Business Leaders Say Arizona Should Engage In Crafting NAFTA 2.0

Cars wait in line for inspection at the Mariposa Port of Entry in Nogales. The port underwent a $250 million upgrade but some trade groups say it has not lived up to its promise. (Photo courtesy of Customs and Border Protection)


Arizona business leaders said the state’s commerce experts and political actors should help craft a new North American Free Trade Agreement if the two-decade-old agreement is renegotiated.

At a forum in Phoenix this morning, business leaders emphasized how NAFTA has benefited the state’s economy, noting that more than 100,000 Arizona jobs depend on trade with its southern neighbor and roughly $17 billion in trade flows between Arizona and Mexico.

The business leaders said SB1070, which requires Arizona law enforcement authorities to inquire into someone’s legal status during routine stops if there is suspicion he or she is in the country illegally, was a low point in the relationship between Arizona and Mexico.

But Jessica Pacheco, president of Arizona-Mexico Commission, said she has since seen improvement in Mexico’s perception of Arizona, and stressed that a strong and productive relationship with Arizona’s neighbor “only helps position ourselves for future prosperity.”

Jaime Molera, who serves on the Arizona Chamber of Commerce’s Board of Directors, also credited Gov. Doug Ducey for improving ties with Mexico.

“The feedback that we’ve received from politicians in Mexico, more importantly business organizations (and) organizations that were perceiving Arizona to be a state that was unwelcoming, has totally changed,” Molera said. “Now, they have a perception that we want to work with this governor. They want to work with our (policymakers), and they have.”

Lea Marquez Peterson, president and CEO of the Tucson Hispanic Chamber of Commerce, said a new NAFTA agreement could benefit the state, and added that a positive relationship with Mexico is critical to people in southern Arizona.

“We know that Mexican nationals spend over a billion dollars a year in just Pima County,” Marquez Peterson said. “So, the tone and respectful way in which this could be managed is very important to us because it impacts our neighbors.”

Steven Zylstra, president and CEO of Arizona Technology, emphasized that Mexico “couldn’t be a more important trading partner to Arizona.”

Zylstra noted the U.S. is at full employment, and the technology sector is struggling to fill jobs. He said Arizona’s proximity to Mexico gives the state a leg up, and Mexico could provide the talent tech companies need to thrive.

Economist Jim Rounds, who joined the panel at Arizona Capitol Times’ Morning Scoop, said that since the last market crash, Arizona has done “a lot of things right.”

He warned against a border tariff, and said consumers are ultimately going to pay for a border wall, if the Trump administration builds one.

“If for some reason NAFTA 2.0 ends up being something draconian… it’s going to cause a lot of ripple effects,” Rounds continued. “It’s not as simple as saying, ‘Sorry, you’re going to have to pay a little bit more for that one device.’ You have the consumer side, and then you have a very heavily integrated business side that is going to create far-reaching harm if they’re not careful.”

During the presidential campaign last year, Trump called NAFTA “the worst trade deal ever.” Trump believes NAFTA is unfair to American workers, and has often railed against trade imbalance with America’s trading partners.

NAFTA was negotiated in 1994 by President Clinton, and was intended to promote free trade by streamlining and simplifying the exporting process among Canada, the U.S. and Mexico.

Trump had threatened that if he could not renegotiate “a fair deal for all,” the U.S. would pull out of NAFTA.




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