LEAKED NAFTA DOCUMENT GIVES INSIGHT INTO POSSIBLE CHANGES AND FOCUS

A recently leaked draft letter from the Acting U.S. Trade Representative (USTR) Steven Vaughn, which would notify Congress of the Administration’s intent to request renegotiation of the North American Free Trade Agreement (NAFTA), provides an insight into the specific objectives that the United States will likely seek in its deliberations with Canada and Mexico.

Specific Objectives for Labor

  • Adopt measures implementing internationally recognized labor rights and effectively

enforce the labor laws concerning those rights.

  • Promote respect for internationally recognized labor rights, including those embodied in the ILO Declaration on Fundamental Principles and Rights at Work and ILO Convention 182 on the Worst Forms of Child Labor, and effectively enforce their respective labor laws.
  • Place enforceable labor obligations within the body of the agreement.

 

Specific Objectives for Agriculture as well as Sanitary and Phytosanitary Measures

  • Reduce or eliminate non-tariff barriers on U.S. agricultural exports.
  • Eliminate export subsidies on agricultural products.
  • Maintaining the right to provide bona fide food aid.
  • Preserving U.S. agriculture market development and export credit programs.
  • Robust rules on sanitary and phytosanitary measures.
  • Elimination of sanitary and phytosanitary measures that are not based on science.
  • Strengthen cooperation between the authorities of the U.S., Canada and Mexico.

 

Specific Objectives for Rules of Origin

  • Seek rules of origin that ensure that the NAFTA supports production and jobs in the United States, procedures for applying these rules, and provisions to address circumvention.

 

Specific Objectives for Customs Matters and Enforcement Cooperation

  • Improve upon the parties’ WTO trade facilitation commitments.
  • Conduct customs operations with transparency, efficiency and predictability.
  • Strengthen collaboration in implementing the WTO Trade Facilitation Agreement.
  • Create a process for exchanging information on trade facilitation-related issues.
  • Cooperative efforts for enforcement of customs rules and related issues.

 

Specific Objectives for Technical Barriers to Trade

  • Improve the parties’ WTO technical barriers to trade commitments.
  • Eliminate unnecessary measures.
  • Strengthen collaboration in implementing the WTO TBT Agreement.
  • Create a procedure for exchanging information on TBT-related issues.

 

Specific Objectives for Intellectual Property Rights

  • Establish standards reflected in the WTO Agreement on Trade-Related Aspects of  Intellectual Property Rights and other international intellectual property agreements, such  as the WIPO, the WIPO Performances and Phonograms Treaty, and the Patent Cooperation Treaty.
  • Secure fair, equitable and nondiscriminatory market access opportunities for U.S. persons that rely on intellectual property protection.
  • Strengthen laws and procedures on enforcement of IPR (e.g., ensure that authorities can seize and destroy infringing goods and the equipment used to make counterfeit goods, as well as documentary evidence).
  • Strengthen measures that provide for compensation of right holders for IPR infringements.
  • Provide for criminal penalties under their laws that are sufficient to have a deterrent effect on piracy and counterfeiting.

 

Specific Objectives for Trade in Services

  • Expand market opportunities for U.S. services, to obtain fairer and more open conditions of services trade, improve transparency and predictability.
  • Pursue specialized disciplines for financial services and additional disciplines for telecommunications and other sectors.
  • Competitive approach to market access including improvements in access to the telecommunications, financial services, express delivery, professional services or other sectors, and address the operation of any designated monopolies or state enterprises.

 

Specific Objectives for Investment

  • Reduce or eliminate artificial or trade-distorting barriers to U.S. investments.
  • Secure for U.S. investors rights and protections akin to those available in the U.S..
  • Ensure that U.S. investors receive favorable treatment in the NAFTA countries.
  • Address unjustified barriers to U.S. investments in NAFTA countries.
  • Improve rules to resolve disputes between U.S. investors and NAFTA countries.

 

Specific Objectives for Digital Trade and Cross-Border Data Flows

  • Refrain from imposing customs duties on digital products.
  • Refrain from unjustifiably discriminating against products delivered electronically.
  • Refrain from impeding digital trade in goods and services.
  • Refrain from restricting cross-border data flows.
  • Refrain from requiring local storage or processing of data.

 

Specific Objective for Government Procurement

  • Conduct government procurement consistent with U.S. law and policy.
  • Expand U.S. market access in the CA and MX government procurement markets.

 

Specific Objective for Transparency of Regulatory Reform

  • Make administration of trade and investment regime more transparent.
  • Permit timely and meaningful public comment before adoption of measures.
  • Consultative mechanisms to improve regulatory practices.

