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.