Politics holding up trade deal with Mexico, Canada, border business leaders say

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Former ambassador says Trump's issues with Mexico are personal, stem from bad business deals

EL PASO, Texas (Border Report) — Politics is again interfering with economic prosperity on the border, a former Mexican ambassador to the United States said.

Arturo Sarukhan, Mexico’s top diplomat in the United States from 2007 to 2013, said the passage of the U.S.-Mexico-Canada Agreement is being held up by partisan efforts to impeach President Trump and by labor unions pressing Democrats not to vote until Mexico implements sweeping workplace laws.

“If the USMCA doesn’t happen between now and December, it’s not going to happen until the late session (of Congress) in 2020. The big danger there is that Trump is then tempted to press the nuclear button and unilaterally withdraw from NAFTA. That would send a terrible signal at a moment when the U.S. economy could be in the throes of a slowdown,” Sarukhan said Thursday in El Paso.

Trump early in his presidency threatened to withdraw the United States from NAFTA, the North American Free Trade Agreement, something that temporarily wreaked havoc on Mexican stocks and their national currency, the peso.

The USMCA is a trilateral pact to replace NAFTA, which went into effect in 1994 amid controversy. The pact led to the flight of thousands of jobs abroad but eventually boosted U.S. exports and led to more imports from Mexico and Canada.

“Even though (USMCA) is not a perfect agreement, it certainly has modernized NAFTA in ways it needed to be modernized. When we negotiated (NAFTA) in 1993 Amazon and eBay did not exist,” Sarukhan said. “So how do you take advantage of e-commerce and digital trade and IP issues that weren’t in the original agreement? We’ve done this with USMCA.”

Sarukhan was part of the “Distinguished Speaker Series” of the Borderplex Alliance, which plans to bring in former Florida governor and ex-presidential candidate Jeb Bush in November.

“Passage of the USMCA is absolutely vital to the Borderplex region. We understand the importance of bilateral trade. We know that having a partner like Mexico to grow the economies of both sides of the border is critical,” said Jon Barela, CEO of the Borderplex Alliance, an El Paso-based nonprofit that promotes trade.

Barela said trade with Mexico props up between 5 million and 6 million jobs in the United States and that such a relationship is vital to both countries’ economies.

The group is aware of the obstacles for prompt approval of the trade deal, but Barela believes there is a chance if House speaker Nancy Pelosi calls for a vote on the House floor.

“My opinion is there is a critical mass of votes, a majority of which would lead to the passage of the USMCA. Hopefully, Speaker Pelosi will bring this to the house floor for a vote. At that point, I think there will be a majority to vote for it,” he said.

Another hurdle for border industry right now is the slow pace at which components manufactured in Juarez, Mexico, are coming across to factories in the United States, Barela said. That’s because wait times at the U.S. ports of entry are still excessively long, he maintains.

“We are working in tandem with members of Congress to examine how we can invest in our ports of entry. The General Accounting Office estimates that $5 billion is needed to upgrade ports of entry from Brownsville, Texas, to San Diego and our region in particular,” Barela said.`

Trump ‘has it in’ for Mexico

“There is a high possibility that Trump will repeat his playbook of 2016 using Mexico as a political piñata, using immigrants and using border security and the wall. How do we Teflon-coat the relationship? It’s going to be communities like this one that are going to lead the way in showing what the potential of this relationship is truly about,” Sarukhan said.

The former ambassador said he fears President Trump will revert to Mexico-bashing during his re-election bid.

He added that Trump appears to be resentful of Mexico, probably because of previous investments there that went sour.

“The problem for Mexico is that Mexico, for Donald Trump, is personal. It probably comes from two or three failed real estate deals in Mexico; a Miss Universe pageant in which he chose poorly his counterpart in Mexico and the pageant didn’t pan out. From as early as April of 2014, Donald Trump starts tweeting that Mexico is not a trustworthy business partner,” Sarukhan said. “What happens later on, in the campaign, is that what was a personal issue toward Mexico became politically electorally expedient.”

The speaker said border leaders and communities can craft their own economic success stories simply by working together despite absent support from Washington, D.C., or Mexico City.

Visit the BorderReport.com homepage for the latest exclusive stories and breaking news about issues along the United States-Mexico border.

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