MCALLEN, RGV – A well-known academic from Mexico City says Speaker Nancy Pelosi and the Democrats will likely try to thwart President Trump securing a great triumph with USMCA.
María Cristina Rosas says the successor trade agreement to NAFTA will be advantageous to U.S.-Mexico border communities and that, therefore, they should spend money on lobbyists to push for its ratification.
“Everyone can do more. There are politicians, the governor of Texas, the mayors of this region, they can all do more to convince the skeptics. There is too much skepticism,” Rosas said.
“I have a chart that shows the importance of Mexico for Texas, the trade between the two is bigger than the trade between Brazil and South Korea and China. It is enormous, extremely important. Texas can really make a difference.”
With more than 30 years of academic experience, Rosas is and academic based in the Department of International Relations at the National Autonomous University of Mexico in Mexico City. She has served as advisor to the Mexican, Japanese and Canadian governments in areas such as international security, national security, regionalism, and human security, and soft power. She is head of the Olof Palme Center of Analysis and Research in Peace, Security and Development in Mexico City.
Rosas spoke at two events in the Rio Grande Valley last week, hosted by the Mexican Consulate’s Office in McAllen. The first was held at UT-Rio Grande Valley in Edinburg and was co-sponsored by the university. The second was held at the McAllen Convention Center and was co-sponsored by the McAllen Economic Development Corporation.
At both events, Rosas promoted her new book, El Tratado De Libre Comercio De América Del Norte 2.0.
“The idea of the book was to analyze the results of NAFTA because when Trump became president he proposed renegotiating NAFTA. He also trashed Mexico and Canada by saying he would withdraw from NAFTA if the renegotiation was not made,” Rosas said.
“Having that in mind I invited some colleagues from the university (to work with me) that happened to be experts in several fields, such as agriculture, intellectual property, investment, dispute elements and such. So, we created this group and out of this came this book, which analyzes some of the consequences of NAFTA and also addresses possible scenarios of the new free trade agreement. It also includes a number of recommendations to be considered for the governments in light of the new free trade agreement.”
In her remarks, Rosas spoke about Perfidio Muñoz Lerdo, a Mexican politician who famously opposed NAFTA when it was being crafted in the early 1990s. Asked about him after her presentation, Rosas told the Rio Grande Guardian and RGV Public Radio 88 FM:
“Muñoz Lerdo has had a very important political career in Mexico. He was a member of the ruling party, the PRI, which ruled Mexico for 70 years. He was ambassador to the U.N. He is a very prominent figure.
“But, recently he has shifted to the left and now is a prominent member of the new ruling party, Morena. I meet him frequently because he has a TV show. He invites me to comment on political issues. I ask him, what do you think about USMCA, and he says, well, I opposed NAFTA but I know I cannot oppose this new free trade agreement because it is necessary and it could be disruptive if it is not signed. He is proud of not voting for NAFTA.”
Rosas also spoke about the possibility of Mexico and Canada developing a trade agreement with China. She said the odds are stacked against it in Mexico.
“It is a long story. I have spoken to Mexican businessmen. They are very afraid of China. They believe China is a threat. Currently, Mexico has a major deficit with China, enormous. Every year it grows bigger and bigger. The theory is that if we sign a free trade agreement with China that would destroy the national industry. The other thing is, Mexico is used to trading by road, not by sea. We do not have a fleet to move merchandise to China. We have not developed our ports. Our major trading partner is the U.S. There are logistical and political difficulties and with the business community in Mexico, they lack the vision to move towards China.”
So at this point, the possibility of Mexico developing a trade agreement with China is next to zero. But, Rosas said: “I would say the business community should change its mind. Some business people have told me, we don’t speak Chinese, we don’t know their culture, they are completely different to us. Yes, sir, but many countries that do not speak Chinese trade with China. I would like to see the business community in China change their minds, their attitude.”
As for USMCA, the challenges are now political, not economic, the professor argued.
“The challenges have changed. During the negotiations, most of the challenges were about a specific sector, economic challenges. Now, I believe, the challenges are mostly political. The biggest challenge of all is the ratification of the USMCA in the United States. It will pass without any trouble in Mexico and Canada. But in the U.S. the Democrats could hold it hostage. If the USMCA is passed it is a winner for Trump. The Democrats don’t want that. It would be a victory for Trump and Nancy Pelosi and the Democrats do not like that. That is the issue.”
