As the only deep-water port on the US-Mexico border — serving as a major international conduit in and out of both countries — we remain very watchful of the ongoing North American Free Trade Agreement negotiations.
For example, our unique location positions us 100 miles closer than any Mexican port to Mexico’s industrial complex in Monterrey, which is one reason why we ship more steel into Mexico than any other US harbor. This puts us and our metals shippers squarely in the center of possible trade balance changes involving the auto manufacturing and white goods sectors.
Additionally, a majority of our volume is energy-related products. Therefore, changes to NAFTA’s approach in this area — particularly given Mexico’s recent reforms to its energy policies, and technological advancements that are expected to open new source fields on both sides of the border — will be critical to our trade outlook over the next decade.
Our grain customers similarly noted Mexico’s recent outreach to Argentina and other South American countries for alternatives to US sources of wheat, oilseeds, and other grain as contingencies to any NAFTA-related curtailments. The Mexican livestock industry is actively sourcing feedstock alternatives if access to US corn is restricted, according to government sources.
We all appreciate that NAFTA has dramatically reshaped the North American economic landscape, fueling a quadrupling of regional trade to more than $1 trillion annually over the past 20 years. Like many ports in their own communities, we serve as the fulcrum for trade between the United States and Mexico, supporting thousands of jobs and significant economic activity. Yet all of the fluctuations noted above continue to perpetuate an angst and apprehension among sources, shippers, and customers as we watch the trade negotiations unfold. Frustrations voiced by various parties, and talk of pulling out of the agreement altogether, clearly puts NAFTA resolution at the top of our outlook for 2018.