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Border Expert: Discarding NAFTA Will Cost Jobs in Michigan, Elsewhere

The head of a business group on the U.S.-Mexico border says NAFTA could be made better, modernized, but warned against discarding it.
In this December 2013 photo, vehicles line up to cross The Paso del Norte Bridge between El Paso, Texas and Ciudad Juarez towards El Paso. Twenty years ago, the North American Free Trade Agreement went into effect, dramatically changing Mexico in fundamental ways. Ivan Pierre Aguirre / AP

WASHINGTON - When he champions the North American Free Trade Agreement, Borderplex Alliance CEO Jon Barela spotlights Michigan’s link to Mexico.

“One third of Michigan’s total trade is done with Mexico and that puts it on par with states like Arizona and Texas,” Barela told NBC Latino.

“Michigan’s supply chain and Michigan’s relationship with Mexico is as strong as border states, certainly proportionally … 138,000 jobs in Michigan depend on direct trade with Mexico,” Barela said.

Related: Scrubbing NAFTA Could Cost More Than 30,000 U.S. Auto Jobs

But Barela, former New Mexico secretary of economic development, is not opposing Trump’s plan to renegotiate NAFTA as he treks across Capitol Hill this week, meeting congressional members and testifying in a hearing held by the Congressional Border Caucus.

He is arguing that a reopening would be a chance to bring the agreement up to date. The trilateral agreement between the U.S, Mexico and Canada, was signed in 1994 before social media and smart phones became commonplace, before many advances in alternative energy.

“A renegotiated NAFTA can be improved and strengthened and modernized,” he said. “Clearly NAFTA has a positive impact on the border region. It also affects 5 million American jobs. If NAFTA went away, 5 million jobs would go away as well."

The Borderplex Alliance that Barela now heads unites the Ciudad Juarez, Mexico, southern New Mexico and El Paso, Texas region economically, using their combined power to attract investment and business and create jobs in the area.

Trump is due to meet with Mexico’s Economy Minister Ildefonso Guajardo this week and Foreign Minister Luis Vildegaray. The meeting follows Trump’s signing of an executive order withdrawing the U.S. from the Trans-Pacific Partnership.

Related: In Hard-Hit Ohio Steel Town, Trump and Sanders Resonate

Trump promised in the campaign to renegotiate NAFTA and made the 23-year-old pact a whipping boy of the campaign. He often blamed it for U.S. job losses and described it as “one of the worst deals ever.” He said in a debate if a better deal couldn’t be negotiated, the U.S. would walk away from it.

His NAFTA threat was welcomed in Michigan where Trump won the Republican primary and general election. Michigan had a 4.9 percent unemployment rate last November, according to the Bureau of Labor Statistics.

While researchers acknowledge some job losses resulted from NAFTA, there also have been gains. Studies have found the overall impact was not as drastic as has been portrayed or was projected.

“You can’t scapegoat NAFTA or Mexico for the reason these jobs have gone away,” Barela said. “Technology and automation have supplanted certain jobs. Things like an onerous regulatory environment, high corporate taxes also force jobs to leave the country.

Meanwhile, “hundreds of thousands of manufacturing jobs have been created as a result of NAFTA along with very high paying service and logistics jobs that help to support free trade between the U.S. and Mexico,” Barela said.

Jon Barela is the former New Mexico Secretary of Economic Development and is now CEO of The Borderplex Alliance, which promotes and develops business and investment in El Paso, Texas, Ciudad Juarez, Mexico and southern Mexico.Borderplex Alliance / Borderplex Alliance

He likes to point out that six years ago, New Hampshire did more trade with Mexico than New Mexico. But because the state saw Mexico as an ally while he served as its economics department secretary, New Mexico became a leader in overall trade growth and export related job growth, Barela said.

On Tuesday, Guajardo said Mexico may leave the agreement if renegotiation is not favorable to Mexico.

Some things Barela said could be negotiated in NAFTA:

_ Create a North American Energy union based on traditional fuel sources of petroleum and natural gas, but add in renewable energy, which was in its infancy when the pact was signed. The three partners could create a North American energy grid with such a change, Barela said.

– Build better border infrastructure and make security for all three countries part of that infrastructure.

– Enter into research and development agreements to pursue water conservation and work on water borne disease, add in agreements on new air emission technology and other environmental issues.

– Modernize the TN Visa, which allows NAFTA professionals from Canada and Mexico to work in the U.S. or foreign employers.

Trump has been threatening to impose a border tax on companies that are manufacturing in Mexico and selling products in the U.S. That threat drew immediate rebuttal from Mexico, which promised to respond in kind.

Trump’s also pledged to build a wall along the border and Barela acknowledged that could be brought to the table in any NAFTA negotiations.

But he warned that Trump’s attempt to secure the border could be undermined by undoing NAFTA in a way that erases jobs in the U.S. and across the border in Mexico.

“People want to provide for families and loved ones and will find a way to do it. Sadly, some will turn to violence, others will seek economic opportunity elsewhere, that means people looking for work,” Barela said.

Related: Trump's Tough Stance On Mexican Jobs Could Spur Immigration to U.S.

He said it’s no coincidence that the Ciudad Juarez unemployment rate has dropped to four percent. Mexico is seeing reverse migration. More Mexicans are leaving the U.S. and returning to their country than are arriving in the U.S. as Mexico’s economy has begun to grow and jobs there have become available.

“You want to destabilize the border,” Barela said “take way that hope and opportunity and jobs for individuals.”

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