Trade Experts Say Trump’s Anti-NAFTA Blasts Have Clouded Renegotiation Talks

Shari Biediger September 29, 2017

While former Mexican and American diplomats blamed President Donald Trump’s broadsides against the North American Free Trade Agreement for harming U.S.-Mexico relations, San Antonio Mayor Ron Nirenberg brought the current trilateral trade renegotiation talks home by pointing out the almost 200,000 local jobs that are at stake.

“We employ about 63,000 people as a result of NAFTA, and the indirect impact, it’s 135,000 jobs,” Nirenberg said during a panel discussion on the NAFTA renegotiations. “And if you look at it overall, the benefit San Antonio families have had as a result of very positive and inclusive environment with trade in Texas, the bulk of our GDP growth has come from the fact that we have been involved [in support of NAFTA] locally.”

At a forum co-hosted by the Rivard Report and St. Mary’s University on Friday morning, former U.S. Ambassador to Mexico Antonio Garza acknowledged that job losses across the nation have driven some of the anti-NAFTA rhetoric.

As part of the “NAFTA 2.0: The Future of North American Trade” forum, Rivard Report publisher Robert Rivard moderated the discussion between Garza and Mexico Ambassador to the U.S. Gerónimo Gutiérrez, who talked about NAFTA’s history, including the most recent round of the trade negotiation talks that took place in Ottawa, Canada.

“We are in better shape now than we were at the beginning of the year,” Gutiérrez said, avoiding direct criticism of U.S. officials. “We are talking to each other. We have good communication with Trump. But that doesn’t mean we agree on everything.”

Garza said that although he believes negative rhetoric around immigration and NAFTA has drawn down the reservoir of goodwill between Mexico and the U.S., he also remains optimistic about NAFTA’s future.

“In the wake of the response to Harvey, and the solidarity we’ve shown following the earthquakes in Mexico, we’re seeing the very best in human nature,” Garza said. “And if we could somehow distill that … we could resolve some of the major challenges we have.”

Gutiérrez said NAFTA has been oversold and underexplained. “Oversold in the sense that it was not a solution to every problem the U.S., Mexico, or Canada has in terms of its development and it was never intended,” he said. “But the numbers don’t resonate to someone in Ohio maybe [who lost a job].” He believes the good news of NAFTA is better told through stories and people.

Nevertheless, he believes the first three rounds of talks only set the stage for tougher ones to come. The timetable set to complete negotiations – by the end of this year or the start of 2018 – is too ambitious, he said.

Although many state and national analysts consider the trade deal to have had far-reaching and positive economic effects on all three countries, NAFTA opponents argue that the U.S. lost high-paying jobs and gained a mounting trade deficit. Trump campaigned on protectionist ideals in 2016, and against NAFTA.

In the U.S. currently, the number of jobs that depend on foreign trade is at 14 million, Bexar County Judge Nelson Wolff said. Nearly 5 million of those jobs come from trade with Mexico and Canada, countries that buy $600 billion goods from the U.S. – cars and parts, food, and fuel – every year. Almost 400,000 jobs in Texas are supported by NAFTA-created commerce, according to the Texas-Mexico Trade Coalition.

The 1993 signing of NAFTA occurred in a courtyard of La Villita in San Antonio. As the agreement is cross-examined and renegotiated, some political and civic leaders remain optimistic that NAFTA 2.0 will uphold the neighborly relationship it affirmed 24 years ago.

“History has shown time and again that protectionism does not work,” said Wolff, who was San Antonio’s mayor when NAFTA was signed. “One country’s overregulation of free trade leads to another country’s terror. They lose economic activity, competitiveness, innovation declines and ultimately, jobs are lost. This reality seems to be lost in the current dialogue about the North American Free Trade Agreement.”

Bonnie Arbittier / Rivard Report

Bexar County Judge Nelson Wolff attends NAFTA 2.0: The Future of North American Trade at St. Mary’s University.

U.S. Trade Representative Robert Lighthizer has said that during the trade talks this week some issues related to small- and medium-size business were resolved. He also said delegates made significant progress on competition policy, digital trade, state-owned enterprises, and telecommunications.

