TEXAS' ROLE AS A U.S.-MEXICO TRADE GATEWAY. FINAL REPORT

In providing incentives for increased trade among the U.S., Canada, and Mexico, the North American Free Trade Agreement (NAFTA) could considerably liberalize freight carriage across these countries' respective borders. While Texas has a substantial economic interest in the increased trade, its strategic geographic location, as well as its 2000-km-long border with Mexico, ensures that the state will sustain a disproportionate share of such negative effects as traffic hazards, pavement consumption, and excessive capacity on its highways and at its border crossings. This report summarizes one important result of the Texas Department of Transportation's Project 7-2932, namely, the quantification of the amount of U.S.-Mexico trade that uses Texas highway and rail infrastructure, but which has its origins and destinations outside Texas. Despite some data limitations, the analysis indicates that Texas is the major gateway for U.S.-Mexico trade.