NAFTA 2.0: A North American Union

Gross domestic product of NAFTA about $19 trillion

by Alberto Tomas Halpern // September 15, 2014 // Business & Technology

U.S. federal lawmakers at a border conference in El Paso on Friday discussed the possibility and need to not only expand and integrate U.S.-Mexico trade further, but also strengthen North American trade by better linking commercial relationships between Canada, the U.S., and Mexico.

The Texas-Chihuahua-New Mexico Regional Economic Competitiveness Forum, hosted by El Paso Congressman Beto O’Rourke (D-TX-16) and the Border Legislative Conference, and sponsored largely by the United States Agency for International Development and the Wilson Center – a Washington, DC think tank – brought the lawmakers together to discuss increasing the competitiveness of the El Paso-Juarez border region. But with regional economies and markets across the planet becoming increasingly competitive in a globalizing and urbanizing world, the notion of building upon a stronger North America in a post-NAFTA hemisphere was clearly on lawmakers’ minds.

Longtime Congressman Henry Cuellar (D-TX-28), who represents a large swath of the Texas-Mexico border in the Rio Grande Valley, cited new reforms in Mexico under the Enrique Peña Nieto administration as an indicator of the potential competitiveness and growth of North America. He specifically noted Mexico’s reform of its oil and gas industry, which after decades of nationalization, is now open to foreign investment.

“I think if we do this right, working with Mexico, and they do the implementation well, you put Mexico, Canada, and the U.S. (together) and we will now be the new Middle East of the world when it comes to energy,” Cuellar said.

Congressman William “Bill” Owens (D-NY-21), who represents a district that shares a border with Canada, said the gross domestic product (GDP) of NAFTA countries totals about $19 trillion. That’s compared to the GDP of the European Union and China, which are about $17 trillion and $8 trillion, respectively.

“What that tells us, when you combine it with what Mr. Cuellar talked about, is an environment in which if we work at making our relationships more efficient and effective, we can stay ahead of the anticipated growth of South East Asia,” Owens said.

Canada and Mexico are already the U.S.’ largest trading partners, with about $740 billion a year in trade between the U.S. and Canada and about $500 billion in trade a year between the U.S. and Mexico. Owens said that given those figures, there is a “tremendous need” to remain focused on the commercial relationships between North American countries.

He added that supply chains between the three countries have become much more integrated, with Canada moving goods to Mexico and Mexico moving more goods back into the U.S. And what that integrated supply chain spells out, is more jobs among North American workers.

“The vehicle is these agreements that allow us to move goods back and forth,” said Owens, adding that the three countries need to build upon infrastructure, regulations and statutes, and security mechanisms that facilitate greater cross-border movement. “But those concepts need to be integrated. Neither is the exclusive desired outcome,” he said of the debate between border trade and border security.

To that end, O’Rourke called on colleagues, administration officials, and citizens to “traffic in the facts when it comes to the border.” Since taking office, O’Rourke has made it a mission to dispel inaccurate narratives of the border that he believes only serves to push away potential capital and investment from the border region.

Congressman Joaquin Castro (D-TX-20), echoed O’Rourke, saying that U.S. citizens from across the country must understand the realities and needs of southern and northern border communities.

“That is the first part in building coalitions and it can be done in a bipartisan way,” Castro said.

O’Rourke told Newspaper Tree that in order to be competitive globally, North America has to do a better job of maximizing its borders. That includes investing in Latin American economies, including Mexico.

“Not only will that decrease demands on immigration in this country, it will raise the purchasing power of a market that we need and it will also raise the production platform of the Americas so that we’re more competitive with Asia and more competitive with Europe,” O’Rourke said.

Asked whether a political and economic system such as the European Union could be created between North American countries, Cuellar said it was unlikely.

“I think we will have more integration between the U.S., Mexico, and Canada,” Cuellar told Newspaper Tree. “I want to see more, but to that extent, probably not in the near future.”

O’Rourke, on the other hand, said it is not an entirely “ethereal” notion, but acts more as a prime motivator for border representatives who want to see the further integration of North American economies.

“It’s very much a work in progress,” said O’Rourke. “But one I think we’re making some significant progress on.”

NEWSPAPER TREE: http://newspapertree.com/articles/2014/09/15/nafta---a-north-american-union