In another discussion at Friday’s forum, former Canadian diplomat Colin Robertson said he remains positive about the treaty’s prospects, despite Trump’s rhetoric. Robertson called upon delegates to not only be as pioneering in renegotiating NAFTA as they were in creating it, but simply to get it done.

“I’d be happy to call it the ‘Trump Trade Agreement.’ Whatever we have to do to get it approved,” he said. “Make [this version] different but something that will sustain public support because if the people don’t like it and [it’s] simply done for business, it’s not going to fly.”

Gerry Schwebel, International Bank of Commerce’s corporate international division’s executive vice president, was in Canada earlier this week for the negotiations.

“At the end of the day, governments don’t trade. People trade,” he said. “And I think it’s important that we, the people, those of us who are engaged in the process tell the story and stay engaged, whether at the local chamber level or state level or coalitions.”

U.S. Chamber of Commerce Senior Vice President of International Affairs Jodi Hanson Bond was also in Canada this week and said protectionism will not help U.S. businesses now or in the long term.

“We need to have an open mind and an open market. That protectionist sentiment will keep you from growing,” she said. “You can blame a country for those [job] losses, but that country’s name is ‘innovation.’”

Bond said the U.S. Chamber is working to help the agriculture industry in “red states” understand NAFTA’s contribution to food exports, “because farmers had no idea who was buying their crops,” and because if NAFTA “goes off the cliff, it will be a disaster for those red states.”

Robertson, Bond, and Schwebel encouraged forum attendees to ensure their voices are heard, noting that if more people outside the state of Texas understood the stakes, NAFTA would not be at risk. One visit to the border would do it.

Schwebel described Laredo as “sitting on the 50-yard-line of the Super Bowl of Trade,” adding, “you could say the same for San Antonio.”

On a panel with North American Development Bank Acting Managing Director Alejandro Hinojosa and policy development consultant Luz María de la Mora Sánchez, Nirenberg criticized anti-NAFTA statements out of Washington.

“It simply belies the fact that we would take on this protectionist mode as we get into what should be a very serious negotiation to modernize one of the most significant trade agreements in human history,” he said. “Unfortunately, the backdrop of negotiations has been poisoned by national campaign rhetoric.”

Nirenberg brought up ongoing issues with immigration as well. “So it makes it very difficult to govern in that environment when it’s your own local community that is suffering.”

The 1994 creation of NADBank in San Antonio was a side agreement to NAFTA. Since then, the bank has funded many infrastructure improvements along the border, including wastewater treatment. Those improvements are more than about attracting businesses and creating jobs across the border. It’s brought quality of life to an entire region.

“North America is a region,” said De la Mora, who served as a negotiator during the first NAFTA negotiations 23 years ago. “We take it for granted. We never really took the time to explain to people what’s at stake … Trump has said, ‘NAFTA has been a disaster,’ and it’s been the worst trade deal ever negotiated. That’s the way it has been presented.

“We felt like we were in a war.”

Every country has lost, and gained, jobs because of NAFTA, she said. “Mexico and Canada are coming to the table to update and modernize the agreement,” she said. “But the U.S. perspective is of isolation, nationalism, protectionism and, with all due respect, racism.”

De la Mora said choosing how to communicate NAFTA’s impact is important. “What we really need to do is find a story that makes sense to people, that really touches them,” she said. “We have not done a good job at that.”

Making a case for the proposed Toyota-Mazda plant to be built in San Antonio is a story that begins with NAFTA, Nirenberg said. “NAFTA is why we have an integrated supply line with Mexico today.”

Rivard said the publication contacted the U.S. Department of Commerce and the Trump administration’s communications staff about participating in the forum, but received no response. Also invited to participate was Texas Secretary of State Rolando Pablos, who said he was unable to attend because he was working on Hurricane Harvey recovery efforts in Houston.

At the start of the forum, Rivard announced that proceeds from sponsorship of the event will fund a new $10,000 scholarship at the San Antonio-Mexico Friendship Council, aid to Mexican earthquake victims, and nonprofit journalism.

“While other people are talking about building walls and closing borders, we want to create a scholarship where more young people can come from Mexico and Canada and throughout the United States to St. Mary’s to study international business and relations,” Rivard said.