Executive Briefings

No Nafta? No Problem, Says One Mexican City

In San Luis Potosi, Mexico, Josué Vidales considers his business a Nafta success story. The 43-year-old father of five founded his engineering firm a decade ago, on the eve of the world economic crisis, to capi­tal­ize on the factory boom in this burgeoning industrial city 250 miles north of Mexico City.

The business stumbled at first but subsequently blossomed, swelling to 25 employees as manufacturers poured into San Luis Potosi and hired the firm to design and install electrical substations.

Now, the free-trade treaty that jump-started the city’s prosperity is being renegotiated, with a fifth round of talks last week in Mexico City. Amid threats by President Trump to tear the agreement up, Vidales admits to some disquiet. Yet like many entrepreneurs here, he still thinks his business — and San Luis Potosi — could survive if that happened.

“Of course we’re concerned. It could impact us hard, especially if tariffs increase or they block access to the U.S. market,” Vidales said, sitting in a popular cafe here. But, he added, “We’ll get through this, and much more quickly than before, because we have much more know-how and much more experience.”

Such optimism is common in San Luis Potosi, a charming colonial-era city and state capital that sells itself as a free-trade miracle — a place where manufacturing replaced mining and farming and young people stay and work rather than migrate to America.

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The business stumbled at first but subsequently blossomed, swelling to 25 employees as manufacturers poured into San Luis Potosi and hired the firm to design and install electrical substations.

Now, the free-trade treaty that jump-started the city’s prosperity is being renegotiated, with a fifth round of talks last week in Mexico City. Amid threats by President Trump to tear the agreement up, Vidales admits to some disquiet. Yet like many entrepreneurs here, he still thinks his business — and San Luis Potosi — could survive if that happened.

“Of course we’re concerned. It could impact us hard, especially if tariffs increase or they block access to the U.S. market,” Vidales said, sitting in a popular cafe here. But, he added, “We’ll get through this, and much more quickly than before, because we have much more know-how and much more experience.”

Such optimism is common in San Luis Potosi, a charming colonial-era city and state capital that sells itself as a free-trade miracle — a place where manufacturing replaced mining and farming and young people stay and work rather than migrate to America.

Read Full Article