California Pays a Neighborly Visit

A California trade delegation of politicians and business leaders headed by Assembly Speaker Cruz Bustamante is here this week engaging in a unique effort at cross-border damage control.

Their mission, the first ever led by a state legislator, is to try to repair the state’s image here, which remains tattered in some business and government quarters three years after Gov. Pete Wilson’s successful 1994 reelection and Proposition 187 campaigns.

Wilson used television advertisements showing what appeared to be illegal immigrants bolting over border fences. The ads were widely viewed by government and business leaders on this side of the border as anti-Mexican and inflammatory.

The negative fallout from Wilson’s “mean-spirited politics” still lingers and the state is losing Mexican trade to other states, notably Texas, as a result, said Bustamante, a Democrat from Fresno who is the highest-ranking Latino leader in state government.

“California has got to stop looking at Mexico as a border country, in terms of immigration problems, and more as a trading partner,” Bustamante said at a gathering at the U.S. ambassador’s residence in Mexico City on Monday night. “Because of the climate, we’ve lost many opportunities.”

Bustamante’s delegation, which includes six other state legislators and 30 California executives, will visit with Mexican President Ernesto Zedillo and federal Cabinet secretaries in meetings this week in an attempt to mend fences.

“There has been a lapse in the relationship, economically speaking, and this visit will get us on track to forging a better one,” said Assemblyman Nao Takasugi (R-Camarillo).

State trade officials, while admitting they operate under a handicap because of the perception Mexicans have of Wilson, say the state nevertheless is doing an effective job brokering Californians’ interests in Mexico.

California exports to Mexico have shown gains every year since Wilson was reelected, even during the deep recession following Mexico’s December 1994 peso crisis. California exports to Mexico over the first six months of 1997 are up 25% over the same period in 1996 and are expected to exceed $10 billion for the year.

“We don’t believe that trade has suffered and the figures prove it. If trade had really suffered, why would we see double-digit growth in trade?” asked Wilson spokesman Jesus Arredondo, adding that his office even facilitated the Bustamante delegation’s trip.

In agreement is software distributor Nick Renner, a member of the Bustamante delegation, who said the governor’s trade office in Mexico City arranged meetings with business leaders here that led to $500,000 in export business for his Madera-based small business.

But given a choice, too many Mexicans opt to do business in other states, and California’s high-technology, agriculture and service sectors are the losers, said David Rosales, chairman of the U.S.-Mexico Chamber of Commerce and a Los Angeles-based business consultant.

The “state of affairs” especially hurts California medical, accounting legal and other service firms trying to get started in Mexico, Rosales said.

“It’s too easy for Mexican businesses to say, ‘Why should we do business with them if they view us as undesirables?’ Texas, on the other hand, has a stellar image in the eye of the Mexican population,” said Rosales, a member of the visiting delegation.

In a country where personal relationships count heavily in business or government transactions, Wilson is personally anathema to many prominent Mexicans because of his anti-immigrant politics, Assemblywoman Grace Napolitano (D-Santa Fe Springs) said.

Napolitano and others mentioned the examples of former Texas Gov. Ann Richards and current Gov. George Bush, who have both maintained personal relationships with Mexican presidents and with neighboring Mexican state governors, to Texas’ benefit.

Bush has “met with Zedillo a number of times and talks with him on the phone on occasion,” said Bush spokesman Ray Sullivan. “The governor recognizes that we will not always agree, but dealing with Mexico in an environment of mutual respect and cooperation really helps.”

Wilson has not visited Mexico since July 1993, before his reelection campaign and support of ballot Proposition 187, which would deny illegal immigrants certain state government provided benefits, a spokesman said.

Many believe California has even felt the sting of retaliatory Mexican government policy. Mexico’s reimposition earlier this year of 20% tariffs on U.S. wine and other alcoholic beverage imports was seen by many as a slap at the state and its dominant share of the U.S. wine industry.

Federico de la Garza, director of Modesto-based E&J; Gallo Winery’s Mexican operations, is in Mexico City to lobby for a lifting of the tariff. But he said he doubts that the tariff, which had been lifted with the North American Free Trade Agreement, was aimed specifically at California

In any case, California’s exports to Mexico are less than half the $27 billion claimed by Texas, Bustamante said, although much of that imbalance is because Texas is a bigger trade funnel for goods produced in other states headed to Mexico.

Texas uses figures compiled by the U.S. Customs Service that include the value of all goods passing through Texas to Mexico, while the $10-billion figure for California is for all exports originated in-state, a state trade official said.