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Border business leaders are optimistic

Copyright © 2018 Albuquerque Journal

SANTA TERESA – Business and community leaders on the border are cautiously optimistic New Mexico will continue to benefit from trade under Mexico’s newly-elected leftist president Andrés Manuel López Obrador.

“I’m holding positive hope that he does want to preserve the good cross-border relationship we have and that he does make bold moves like easing up on taxes in Mexico’s border area to attract new investment,” said Jerry Pacheco, Border Industrial Association president. “That benefits us in New Mexico.”

Pacheco said López Obrador proposed a “tax free border zone” when he met with business leaders during a visit to the New Mexico border region last year. He also chose to kick off his presidential campaign just across the border in Ciudad Juárez, where the Morena Party candidate acknowledged the importance of trade for the region.

But on the campaign trail, López Obrador, also known by his initials AMLO, said he wanted NAFTA renegotiations to be put on hold until after the presidential election and said he would take a close look at the energy reform that allowed foreign investment in the sector controlled by the government oil monopoly Pemex.

“There’s too much at stake to go back and roll back the hands of time, especially when it comes to NAFTA,” said Jon Barela, Borderplex Alliance CEO. The organization promotes economic development in the border region that includes southern New Mexico, Chihuahua, and El Paso.

“I believe that AMLO will press forward with renegotiations … ,” said Barela. New Mexico’s exports to Mexico totaled $1.58 billion last year and account for more than 40 percent of the state’s total annual global sales.

During the presidential campaign, opponents portrayed López Obrador as a risky leftist similar to the late president of Venezuela, Hugo Chavez, whose policies resulted in a prolonged economic crisis that includes food shortages in the once oil-wealthy country.

“I still don’t think it’s going to be like Venezuela, like a lot of people were worrying about. I just don’t see that happening,” said Patrick Schaefer, Executive Director of the Hunt Institute for Global Competitiveness. The institute, based at the University of Texas at El Paso, researches markets in the Paso del Norte region that includes southern New Mexico.

Schaefer, lived in Mexico City when López Obrador was elected mayor in 2000.

“He was well known in Mexico City for expanding social welfare programs, so that might have some impact on labor markets here,” said Schaefer.

In his victory speech Sunday night, Mexico’s president-elect reiterated his commitment to helping the poor and weeding out corruption. He said he will pay for social programs with money saved by reducing graft.

He also said he wanted Mexicans to migrate to the United States by choice, rather than because of conditions at home.

He looks forward to a cooperative relationship with the U.S. based on “mutual respect.” He and President Trump had a 30 minute phone conversation on Monday and discussed border security and trade, including NAFTA.

“In many ways AMLO and Mr. Trump are very similar. Populism and nationalism cuts both ways,” said Barela.

López Obrador beat three candidates to win the election in a landslide with more than 50 percent of the vote and takes office Dec. 1.

In his third bid for the presidency, the 64-year-old who created his own political party after dissatisfaction with the status quo, had a populist appeal but also displayed a more pragmatic approach.

“We’ll see which AMLO governs,” said Barela.

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