It’s currently monsoon season in El Paso, Texas, but the skies over the Santa Fe Bridge were clear Thursday when a delegation of business and government leaders from the U.S. crossed into Ciudad Juárez, Mexico, for the second day of the annual U.S-Mexico Border Summit.
Organized by the Borderplex Alliance, the summit began Wednesday in El Paso on the same day leaders from the U.S., Mexico, and Canada gathered in Washington, D.C., to begin negotiating changes to the North American Free Trade Agreement (NAFTA).
Far from the nation’s capital, El Paso is a major port of entry feeding Texas’ $650 billion international trade business and ground zero for a trilateral trade deal that U.S. Trade Representative Robert Lighthizer said as negotiations opened in Washington had “failed many, many Americans.”
For those at the summit, negotiations in Washington shortened the distance between the two cities, if not the space between “single worst trade deal,” as President Donald Trump has called NAFTA, and their own “do no harm” approach to renewing the landmark trade agreement.
The Borderplex Alliance is a nonprofit corporation that provides consultation to businesses interested in relocating or expanding their operations to El Paso, Juárez, and Southern New Mexico. As a gateway for international trade, the Borderplex Alliance serves as a resource for regional ideas, information, and influence.
Speakers at the first day of this year’s Borderplex summit included government and business heads from the border region stretching from California to Texas, as well as U.S. Rep. Will Hurd (R-Texas), North American Development Bank Managing Director Alex Hinojosa, and Eddie Aldrete, senior vice president of the International Bank of Commerce and chairman of the Texas-Mexico Trade Coalition.
“A lot of people who talk about the border have never been to the border,” Hurd said. In shepherding members of Congress to the border in recent years, Hurd said he has changed some minds about NAFTA and its value. “But these issues are not just border issues; they affect our entire state and country.”
The border region and Texas, in fact, has the most to lose and the most to gain from NAFTA, said Chris Wallace, president of the Texas Association of Business (TAB), one of the four organizations that formed the Texas-Mexico Trade Coalition.
“Texas is the largest exporting state to Mexico and 400,000 Texans directly benefit from NAFTA,” Wallace said. “This is serious business and the most important issue at TAB today. We are making sure the business voice is heard because we think it’s working well. About a million jobs in this country are supported by this trade agreement.”
The challenge now is keeping the benefits of NAFTA, but making it even better, Aldrete said. For San Antonio, that means many things, including the smooth flow and transport of goods.
“One of the areas we’ve been pushing as a state and a region is ease of flow across the bridges,” he said. “The easier it is to get goods and services across the border, the better communities can thrive because of that accessibility. Unfortunately, post-9/11, everything was designed to keep things out.”
Aldrete described how one of the largest breweries in the world, Grupo Modelo, exports about 100 railroad boxcars of product a day, traveling from Eagle Pass through San Antonio – all for American consumption.
“That’s an example of one item that in some way touches San Antonio,” he said. “But there are small- and medium-size businesses in San Antonio that do benefit from NAFTA because they export to Mexico, and there’s a misconception that export in trade is by large conglomerates only.”
The real gap between perception and reality lies in Washington, said Borderplex Alliance Chair Woody Hunt, a gap “politicians use to their advantage and our detriment.”
But “nobody is going to reduce that gap but us,” Hunt said. “We have to take responsibility to change that dialogue. We’ve been working very hard to do that since Nov. 8, when it became very clear that it was going to be a challenge. Now we have an opportunity, given the elevation of these issues to national scope, to seize that opportunity.”
In a panel session at the summit called “NAFTA 2.0 Begins: What Lies Ahead?” TAB’s Wallace said he thinks that Trump’s negative stance on NAFTA was simply a negotiating tactic. “At the end of the day, the administration wants a fair deal. We all do.”
But Lea Márquez-Peterson, president and CEO of the Tucson Hispanic Chamber, disagreed. “The tone was so disrespectful,” she said. “There is an ‘art to the deal,’ but I’m very concerned about the language used.”
Southwest Steel Coil President Ed Camden echoed her remarks. “That negative style exhausts me. That being said, the tone doesn’t end up in those negotiations. Most of that is born out of a lack of knowledge,” he said, admitting his own lack of understanding when he supported independent presidential candidate Ross Perot in the 1992 election because he thought NAFTA would take his job. “NAFTA saved my job,” Camden said.
The panel also discussed NAFTA’s “rules of origin,” the criteria needed to determine the national source of a product. Under rules of origin, duties and restrictions are applied based upon the source of imports, and because some products are crossing the border several times over before assembly is complete, origin is blurred.
“Toyota manufactures trucks in Texas,” Wallace said. “They take them down to Monterrey, make parts for the chassis, bring them back to Texas. So you have obvious origin issues. Parts are made that are imported back to Texas from Mexico that obviously benefit Texas businesses. That’s just one example of the importance of NAFTA and why we must be very cautious in how we tweak the document and the rules of origin.”
