A key factor that should be discussed when renegotiating the North American Free Trade Agreement isn’t even in the original agreement, according to Google’s public policy manager, Kate Sheerin.
NAFTA 2.0 needs to evolve with the times by addressing the digital trade and economy, according to representatives from Mexico, the United States and the tech industry. It should reflect how the “economy now is globally digitized,” said Patrick Schaefer, executive director of the Hunt Institute for Global Competitiveness.
Sheerin and Schaefer were among the panelists who spoke at South by Southwest Interactive’s Casa México session that focused on the gains and shortcomings of the 24-year-old trade pact among the U.S., Canada and Mexico. The panel discussed how NAFTA should modernize in the face of digital advances that have changed trade.
The Mexican Consulate in Austin organized Casa México to highlight the advances in the digital and technological sectors in Mexico and their relationship to the U.S. market.
The other panelists were U.S. Rep. Will Hurd, R-Helotes; Paulo Carreño, director general of the trade group ProMéxico; and Alejandro Delgado, president of the Instituto Nacional del Emprendedor, which supports entrepreneurship in Mexico.
With the signing of NAFTA came many firsts, including the first trade agreement between a developed country and a developing one that included “investment treaty provisions at the same time” that, in Schaefer’s words, are “a very innovative legal and economic tool.”
But the last quarter-century has seen a shift: NAFTA is no longer just about products crossing between countries, he said, but about the “systems that underlie all those trades and goods and services.”
“When we are rethinking NAFTA, I think it’s our opportunity as Americanos and North Americans to create a new free trade agreement that can show the rest of the world how we can protect trade, create jobs and have a more competitive North America,” he said.
Creating systems for those who might face job displacement was an issue that arose more than once.
For Sheerin, the “digital economy is the economy of today” and the challenge is in presenting an agreement that could be sustainable in the future. It is also important to create more job opportunities outside those of the traditional tech areas, she said.
Delgado said programs should focus on education, relocation and software development — and by relocation, Delgado doesn’t mean to other cities but rather within the company.
As for Mexico, NAFTA already has had a cultural impact in a country where the median age is 27, Carreño said. He added that Guadalajara is seen as the country’s “own Silicon Valley.”
When asked about NAFTA’s role in making Mexico something of a rising hub for startups, Delgado said there has been an entrepreneurial cultural shift that has forced the nation to discipline itself to become more competitive.
“Previously we were educated to become employees. … Mexico is educating youngsters to be owners of their own destiny, of their own economy,” he said.
But Mexico still faces many challenges, he added, and must invest in innovation, productivity and the rule of law throughout the country.
As for how this agreement can be sustained in the long term, Hurd said the tech industry is rapidly changing and that there should be a framework that allows for the updating of NAFTA.
Before slipping out early from the discussion, Hurd said that the relationship among the three countries is more than just as neighbors and partners.
“We are married and can’t get divorced,” he said.
The relationship between U.S and Mexico, Delgado added, is one that is socially and economically intertwined and “goes beyond us.”