Trade connection to Mexico essential

SAN DIEGO – Across America they were rounding up undocumented ­workers and promising to build that wall, but 10 floors above and a few miles from the busiest border crossing in the world, a group of politically diverse leaders met last week to stress the importance of open trade with Mexico, the economic lifeblood of the region.

"It's been honestly kind of crazy times," said U.S. Rep. Scott Peters, D-San Diego. Peters, a former Dorsey and Whitney attorney whose main charge from voters when he got elected was to facilitate more trade, seems stunned that attitudes toward Mexico have changed so much.

Want crazy? On the same day Secretary of Homeland Security John Kelly visited the border near San Diego to talk about building the wall, the top business story in the San Diego Union Tribune was about how the state's largest garlic producers couldn't find enough workers. The reason was that too many Mexican laborers had been deported by a U.S. president — President Obama.

So Wednesday, CEOs from the U.S. and Mexico, as well as elected state and federal officials crammed into the offices of the San Diego Regional Chamber of Commerce to strategize, gripe and openly condemn trade policies of President Donald Trump, which seem to shift almost daily.

For this area of the country, where I've been traveling for the past few weeks, the connection to Mexico is essential. More than 50,000 vehicles and 20,000 pedestrians cross the border here every day, moving goods and money and providing workers both ways. According to Peters, $53 billion and 6 million jobs in the U.S. are dependent on trade with Mexico.

But it's not just California that would be hurt by trade restrictions. Alejandra Mier y Teran of the Otay Mesa Chamber of Commerce specifically mentioned Minnesota's Medtronic as a company that would be harmed. "Medtronic is doing very well in Tijuana," she said.

Will Ostick, U.S. Consul General for Tijuana, brought up the recent proposal by a Mexican official that would direct his country to start buying corn from Brazil and Argentina, instead of Iowa and Minnesota. Mexico actually is the top export destination of Minnesota-grown corn and soybeans.

Mier y Teran stressed that the U.S. is not getting taken in the NAFTA deal, as Trump often says. In fact, 40 percent of imports from Mexico have contents that originated in the U.S., she said, and the balance of trade has been steadily improving. "We do need to show we are competitive, and we don't want these companies to move to Asia," she said.

Paola Avila, vice president of the San Diego Chamber of Commerce, said business leaders could do more to educate people that improved technology has eliminated far more jobs than trade. "Trade is not the evil, it's not the reason for job loss," she said.

Steve Gallo, CEO of Chosen Foods, which produces avocado oil and other products, combined family-run businesses on both sides of the border for his company, with sales of more than $100 million per year. He has manufacturing plants in the U.S., Mexico and Canada, each offering something particular to his company's success. The plant in Mexico, for example, is essential because it's closer to the source of most of his avocados.

"We invented avocado oil," said Gallo. "We wouldn't have been able to do that without innovative partners on both sides of the border. We are a good model for the right future."

Some GOP legislators are pushing for a Border Added Tax, or BAT, which would tax a company's net imports at up to 20 or 30 percent, something widely criticized by the business leaders in San Diego.

Avila asked Gallo if a BAT would entice him to move his plant to the U.S.

"Simple answer: No," said Gallo. "It's Economics 101. It would simply raise the cost to consumers and hurt consumer demand for our goods."

But simple answers are of no value in crazy times. If there was any optimism among this group of business and political leaders, it was that despite all the threats, all the reckless rhetoric and insults to Mexican leaders, Trump has essentially done nothing on economic policy thus far. His Cabinet leaders dispatched to Mexico also seem to be undercutting his message and trying to bring a little sanity to the equation.

"It's disorganized," said Peters, "there's not a lot of policy coming out of Congress."

I asked Tijuana consul Ostick if it was all just political theater to feed the base.

"We're a laboratory here," Ostick said. "We'll see."

jtevlin@startribune.com • 612-673-1702

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