As trade between the U.S, Mexico and Canada is debated by top negotiators in Mexico City as part of NAFTA, one Arizona city is working on a long-term million-dollar project that would potentially increase direct trade with Mexico.
The Phoenix-Mesa Gateway Airport Authority Board will vote in the next few days to approve a master development agreement with the company Mesa Skybridge for an infrastructure project at the airport.
The project, if approved, would include a program to facilitate cargo processing that goes to Mexico by bringing Mexican customs officials to the Valley airport, otherwise known as the Unified Cargo Processing Program, recently created by the U.S. Customs and Border Protection.
“It has the potential to be the most significant source of commerce between Mesa and Mexico,” Mesa Mayor John Giles said.
Giles added the “premise” of the project is to build an e-commerce distribution center at the airport and seize the opportunities of this growing industry in Mexico.
Last year, e-commerce produced around $17.63 billion in Mexico, according to a report by the Mexican Internet Association. According to the same report, two out of three Mexican online buyers shopped from international retailers in 2016, and the number one market was the U.S.
“The consumers in Mexico would receive the same delivery schedules that consumers in the U.S. have,” Giles said.
After the approval of the project, Mesa Skybridge would move forward with the application to bring the Unified Cargo Processing Program to the airport, according to Ryan Smith, Phoenix-Mesa Gateway Airport director of communications and government relations.
Specifically in terms of NAFTA, Mexican officials have recognized the 23-year-old agreement needs to be updated to consider new business transactions such as e-commerce, but the three involved countries could not come to an agreement during the previous rounds when the U.S. suggested it wanted to raise the current dollar limit of products that can be exported with no tariffs.
“All of the mayors of cities in Arizona and the governor, we’re all very concerned about the NAFTA negotiations because trade with Mexico is very important to every city in Arizona,” Giles said.
“This opportunity for e-commerce is just the latest example of why our relationship with Mexico is important for Arizona,” he added.
Just last year, census data shows exports to Mexico reached $8.3 billion, while imports accounted for $7.4 billion. According to a report by the Atlantic Council, 37 percent of Arizona’s total international trade is with Mexico.
The fifth round of NAFTA talks began Wednesday in Mexico City. Negotiators are expected to continue to discuss topics that are already on the table.
“The program will abide by whatever regulations and rules are set. It’ll find it’s way around that and be flexible to any changes that may come up or occur,” Smith said.
According to Giles, the company is committing to build 20 or 30 million dollars of infrastructure during a 50 or 60 year-period, which will include “buildings, streets and other infrastructure,” some of those “tied to e-commerce.”
Giles reiterated both the City of Mesa and the Phoenix-Mesa Gateway Airport would benefit from continuing the trade agreement with Mexico.
“If we have good trade relations between the U.S. and Mexico, that’s good for the Arizona economy and for the Mesa economy. We’ll have more jobs and a busier airport if we have a strong NAFTA agreement,” Giles said.
