MCALLEN, RGV – President Trump on Monday announced a preliminary deal between the United States and Mexico to modernize trade between the two countries.
In front of reporters assembled in the Oval House, Trump called Mexican President Enrique Peña Nieto to congratulate him on the potential accord. Trump said the deal could replace the North American Free Trade Agreement.
Under the deal, at least 75 percent of the content of autos sold in the trade block must be made in North America. While 40 percent must be made by workers earning at least $16 an hour.
“They used to call it NAFTA. We are going to call it the United States-Mexico Trade Agreement and we will get rid of the name NAFTA. That has a bad connotation because the United States was hurt very badly by NAFTA for many years,” Trump told reporters. “Now it is a very good deal for both countries.”
Canada is also part of NAFTA. No agreement has been reached with the Canadians. The Canadian foreign ministry said it was encouraged by the progress so far.
Reaction from U.S. border leaders has largely been encouraging. Here are some of the comments sent to the Rio Grande Guardian:
Texas Border Coalition
“The Texas Border Coalition is heartened by the announcement of a new preliminary trade agreement between the United State and Mexico. This is good news for a strong and growing economy on the border,” said Laredo Mayor Pete Saenz, chairman of the Texas Border Coalition.
Saenz pointed out that trade directly generates 30 percent of the U.S. economy, including 41 million American jobs – 3.1 million of them in Texas.
“Interdependence is the way business gets done in the 21st Century economy, on the border and across the globe,” Saenz said. He argued for a “strong NAFTA agreement” that “facilitates trade of manufactured goods, agriculture products and other goods – linking the productivity and competitiveness of communities on both sides of the border and beyond.”
Saenz said such a deal creates jobs and prosperity that improve the lives of border residents.
However, Saenz acknowledged that an agreement between the U.S. and Mexico is “not enough” because, under the terms of NAFTA, Canada must still concur with the solutions that the U.S. and Mexico have reached.
“We look forward to Canada returning to the negotiating table in the coming weeks and bringing the NAFTA negotiations to a close,” Saenz said. “We look forward to that day, and to working with Congress to ratify a new treaty that strengthens the U.S. and North American economies.”
Rep. César Blanco
State Rep. César J. Blanco, D-El Paso, offered this reaction to the potential trade agreement:
“Despite its shortcomings, NAFTA has been a boon to our border communities and State economy. NAFTA has been a huge job creator for El Paso, Texas, and the United States. In El Paso alone, one in four jobs depend on cross-border trade with Mexico and is the 4th largest manufacturing hub in North America,” Blanco said.
Blanco pointed out that President Trump has repeatedly threatened to scrap NAFTA against the urging of Texas and border leaders.
“Trump’s past rhetoric and actions have already caused wide-spread uncertainty and spurred trade-wars with some of our closest allies. Trump’s actions on trade thus far have hurt American workers, consumers, steel workers, and farmers,” Blanco said, adding that trade is critical to economic growth.
“While I support modernizing and strengthening trade with our North American neighbors, it is critical American workers are not left behind. I remain cautiously optimistic to this preliminary agreement and continue to urge President Trump to solidify a trade agreement that brings NAFTA into the 21st century,” Blanco said.
Border Trade Alliance
Border Trade Alliance President Britton Clarke said he was encouraged by the potential agreement on cross-border trade.
“The cross-border trade community is encouraged by this important step to formulate an updated trade agreement with Mexico. Credit is due the White House and the outgoing and incoming Mexican administrations for working diligently to reach agreement on a number of important issues that we believe will help bolster the continued health of the U.S.-Mexico relationship,” Clarke said.
“The Border Trade Alliance would continue to stress, however, that NAFTA’s trilateral construct, which has defined the world’s most economically competitive trade bloc for nearly 25 years, should be preserved and modernized. We would urge all parties to continue to work to ensure that the final agreement is a trilateral one.”
International Bank of Commerce
Laredo-based International Bank of Commerce has had executives at all the NAFTA negotiations. In fact, the bank has been intimately involved with NAFTA since the trade agreement’s original negotiations in the early 1990s.
Dennis E. Nixon, CEO and chairman of the board of International Bancshares Corporation and International Bank of Commerce, offered these remarks about the potential U.S.-Mexico trade accord:
“As CEO of a Laredo-based bank, I have witnessed first-hand the powerfully positive economic impact NAFTA has had in Texas and throughout the United States over the past 24 years. The bilateral agreement between the United States and Mexico is an important step in renewing and updating this critical trade pact.”
Nixon is a member of the U.S.-Mexico CEO Dialogue, an elite group of 25 U.S. and 25 Mexican chief executives whose members address core issues in the bilateral relationship between the two countries. The Dialogue is an initiative of the U.S. Chamber of Commerce, of which Nixon is a former member of the board of directors.
Gerry Schwebel, executive vice president of IBC Bank’s Corporate International Division, is a member of the U.S.-Mexico Economic Council (USMXECO), also an initiative of the U.S. Chamber of Commerce.
Schwebel said: “Today’s announcement is of course an extremely positive development. However, it is important to understand the political obstacles a final agreement may still face in the United States and Mexico, as well as Canada.”
Eddie Aldrete, IBC Bank senior vice president, also had comments about the NAFTA negotiations.
“As we update the tripartite trade agreement, nothing is more important for the Texas economy than solidifying our trade relations with Mexico, the state’s largest trading partner and the nation’s third-largest trading partner,” said Aldrete, who also serves as co-chair of the Texas-Mexico Trade Coalition, a pro-NAFTA group whose members include the Texas Association of Business, the Texas Business Leadership Council, the Borderplex Alliance and the Texas Association of Manufacturers.
Nixon, Schwebel and Aldrete have had leadership roles in bilateral efforts to facilitate the successful conclusion of NAFTA negotiations. Earlier in the summer, the three IBC leaders participated in the biannual meeting of the U.S.-Mexico CEO Dialogue in Washington, D.C.
Rep. Henry Cuellar
U.S. Rep. Cuellar, D-Laredo, said the Monday’s announcement of a preliminary deal on NAFTA was a step in the right direction.
“While this entire process could have been avoided without the dramatization and harsh rhetoric from the administration, which has created uncertainty for business and stifled growth, this preliminary deal presents us with the opportunity to modernize the trilateral agreement which has grown trade between the United States, Canada, and Mexico from $290 billion in 1993 to over $1.1 trillion in 2016,” Cuellar said.
“These numbers reflect what I have said all along: NAFTA is an integral part of our economy. Businesses large and small throughout the country simply cannot function in an environment of unpredictability. They rely on the stability, as provided by this treaty, to grow and remain competitive.”
However, while Cuellar said the provisional deal is a step in the right direction, there is still a lot of work to do before Congress votes on this agreement.
“Canada still must agree to U.S.-Mexico agreements that affect their interests, and there is significant trilateral ground to cover. We must solidify a deal that includes Canada, so that we can build upon the successes of NAFTA and strengthen trade relations with both partners,” Cuellar said.
“I ask that the administration quickly provide me with a detailed briefing, so that I remain engaged on this issue. I will continue work with my colleagues on both sides of the aisle and in both chambers to make certain that the new U.S.-Mexico agreement continues to promote job growth and stimulate the economy, just as it has since its inception.”
Rep. Vicente Gonzalez
U.S. Rep. Vicente Gonzalez, D-McAllen, also commented on the provisional U.S.-Mexico deal on NAFTA.
“I look forward to reviewing the details of this preliminary agreement and to working with Mexican President Enrique Peña Nieto, incoming Mexican President Andrés Manuel López Obrador, and Canadian Prime Minister Justin Trudeau to reach a final agreement with our partners in Canada,” said Gonzalez, who recently met with López Obrador’s chief of staff, Alfonso Romo in Mexico City.
“For more than two decades, the North American Free Trade Agreement has bolstered local economies and opened doors for communities in South Texas. Since renegotiation talks began, South Texas farmers, ranchers, businesses, and community leaders have anxiously waited for the administration to deliver NAFTA 2.0,” Gonzalez said.
“Today, we are closer to achieving that goal, but must still work to raise food safety standards, reduce non-tariff trade barriers, improve supply chain security, and lower costs for consumers while ensuring trade that is equitable and just for all North Americans.”
AFL-CIO President Rich Trumka, United Steelworkers President Leo Gerard, United Auto Workers President Gary Jones, Machinists President Bob Martinez and Communications Workers of America President Chris Shelton issued a joint statement on the provisional U.S.-Mexico deal on NAFTA. They said:
“NAFTA has had a devastating impact on workers for more than 25 years. We are aggressively engaged in pursuing an agreement that works for working people in all three countries, and we are not done yet. There is more work that needs to be done to deliver the needed, real solutions to NAFTA’s deeply ingrained flaws.
“Any new deal must raise wages, ensure workers’ rights and freedoms, reduce outsourcing and put the interests of working families first in all three countries. And working people must be able to review the full and final text and have the confidence not only in the terms of the deal, but its implementation, monitoring and enforcement. We remain committed to working with the administration to get NAFTA right. Our members’ jobs depend on it. But, as always, the devil is in the details.”