ALBUQUERQUE, N.M. — Business leaders along the New Mexico border are relieved and optimistic after President Trump announced the U.S. and Mexico had reached “an understanding” to create a trade pact to replace the North American Free Trade Agreement.
“We’re all sort of breathing a big sigh of relief knowing that now we have the rules set out,” said Jerry Pacheco, Border Industrial Association president.
The non-profit association advocates for border economic development. Members include companies in four industrial parks near the Santa Teresa border crossing.
“It means that some that were delaying investment because of the uncertainty about whether there would be a NAFTA or not can now proceed with investment and their long term plans,” said Pacheco. He said having the trade pact in place would help attract new companies to the New Mexico border region.
Talks to renegotiate the trade deal began a year ago. “It’s a great day for trade. It’s a big day for our country,” President Donald Trump told reporters who listened as he used a speaker phone to speak to Mexico’s president Monday morning.
President Enrique Peña Nieto during the call said he was pleased with the agreement but looked forward to adding Canada to the new trade pact. Peña Nieto who leaves office in December, said he consulted with President-elect Andres Manuel Lopez Obrador during the final push to renegotiate the agreement.
“As we await details on the terms of the deal, I remain cautiously optimistic about the prospects for modernized and strengthened NAFTA,” said Jon Barela, CEO of the Borderplex Alliance.
The non-profit organization promotes economic development in southern New Mexico, West Texas and Chihuahua, Mexico.
“A successful ratification of a new NAFTA will solidify the Borderplex region as the 4th largest manufacturing hub in North America,” said Barela.
President Trump said the renegotiated trade agreement would not be called NAFTA since he was “terminating” that 24-year-old trilateral trade pact which he has described as the worst trade deal ever. Instead he referred to it as the “United States-Mexico Trade Agreement.”
Both countries agreed to periodic reviews of the agreement every six years that would extend the life of the pact for another 16 years. The U.S. had previously demanded an automatic expiration known as a “sunset clause” that would force a renegotiation every five years.
President Trump said his administration would begin talks with Canada “relatively soon.” Relations between the two neighboring nations have deteriorated over U.S. tariffs on steel and aluminum and Canadian regulations on dairy production.
“It appears to be a significant step but I wouldn’t be popping any corks, or not yet anyway. What’s not clear is the status of Canada,” said former U.S. Ambassador to Mexico Tony Garza.
And Garza said there’s uncertainty with a new presidential administration taking office in Mexico and U.S. midterm elections. Congess has to ratify any trade agreement. “Let’s not get ahead of ourselves,” said Garza.