A near-capacity audience filled the Naveen Jindal School of Management Executive Dining Room on Feb 26 to hear dignitaries representing the U.S., Canada and Mexico, as well as business executives and educators discuss the impact of the North American Free Trade Agreement—NAFTA—on the Texas economy.
The Executive MBA program at JSOM and the Canada-Texas Chamber of Commerce (CTCC) hosted the event, the 2018 kickoff event for the chamber, which was established in 2017. The World Affairs Council of Dallas/Fort Worth, Air Canada and Bureau du Québec à Houston (Quebec Government Office in Houston) were sponsors.
Businesses and officials in Canada, the United States and Mexico are watching NAFTA negotiations closely. Any changes to the agreement could affect the economies of all three countries.
“There’s been a big vacuum in Texas as far as NAFTA goes,” District 103 State Representative Rafael Anchia, chair of the Texas House of Representatives’ International Trade and Intergovernmental Affairs Committee, said, “but we are finally starting to see Texas step up. If we do NAFTA right, it will be a big boon to Texas; if we do it poorly, Texas will be hurt.”
Anchia served on a panel that also included Francisco de la Torre Galindo, Mexico’s Consul General in Dallas; Vasken Khabayan, Canada’s Consul General (acting) in Dallas; and Matthew Rooney, director of economic growth at the George W. Bush Institute and a Jindal School 1985 MA in International Management Studies alumnus.
While Khabayan opposes killing NAFTA, he believes it could be updated.
“Through NAFTA, we have not only opened our markets, we have forced other countries to open their markets,” he said. “For Canadians, there is much trepidation about NAFTA. We fear job loss.”
According to de la Torre Galindo, NAFTA is not only about jobs. “Trust is the most difficult part at this stage,” he said. “No one is liking how negotiations are going, and we don’t know what’s going to happen after Mexico’s presidential election in July.”
“The United States, Canada, and Mexico have all grown under NAFTA,” said Rooney, a JSOM 1985 MA in International Management Studies alumnus. “It doesn’t need to be renegotiated. Any problems can be worked out without renegotiating.”
Jim Falk, president and CEO of the World Affairs Council of Dallas/Fort Worth and a member of the board of directors of CTCC, served as moderator of the event, which included a second panel.
One member of the second group, Elizabeth Lalli-Reese, said that, for her generation, NAFTA has always been. “The idea of changing it is hard to understand,” she said. “Our business has flourished under NAFTA. Changes would impact transportation, with higher tariffs and more red tape.”
Lalli-Reese is general manager and vice president of human resources and risk management, Demilec Quebec, an insulation manufacturer that also has a location in Arlington.
Other panelists were JSOM professor Dr. Mike Peng, O.P. Jindal Chair of Global Strategy, considered by many to be an expert on NAFTA; and Todd Bluedorn, CEO, Lennox International Inc.
While he agreed NAFTA has been good for his company and for the country, Bluedorn said it has not been good for everyone. He pointed to U.S. workers who lost their jobs because of NAFTA, such as those in the steel industry.
“The fact that some things are cheaper doesn’t matter if you’ve lost your job,” he said, adding that he was stating his beliefs, not those of his company. “I know you can’t swing the pendulum back, but any changes to NAFTA need to consider those people.”
Peng pointed out that Texas— as a state — is the number one exporter in the U.S., and that Dallas is almost equal distance from Quebec and Mexico City. “If NAFTA goes away, we’ll continue to trade with each other and growth will happen, just not as much,” he said. “But one thing we should remember, the U.S. doesn’t have a free-trade agreement with Europe, but Mexico and Canada do. If the U.S. gives up the preferential relationship with Canada and Mexico, competitors of U.S. companies will go to Europe, and Europe will love it.”
Charles Gillis, executive director, Munsch Hardt Kopf & Harr P.C., and a 2004 graduate of JSOM’s Executive MBA program, and Pamela Foster Brady, director of JSOM’s EMBA programs and a 2011 EMBA and 2016 MS in International Management Studies graduate, organized the event. Both Foster Brady and Gillis are board members of CTCC.
“When asked to serve on the board of directors for the CTCC, it was clear to me that this would provide direct insight into very relevant issues that Texas and the U.S. are facing with regards to trade with Canada,” Foster Brady said.
