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The Center for North American Studies has gained a new partner: Texas
Tech University.
In the summer of 2002, faculty and graduate students in the agricultural
and applied economics department joined in the North American Free Trade
Agreement effort by conducting research on cotton trade between the United
States and Mexico.
Dr. Don Ethridge, professor and department chairman for the agricultural
and applied economics department, and Dr. Jaime Malaga, assistant professor
in the ag economics department, are glad to be partners in this cotton
research project with the CNAS. The study will last as long as funding
is available. At this time, there is funding for at least two years.
Since cotton is a major crop in west Texas, Tech has been asked to aid
in the research being conducted on cotton and textiles. Mexico is the
largest importer of Texas cotton, so more research is needed to make trade
run smoother.
“This is an exciting opportunity for Texas Tech,” said Ethridge.
The purpose of the project is to provide research and conferences to find
solutions to trade problems. The goal is to better inform private sectors
of the latest improvements. Texas Tech hopes to join the other universities
that are already involved by organizing and hosting conferences.
The interaction of trade and domestic policy is the main idea when it
comes to economic issues as the United States engages in trade negotiations
and formulation of domestic policy. The outcome of this interaction affects
agricultural producers and agribusiness worldwide.
The last conference was May 22-24th, 2002, in San Antonio, Texas. The
theme of the conference was Free Trade Areas of the Americas, the World
Trade Organization and new farm legislation: responding to opportunities
and challenges. The conference focused on the opportunities and challenges
that arise out of the policy debates.
Texas A&M University has been working with the CNAS for the past
three years and one of the main crops in its study is rice. Louisiana
State University, which has also been working on the project for three
years, focuses on rice and sugar cane trading.
The fourth partner working with the CNAS is New Mexico State University.
It is conducting research with different horticulture products. Most trade
research being done by the CNAS is concentrated on trade with Mexico.
The Mexican cultural influence in Texas helps with the transition of NAFTA.
According to Malaga, NAFTA is a customs union hoping to eliminate tariffs
and quotas. Currency will not be integrated and it is hoping to limit
labor movement. The major trade barriers are tariffs, rules and regulations.
However, investments are moving more freely due to the implications of
NAFTA.
Unfortunately, there are a few potential problems the program needs
to address. Mexico and the U.S. have different safety regulations regarding
transportation. When it comes to the cotton market, when the U.S. market
suffers, so does the Mexican cotton market and vice versa.
Due to liberalization through NAFTA, some U.S. producers have experienced
more market access and rising exports for their crops. However, others
have faced more import competition and lower prices.
There are many goals that Tech and the other universities hope to accomplish
through the project. The CNAS with its teams hope to educate people on
both sides of the border about the future currency market to prevent problems
with price and currency fluctuations. It also hopes to assist the U.S.
and Mexico in becoming more economically integrated. The model for the
CNAS program is the European Economic Union from 50 years ago according
to Dr. Ethridge. The European countries instituted their union after the
end of World War II. Now there are many centers throughout the U.S. to
assist with NAFTA. Programs similar to the CNAS in College Station, Texas,
exist in the Northern plain states and deal more with trade to Canada.
Trade among the United States and its neighboring countries have increased
in recent years due to NAFTA. “Hopefully with further research help
by the CNAS, trade will continue to flourish. No tariffs and a decrease
in other trade barriers are not the only reasons trade has increased,”
said Malaga. “Mexicans’ are changing their diets and eating
more American influenced foods.”
Tech’s work will focus on the trade with Mexico. With Tech’s
prior experience in cotton and textiles, as well as crops and livestock,
it has proudly accepted an invitation to be involved in re-search with
three other universities.
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