 

Specific Objectives for Anti-Corruption

  • Ensure that the NAFTA countries apply high standards prohibiting corrupt practices affecting international trade and investment and have effective domestic enforcement mechanisms.

 

Specific Objectives for Competition

  • Address anticompetitive business conduct and other competition-related matters
  • Cooperation on competition law and policy.
  • Consultations on competition issues that may arise.

 

Specific Objectives for State-Owned and State-Controlled Enterprises

  • Eliminate or prevent trade distortions and unfair competition favoring state-owned or state-controlled enterprises to the extent of their engagement in commercial activity.
  • Ensure transparency in the level of ownership, control and support of state-owned enterprises.

 

Specific Objectives for Trade Remedies

  • Safeguard mechanism for temporary revocation of tariff preferences.
  • Preserve U.S. ability to enforce its trade remedy laws.

 

Specific Objectives for the Environment

  • Effectively enforce environmental laws.
  • Undertake implementation of applicable multilateral environmental agreements.
  • Promote sustainable development and address environmental issues.
  • Eliminate fisheries subsidies that distort trade.
  • Address illegal, unreported and unregulated fishing.
  • Seek enforceable environmental obligations within the body of the agreement.

Specific Objectives for Labor

  • Adopt measures implementing internationally recognized labor rights and effectively enforce the labor laws concerning those rights.
  • Promote respect for internationally recognized labor rights, including those embodied in the ILO Declaration on Fundamental Principles and Rights at Work and ILO Convention 182 on the Worst Forms of Child Labor, and effectively enforce their respective labor laws.
  • Place enforceable labor obligations within the body of the agreement.

 

Specific Objectivesfor Antidumping andCountervailing Duty (“AD/CVD”) Dispute Settlement (NAFTA Chapter 19)

  • Eliminate the Chapter 19 dispute settlement of AD/CVD determinations in light of U.S.experiences where panels have ignored the appropriate standard of review and applicable laws, and where aberrant panel decisions have not been effectively reviewed and corrected.

Specific Objectives for State-to-State Dispute Settlement and Institutional Provisions

  • Early identification and settlement of disputes through consultation.
  • Improve procedures designed to increase compliance with the agreement.
  • Review the NAFTA 5 years after entry into force to ensure proper implementation.

Once the letter is revised, finalized and submitted to Congress

and consultations get underway, advisory groups within the

House Ways and Means and Senate Finance Committees will

begin working with the President on the specified objectives

of the negotiations, the potential impact of any proposed tariff

changes on certain products will be examined, and industry

stakeholders (especially those in import-sensitive sectors)

Page 6

FOREIGN SUPPLIERS VERIFICATION PROGRAM- TOP FIVE QUESTIONS

FOREIGN SUPPLIERS VERIFICATION PROGRAM 

FROM:  FOOD SAFETY TECH

BY:  RANDY FIELDS

 

The Foreign Supplier Verification Rule, part of FSMA, requires the importer of food to meet the same stringent guidelines found within FSMA’s Preventive Controls rule. Companies defined as the importer are now required to deploy a Foreign Supplier Verification Program (FSVP) that ensures their foreign supply partners are producing the imported food in compliance with processes that meet the FDA’s standards for preventive controls and safety.

Companies importing food products must anticipate hazards associated with the imported food and evaluate the risk posed by the food based on the hazard analysis and the supplier’s record of compliance every three years or when new information comes to light. In general, these companies must maintain the integrity of their extended supply chain.

  1. Are you considered to be the importer under FSMA’s Foreign Supplier Verification rule?

Under FSMA, the importer is the U.S. owner or consignee of an article of food that is delivered to the United States from any other country at the time of U.S. entry. If you are still unsure as to whether you are the importer, try answering the three questions below. If you answer “me” to any of them, you might want to have your food safety team confirm your status as the importer with your foreign suppliers:

  • Who controls the finances of the imported food?
  • Who controls the agent?
  • Who controls the goods? Whose truck picks it up or in whose DC is the product stored?
  1. What comprises a FSVP?

The new regulation puts an additional burden on importers since it requires them to establish and follow written procedures for verifying foreign suppliers and correcting any violations of FDA standards. If you are considered the importer, you must have a separate FSVP in place for each food product and each foreign supplier, even if the same food is obtained from a number of suppliers. Proper documentation is essential to maintaining access to U.S. food markets since this will be the primary means by which FDA will establish compliance with FSVP. If you are not the importer, it might make sense to ensure you have copies of what your importer says he or she has on file.  (Hint: It’s a good idea to trust but verify in this situation.)

