JONESBORO — The North American Free Trade Agreement (NAFTA) has been good for Arkansas’ economy, and its replacement could have a similarly positive impact on the state, according to Melvin Torres, director of Western Hemisphere trade at the World Trade Center of Arkansas.
“Arkansas is an export state,” Torres said. “It’s an ag state and aerospace and defense space, but it’s an export state. We depend on trade. Arkansas has a highly diversified industry which helps balance the economy.”
Speaking to a group of business students and professors earlier this month at Arkansas State University, Torres explained how implementing the United States-Mexico-Canada Agreement (USMCA) will help sustain Arkansas’ economy — from the rural farms to major cities like Jonesboro.
USMCA was signed into law in late 2019 and is expected to be approved by the Canadian Parliament in April. The deal could increase Arkansas trade between Canada and Mexico — the state’s two biggest export markets, respectively, according to data gathered by the Center.
NAFTA, which was signed into law in 1994, removed numerous trade barriers between the three nations, according to The Associated Press.
Since NAFTA’s implementation, Arkansas’ exports to Mexico have increased by more than 700% compared to just 300% with the rest of the world. Combined, Canada and Mexico supported 120,000 in-state jobs in 2018.
Jonesboro’s economy has been booming over the past several years, with record low unemployment and major employers in health care, education and manufacturing “looking for and expecting a more skilled workforce,” according to Arkansas Money & Politics.
Torres said data showed that Arkansas exports flourished after NAFTA, noting that today, the state has nearly 70,000 corporations in good standing.
“That’s incredible for a state like Arkansas,” Torres said. “We only have 3 million people.”
Meanwhile, Arkansas’ small businesses have also benefited thanks to international trade.
In the Natural State, small businesses account for about 80% of exports. Furthermore, Arkansas’ trade-related jobs grew six times faster than total employment while jobs in the export industry paid 18% better than similar jobs in non-trade positions, according to Center data.
The mission of the World Trade Center Arkansas is to grow trade and increase Arkansas exports by connecting Arkansas businesses to the world through international trade services. The center is part of the University of Arkansas and serves as the trade promotion arm for the Arkansas Economic Development Commission. For more information and valuable updates, please follow the center on Facebook and Twitter or subscribe to the World Trade Center Arkansas newsletter.