Present at NAFTA’s negotiation more than a quarter century ago, Kevin Smith Ramos stopped in Kansas City on Wednesday to plead for free trade’s survival.
Back then, Ramos was a fresh face out of college and part of Mexico’s negotiating team on what became the North American Free Trade Agreement among Mexico, the United States and Canada. Now, he’s director of the Trade and NAFTA Office of Mexico’s embassy in Washington, D.C.
Ramos made his case to a Greater Kansas City Chamber of Commerce audience largely in economic terms — and he acknowledged the politics driving U.S. President Donald Trump’s campaign attacks on the pact.
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“We know that there are a lot of pressures on the administration from certain groups that would like to see the NAFTA dismantled. We hope that cooler heads prevail,” Ramos said after a presentation at Union Station.
Evidence of cooler heads is emerging, Ramos said, adding that he has heard U.S. Commerce Secretary Wilbur Ross talk about modernizing and strengthening the trade agreement.
Ramos credited U.S. companies, business associations and red-state senators who have urged Washington to renegotiate NAFTA but to do no harm to free trade in the process.
Patrick Ottensmeyer, CEO of Kansas City Southern, has been one of those pressing to be part of the renewed NAFTA debate. He told the chamber group that he’s gotten more access to the Trump administration than he’d hoped.
“They are listening. I believe they are paying attention to these messages,” Ottensmeyer said. “We will encourage and ask each of you to spread your influence ... because there’s a lot at stake if we end up with a bad outcome on NAFTA negotiations.”
The stakes include 145,000 jobs in Missouri and Kansas tied to and supported by trade with Mexico, according to Ramos’ presentation. Ramos said Missouri and Mexico did $5.2 billion worth of business last year, and Kansas $2.7 billion, and that both totals had increased by more than 500 percent since NAFTA took effect in 1994.
He said much of U.S.-Mexico trade is two-way, for example, as calves born in Mexico head to the United States for slaughter and beef is exported to Mexico and the rest of the world. Airline and automotive parts made in Mexico become parts of vehicles assembled in the United States, or vice-versa, and sold abroad.
In short, NAFTA has led to North American products that compete well in world markets. Ramos said 40 percent of the value of Mexican exports comes from U.S. inputs.
“Let’s leave the political rhetoric aside and look at what NAFTA has done for all three countries,” Ramos said.
Others say the agreement has damaged many U.S. and Mexican workers and small businesses, as well as the environment, despite side agreements on both fronts during the original negotiations.
“The losers of NAFTA have been workers in all three countries. The winners have been big corporations,” said Judy Ancel, director of Worker Education and Labor Studies at the University of Missouri-Kansas City. “Any attempt to so-called fix it needs to recognize that.”
Ramos said all elements of the trade agreement can be on the table as far as Mexico is concerned, so long as the objective is to update NAFTA and improve economic ties on the continent.
“Where we draw a red line is on the issue of either increasing tariffs or imposing quantitative (trade) restrictions — going back to the old days of protectionism,” Ramos said.
Toward that end, Mexico is working on a second track parallel to future NAFTA talks, should the latter fail to protect free trade. Ramos said Mexico is engaged in talks to produce stronger trade partnerships with western Europe, Brazil and Argentina, and Asian-Pacific nations.
Advocates of the North American Free Trade Agreement say 145,000 jobs in Missouri and Kansas are tied to or supported by increased trade with Mexico under the pact.
Missouri has 97,400 jobs from $5.2 billion in trade with Mexico.
Kansas has 47,700 jobs from $2.7 billion in trade with Mexico.