  1. Can you meet the FSVP challenge?

Any record requested by the FDA must be available within 24 hours and could date two years back. If you don’t have an automated system, it’s time to consider one, as it’s really the only way to manage the range of documents required by a FSVP across a retailer’s or wholesaler’s vast supplier base. (Verification includes on-site audits, sampling/testing, records, certificates of conformance and continuing guarantees.)

  1. What is the CEO’s responsibility under FSVP?

Senior executives in the extended retail food supply chain are personally responsible not only for their company’s compliance with FSVP, but also for verifying the compliance of their upstream supply chain.

  1. Why is Now the Time to Take Action?

Implementing a new system with suppliers will take time. It is your responsibility to ensure you and your suppliers are in compliance by the deadline. FSVP compliance goes into effect for most companies at the end of May 2017.

While we like to think of food safety as not being a competitive advantage, it can be used as leverage against the competition. So it’s critical to understand not only what the importer should be doing to comply with FSVP, but also what the supplier can do in advance to help the importer meet its obligations under the law.

 

MODERNIZING NAFTA

FROM BLOOMBERG

 

Mexico’s top trade negotiator will grant President Donald Trump this: Nafta is in need of updating. He doesn’t agree, however, that the U.S. auto industry has gotten the short end of the stick.
The North American Free Trade Agreement has served the U.S., Canada and Mexico well, Economy Minister Ildefonso Guajardo said Friday at a luncheon hosted by the Detroit Economic Club. But when he was negotiating the original agreement in the 1990s, he didn’t have a cell phone, there was no such thing as e-commerce and Mexico’s energy and telecommunications sector lacked competition.
“Nafta is 23-year old agreement — we need to bring it up to modernity,” Guajardo said.
Trump has been determined to wring more favorable terms from Nafta, though he hasn’t been explicit on what he wants to change. The president has criticized automakers including Ford Motor Co., Toyota Motor Corp. and BMW AG for building vehicles south of the border and has threatened to tax imported vehicles.
It’s necessary to recognize what’s worked well with Nafta and push back against the notion that the rapidly expanding Mexican auto industry has taken the lion’s share of growth, Guajardo said. He visited Detroit ahead of planned discussions around the possible renegotiation of the free trade agreement.
Capital Investment
“Of the 100 percent of investments that have been made in the auto sector in the last five years, 72 percent have been in the U.S.,” he said.
While in Michigan, Guajardo was scheduled to meet with Joe Hinrichs, Ford’s head of the Americas, and Mustafa Mohatarem, General Motors Co.’s chief economist, according to company representatives. He also visited with auto-parts company executives that have factories in Detroit and Mexico, he said during his speech at the MotorCity Casino Hotel.
In an interview last Friday, Guajardo said he would break off talks if the U.S. proposes the kind of big border tax suggested by President Trump.
“The moment that they say, ‘We’re going to put a 20 percent tariff on cars,’ I
get up from the table,” he said in the interview. “Bye-bye.”
Trump has called Nafta unfair and responsible for a “massive” imbalance favoring Mexico. The country shipped $294 billion worth of goods north last year while the U.S. sent $231 billion south.
Without Nafta, trade between Mexico and the U.S. would be ruled by World Trade Organization strictures limiting tariffs either country can impose on the other. That means an import tax like the one Trump has suggested could result in a WTO challenge, Guajardo said.
Before it’s here, it’s on the Bloomberg Terminal. LEARN MORE

SEN. CORNYN POSITIVE VIEW OF NAFTA

 

 

 

 

 

 

American-Statesman Staff

3:44 p.m Thursday, March 2, 2017  Texas News & Politics

President Donald Trump says he’s going to renegotiate NAFTA, which as a candidate he described as the “worst trade deal ever approved in this country.”

But U.S. Sen. John Cornyn of Texas, the No. 2 Republican in the Senate, described NAFTA as an economic boon to Texas, Mexico and the United States in an op-ed in “Politico Magazine” Thursday, and called for the administration and Congress to mend the trade pact, not end it

“It’s now more than 20 years old. Texas and the United States as a whole would benefit from a revised agreement that makes trade freer and fairer,” Cornyn wrote. “By fixing NAFTA, we can address modern-day challenges and preserve and protect America’s unrivaled stability and prosperity into the next century.”

But Cornyn made clear that NAFTA was critical to Texas’ economic success.

“When looking for a model economy, Washington would be wise to look no further than Texas. The `great American jobs machine,’ as we’re affectionately known, has been the economic engine that pulled our country out of the recent recession, singlehandedly adding more than 1 million jobs to the American economy,” Cornyn wrote.

But, Cornyn argued, “Trade has been a cornerstone of the Texas economy, with no partner more important than Mexico.”

