The uncertain future of trade with Mexico has Arizona financial leaders nervous yet hopeful that business will continue.


Caught up in the winds surrounding the current occupant of the White House is a major piece of legislation. While it doesn’t involve health care or tax reform, it affects all of us.

It’s called NAFTA, the North American Free Trade Agreement, a pact that has been in place for 23 years, one that President Trump called “the worst trade deal ever.” He also made a campaign-trail promise to “tear it up.”

After threatening to withdraw completely from the agreement in April, the administration gave Congress official notice in mid-May that it planned to renegotiate the deal, keeping an eye out for ways to improve economic growth and add better-paying jobs.

According to regarding trade deals, Americans “have been forced” into deals “that put the interests of insiders and the Washington elite over the hard-working men and women of this country ... President Trump is committed to renegotiating NAFTA. If our partners refuse a renegotiation that gives American workers a fair deal, then the President will give notice of the United States’ intent to withdraw from NAFTA.”

White House officials have expressed hope such an agreement can be negotiated by year-end.  But now that notice has been given of intent to stage NAFTA trade negotiations with Mexico and Canada, the congressional clock to take action on the issue is ticking under a 90-day consultation period.  The earliest date such meetings could lawfully begin would fall on August 16.

Because the contract concern is nationwide, Tucson and Southern Arizona are paying attention.   Enough so that some 60 attendees showed up recently at a downtown gathering to discuss “New Challenges and Opportunities in Cross-Border Agricultural Trade.”

With panel discussions involving a dozen experts on the policies and logistics of bilateral trade of agricultural products between the U.S. and Mexico—and with Washington politics and regulatory decisions still uncertain, so too, were some of the speakers.

Gonzalo Avila, chairman of the board at the Fresh Produce Association of the Americas in Nogales, expressed a cautious optimism. He noted in his keynote speech that since its passage, trilateral trade of all sectors under NAFTA had grown more than 370 percent in the period from 1994 to 2016.

“It’s important to ensure that people understand how important NAFTA is for the U.S., Mexico, Canada and our integrated economies because fair trade benefits us all,” Avila said.  “Consumers in North America now have year-round supplies of fresh fruits and vegetables because of NAFTA.  Last year, we imported 6.3 billion pounds of fresh produce from Mexico through the Mariposa Port of Entry in Nogales, with $171 million a month in Arizona produce exports going into Mexico.”

Erik Lee, executive director of North American Research Partnership, admitted some reluctant pessimism.  

“I’m a border guy myself,” he said, “I’ve assumed NAFTA would always be around and that agriculture would continue to be the success story within that agreement.  But at this point, that might be a false assumption.  I’m hoping the U.S. will come to its senses.” 

Nogales-based importer Jaime Chamberlain was equally cautious and candid. 

“NAFTA, over the last two decades, made North America the strongest economic block in the world.  Its re-negotiation will affect the daily consumption of everything we buy in America.”

In the March 2017 Update of Arizona-Mexico Economic Indicators, analysts reported Arizona exports to Mexico were down a bit over a year ago, but still represented $667 million a month in average value of exports going south.

Regardless of current quarterly numbers, Tucson Mayor Jonathan Rothschild, who campaigned on a promise of economic growth, was direct in his welcome to the crowd.

“We live in challenging times with a lot at stake, and it’s more than just parochial interest along the border,” he said. “We get it at the local and state level—but the message and the scope of the issue may not be reaching Washington.”

Rothschild said that trade policies impact “all of us, and if these discussions go the wrong way, it will not only seriously affect the economy, it will affect the bottom line: our quality of life.”

Rothschild added that it’s important for “55 million people within a 1,000-mile radius of the border” to continue telling Washington, D.C., how trade affects this region and the greater economy. 

“Now is the time for all affected parties to come to the floor and deal with folks on both sides of the aisle to get proper policy,” Rothschild said. “We are a mega-regional trade and logistics center, and we need to be ready for what lies ahead—hopefully something even bigger and better.”

The third annual City of Tucson Border Trade Conference, which will focus on the issue of transportation, is scheduled for mid-October, in partnership with the Pima Association of Governments.

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