTA. Trade that should be expanded with the approval of the USMCA.