Consul General of Mexico in El Paso Marcos Bucio Mújica assured the group assembled in the El Paso Convention Center that Mexico wants only to expand, not restrict, commerce. “In all subjects, Mexico doesn’t want taxes or more barriers,” he said.
He believes the negotiations will strengthen business in all three countries. “We’re undergoing changes in the world and these changes have resulted in geographic blocks, commerce blocks, and North America is a solid block that has to be strengthened and we have to look to future, not the past. We cannot regress.”
Another panel at the summit discussed at length how NAFTA could strengthen the energy relationship between the U.S and Mexico, and remove the potential for political uncertainty. Both energy and e-commerce were discussed as areas in which NAFTA could be improved.
Later in the day, as negotiations went behind closed doors in Washington, the Mexican Embassy’s Deputy Chief of Mission, José Antonio Zabalgoitia, promised, “We are going to negotiate in an all-encompassing way, which means we won’t agree on anything until everything is agreed upon. We’ve been working on three main areas which are, first of all, migration; second, security; and third, trade and investment.”
The border is important because it touches all three of those issues. “There is a lot at stake in this negotiation,” he said. “If we do it well, the border is going to thrive. If we don’t do it well, the border is going to take some pain.”
El Paso County Judge Veronica Escobar said that although she feels El Paso should be leading the conversation on many of those issues – because of how the border city recovered after losing thousands of jobs to Mexico post-NAFTA – it is disheartening that the facts concerning border security, immigration and trade along the border “don’t seem to matter.”
“As we’re seeing NAFTA debated and retooled, now would be the time and opportunity to ensure we’re including topics like migration and how NAFTA impacts migration,” Escobar said. “If you protect the environment and you protect workers in other countries, they are less likely to want to migrate. My concern is that’s not going to happen.”
That disconnect is also apparent in how unaware many are of the infrastructure work that the North American Development Bank has completed since the passage of NAFTA. NADBank Managing Director Alex Hinojosa said the bank has completed $8 billion worth of projects, including bringing needed infrastructure in the form of wastewater treatment plants and electricity to the border region.
Today, due to these improvements and to NAFTA, Mexico’s border region is responsible for 21% of the country’s gross national product and carries a lot of weight in a reforming Mexico, Zabalgoitia said.
At the Centro de Convenciones in Juárez on Thursday, the conversation among panelists, mostly Mexican officials, focused largely on rhetoric coming from President Trump since before the election, and how his threats will influence negotiations for the Tratado de Libre Comercio (TLC), the Spanish term for NAFTA.
“I’ve never seen a national leader talk about a commercial partner the way Trump talked about us,” said State of Guerrero Senator Armando Ríos Piter. “Mexico needs to be clear that they can be the ones walking away from the table because they have a lot of things at stake. That is the spirt in which we should go.”
He added that the negotiating team from Mexico should work toward incorporating more environmental issues into the agreement. “Trump pulled out of the Paris Agreement,” he said. “Now let’s see if we can get it done with the TLC.”
State of Zacatecas Senator José Marco Antonio Olvera Acevedo called for caution in approaching the negotiating table.
“We need to watch that we don’t fall into anti-Yankee rhetoric,” he said. “We need to defend our nation’s interests, but defend them realizing we are part of a global dynamic. In 1994, we broke with that protectionist policy and entered the global economy and we need to focus on that open economy. I don’t think it’s going to be profitable to have anti-American speech.”
Asked if he considered Trump a “disrupter,” Ríos responded: “As a senator, I must work with Trump. The U.S. has other problems. Look at the images coming from Virginia. They have a big problem with human rights. How do we use negotiations with NAFTA to generate solutions? My proposal is let’s put something [in the agreement] regarding human rights and reinvigorate the issue.”
Frank Herrera, San Antonio attorney and president of Hero Logistics, a major Toyota Texas Manufacturing supplier, attended the summit Thursday, revisiting the region where he operates warehouses supporting Toyota’s plants south of the border.
“I’m not in accord with President Trump’s positions, but I think that the realities of the world will govern how Texas will be a major thoroughfare to the benefit of both the U.S. and Mexico,” Herrera told the Rivard Report. “So I’m hopeful that the interests of commerce prevail in terms of strengthening the border.”
Borderplex Vice President of Business Development Marcos Delgado felt sure that what was being discussed in El Paso and Juárez this week was being heard in Washington. Although trade with Mexico has always been a component of the summit, this year’s event focused primarily on how to maintain the relationship with Mexico.
“NAFTA negotiations are putting the relationship on the national radar,” Delgado said of the sentiments expressed by many at the summit, including Javier Corral, governor of Chihuahua. “Effecting change starts with us.”