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NM already recovering from export dip, experts say

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El Paso-based development company Franklin Mountain Management LLC expects to open this new, 183,000-square-foot spec building at the Santa Teresa industrial park in southern New Mexico early next year. Local trade advocates say it is an indication of the area\’s growing strength in trade with Mexico. (Photo courtesy of Franklin Mountain Management.)

ALBUQUERQUE, N.M. — The impact of President Trump’s America-first trade policies took a bite out of New Mexico’s surging exports to Mexico last fall and winter, but local trade experts say exports are on the upswing again.

The election’s effects are still evident in the latest statistics from the U.S. Commerce Department, which show New Mexico sales to its southern neighbor down 9 percent in the first half of 2017 compared with the same period last year. Exports to Mexico totaled $810.7 million from January to June, down from $890.3 million in the first six months of 2016.

But experts say that’s misleading because trade with Mexico was surging in early 2016. The state must still fully recover from the downturn following the elections, but since then, it’s generally gone back to business as usual, with companies now either holding steady or climbing in sales, said Jerry Pacheco, executive director of the International Business Accelerator at Santa Teresa.

“From about November to February, things were practically dead as everyone struggled to understand what was going on, and many companies froze their inventories,” Pacheco said. “But after February, people decided to get on with life.”

Worldwide, New Mexico’s total exports are down by about 11 percent in the first half of 2017, from $1.96 billion to $1.74 billion, thanks largely to a plunge in sales to Israel this year.

Exports to Israel fell from $314.3 million in first-half 2016 to just $6.8 million this year, generally reflecting the ups and downs of sales from Intel Corp.’s plant in Rio Rancho.

The Commerce Department doesn’t publish quarterly statistics that might show an upswing in exports to Mexico in the second quarter. But sales for the first half of 2017 already surpass more than half of the total $1.58 billion that New Mexico exported across the border in 2016.

“At the current pace, we expect to do at least as much if not more than last year,” Pacheco said.

That reflects renewed confidence among export businesses about renegotiation of the North American Free Trade Accord, which began in August .

Trump’s early threats to pull out of NAFTA contributed to a huge devaluation in the Mexican peso, making U.S. exports there more expensive. That, plus general uncertainty about NAFTA, fueled the initial trade slump.

But border businesses are more confident now, said Robert Queen, director of the Commerce Department’s New Mexico Export Assistance Center in El Paso.

“Early this year, there was a lot of concern,” Queen said. “But now that we’re into negotiations, businesses are more comfortable and eager to see a final deal.”

In fact, three new companies have moved into Santa Teresa’s industrial parks since the spring. A new, 183,000-square-foot spec building is also under construction there, Pacheco said.

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