“As our largest export market, Mexico has an extraordinary economic relationship with Texas. Trade with our southern neighbor supports hundreds of thousands of jobs in my state and provides more goods at a better price for Texas families,” Cornyn said. ” More than a third of all Texas merchandise is exported to Mexico – meaning our farmers, ranchers and small businesses have found no shortage of customers south of the border too.

“This explosion in trade for our state has catapulted Texas to the top of exporting states in the country for more than a decade now. Thanks to trade pacts like the North American Free Trade Agreement, goods and services flow more freely among the three North American countries, growing jobs across Texas and stretching paychecks further,” Cornyn said. “This isn’t just true for Texas. A majority of exports coming from Michigan and Ohio, for example, are bound for our NAFTA partners too.”

“Texas – where taxes are low, regulations are sensible and trade is encouraged – has proven time and again that we’re a blueprint for growing the national economy,” Cornyn said. “In my state, border security, trade and the economy are intimately connected. So as Congress considers whether to revisit agreements like NAFTA and how to best secure the border, we must take great care to advocate for smart policies that drive growth here at home and enhance our partnerships abroad.

TEXAS BENEFITS GREATLY FROM NAFTA

WORLD TRADE BRIDGE  LAREDO, TEXAS

 

FROM THE DALLAS MORNING TIMES 

President Donald Trump has called NAFTA the worst trade deal in the history of free-trade deals. “A disaster,” he has said often. But anyone who has been in Texas for longer than a day knows the North American Free Trade Agreement has been, overall, enormously beneficial to America, especially to Texas.

Texas, therefore, is counting on Sens. John Cornyn and Ted Cruz, and the business lobby, to loudly proclaim the benefits of this 1993 agreement. That’s essential to protect this state from the harm that will almost certainly come if Trump follows through and withdraws this country from the pact.

Texas is the nation’s leading export state. And which country buys our products more than any other? Mexico, of course. In 2015, Texas exported $95 billion worth of goods made here to Mexico, which, thanks to NAFTA, assesses little or no tariffs on those products. The largest category of goods exported from Texas to Mexico? Computers and electronics, which in the first quarter of 2016 accounted for 31 percent of all such goods.
Other states also export goods to Mexico, naturally. And when they do, the vast majority of them are sent by trucks that travel through Texas, another source of jobs and infrastructure investment for our state. All that means jobs for America, jobs for Texas.

Has the deal also helped Mexico? Certainly.

Several thousand assembly plants have been built along the Mexico side of the border since NAFTA was ratified. Those plants are given special treatment if they agree that the goods they assemble — usually using parts manufactured in America — will be exported out of Mexico. Every year, about $300 million worth of goods are sent from those plants in Mexico out of the country, mostly back here to America.

A stronger Mexican economy is absolutely in America’s best interest — and in Texas’.

These are just some of the reasons why free trade, and NAFTA in particular, has been so strongly supported by Republicans in federal office, and by governors in Austin. It was largely negotiated, after all, by President George H.W. Bush’s administration and ratified by the Senate in the first year of President Bill Clinton’s first term.

Nevertheless, Trump has promised to put our NAFTA partners on notice that he wants a better deal. Will they agree to renegotiate? Time will tell. But Trump and his team must know that even if they do, re-opening negotiations is fraught with risk. Mexican farmers and others have long lamented what they see as a lop-sided arrangement with America. Will suddenly their concerns take center stage, too?

Any new agreement would then face the political risks associated with new rounds of ratifications in Congress and the two other capitals.

For Trump, and the many Democrats who have long opposed trade agreements like NAFTA, the risk seems negligible. He says he’s happy to pull out of the agreement if he can’t negotiate a better deal.

That would be foolish.

 

MEXICO NAMES NEW AMBASSADOR TO USA

Scott Ball / Rivard Report

A Mexican flag at the 19th Annual Cesar Chavez March for Justice in 2015.

Updated January 14, 2017
To read this article in Spanish, click here.

Mexico’s Foreign Affairs Ministry announced Friday that Gerónimo Gutiérrez Fernandez, head of San Antonio-based North American Development Bank(NADBank), will be Mexico’s new ambassador to the United States.

Geronimo Gutierrez

North American Development Bank Managing Director Gerónimo Gutiérrez Fernandez

Gutiérrez will succeed current ambassador Carlos Sada Solana, who will become undersecretary for North America on Jan. 23, the Mexican Foreign Affairs Ministry stated in a release Friday. Sada, who served as Consul General of Mexico in San Antonio from 1995-2000, was ambassador for only nine months. He will attend the inauguration of President-elect Donald Trump on Jan. 20.

