Texas on front lines of NAFTA negotiations

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PBS NEWSHOUR WEEKEND, LISA DESAI: At Precision Mold and Tool, this is business as usual.

This company in San Antonio, Texas, creates plastic parts and molds for industries in the United States and around the world. Domingo Auces is the Vice President of Operations.

You know, parts like you don’t notice and use every day like the remote control that you use for your TV, the buttons on your laptop, the buttons on your shirt..

With sales topping 12 million dollars last year, Precision Mold and Tool is one of many small businesses that make Texas the number one state for foreign exports.

The Lone Star state depends heavily on The North American Free Trade agreement, or NAFTA, signed in San Antonio by President Bill Clinton in 1993.

The agreement allows goods and services to move more freely — without tariffs — across the borders of the U-S, Canada, and Mexico. The benefits promised to Americans were economic growth, access to cheaper products, and more American jobs.

According to the Census Bureau, since NAFTA took effect, U-S trade with Canada and Mexico has grown steadily and tripled by 2015 to a trillion dollars a year. And a 2014 study by the U-S Chamber of Commerce, shows that nearly 5 million American jobs — including 350-thousand in Texas — are supported by increased trade from NAFTA.

Auces’ company is among those that reaped these benefits. It started in 1985 with just two workers in a garage. Today, more than 60 workers are employed at three factories — two in Texas and one in Mexico.

DOMINGO AUCES: The whole NAFTA, you know the way it’s set up it allows us to have that free flow and just to enter and leave the country with a lot of ease.

DESAI: Reynosa, Mexico, has attracted companies from the U-S and around the world taking advantage of lower labor costs. It’s become a booming manufacturing hub producing everything from cars to electronics. This growth has allowed Auces to expand his business by selling molds directly to the flock of new companies based on the Mexican side of the border.

What’s the benefit of having a presence in Mexico?

AUCES:
You can find other companies that do what we do or similar services, but they
might be located on the other side of the country where we are located right next to the majority
of our clients.

DESAI: Without NAFTA, would your business be able to stay competitive?

AUCES:
I don’t think we would have been as successful as we have been.

DESAI: 150 miles from San Antonio, Laredo, Texas, is the border town at the epicenter of this growth. It’s home to the World Trade Bridge, which 14 thousand trucks cross every day from both sides of the border. They carried over 160 billion dollars worth of goods last year — according to the Texas Center on Border and Economic Development at Texas A&M University. That’s nearly a third of all trade between the U-S and Mexico.

I-B-C Bank, headquartered in Laredo, finances real estate deals boosted by free trade — like these warehouses that distribute goods that travel across the border.

Dennis Nixon is the bank’s CEO.

DENNIS NIXON: Laredo was pretty much a small town that was formed as kind of frontier city, I guess you would describe it. And then when NAFTA came to play, that just sort of exploded.

DESAI: Nixon says the state’s economic growth could come to a standstill if the U-S were to significantly rollback NAFTA.

NIXON: The people who say we should stop these trade agreements, that would be the beginning of the end for us, and we’ll push. Texas cannot survive without Mexico, it’s our largest trading partner. It would put Texas in a recession — immediately — and it would frankly destroy Laredo, Texas. We would not exist without trade.

With views like that, it might surprise you to learn that Nixon was the Texas finance chairman for the Trump presidential campaign.

PRESIDENT DONALD TRUMP:
NAFTA has been a terrible deal, a total disaster for the United States from its inception.

DESAI:
Nixon has tried to tell Mister Trump, in his opinion, why rolling back NAFTA could do more harm than good.

NIXON: My message to the Trump administration is, I’ve been saying all along,is reach out to people who really live and understand the complications of trade and how they affect the lives of everyday Americans and what it does to our nation and our economy. So this has to have a holistic process to it. The old story if it ain’t broke don’t fix it. Many people would argue that this trade agreement is not broken. I’m one of those.

