AZ Trade Talk …
… is a communication from the desks of Chris Camacho, President & CEO of the Greater Phoenix Economic Council, and Glenn Hamer, President & CEO of the Arizona Chamber of Commerce & Industry.
As we begin a new year, companies with a significant Arizona presence are bullish on the future of our nation’s economy following the passage of the federal tax reform last month. They are right to be optimistic. Tax reform coupled with a modernized North American Free Trade Agreement (NAFTA) that is better aligned with today’s economy is poised to unleash Arizona’s economic growth.
As we approach the sixth round of NAFTA negotiations in Montreal later this month, U.S., Canadian and Mexican negotiators will be debating controversial measures such as rules of origin, whether to institute a sunset clause, and investor state-dispute settlement. Though there has been consensus on the wording of some measures such as anti-corruption, telecommunications, and goods market access, there is still a great sense of uncertainty about the future of NAFTA.
At the end of the fifth round of negotiations in Mexico City in November 2017, U.S. Trade Representative Robert Lighthizer said, “While we have made progress on some of our efforts to modernize NAFTA, I remain concerned about the lack of headway. Thus far, we have seen no evidence that Canada or Mexico are willing to seriously engage on provisions that will lead to a rebalanced agreement. Absent rebalancing, we will not reach a satisfactory result.” Just last week, Reuters cited Canadian sources saying they expected President Trump would make a move to end NAFTA at the end of the month, which led to Canadian and Mexican currencies weakening against the U.S. dollar.
Arizona’s policy leaders, led by Governor Doug Ducey, remain steadfast in their belief in the importance of the trade agreement for our state’s economic prosperity and export-oriented jobs. In the midst of the NAFTA debate, Arizona is strengthening its economic cooperation.
Governor Ducey earlier this month announced that the region will be home to SkyBridge Arizona at Phoenix-Mesa Gateway Airport, the nation’s first international air cargo hub to house both Mexican and United States customs. This gamechanger for international trade comes with a projected 17,000 new direct and indirect Arizona jobs.
At the outset of 2018, national leaders should look to Arizona to gain an understanding of how greater integration across borders can lead to economic growth.