“[Gerónimo] is a great bridge builder and he is a leader on policy and trade,”San Antonio Hispanic Chamber of Commerce CEO Ramiro Cavazos told theSan Antonio Business Journal Friday.

Mexican President Enrique Peña Nieto will submit Gutiérrez’s appointment to the Mexican Senate for ratification. Naming a new ambassador in Washington also requires approval from the U.S. government.

“(I am) thankful to President Enrique Peña Nieto for (the) opportunity to serve my country and be a part of his administration under leadership of Secretary Luis Videgaray,” Gutiérrez stated on Twitter.

To uphold diplomatic form and comply with Mexico’s constitution, Gutiérrez said he will withhold further comments “until the conclusion of appropriate processes” in Mexico and the U.S.

Since 2010, Gutiérrez has been the managing director of NADBank, which was created in 1994 under the North American Free Trade Agreement (NAFTA). The bank is jointly financed by the U.S. and Mexico to lead environmental projects that preserve and enhance the quality of life for people living on the border.

Gutiérrez currently serves on the board of directors for the Asociación de Empresarios Mexicanos (AEM) and has collaborated on events that deal with cross-border infrastructure, trade, and the promotion of binational energy production.

Prior to his role with NADBank, Gutiérrez served as Mexico’s undersecretary for North America as well as undersecretary for Latin America and the Caribbean. He has held posts in sectors of commerce, finance, foreign relations, and national security in the last four administrations of the Mexican government.

Gutiérrez holds a bachelor’s degree in economics from the Instituto Tecnológico Autónomo de México (ITAM) in Mexico City and a master’s in public administration from the John F. Kennedy School of Government at Harvard University.

As Mexico prepares for a complex new relationship with the U.S. under Trump, Peña Nieto has begun a political chess game and moved around key government roles in an effort to strengthen bilateral ties in security, immigration, commerce, and investment.

On Jan. 4 the Mexican president designated former finance minister Luis Videgaray as the country’s new foreign minister, thus replacing Claudia Ruiz Massieu. It was Videgaray who suggested Peña Nieto invite Trump to Mexico in August, a decision that caused uproar among the Mexican populace and put pressure on Videgaray to resign as finance minister.

It’s been a rough start to the new year for Mexico, as Peña Nieto grapples with Trump’s ascent, the fall of the Mexican peso, and violent unrest due to a 20% increase in gas prices. Opposition has taken the form of protests, looting, and robberies all over the country.

In his new role, Gutiérrez will have to respond to Trump’s promise to build a wall on the U.S.-Mexico border, deport of thousands of immigrants, and renegotiate NAFTA. Most recently, Trump berated members of the auto industry for investing in Mexico and opening up car plants there instead of in the U.S. His statements prompted strong responses on social media from former Mexican presidents Vicente Fox and Felipe Calderón.

“Gerónimo Gutiérrez is the perfect person to serve as the ambassador from Mexico to the United States because he is an expert on U.S.-Mexico relations,” Cavazos told the Rivard Report Saturday. “Now more than ever, his skills and experience should help bridge the economic/immigration tensions between our two countries.”

The Hispanic Chamber frequently works with Gutiérrez and other officials at NADBank to plan annual trade missions to Mexico.

“Gerónimo’s role as the NADBank managing director for six years has provided a strong partner for us at the San Antonio Hispanic Chamber of Commerce to help make our trade missions, advocacy of NAFTA, and support for free trade very effective,” Cavazos added.

USA TRADE WITH MEXICO IS MORE IMPORTANT NOW THAN EVER

 

TRUCKS CARRY MAJORITY OF NAFTA TRADE
TRUCKS CARRY MAJORITY OF NAFTA TRADE

BY:  Alfredo Corchado          From:  Dallas Morning News

MEXICO CITY — Mexican and U.S. business leaders are quietly strengthening coalitions from America’s heartland to North Texas to persuade a skeptical Donald J. Trump to maintain strong  ties between the two countries.  The president-elect has sent ambiguous signals over future and past trade deals and building a wall, or perhaps just a fence along the border with Mexico.

To help gain leverage with Trump, Mexico is also pondering several options, including replacing Foreign Minister Claudia Ruiz Massieu with former Finance Minister Luis Videgaray, according to three senior Mexican officials with knowledge of the plans.

The plan is to make the case that Mexico is not China and should be treated not as an adversary, but as an ally on matters ranging from economic to cultural integration, with security the critical glue binding both sides, business and policy leaders on both sides of the border said.
North Texas is key in that effort.

