Bilateral trade between Arizona and Mexico recently surpassed $15.7 billion annually, and is an extremely important issue to the economic growth of both the State of Arizona and the SEAGO Region.  As a result, the renegotiation of the North American Free Trade Agreement (NAFTA) has the potential to significantly impact the economy of Arizona and the SEAGO Region for better or worse.

It has been 23 years since the implementation of NAFTA, and during that time trade between Arizona and Mexico has grown, and industries on both sides of the border have expanded and prospered.  Currently, Arizona imports approximately $7.4 billion in goods from Mexico, and exports $8.3 billion in goods to Mexico.  Indeed, Mexico is Arizona’s largest export market and trading partner.  While the U.S. imports more goods and services from Mexico annually than it is exporting to Mexico (commonly referred to as a “trade deficit”), Arizona experiences a $900 million economic benefit from the Arizona/Mexico trade equation.

Mr. Kenneth Smith Ramos, Director of the Trade and NAFTA office at the Embassy of Mexico in Washington D.C. recently made a presentation to the Nogales/Santa Cruz Chamber of Commerce, in which he expressed his optimism about the NAFTA trade renegotiations.  Mexico’s position, as expressed by Mr. Smith, is that Mexico welcomes the process as an opportunity to update NAFTA and modernize the document to reflect the economic changes that both the U.S. and Mexico have experienced over the past 23 years. 

Mr. Smith indicated that economic conditions for both the U.S. and Mexico have changed substantially since the implementation of NAFTA, and the while each country is expected to look after its own interests in the modernization process, the renegotiations can and should result in a “win/win” for both countries.  The Mexico approach to renegotiating NAFTA seems to be from a healthy perspective of making mutually agreeable adjustments to the agreement that will protect each country’s economic interest while maintaining the robust trade relationship between the two countries. 

Whether you call it NAFTA renegotiations or NAFTA modernization, the State of Arizona, and the SEAGO region of Cochise, Santa Cruz, Graham and Greenlee Counties has a great deal at stake in the results of the process.  SEAGO is hopeful that the negotiations will proceed and conclude swiftly, and that the process will result in a structure that will continue to foster and grow business with Arizona’s number one trading partner – Mexico. 

The City of Sierra Vista was a primary sponsor of the annual Site Selector’s Guild Conference that was recently held in Tucson, and for a nominal fee, the SEAGO Economic Development Program was honored to have had the opportunity to piggy-back on the City’s sponsorship and participate in the conference.  The Site Selector’s Guild is an organization comprised of national and international professionals assisting companies in analyzing favorable communities for relocation or expansion opportunities. 

Attending the conference was an enlightening and positive experience in terms of understanding the key elements that site selectors are looking for in determining optimum locations and business opportunities, as well as the opportunity to network with professionals who are instrumental in helping businesses making site selection decisions.  While every sector has industry-specific relocation or expansion requirements, according to site selectors, the following core criteria are among the most important considerations for all businesses:

Workforce  -  The emphasis on workforce availability focuses on three primary issues: The immediate availability of a trained workforce; the ease with which a trained workforce can be attracted to an area; and a community’s “readiness” to provide workforce training to meet a company’s workforce needs.  One site selector made an interesting observation that “companies are chasing millennials” to meet their current and future workforce needs.

Shovel Ready Sites -  Whether or not a community has an available inventory of existing building space, or has sites that are immediately available for development, is often an important site selection criteria.

Sufficient Infrastructure -  The availability of sufficient infrastructure is also an important site selection consideration.  Such things as adequate water resources, access to good transportation infrastructure, and high quality internet bandwidth are some of these important site selection criteria.

Quality Education -  The quality of a community’s education system is an essential criteria to attract qualified employees from another location to work for a company.  This important site selection criterion includes both a community’s K-12 school system, and the availability of quality higher education.  Businesses are looking at this issue from these key perspectives: The quality of a community’s educational system as it relates to the Workforce criterion above; and the quality of education as it relates to the children of a company’s current executives and other key professionals the company will need to attract to the community to be successful. 

Community Livability  -  A community’s livability is, like beauty, in the “eye of the beholder” and is largely a subjective determination.  However, several site selectors indicated that it is, indeed, an important consideration as companies look at the community attributes that will attract qualified employees and retain them once they have arrived.  Site selectors look at a community and its surrounding area for attributes such as things to do, things to see, housing availability and diversity, community appearance, and social, art, and cultural amenities.

Viable Incentives  -  While many communities focus on incentives to attract a business to the community, several site selectors indicated that incentives can be a tie breaking factor when comparing one community against another, but become important considerations only after some of the threshold criteria above and other company-specific criteria are met.

SEAGO looks forward to developing solid working relationships with site selectors that attended the conference, and working with our economic development partners to ensure the essential site selection criteria that were expressed in the conference are present in the communities within our region.