Trump’s anti-trade talk rankles businesses on the U.S.-Mexico border
Three decades ago, when Rosa Hernandez began working at the Otay Mesa cargo port on the U.S.-Mexico border, it was hardly a bustling center of commerce.
“When I came here in ’86, all there was was the port of entry and tumbleweeds and brown fields,” Hernandez said. Back then, about 300 trucks each day crossed from Mexico loaded with goods to be sold in the U.S.
Now, as port director, she oversees an operation that daily inspects and moves 6,000 trucks loaded with electronics, produce, even live animals, in and out of the country. The surrounding fields have morphed into strip malls and gas stations and premium shopping outlets.
The populist rhetoric of Donald Trump and Sen. Bernie Sanders has made international trade a focal point of the presidential campaign. Often, the debate is framed in stark terms of winners and losers: jobs migrating to lower-wage countries like Mexico and China, leaving in their wake hollowed-out industrial towns in the Midwestern Rust Belt.
“Culturally, it is so very different than what we see on the national stage,” said Mark Cafferty, president of the San Diego Regional Economic Development Corporation, a nonprofit group promoting area businesses.
Local attitudes toward trade are hardly monolithic. Business leaders are quick to tout their relationships on both sides of the border. Labor groups, many of which detested the 1993 North American Free Trade Agreement, which removed trade barriers among the U.S., Canada and Mexico, say such deals have devastated local manufacturing.
But all say that a more protectionist tilt against trade with Mexico would fundamentally alter their region’s economy, which has become so tightly braided with that of their southern neighbor that untangling seems unimaginable.
“The fact is, this is a cross-border economy. That’s just the way it is,” said Jo Marie Diamond, who leads the East County Economic Development Council, located in one of the more conservative pockets of the county.
Whether that is a good or bad thing has been discussed with unusual frequency on the campaign trail this year. Sanders, whose opposition to NAFTA dates back to its origin, has regularly denounced such agreements as toxic to American workers. Hillary Clinton, whose husband gave final approval to NAFTA after it was negotiated and signed by President George H.W. Bush, has also knocked the deal, albeit more mildly.
But no one has seized the trade issue quite like Trump, who has said Americans are getting “killed” in the globalized economy. He notes that the United States last year imported $58 billion more in goods from Mexico than it exported — proof, he claims, that Mexico is profiting at America’s expense. And he regularly castigates companies such as Ford and Nabisco that have relocated their operations south of the border.
To readjust the playing field, Trump has said he’d slap companies that move to Mexico with a 35% tariff on goods they try to sell in the United States. He’s called for similar duties on goods imported from China.
Neither Democratic candidate has laid out how they’d approach trade with Mexico; instead, most of their campaign pledges on trade have centered on renegotiating the Trans-Pacific Partnership, a pending deal involving the U.S. and 11 other Pacific Rim countries championed by President Obama that both candidates oppose.
Many economists say the trade deficit is the wrong way to measure winners and losers on trade. In San Diego, supporters of trade make frequent mention of a study by the Wilson Center, a Washington, D.C.-based nonpartisan think tank, which estimated that 40% of the content in goods imported from Mexico originates in the United States.
“It’s not uncommon that products cross the border many times before they’re ready to go to market,” said Gary Gallegos, executive director of the San Diego Assn. of Governments.
Companies with footprints on both sides of the border describe their dual operations as symbiotic.
“They fit together like the pieces of a well-made guitar,” said Barbara Wight, chief financial officer of Taylor Guitars. The company has its American headquarters in El Cajon and, 50 miles away, a production facility in Tecate, Mexico.
Manufacturing occurs on both sides of the border; the Mexican facility produces cases and entry-level guitars, while the El Cajon operation makes solid wood instruments. Both use the same management team.
“The fact they have the Tecate facility allows them to stay in East County,” said Diamond, whose group promotes economic development in El Cajon and nearby cities.
But not everyone sees the post-NAFTA integration of the San Diego and northern Mexican economies as an unabashed success.
Labor groups point to the decline in local manufacturing, which shed nearly 20,000 jobs between March 1990 and March of this year, according to the Bureau of Labor Statistics.
Maquiladoras, Mexican-based factories owned by American companies, were meant to host basic production south of the border while keeping more complicated work for domestic workers, said Richard Barrera, a local leader with the United Food and Commercial Workers. But ultimately, many companies moved their entire operations farther south.
“If labor is cheap in Tijuana relative to San Diego, you’re going to have companies that move production across the border,” Barrera said.
“It’s really too hard to manufacture in the U.S.,” she said. “If I was manufacturing my denim line still, I would definitely go into Mexico or other countries to seek out labor.”
A USC Dornsife/Los Angeles Times poll in March found that Californians are torn on the benefits of international trade.
Two-thirds of respondents said trade with other countries led to lower prices. But nearly six in 10 said such commerce pushed jobs out of America, while just over a third said it created jobs stateside. Only a third of Californians back Trump’s proposed tariff on Mexican imports.
But even though the trade issue has been one of Trump’s main themes, some here support him despite disagreeing on that issue.
Michael McCaffrey, an auto mechanic from the seaside neighborhood Point Loma, adamantly backs free trade and believes that, in the long run, protectionist policies would “hurt everybody’s quality of life.”
Nevertheless, he plans on backing Trump, not because of his trade policy but in spite of it.
“I feel like me voting for Trump — it’s as if I’m throwing a grenade into the Republican establishment,” McCaffrey said.
Sentiments like that cause a wince from Antonio Maldonado, an attorney licensed in both California and Mexico who specializes in cross-border commerce.
“Republicans would usually be 100% in favor of free trade,” said Maldonado, who typically votes with the GOP, shaking his head. “But something’s in the air this last year.”
For more on Campaign 2016, follow @MelMason
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