“These guys and gals have known each other for years,” he said. “They will push this agenda. You will see a powerful binational coalition forming between these two countries. That’s what I have been watching take place over the past 20 years and I’d be surprised if that’s not happening again.” “You have powerful people from Mexico talking, drinking, having dinner with very powerful Texas people,” said James Hollifield, director of the Tower Center at Southern Methodist University, or SMU, and a founding member of the Mission Foods Texas-Mexico Center.

Nearly 5 million U.S. jobs depend on trade with Mexico, with more than $400 billion in goods and services crisscrossing the border. Of that figure, $179 billion is between Texas and Mexico.

Over the years, the two countries have set up supply chains that snake across the countries, often along the Interstate 35 corridor, carrying manufactured goods, including cars, assembled in both countries. Cars built in places like Arlington crisscross the United States and Mexico border,  including Silao, Guanajuato, at least eight times during production, according to a study by the Woodrow Wilson Center’s Mexico Institute.

“This relationship is not optional,” said U.S. Ambassador Roberta Jacobson. “And this relationship isn’t just about economics, or cultural ties, but security too.”

Employees at work in the multibillion-dollar Honda car plant in Celaya, in the central Mexican state of Guanajuato. The factory is part of a national manufacturing boom that has turned the auto industry into a bigger source of dollars than money sent home by migrants.

Critical timing

The timing in Mexico is critical. The country of more than 120 million is facing uncertain times,  and Trump’s ascent can either mean a slower growth rate, or recession. During the presidential campaign, Trump referred to Mexicans as “rapists” and criminals, drug dealers — “although some, I assume, are good people,” he said.

He promised to deport millions of undocumented immigrants, which would curtail more than $22 billion in annual remittances into Mexico. And he also wants to renegotiate trade deals, including the North American Free Trade Agreement, or NAFTA, that over the past 22 years has woven an infrastructure of new industries stretching from Mexico, the United States to Canada.

Since the late 1980s, Mexico has shifted from a close, privately held economy into one of the most open in the world, hedging its bets on trade agreements, including NAFTA in 1994. Today, the average Mexican has about one-third of his income from jobs tied to trade.

Trump has also threatened a trade war with Mexico by slapping 35 percent tariffs on cars and auto parts imported from Mexico. His most applauded pledge was to build a wall with Mexico and have the Mexican government pay for it, leading supporters to chant “Build That Wall.”

But since his election, Trump has seemed to back off his promises.

“What shocked so many of us during the presidential campaign was not that a candidate could describe Mexican immigrants as criminals and rapists or that he would threaten a trade war with Mexico,” said U.S. Rep. Beto O’Rourke, D-El Paso, who’s from a region that’s been transformed by trade. “What was shocking was that so many people throughout the country seemed to agree with those sentiments. The vilification of Mexico and the undervaluation in the U.S. of our bilateral relationship did not happen overnight. It will take many years to get it back on track.”

In Mexico, “all possibilities are on the table,” said a senior Mexican official who was not authorized to speak publicly.

That includes bringing back Videgaray, who fell from grace as the mastermind of Trump’s last-minute, controversial visit to meet with President Enrique Peña Nieto in Mexico City last August. Videgaray promptly resigned amid the fury that ensued. But following Trump’s victory, Videgaray’s stock rose. The U.S.-trained technocrat is known as a friend to key binational business leaders and has ties to some of Trump’s key people, including the president-elect’s son-in-law, Jared Kushner.

The fiasco contributed to Peña Nieto’s worsening approval ratings — now in the low 20s — and fallout with the Democratic Party in the U.S.

Mexico will need to “simultaneously engage the incoming (Trump) administration and rebuild ties with the Democratic party,” said Arturo Sarukhan, Mexico’s former ambassador in Washington.  “If NAFTA were to unravel, it would be the proverbial spanner in the works, one that will damage Mexico and the United States alike.”

Other challenges for Mexico range from gasoline price hikes and shortages to more corruption, impunity in his administration, and renewed drug violence in regions, including Ciudad Juarez, across from El Paso. In the first 10 months of 2016, more than 17,000 people were killed in Mexico, the highest 10-month tally since 2012. That has generated fears among citizens of a return of gangland mayhem that’s marred Mexico for more than 10 years.

“I don’t know that we’ve ever felt safe again,” said Francisca Jimenez, a cleaning woman in Ciudad Juarez. “There’s also more uncertainty for Mexicans here in and in the United States with the arrival of el señor Trump.”

 

Slowing immigration

Ironically, over the years, Mexico has dramatically slowed illegal immigration north, in part due to a decades-long campaign to lower fertility rates and transform its economy into a mega center for cars, TVs, aerospace manufacturing and computers.

