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Mexican envoy expresses concerns for NAFTA

First in a two-part series on conversations with Geronimo Gutierrez, Mexico’s ambassador to the U.S.

On Nov. 16, I spent the better part of the day with Mexican Ambassador to the U.S. Geronimo Gutierrez, who visited the El Paso/Juárez/southern New Mexico region.

In the morning, I was part of a small delegation that had breakfast with Gutierrez at the Foxconn plant just across the border from Santa Teresa, N.M., in San Jeronimo, Chihuahua. After breakfast, we toured the Foxconn facility, which is making Dell computers and HP tablets, followed by an interactive lunch at the El Paso Branch of the Federal Reserve Bank of Dallas.

Within the past 25 years, Gutierrez has worked in various high-level positions in the Mexican federal government, including stints in Mexico’s Treasury Department, Banobras (the Mexican development bank), the Mexican Interior Ministry, and the Secretariat of Foreign Relations. Most recently, he was the head of the North American Development Bank, which is headquartered in San Antonio, Texas.

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Gutierrez presented a model of a well-informed and polished diplomat. It seemed to me that his personality and intellect made him a natural to rise to the position of ambassador to the U.S., Mexico’s most important diplomatic post.

During his visit, he provided insight on the U.S.-Mexico relationship and the ongoing North American Free Trade Agreement (NAFTA) negotiations. He was very open and honest in answering questions, and the people who joined him were eager to ask his opinion on a myriad of issues, and to also provide the ambassador with personal feedback on a variety of subjects.

On U.S.-Mexico relations, Gutierrez stated that it is “better for both countries to cooperate, rather than pointing fingers.” This applies not only to a secure border, which he believes is in the best interest of both nations, but also to better economic integration, of which “NAFTA has been the backbone.” The ambassador talked about how there were strong concerns in the U.S. concerning globalization, security, and job losses. He believes these are legitimate concerns; however, appealing to fear is not a good approach.

Gutierrez believes the U.S. and Mexico must work closely together on border infrastructure. “We have to come up with 21st Century ports of entry at our borders,” he said. “Maybe we need to establish a joint toll so that we can pay for infrastructure, which everybody says that they want, but nobody wants to pay for.”

Gutierrez also believes that Mexico has an image problem in the U.S., and that his country needs to let people know that there are far more positive things happening in Mexico than negative. In short, Mexico needs to do a better job in the U.S. presenting itself. According to the ambassador, “During the last 30 years, there have been many Mexicans who have come to the U.S. in search of a better life – that is our fault. This is changing in Mexico, as jobs are being created.”

A major part of immigration reform will entail addressing the visa issues in the U.S., which Gutierrez believes need to be worked on. He pointed out that Mexico has the labor that the U.S. needs. In sectors such as agriculture, both countries can benefit from this situation.

At the beginning of the year, Gutierrez believed there was an 80-20 percent chance that the three North American partners would end up rescinding the agreement. He now believes that the odds are 50-50. He said that his confidence was growing but tempered with pragmatism. He stated, “If the U.S. does leave NAFTA, we can’t count on the people who follow Trump to put another free trade agreement in front of the U.S. Congress for another 25 years. If NAFTA fails, it will hit Mexico hard, but we will survive.”

Gutierrez believes that rather than focusing solely on North American trade, the three NAFTA partners should focus on what they produce together. He emphasized how economically integrated the partners are, and how this integration allows them to compete against other parts of the world. He pointed out that while the U.S. has a $347 billion trade deficit with China, Mexico also runs a $65 billion trade deficit with this Asian nation, and that a lot of this is due to the electronics industry, which has migrated from both the U.S. and Mexico to China. One solution might be for Mexico to explore sourcing more electronics from the U.S., which will help both NAFTA partners and would keep more capital flowing in North America.

Next: The critical NAFTA renegotiation points and potential deal breakers.

Jerry Pacheco is the executive director of the International Business Accelerator, a nonprofit trade counseling program of the New Mexico Small Business Development Centers Network. He can be reached at 575-589-2200 or at jerry@nmiba.com.


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