By Dan Frosch in Fort Worth, Texas, and Dudley Althaus in Laredo, Texas
When Rick Chevalier wants to ship raw materials from Mexico to his company's coffee plant in Canada, all it takes is a quick email.
As U.S. distribution manager for Mother Parkers Tea & Coffee, Mr. Chevalier arranges a single trucking or train company to whisk the materials, used for coffee-machine capsules, from the Mexican state of Querétaro up through the U.S. and into Ontario in Canada.
Because of the North American Free Trade Agreement, what was once a seven-day trip might now take only five and saves his company money, he said.
"It's free trade that simplifies it," said Mr. Chevalier, who works from Fort Worth, where Mother Parkers has a roasting plant with 300 employees.
Far from abandoned mills and factories of the industrial Midwest, where simmering anger over trade deals and jobs shipped overseas helped catapult Donald Trump to victory, Texas' export economy is powered by Nafta. As a candidate, the president-elect blasted the 22-year-old agreement, which allows goods to move across the borders of Mexico, the U.S. and Canada without tariffs, and said he would like to revamp it.
That sets up a challenge for the president-elect, who must weigh his campaign promises to right the Rust Belt's crumbling factory economy without slowing the Texas trade juggernaut. Many of the businesspeople here who are fretting about what might become of Nafta supported Mr. Trump in the election, including Mr. Chevalier of the coffee company, and say they are hopeful he won't follow through on his threats, pointing to his experience as a businessman.
"How are you going to go in and end a trade agreement that has been in place for more than 20 years where the economy of North Texas is so intertwined with the economies of Canada and Mexico?" said S. Kerry Tassopoulos, vice president of government relations for Mary Kay Inc., the Dallas-based cosmetics company, which ships products to Mexico and Canada.
From the booming border city of Laredo to the bustling trading hub of Dallas-Fort Worth, Texas has become the nation's top exporter of goods, according to the Federal Reserve Bank of Dallas, and Mexico is its biggest customer. Some 382,000 jobs in Texas alone depend on trade with Mexico, according to 2014 data released this month by the Woodrow Wilson International Center for Scholars, a nonpartisan global research group. Goods exported from Texas help support more than a million jobs across the U.S., according to the U.S. Commerce Department.
Most of those jobs are in the manufacturing sector. According to federal data, Texas' top five exports -- key to supporting local jobs -- are computer and electronic products, petroleum and coal products, chemicals, machinery and transportation equipment.
"We hope the president-elect will take these benefits into account as he looks at global trade partnerships," said Bill Thornton, chief executive of the Fort Worth Chamber of Commerce, which wants to meet with the new administration over Nafta.
Even as Texas' economy has struggled during the oil bust, Nafta has helped keep its financial engine humming. Withdrawing from Nafta "would have potentially disastrous consequences not only for our state, but for the U.S. and also countries around us," said Pam Villarreal, senior fellow and economist at the National Center for Policy Analysis, a Dallas-based free-market think tank.
A spokeswoman for Mr. Trump didn't respond to requests for comment.
At a recent conference in Fort Worth and Dallas hosted by the North American Strategy for Competitiveness, a trade group supporting Nafta, business leaders and diplomats, including George W. Bush, a former president and Texas governor, stressed the pact's economic footprint throughout the state.
The Dallas-Fort Worth area is home to more than 20 major Mexican businesses and dozens of American businesses with Mexican subsidiaries, according to the Dallas Regional Chamber business group. Smaller metro areas in the state have prospered, too, few more so than Laredo and other smaller cities along the Rio Grande.
"That's our bread and butter. We're a Nafta town," said Pete Saenz, Laredo's mayor.
Laredo ranks as the nation's third-most important port in total dollar value of trade after Los Angeles and New York, according to U.S. customs data. Some 14,000 trucks and 1,100 rail freight cars cross the river every day between the city and Nuevo Laredo in Mexico,according to Texas state figures.
Since Nafta took effect in 1994, Laredo's population has grown exponentially to some 270,000 people. New middle-class neighborhoods shoot out in all directions, from the historic riverfront center into mesquite-choked former ranch lands.
The trade in goods crossing the Laredo area's five international bridges -- one of which feeds Interstate 35, the so-called Nafta Highway -- contributes about $52 billion to the state's economy annually, state Comptroller Glenn Hegar, a Republican, said during a visit to the city in November.
That level of commerce -- which directly supports jobs in warehouses, transport companies, customs brokers and indirectly in restaurants, hotels and retail -- will force the incoming administration to take heed, many here wager.
"We have to wait until the winds die down to see what happens," said J.O. Alvarez Jr., 62, a third generation customs broker and traditionally Republican voter who has seen his family-owned business boom under Nafta. "People have to realize that the Nafta Highway is a huge trade going both ways. It means jobs in the States and jobs in Mexico."
Gerry Schwebel, executive vice president of the International Bank of Commerce in Laredo, which helps finance crossborder trade, said renegotiating parts of Nafta to help struggling communities in other parts of the country wouldn't be such a bad thing -- so long as businesses are involved.
"As we talk about the benefits of this relationship, the agreement itself is a framework," said Mr. Schwebel, who supported Mr. Trump. "It wasn't intended be a solution for everyone, and we have to be sensitive to that."
Write to Dan Frosch at firstname.lastname@example.org and Dudley Althaus at Dudley.Althaus@wsj.com
(END) Dow Jones Newswires
November 28, 2016 11:22 ET (16:22 GMT)
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