“Mexican business leaders need to go to Wisconsin, Kansas City, Michigan, Oklahoma, North Texas and skip Washington, D.C., and the border,” said a senior U.S. official without permission to speak publicly. “The heartland, middle America, is where the fight is. There is a need to remind Americans that Mexico is a partner, not a rival.”

O’Rourke added: “It’s important that those who understand the importance of this relationship —  especially in those places far from the border where the positive value of Mexico is not as intuitive — work as hard as they can to bring the facts to the broader public.”

Larry I. Rubin is president of the American Society in Mexico, which represents U.S. interests in Mexico. He’s one of several candidates being vetted by Trump’s team as a possible new U.S. ambassador to Mexico. During the presidential campaign, Rubin took groups of Mexican business leaders to U.S. regions, including the Midwest, to narrow the gap of understanding.

Rubin estimates more than 1 million Americans live in Mexico, a number that fluctuates seasonally. More than 35 million Americans trace their roots back to Mexico.

“Texas is used to its huge Latino population, and its integration with Mexico, but that kind of assimilation, integration is ongoing throughout both countries,” said Rubin, also leader of the Republican Party in Mexico and a dual citizen whose father is from Cleveland, Ohio. “We need to work closely with Mexico to secure the entire region and a wall is one way to do that, but it’s not the most effective way to deter terrorism.

“Broader knowledge and deeper understanding about the U.S.-Mexico relationship needs to happen on both sides of the border,” he said. “Neither side understands each other fully. We all say we do, but we really don’t.”

Tortilla diplomacy

Business leaders like Javier Velez Bautista, CEO of Mission Foods’s U.S. headquarters in Dallas, understands the urgency. He welcomes “updating” and “reviewing” NAFTA because he said after 22 years of experience with the agreement, there are areas the countries can agree on that need to be improved.

Yet, interrupting the economic integration between both countries may prove disastrous for both sides, he cautioned.

Take tortillas, for example. Nationwide, on a daily basis, Mission produces some 100 million tortillas in its 21 U.S. plants. In Dallas alone, Mission, a unit of Monterey-based Gruma S.A., employs more than 1,000 people and is constructing a new plant in Grand Prairie. Once the plant is fully operational sometime after the fall of 2017, Mission plans to make more than 35 million tortillas per day — more than twice what it was making some 20 years ago.

“The growth is not coming just from Mexicans, because tortillas are everywhere today, shrimp tacos, sushi places, etc.,” said Velez, who’s also a board member of the Mission Foods Texas- Mexico Center at SMU. “The main growth comes among non-Mexicans, which is representative of the economic integration we’re seeing nationwide. That’s something I hope the new administration will see more as an opportunity than a threat.”

Alfredo Corchado is co-director of the Borderlands Program at the Cronkite School of Journalism at Arizona State University and author of “Midnight in Mexico.” He’s the former Dallas Morning News Mexico Bureau chief.

Follow Alfredo Corchado on twitter at @ajcorchado

Texas-Mexico trade facts

–Texas is the top exporting state in the U.S., and its main export market is Mexico.

–Trade between Texas and Mexico was more than $176.5 billion in 2015, with a surplus of $8 billion for Texas. This represents more than a third of the state’s total trade.

–Texas is No. 1 in the U.S. for export-related jobs, with 382,000 jobs in Texas depending on trade with Mexico.

–The Dallas-Fort Worth metro area is the country’s eighth-largest exporter. In 2015, Mexico was DF-W’s top foreign market with 17 percent of its total goods exports.

–Texas exports to Mexico are highly diverse, with computers and electronics making up over one fourth of exports, followed by transportation equipment at 12 percent and petroleum products at 11 percent

–Mexican immigrants continue to remit billions of dollars annually to Mexico, adding to economic growth and increasing investments in everything from housing to infrastructure, and adding to the purchasing power of Mexican consumers.

Source: Mission Foods Texas-Mexico Center at SMU, Dallas Federal Reserv

FOREIGN SUPPLIERS VERIFICATION PROGRAM UNDER FSMA REQUIRES FULL ATTENTION OF IMPORTERS

FOREIGN SUPPLIERS VERIFICATION PROGRAM TO BE ANNOUNCED LATER THIS WEEK

Wednesday, November 09, 2016
Sandler, Travis & Rosenberg Trade Report

 

Food importers should act now to design, test, and implement foreign supplier verification plans or risk supply chain disruptions, delays in entry processing, and possibly the exclusion of their products from the U.S. marketplace. Domenic Veneziano, independent Food and Drug Administration regulatory and strategic consultant for Sandler, Travis & Rosenberg and previously the FDA’s director of import operations, issued this warning at a Nov. 4 town hall meeting sponsored by the Association of Food Industries in Newark, N.J.

