July 30, 2014

In Mexico, a ‘new Jerry Brown’ comes around to free trade

Gov. Jerry Brown, who once campaigned against the North American Free Trade Agreement and criticized the “insertion of Mexico into our economy,” pushed back his chair at a breakfast here Wednesday and looked on from the head table as Mexico’s secretary of economy heaped praise on the pact.

Gov. Jerry Brown, who once campaigned against the North American Free Trade Agreement and criticized the “insertion of Mexico into our economy,” pushed back his chair at a breakfast Wednesday and looked on from the head table as Mexico’s secretary of economy heaped praise on the pact.

The number of California politicians who supported the measure two decades ago was “impressive,” Ildefonso Guajardo Villarreal said, urging California and Mexico now to “push NAFTA to the next level.”

It was unclear whether the official knew of Brown’s history with NAFTA, and the governor later said he didn’t notice the remark.

Even if he did, four days in Mexico laid bare how dramatically Brown’s approach to international trade has changed. In speech after speech in this sprawling metropolis, he called for a greater integration of the Mexico and California economies and cultures, and in a largely symbolic agreement his administration called NAFTA the “principal foundation” for expanding trade and investment between the country and the border state.

In his third term – and with the state’s largest trading partner – Brown has become what the California Chamber of Commerce called several times this week its chief ambassador on trade.

“This,” state Sen. Lou Correa said outside the breakfast, “is the new Jerry Brown.”

Brown said in an interview Wednesday, hours before returning to California, that NAFTA had mixed effects.

“NAFTA has had pluses and has had minuses, and some of the immigration flows are a direct consequence of the disruptive impacts of globalizing local economies,” he said. “On the other hand, the global economy is on the march.”

Yet in the midst of that expansion, Brown said, the United States has neglected Latin America.

“There’s a lot of economic and cultural exchange going on in Asia and Europe, and there’s a lot of American intervention in the Middle East and Afghanistan,” Brown said. “And there has been real neglect of our own backyard, which is Mexico and Central America, and by extension Latin America, so I really think that … we have to put more focus on the Western Hemisphere.”

The rhetoric is similar to that in years before the tempest over NAFTA, when Brown was governor from 1975 to 1983 and called for a “common market” with Mexico and Canada.

“The main foreign policy opportunity for this country is right across the border,” Brown said in Fresno in 1979. “If in this state we can develop a multi-language, multicultural society, we have something that we can show the entire world.”

The following week, Brown traveled to Mexico, leaving for the country the day he announced the formation of his “Brown for President” exploratory committee.

It was the beginning of Brown’s second unsuccessful presidential campaign, and by the third time Brown ran for president, in 1992, border politics had shifted. Brown that year was among many Democrats who opposed NAFTA, fearful of the trade agreement’s impact on U.S. labor and the environment.

Brown said before traveling to Mexico he “thought NAFTA had some real issues in terms of environmental impact, in terms of the displacement of jobs and labor protections.” He said the agreement has “evolved,” but he declined to give an updated assessment of it, and he declined to do so again on Wednesday.

The impact of Brown’s own effort to increase international trade is also difficult to measure. The trip this week is only his second international outing, after a similar trade mission last year to China.

In its first report on the California trade office in that country, which Brown ceremoniously opened in Shanghai, the Governor’s Office of Business and Economic Development said in May that it had “nothing to report yet” on the investment value and job creation reported by companies working with the office.

The trade office, staffed by two people in China and one in San Francisco, is financed by private donations and operated by the Bay Area Council, a business group, but it carries the imprimatur of the state and is the first foreign office opened since California closed its 12 foreign trade offices amid controversy in 2003.

Jock O’Connell, international trade adviser for the economics consulting firm Beacon Economics, said the office appears to be “strapped for money.”

“When you consider that here’s an office that ostensibly is responsible for promoting the commercial interests of the eighth largest economy of the world in the second largest economy of the world,” he said, “two people’s a stretch.”

John Grubb, chief of staff at the Bay Area Council, said the office is “like any new venture, any new startup – we’re trying to learn what works and what doesn’t work.”

He said, “We’re feeling pretty good about it,” and there is movement in the Legislature to open another trade office in Mexico.

Brown said he does not know if he would support the opening of a state office in Mexico City. The California Chamber of Commerce, he said, “is doing pretty good” on its own.

In Mexico this week, Allan Zaremberg, president and CEO of the California Chamber of Commerce, praised a governor he said “has made international trade and jobs – and the growth of our economic expansion dependent on trade – one of his priorities.”

Brown was applauded when he called “unconscionable” the two- and three-hour waits at the U.S.-Mexico border crossing near San Diego, and he stopped at the offices of AeroMexico to promote a joint advertising campaign between the airline and the tourism group Visit California.

Brown, standing at a podium between two Visit California banners, said the promotion of tourism from Mexico was “a little paradoxical,” given the controversy over immigration.

“Some people are trying to keep them out, some people want to bring them in, and here we are on the side of bringing more people in,” Brown said, “and investing and buying and supporting our hotel and entertainment industry.”

The audience laughed. A bank of television cameras was on hand, and organizers relished the attention Brown was bringing the deal.

“The governor creates this incremental exposure, a glow effect for us to better engage our target market,” said Caroline Beteta, president and chief executive officer of Visit California. “You can see the sense of energy and passion the governor has about the market, and that really resonates.”

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