UC San Diego symposium marks NAFTA’s 20th year

By Pat Sherman

Janet Napolitano, who became the University of California system’s 20th president last year, was in La Jolla March 6 for a symposium at UC San Diego to mark the 20th year since implementation of the North American Free Trade Agreement (NAFTA).

Addressing more than 300 people at the Sanford Consortium on the UC San Diego Campus, Napolitano touted the newly instituted UC-Mexico Initiative, which sets aside $5 million to provide counseling and financial aid for students living in the United States without residency or citizenship. Some feared that Napolitano — who served as U.S. Secretary of Homeland Security (2009-2013) — might be less than supportive of the minority student population, given her former role in enforcing immigration. Although her visits to other campuses in the UC system, including a stop at UC Berkeley in February, drew protests, the Sanford Consortium event proceeded without incident.

Napolitano said the UC system and Mexico “stand at the beginning of a long learning journey. Who knows where we will end up, but even if the destination is unknown the journey will be informative and transformative,” she said. “We should have, not only a desire and will to do this, but a sense of urgency in getting it done now.”

UCSD Chancellor Pradeep Khosla noted that Mexico is currently the world’s 15th largest economy and is projected to be among the top 10 economies in the world by 2050.

“It just makes logical sense that, being our neighbor to the south, we really have a very deep working relationship (with Mexico),” he said, noting the efforts of UCSD’s Center for U.S.-Mexican Studies, founded more than three decades ago.

“Mexico graduates more engineers than the state of California — and that is really significant, because if you look at the U.S. economy it’s been driven mainly by science and technology,” Khosla said.

Khosla said a discussion of NAFTA — the controversial trade pact between Canada, Mexico, and the United States (signed in 1992 by President George H.W. Bush) — was “extremely relevant 20 years ago and equally relevant, if not more so, today.”

NAFTA was designed to integrate the economies of the three countries, eliminating barriers to trade and investment. While it has boosted economic interaction, NAFTA has had its downside, including a loss of U.S. manufacturing jobs, the exploitation of Mexican labor and loss of jobs for Mexican farmers.

Antonio Ortiz-Mena, a UCSD graduate, member of Mexico’s NAFTA negotiation team and Head of Section for Economic Affairs at the Embassy of Mexico in the United States, recalled the infamous “giant sucking sound” 1992 presidential candidate Ross Perot that warned people NAFTA would create as the pact sent U.S. jobs to Mexico, where labor was less expensive.

“At the same time,” Ortiz-Mena added, “some groups in Mexico also feared a sucking sound, but in the exact opposite direction. They thought that Mexico would lose jobs because U.S. corporations were larger and had easy access to capital and technology.

“There was no precedent for such a far-reaching trade agreement between a developing country and two developed countries,” he said.

Though Ortiz-Mena said assessing NAFTA has become “somewhat of a cottage industry,” he added when judged on its initial goals, including expanding and securing a market for the goods and services produced by each country and ensuring a predictable, commercial framework for business, planning and investment, that NAFTA had been “a clear success.”

“Intra-NAFTA trade was about $288 billion in 1993 and it is now over $1 trillion,” he said. “Bilateral trade between Mexico and the U.S. went from about $80 billion to about $500 billion annually, which is about $1 million per minute. … By the time I’m finished speaking, about $10-$15 million in bilateral trade will have taken place.”

Ortiz-Mena said today Mexico is the U.S.’s third-largest trade partner and its second-largest export destination. The U.S. exports more to Mexico than to Japan and China combined, and more than to the BRIC countries (Brazil, Russia, India and China) combined, he said.

“The success of NAFTA was largely the result of the rules of the agreement, but particularly the trade and investment decisions made by business leaders during these past two decades,” Ortiz-Mena said. “If we are to take North American integration and competitiveness to the next level, we need to have a much stronger and proactive engagement between the public and the private sector, and to truly think and act regionally.”