Veneziano offered several tips to help food industry professionals meet the May 2017 FSVP compliance deadline.

– Know if your company or facility is covered by the FSVP requirements. “Many people are under the impression that only the U.S. Customs importer of record is required to comply,” Veneziano said. “But the definition of ‘importer’ under the Food Safety Modernization Act is much broader and can include the actual CBP importer, the owner or consignee of food being offered for import, and even the U.S. agent of the importer. All are at risk if FSVP requirements are not met.”

– The FSVP requirement does not just apply to large food importers. “The statute does make some concessions for smaller companies, but there are still requirements to be met,” Veneziano said. “Unless you meet a specific exemption, your company must create a foreign supplier plan.”

– To create an FSVP that meets government requirements, it is important to understand its purpose. “Under FSMA, importers have explicit responsibility to ensure the safety of imported food,” Veneziano explained. “Foreign suppliers are expected to produce food using the same standards of processing and procedures required by domestic producers. What you want to show the FDA is that you are taking steps to ensure that foreign-produced food is safe and that the food entering U.S. commerce is not adulterated or misbranded.”

– A qualified individual should perform required FSVP activities. “The individual creating the FSVP must have the education, training and/or experience necessary to conduct a sophisticated review of all the records associated with an activity under review,” Veneziano emphasized. “You need an expert who can not only develop the actual program but also conduct hazard analyses, evaluate risks specific to the food being imported, verify supplier activities, monitor corrective actions, and maintain records. It’s a major undertaking and requires a high level of expertise.”

To learn more about creating an FSVP for your company, contact Domenic Veneziano at DVeneziano@strtrade.com or visit our website.

NOGALES PORT OF ENTRY SELECTED FOR DONATION ACCEPTANCE PROGRAM (DAP0

U.S. Customs and Border Protection announced Oct. 11 that a new proposal from the Greater Nogales Santa Cruz County Port Authority has been selected to engage in further planning and development activities as part of the Donations Acceptance Program. This proposal would upgrade existing air-conditioned dock space at the Nogales West land port of entry to food safety-certified refrigerated space. CBP states that the Nogales West POE processes more fresh produce than any other POE along the U.S.-Mexico border and that the proposed upgrades would improve CBP’s ability to safely handle and inspect seafood, berries, avocados, and other temperature-sensitive commodities.

CBP notes that this is the first proposal selected under its small-scale process for proposals valued at $3 million or less, which is a new offering and avenue for stakeholders interested in investing in and expediting small scale, high impact border infrastructure, technology, and other related improvements. Proposals that qualify as small scale may be submitted year-round and thus evaluated 60 to 70 percent faster than proposals submitted during the DAP’s annual cycle for mid- to large-scale proposals.

JOINT U.S. AND MEXICO CARGO CLEARANCE

CUSTOMS AND TRADE PARNERSHIP AGAINST TERRORISM

Joint Cargo Clearance, the next step in Customs Clearance

By Roxana Osuna | 09/18/2016 | 2:26 PM

On July 25, 2016, U.S. Customs and Border Protection (CBP) announced an innovative concept in which CBP and the Servicio de Administración Tributaria (SAT), the Mexican tax administration service,  will perform joint cargo clearance and examinations at the U.S. Customs Port of Nogales, Arizona for 120 days. By conducting joint cargo processing, CBP and SAT will reduce cargo inspections and wait-times at the border. These reduced wait-times will lower the cost of doing business in the region, as well as, enhance national security for the United States and Mexico.

The announcement came as an invitation for manufacturing companies currently certified in the Customs-Trade Partnership Against Terrorism (C-TPAT) to try the pilot program which is expanding to additional Ports of Entry. To participate, both the manufacturing company and its transportation partner must be approved to use the “FAST LANE”. Additionally, the manufacturing company must register for the pilot program with the Consejo Nacional de la Industria Maquiladora y Manufacturera de Exportacion (INDEX), the Mexican National Council for the Free Trade Manufacturing and Export Industry, which is tasked with monitoring participation and results.

The program can be seen as an incentive for companies which are currently not participating in C-TPAT or the equivalent Authorized Economic Operator (AEO) programs to support a perimeter approach to security and experience added benefits. It is also another step towards mutual recognition and acceptance of trusted trader programs while the U.S. pursues the implementation of the International Trade Data System (ITDS). ITDS, a system which will allows international traders to submit documents required by CBP and its partner government agencies through a “single window.”

The future of customs clearance looks promising as collaborative, intergovernmental programs are established that are designed to address security threats while allowing for the streamlined movement of goods and people across a shared border.