What Renegotiating NAFTA Could Do to North Texas

Economist Mike Davis of SMU’s Cox School of Business provided expertise for this story about the effect of NAFTA on the Texas economy.

By Steve Kaskovich 

Before Donald Trump tries to renegotiate the North American Free Trade Agreement, a trade pact he has called one of the worst ever, he should visit the General Motors Assembly plant in Arlington.

The 62-year-old auto factory has never been busier. More than 4,300 workers fill three shifts there six days a week, turning out large sport utility vehicles including Chevy Tahoes and Suburbans, GMC Yukons, and Cadillac Escalades. Just south of the plant, ground has been cleared for a $1.4 billion expansion that will add new paint and body shops and about 600 more jobs.

GM’s revival is an American success story, made possible in part by NAFTA, which has allowed U.S. automakers to shift some parts production and manufacturing to Mexico.  . . .   

“All of our economies are really just intertwined like a ball of thread at this point,” said Mike Davis, a senior lecturer at Southern Methodist University’s Cox School of Business. “If you damage one aspect of that through tariffs or quotas or something that restricts trade, you’re just going to foul things up all over the place.”

In Arlington, about 40 percent of the parts that go into the luxury SUVs that roll off GM’s assembly line come from outside the country, mainly Mexico, says Johnny Pruitte, president of United Auto Workers Local 276, which represents the factory workers there.

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