DESAI: Congressman Will Hurd’s district, stretching from San Antonio to El Paso, covers 820 miles of the U-S Mexico border — more than any other district in the nation.

Hurd is a Republican who supported Trump, but he’s concerned about how the president may rollback NAFTA or impose an import tax on companies that manufacture products in Mexico and sell them in the U-S.

That could affect one of the biggest employers in his district, Toyota, which has more than 3 thousand workers in San Antonio churning out pickup trucks…with some parts made in Mexico.

REP. WILL HURD: There is uncertainty and uncertainty in the business world is not something that you want. But I think people are also, they recognize they opportunities that we have, and I think people are ready to start having negotiations on what does a future NAFTA look like?

DESAI: Congressman Hurd has his own ideas for modifying NAFTA — by making border crossings more efficient and simplifying the customs process, lowering barriers to U.S. agricultural exports, and decreasing regulation in the oil and natural gas trade.

HURD: If we’re able to upgrade NAFTA and improve the export markets for American businesses, that helps everybody. That puts more people to work, that increases wages, that helps people move up the economic ladder. So a proper negotiation achievement, achieving a NAFTA 2.0, it’s going to be great for American businesses.

DESAI: Bob Cash didn’t support President Trump but agrees that NAFTA needs to be renegotiated. Cash heads the Texas Fair Trade Coalition, an advocacy group for workers rights and fair trade deals.

Trade agreements and the way they’ve always been sold to us is that it’s going to be a win-win situation. // And the fact is that they have turned, they are win-win agreements but they pretty much win-win for the economic elite //And working class folks have really got the short end.

Cash says NAFTA needs new rules for fairer wages and better labor standards to make sure that American workers aren’t left behind.

BOB CASH:
Only a trade deal that’s really based on increasing living standards, not profits necessarily, or super profits of corporations but based on increasing living standards in all three countries has really the chance of delivering the promises that NAFTA made and never delivered.

DESAI: Cesar Mendez is a casualty of NAFTA. He was one of 500 employees who lost their jobs at a wheel manufacturing plant in Arkansas, when the company moved its operation to Chihuahua, Mexico, in 2014.

CESAR MENDEZ: You’re losing your job. I was with the company for about 7 to 8 years. I had settled myself down with the company,with the job I had, so I felt terrible.

Mendez moved to San Antonio in search of new work and to upgrade his skills. His classes are paid for by the Trade Adjustment Assistance program, a U-S Department of Labor program that gives benefits to Americans who’ve lost their jobs because of free trade deals. More than 700-thousand qualified because of NAFTA.

MENDEZ: Once I did my research, I saw that San Antonio is really big in manufacturing and I would have a better chance once I graduate within me getting a job, finding something in my field and my degree. It would be a lot easier than if I were to stay in Arkansas.

DESAI: Automation is another factor causing the decline in the number of manufacturing jobs. Precision Mold and Tool is increasingly reliant on machines that can run around the clock, instead of shift workers.

DOMINGO AUCES: Most people their biggest complaint about NAFTA is that well with NAFTA there went our jobs. And the way we’ve always look at it is that you know, we look ahead. There are some jobs that over time they are going to go away.

DESAI: How has automation really changed your operation?

AUCES: Oh, it’s really revolutionized just the ease of how we do our daily operations. Now we have one person that’s running multiple machines and then he’s able to walk away from it without any interruption,

With the start of NAFTA’s renegotiation imminent, Texas business leaders like banker Dennis Nixon hope the White House hears their message.

DESAI: Are you worried about the future of NAFTA?

NIXON: I mean, maybe, worried it, It’s too big — worried. I think that the pure reality of NAFTA is going to show the benefits of NAFTA and the consequences of dismantling NAFTA would be catastrophic to all three countries. So this thing has such a massively interconnected damaging process we try to take it apart. It’s almost like humpty dumpty, you know, we can’t put it back together again.

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