Rosas said the event hosted by the Mexican Consulate’s Office and UTRGV was illuminating because she learned a lot about the impact NAFTA has had on the Valley.
“It is very interesting to see how NAFTA has changed this part of Texas. I was aware but I did not know the details. I know about the trans-border issues but I was fascinated to hear the stories, to talk to specific people, real people about the benefits (of NAFTA).”
Rosas’ presentation at the McAllen Convention Center focused more on international trade. Interviewed afterwards, Rosas said Canada is very much interested in having a free trade agreement with China but it cannot do so without causing angst with the U.S. and USMCA.
“Mexico is not that interested. It should consider it at some point. What happens if the USMCA is not ratified? We have to explore other options and, probably, the option of trade with China would not be that bad.”
Asked if the border region would benefit from the passage of USMCA, said: “Probably, yes, but do not forget, in the automative sector it would be difficult because there are provisions that favor the big three American companies of Detroit. Textiles also.”
Rosas said she is pleased the Mexican private sector is paying for lobbyists to help persuade U.S. lawmakers to ratify USMCA in Congress. She wishes the Mexican government would do the same.
“I do not see lobbyists from the Mexican government. That is a major difference between now and 1994 (when NAFTA was being ratified). During the Salinas de Gortari government, the Mexican government paid for a lot of lobbyists. That is not the case now. Sell it. Our Mexican ambassador in Washington is very alone on this. She (Martha Elena Federica Bárcena Coqui) is very good, she is charismatic, she is smart, she is well liked, but it is not enough. She needs help. That could make a difference.”
Jorge Torres’ viewpoint
The event at the McAllen Convention Center was dubbed “Debriefing on USMCA and its Ratification – Effects on economy, commercial trade and the industrial sector in the Rio Grande Valley.”
In addition to Rosas, the key speaker at the event was Jorge Torres, president of InterLink Trade Services, a customs brokerage in McAllen.
“The message I wanted to get across is that we are all hoping that with all the political challenges, USMCA is going to go through. It is going to bring some positive things to the region. That it is going to be be positive for industry and trade,” Torres told the Rio Grande Guardian and RGV Public Radio 88 FM.
“If USMCA is ratified, that is going to give certainty to business owners. As was mentioned, Mexico has a lot of other free trade agreements so we will have a regional mix of production and assembly. We can benefit from USMCA and the trade agreements Mexico has.”
Asked why USMCA is a good deal for the border region, Torres said: “It has a lot of provisions. One of them benefits the energy sector, Our region is very invested in energy, in gas and oil. There will be more oil and gas exported to Mexico. Mexico is investing in their energy sector so, infrastructure, parts and supplies, will generate business in this area. There should also be increased growth in the maquila industry because of USMCA. It will create jobs in the region, mainly indirect jobs, such as services, more airline flights, warehousing, logistics, transportation.”
Another reason the border region could benefit, Torres argued, is the decision of the Trump administration to impose a 25 percent Section 301 tariff on Chinese products.
“A lot of companies are looking at establishing operations in North America, particularly in Mexico but to some extent the U.S., under the maquiladora program. With the USMCA in place, that gives them certainty to provide their goods without any tariffs from China for the North American market if they are made in the region.”
Like Rosas, Torres said it is vital USMCA passes.
“We know there are a lot of political issues, particularly in the United States. We need to lobby and talk to our congressmen and senators to make sure they ratify it. There is a lot resistance from the Democrats, in particular, because this is a Trump deal. But, hopefully, they will understand the impact it will have on our region and the whole of the United States,” Torres said.
“Running parallel to this, we have to develop the infrastructure. We need more bridges, we need more warehouse space. That needs to be worked on by the local communities so that we are ready to absorb any possible growth with USMCA and other companies moving into the region. We need to be ready.”
Asked about the politics at play in Washington, D.C., Torres said: “It is a political thing. It is getting close to the election campaign and this agreement, if it is ratified, will be a triumph for Trump. It will be a win so it will give him props for his re-election and Democrats do not want that, even though it might be good for the country.”
Torres said the Valley needs to lobby its members of Congressmen to ensure ratification of USMCA. “It will be great for our region. We need to put politics aside for economic development.”