Gloom Descends on Mexico’s Nafta Capital - WSJ

Gloom Descends on Mexico’s Nafta Capital - WSJ - ,.,...

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1/27/2017 Gloom Descends on Mexico’s Nafta Capital ­ WSJ http://www.wsj.com/articles/gloom­descends­on­mexicos­free­trade­capital­1485449547 1/6 MONTERREY, Mexico—The road from the airport to the center of this city, Mexico’s bustling industrial hub, is lined with factories and warehouses bearing familiar American corporate names that churn out some of the world’s most recognizable products: Whirlpool Corp. washing machines, Mondelez International Inc. cookies and Mary Kay Inc. makeup. At an industrial park in the city’s outskirts that includes General Electric Co. and DuPont Co. facilities, one street is named Nafta Avenue, while another is called TLC Boulevard, the Spanish-language acronym for the North American Free Trade Agreement that binds the economies of the U.S., Canada and Mexico. A flood of Nafta-inspired foreign investment has helped turn Monterrey into Mexico’s Free Trade capital, lifting tens of thousands of workers into the middle class and making this city’s mighty industrialist families even richer. These days, people at both ends of the economy are scrambling to figure out what to do now that the new U.S. president, Donald Trump, appears to be following through on vows to renegotiate Nafta and build a wall between the two countries. Just Thursday morning, President Trump threatened to cancel a scheduled meeting next week with Mexican President Enrique Peña Nieto, during which both sides were expected to agree on a framework to renegotiate the pact, if Mexico refuses to pay for the wall. Mr. Peña Nieto responded by calling off the trip. “Free trade is crucial to Mexico’s growth,” said Alberto de Armas, president of the Monterrey chapter of the American Chamber of Commerce of Mexico, a pro-trade business association. “When I first came to Monterrey in the 1980s, it was a sleepy town. It was all glass factories and cement and beer. Now you can go to the opera.” While American political leaders ranging from Mr. Trump to Sen. Bernie Sanders have blamed Nafta and free trade more broadly for job losses in the U.S., it has turned exports into the engine of Mexico’s economy. Nafta helped a wide swath of the country develop, helped end the country’s chronic boom and busts, and ushered in a fivefold rise in This copy is for your personal, non­commercial use only. To order presentation­ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com. http://www.wsj.com/articles/gloom­descends­on­mexicos­free­trade­capital­1485449547 LATIN AMERICA President Trump’s threat to renegotiate the free-trade agreement and build a wall has created anxiety in Monterrey, where foreign investment lifted thousands of workers into the middle class and further enriched the city’s mighty industrialists A view of Monterrey, Mexico. PHOTO: DANIEL BECERRIL /REUTERS Updated Jan. 26, 2017 12:17 p.m. ET By ROBBIE WHELAN
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1/27/2017 Gloom Descends on Mexico’s Nafta Capital ­ WSJ http://www.wsj.com/articles/gloom­descends­on­mexicos­free­trade­capital­1485449547 2/6 annual foreign direct investment—mostly by U.S. companies. Mexico’s largest private
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