Business Leaders See Strong Trade Future, With or Without NAFTA

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Julio-César Chávez for the Rivard Report

Loaded trucks coming in from Mexico wait in line at the bridge near the U.S. Customs and Border Protection station in El Paso.

As NAFTA negotiators entered their fourth round of talks this week in Washington, members of the San Antonio business community heard relative optimism regarding the future of commercial relations between Texas and Mexico.

“Smart people, locally, will put the right policies in place to keep the relationship thriving despite the tweets, and the headlines, and the rhetoric,” said Joseph Quinlan, head of market and thematic strategy for global wealth and investment management at Bank of America.

Quinlan delivered the keynote speech Thursday at a forum titled “Ripple Effects of NAFTA on South Texas” at Pearl Stable. The event was hosted by the San Antonio chapter of Financial Executives International and sponsored by Bank of America.

Every president has sought to tweak NAFTA in some way since it was originally signed in 1994, Quinlan said. While some recent headlines have indicated that President Donald Trump is serious about potentially scrapping the agreement, Quinlan observed that the rhetoric coming out of the White House has not always matched actual outcomes.

“I’m optimistic and hopeful, maybe blindly, that at the end of the day we can work on an agreement by which Mexico and the United States and Canada can build on the foundation that we’ve created,” Quinlan said. “And it’s created a very successful integrated economy that I think has more upsides.”

Elected leaders and the San Antonio business community alike agree that NAFTA has had a positive impact on the city’s business climate. Speaking at a recent NAFTA forum, Mayor Ron Nirenberg said that the NAFTA impacts around 200,000 local jobs. Former Mexican and American diplomats speaking at the same event said that Trump’s criticisms of the agreement were straining Mexico-U.S. relations.

In a panel discussion following Thursday’s keynote speech, other business leaders pointed out that even if the NAFTA talks fail, government policy does not ultimately dictate the success of trade relations between the two countries.

“When two companies have a relationship, and they’re faced with a policy challenge, there’s always a work-around,” said Reynaldo Cano, vice president of international and business development at the San Antonio Economic Development Foundation.

Carlos Jarquin, president and CEO of the San Antonio Free Trade Alliance, said that should the United States enter a six-month period of withdrawal from the agreement, the subsequent tariffs imposed would not have a drastic impact on trade. Moreover, it is possible that previous trade opportunities could turn into more direct investment.

Howard Energy Mexico President Brandon Seale said that the politics between the two nations don’t dictate the strength of his company’s sale of natural gas into the region.

“Washington isn’t that important in what I do day-to-day,” Seale said. “The fact is, who’s president doesn’t fundamentally affect my business.”

At the same time, Seale pointed how deeply invested San Antonio’s energy sector is south of the border. The five most active independent energy companies from the United States active in Mexico, Seals noted, are Howard Energy, Lewis Energy, NuStar Energy, Valero, and Tesoro.

Panelists also noted the significant presence H-E-B has built in northern Mexico, and the importance of Mexico-based manufacturing partners to Toyota’s truck assembly plant here.

Those references underscored Nirenberg’s remarks two weeks ago about the importance of NAFTA and the Texas-Mexico trade relationship to the San Antonio economy.

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