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College Lecture Offers Peek Into Mexico's NAFTA Strategy
Ken Smith Ramos, a sharply dressed man wearing rectangular eye glasses, strolled into an auditorium filled with business students in Mexico City this month, and laid out one of his country’s most important deals in years: the negotiation over the North American Free Trade Agreement.
Smith Ramos, Mexico’s point person at the negotiating table with American and Canadian counterparts, explained in a slideshow why the deal is so important (the three countries did $1.1 trillion in trade under the agreement in 2016, for example) and why otherwise tedious meetings over the legalese become more delicate the longer they last (President Trump has repeatedly threatened to withdraw).
The presentation to international business students at the elite College of Mexico, gave an overview into top Mexican officials’ position and their strategy to navigate in and out of the official closed-door meetings to re-negotiate the agreement.
Smith Ramos, it seems, has been preparing his entire adult life for this role.
He studied international policy and business at Georgetown and Johns Hopkins universities, started his career as part of Mexico’s original NAFTA in the early 1990s and has worked in international trade ever since.
So why does the deal matter? For example, Smith Ramos tells the students, there’s food.
Agricultural trade between Mexico and the U.S. has grown 520 percent during NAFTA. The U.S. sends lots of agricultural exports to Mexico. Think corn. Think beef.
And Mexico, in turn, sends produce to American tables all year round. Yes, avocados. But also zucchinis, strawberries.
Eventually, Smith Ramos gets to the more interesting part: what’s the drama?
Some of the pressure points were voiced by Donald Trump since he was a candidate. They include that overall, the U.S. buys more from Mexico than the other way around. As president, Trump has repeatedly threatened to withdraw from the agreement.
Smith Ramos said Mexico’s political strategy is to lobby the more amicable parties in the U.S.
"At the end of the day, it's a combination of having the U.S. private sector, U.S. civil society and, of course, the U.S. Congress voice their opinions on the benefits of the NAFTA," Smith Ramos said in an interview.
In other words, Mexico is borrowing a strategy coined by former U.S. House Speaker Tip O’Neil: all politics is local.
Smith Ramos himself met with Arizona Gov. Doug Ducey earlier this month. And members of congress have gotten visits from Mexican diplomats or corporations with business interests in Mexico. Though not all members of congress.
“We have not,” said Arizona Republican David Schweikert, who sits on the U.S. House Ways and Means committee, the first panel that will need to approve any deal. "I have a bit of an excuse for that. This year has been almost solely taken up by the rewrite of the tax code."
Although congress people like Schweikert don’t need much convincing.
Schweikert said he knows 90,000 jobs in Arizona are directly dependent on trade with Mexico. He said he’s aware that many Arizona businesses depend on Mexican imports and exports.
Schweikert said some politicians wrongly attribute the decline in manufacturing jobs to trade.
"I have a personal fixation that math is math, and math should always trump folklore,” Schweikert said. "Part of the negotiation has a theatrical feel to it."
That has become the territory of trade agreements, said Welles Orr, a former assistant U.S. Trade Representative under George H. W. Bush and now an advisor at the law firm Miller & Chevalier in Washington.
“They’ve gotten more theatrical,” Orr said.
Orr said many democrats didn't want Bill Clinton to sign the original agreement because they opposed provisions on labor and the environment. And Orr said that, yes, political pressure does make a difference — even political pressure from outside the U.S.
“Only to an extent,” he added. “The most important audience to U.S. legislators, of course, are U.S. businesses that are directly affected by the re-negotiated agreement.”
One of the negotiation’s most controversial provisions is over what percentage of parts that go into a car get made in the U.S. Orr said that if NAFTA is, indeed, renewed, those sensitive deals will be made at the very end.
The next round of talks is in late December in Montreal.