A renegotiated North American Free Trade Agreement could benefit the United States, Mexico and Canada, enhancing the continent’s competitiveness in global markets, say several close observers of the trade deal with a keen interest in entrepreneurship.
Revising NAFTA with an eye toward increased protection of intellectual property rights would bring “a more collaborative environment … to get some real innovation going,” said Reva Goujon, a vice president at the global geopolitical analysis firm Stratfor. “Because that’s what this continent needs when you’re talking about aging demographics, technological adaptations.
“There’s so much that North America can do to be the most competitive [region] in the world,” she told VOA.
“The North America Free Trade Agreement in the Era of Trump” was the subject of a panel discussion Goujon participated in at the South by Southwest Conference & Festivals (SXSW), an annual gathering of innovators in music, movies and technology, as well as in political thinking and social activism. The annual 10-day festival opened Friday.
President Donald Trump wasn’t at SXSW, but his presence loomed over the discussion. He has talked about withdrawing the United States from NAFTA and imposing border tariffs on goods produced outside the country. That’s on top of repeatedly insisting that Mexicans will pay for a border wall they don’t want and after disinviting their president from a White House visit.
Yet Representative Will Hurd, a Texas Republican, said he trusted that all three signatories would collaborate on updating the deal to maintain a free-trade zone.
“NAFTA can be strengthened,” said Hurd, also a panelist, noting that Trump, Mexican President Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau had made the same point.
“Folks in my district know that the U.S., Mexico and Canada, we build things together. And Mexico — we’re No. 1 trading partners,” said Hurd, whose constituents mostly are Latino. ” … That’s the issue I’m trying to articulate to my colleagues up in Washington, D.C., as we talk about border security, as we talk about strengthening NAFTA.”
Hurd is a former CIA officer who serves on the House Committee on Homeland Security and heads the House subcommittee on information technology.
Areas of concern
He added that any NAFTA revision must “focus on issues such as agriculture and energy, which today are very different from 30 years ago. We should think about creating a NAFTA 2.0 to boost U.S. competitiveness in the rest of the world.” That, Hurd added, also would “improve North American competitiveness in the rest of the world.”
Goujon agreed “there’s a lot to be updated within NAFTA when you talk about labor, environmental regulations, raising regional content so that all of North America benefits. … We just need to make sure there are no distractions related to the wall.”
She acknowledged NAFTA had contributed to “some disadvantages for low-wage workers who have really been left in the lurch,” and who also were pummeled by automation in manufacturing and by China’s 2001 entry into the World Trade Organization.
“But there are a lot of jobs that are created from a free-trade agreement like this,” Goujon said, estimating at least 4 million jobs “depend on U.S.-Mexico trade. And supply chains are so greatly integrated between the United States and Mexico that if you just untangled that — and I don’t think you can — you would be causing enormous economic disruption.”
Skeptics have said it would be hard for the United States to alter the deal and impose tariffs on Mexico without harming Canada, too.
“I can’t see how it is possible at all. It would be very complicated to do and I don’t think Mexico would … ever go along with it,” Mark Warner, a Toronto trade lawyer, told the Reuters news service last month.
Showcase for Mexico
The SXSW panel discussion took place at Casa Mexico, a public-private partnership hosting concerts, exhibitions and presentations that showcase the neighboring country’s sociocultural riches as well as its business ambitions.
“We’re a country of innovation, of technology development,” said Carlos Gonzalez Gutierrez, Mexico’s consul general in Austin. “We’re the 15th- or 14th-[largest] economy in the world. And that story’s often not told in the U.S. We need to rebrand Mexico and fight misperceptions.”
The World Bank ranked Mexico 15th globally in terms of gross domestic product in 2015.
The partnership brought roughly 100 young entrepreneurs to SXSW to meet investors “and benefit from this ecosystem, which is one of the most developed in the world in terms of venture capital and entrepreneurship,” Gonzalez said.
Conversely, Mexico wants to show off its own talent, he added.
“There’s an incredible push in terms of entrepreneurship in Mexico … and there’s a growing and increasingly consolidated market for venture capitalists and funds of venture capitalists in Mexico that we wanted to bring to SXSW to be better known.”
Gonzalez said his government also wanted clarity about the Trump administration’s trade goals so Mexico could “bring that certainty to people who might be asking themselves” about whether and how to deal with the United States.