I was in Mexico City last week with an all-star trade delegation to talk about Arizona’s strong relationship with our neighbor to the south, our state’s number 1 trading partner. Here are some thoughts about what I learned and observed…
Stanton and Tobin are stepping up to lead
Phoenix Mayor Greg Stanton and Speaker of the House Andy Tobin deserve applause for leading the delegation. This is not the first delegation the mayor and speaker have led, which is a testament to their very real belief that Arizona can do more to tap into the growing and dynamic Mexican economy.
The delegation included elected officials at a city and state level. To have Phoenix Councilman Sal DiCiccio along with state Reps. Tom Forese, Rick Gray, Lupe Contreras, Ethan Orr, and Juan Carlos Escamilla in our group made a big impression on the host country officials, making clear that a strong cross-border relationship is a top priority for Arizona leaders. Our leading state economic development official, Sandra Watson, was on the visit, as were officials representing tourism and our excellent universities.
This is Speaker Tobin’s last year in the Legislature. He leaves behind big shoes to fill when it comes to our Legislature’s posture toward Mexico.
We had a jam-packed schedule of sit-downs with Mexican senators, high-ranking agency officials and economic development officers. Time after time we were encouraged to think regionally, to promote not only the Arizona-Sonora border region as an economic powerhouse, but ultimately all of North America.
Energy reforms in Mexico combined with Canada’s, the United States’ and Mexico’s entrance into the Trans-Pacific Partnership sets the stage for big things in the North American marketplace.
Energy reform boom times, a needed step toward energy security
There is a palpable excitement in Mexico surrounding reforms of that country’s energy sector. To open that country’s aging PEMEX system to foreign investment and outside technical expertise bodes well for Mexico and its trading partners.
Former U.S. Ambassador to Mexico Tony Garza accurately calls the energy reforms a “transformative piece of legislation,” and estimates it could bring as much as $20 billion a year into Mexico’s economy.
But there are also energy security gains to be had. A quick scan of the headlines makes clear that depending on foreign hotspots like Venezuela and Russia for energy is not ideal. But with Canada’s development of its oil sands, fracking technology that has led to a natural gas mini-boom in the U.S. and now a more sophisticated energy sector in Mexico, North America is well positioned to be the world’s best option for stable, efficient energy exploration, production and exportation.
Trans-Pacific Partnership the next step in multilateral trade
Assuming North America’s energy profile grows even more robust, the multilateral Trans-Pacific Partnership is shaping up to be a powerhouse trading bloc.
The TPP will encompass 12 countries. According to the U.S. Trade Representative, an estimated 4 million jobs were supported by U.S. goods and services exports to TPP countries in 2012 and it’s a trade bloc that represents 37 percent of U.S. international trade.
We need Trade Promotion Authority, which is crucial for the United States to negotiate trade agreements to open new and foreign markets to spur economic growth and create American jobs, for the TPP to move forward. To that end, the Chamber is building a coalition of Arizona businesses and organizations that can help us encourage our congressional delegation to support TPA.
An engaged congressional delegation
The federal budget deal reached in January includes funding for 2,000 new Customs and Border Protection officers at our nation’s port of entry. The president’s fiscal year 2015 budget request calls for an additional 2,000 officers on top of that. It’s imperative that Arizona gets its fair share.
Rep. Matt Salmon got Arizona’s House members to come together on a letter advocating for Arizona’s ports, and this week Sen. Jeff Flake joined with Texas Sen. John Cornyn on a letter to Department of Homeland Security Secretary Jeh Johnson urging DHS to be mindful of the need of land border ports when allocating new CBP staff resources.
This kind of engagement from the congressional delegation is welcome and needed if Arizona’s trade and travel arteries are going to keep commerce flowing between our state and Mexico.
Action at a state level
It is encouraging that the fiscal year 2015 budget (under consideration as of this writing) includes funding for a Mexico City trade office, and that the City of Phoenix will also have representation in such an office. Our friends from Mexico are also looking to increase its presence in Arizona with some sort of trade office and possibly some representation from the oldest university in North America, the National Autonomous University of Mexico, or UNAM. One theme that came up on numerous occasions, including from U.S. Ambassador Tony Wayne, is the need to increase student exchanges between Arizona and Mexico. Exchanges promote greater cultural understanding between our two countries and have the potential to lay the groundwork for future business relationships.
Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry.