The Free Trade Alliance San Antonio and the San Antonio Chamber of Commerce hosted a bipartisan forum Friday with Texas congressmen Henry Cuellar (D) and Will Hurd (R) regarding the North American Free Trade Agreement (NAFTA), immigration reform, and global trade policy.
Moderated by KLRN’s Rick Casey, the conversation focused on all that is at stake for San Antonio and the state as U.S. President Donald Trump seeks to renegotiate the historic trade agreement he called a “disaster.” The event took place at the Pearl Stable.
“Texas is poised to be the broker between the administration and our friends south of the border,” said AJ Rodriguez, Zachry Group vice president of external affairs, who attended the forum as the newly announced co-chair of the Texas Mexico Trade Coalition.
“The focus is on the fantastic partnership that has been established with NAFTA 1.0 and improve on it in NAFTA 2.0,” Rodriguez said. “It’s really refreshing to see two congressmen from different parties come together and agree that this is about the economic impact, that this is about sustained and expanded jobs and opportunities for those jobs within our state, and … the significance that NAFTA has had on our state’s economy.”
In 1991, the year before NAFTA was signed into law at a renovated 19th-century German-English school building, officially the Plaza San Antonio Hotel Conference Center, Texas exported $15.5 billion in goods to Mexico, according to the Texas Center’s Institute for International Trade.
By 2015, that had increased six-fold. And last year, Texas’ export industry employed 1.1 million people — the most in the country, according to the U.S. Department of Commerce. Currently, over 14,000 trucks a day cross the border transporting goods between the U.S. and Mexico, traveling through the nation’s second largest port, Laredo.
“All those things together just show that NAFTA has done a wonderful job for our state’s economy, but NAFTA 2.0 could do an even greater job,” Rodriguez said. “It’s our job as heads of this coalition to work together with our elected officials and other partners and corporations in our community to help educate on the benefits of what it’s done and what it can do.”
With that much to gain, or lose, Texas leaders had already been working on a reset for years, Cuellar said. “It’s called the Trans-Pacific Partnership. A lot of the work I think the negotiators are going to go over has been done. I think Trump actually made a mistake by getting out of the TPP because I think the only ones who are going to benefit is China.
“We actually did NAFTA 2.0 already. With all due respect to the president, he’s not going to win on throwing away NAFTA like he promised, and he’s not going to win on the wall also.”
The way to keep NAFTA, he added, is to make sure Texas is part of the process.
But there’s an urgency to the situation due to the 2018 presidential elections in Mexico and mid-term elections in the U.S. For that reason, Cuellar and Hurd agree NAFTA 2.0 needs to be finalized before the end of this year. However, Canada is not experiencing the same pressures.
“What’s important is, while we’re less than a month away from negotiations, we’ve got to start focusing the conversation around these negotiations, not just the campaign rhetoric from a couple months ago,” Hurd said. “And when you look at Wilbur Ross and Ambassador [Robert] Lighthizer, the U.S. trade representative, one of the things they say is, number one, do no harm.”
Lighthizer released a comprehensive summary of negotiating objectives on July 17. It includes objectives to add a digital economy chapter and incorporating and strengthening labor and environment obligations that are currently in NAFTA side agreements. The summary shows the Trump administration will work to eliminate unfair subsidies, market-distorting practices by state-owned enterprises, burdensome restrictions on intellectual property, as well as reduce the U.S. trade deficit.
“Some of us live this on a day-to-day basis. Will [Hurd] does that … people at the Port of Corpus Christi do this on a day-to-day basis, and Laredo,” Cuellar said. “San Antonio is a key player, and they need to use our experience as they negotiate this agreement and put those good practices to work.”
Hurd pointed to border infrastructure projects with the North American Development Bank (NADBank) and the development of Eagle Ford Shale and energy consumption as reasons to renegotiate NAFTA and address these issues.
“Having some of these changes codified in a NAFTA 2.0 are very important not only to the U.S. but something we know Mexico wants to do,” he said. “When you look at streamlining some of the regulatory environment in the U.S., Mexico, and Canada, around energy, you make North America competitive in any part of the world. This is an important area to negotiate.
“We can use NAFTA 2.0 as the example for other trade agreements.”
The conversation between Cuellar and Hurd frequently turned toward the administration’s proposed border wall, worker visas, and immigration policies, with Cuellar saying, “The immigrant part is key to NAFTA.”
The congressmen also described how NAFTA has created jobs on both sides of the border, noting that both import and export activity results in jobs.
Hurd read from a report by the Dallas Federal Reserve that showed 73% of imports from Mexico are intermediate goods — things we put into final products made here. Forty percent of the goods that come from Mexico have U.S. parts in them and 25% of Canadian products have U.S. parts.
“The U.S., Mexico, and Canada — we build things together,” Hurd said. “But many people need to better understand this dynamic.
“It’s easy to attack trade,” Cuellar said. “It’s easy to attack the border, easy to come up with simple solutions to the issues we’re facing. We all need to educate, I agree. But nothing’s going to stop me from doing the right thing up there [in Washington] … I think it’s wrong for the Democratic party to be against trade and energy, because those are issues that are important to the state of Texas.”
The first round of the negotiations between the U.S., Canada, and Mexico will take place in Washington, D.C., from August 16-20, 2017, with John Melle, assistant U.S. Trade Representative for the Western Hemisphere, serving as chief negotiator.
Casey suggested to the congressmen that San Antonio could again host the signing of a NAFTA agreement, to which the room spontaneously applauded in support.