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Has NAFTA Helped Minnesota?
By Andrew Haeg
October 25, 2000
Part to Minnesota Public Radio's coverage of Jesse in Mexico
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Representatives from more than 40 Minnesota companies and agricultural concerns say they're getting into the serious business portion of a six-day trade mission to Mexico led by Gov. Jesse Ventura. Ventura says the time is right, six years after the signing of the North American Free Trade Agreement, for Minnesota companies to boost trade with Mexico.

BEFORE NAFTA, many American companies approached the Mexican market with reluctance. The Mexican government protected its own industries with high tariffs and quotas on incoming products. Minnesota companies like 3M have long -established subsidiaries in Mexico. The company employs 1,100 workers in Mexico, making a range of products, like those for hospital patient care and infection control.

But Tom Engels, managing director for 3M Mexico, says the company used to face all sorts of rules that forced it to operate inefficiently.

"There was artificial barriers that were set up in the past, with severe import restrictions,so it forced us to do things that were artificial, and it forced us sometimes to be non-competitive," Engels says.

But in 1994 that all began to change. Mexico, Canada and the United States enacted NAFTA. All three dismantled most quotas and tariffs, and opened their borders to commerce.

"It's definitely made things easier," Engels says. But the biggest thing it's done is created opportunity, both here and in the other NAFTA countries."

But NAFTA's benefits have not flowed freely to everyone. Critics say Mexican and U.S. workers have fared poorly under the agreement.

When Ventura spoke to Good Morning America this morning, the interviewer asked him if he felt NAFTA had hurt Minnesotans more than helped them.

"I said, 'absolutely not, we have the lowest unemployment rate that we've ever had in Minnesota. We have more jobs, we don't have the people to fill them,' said Ventura. "And I said what we're doing here will help Minnesota and Mexico both."

It's that new opportunity that the governor and his trade mission hope to exploit this week, and in the future. More than 400 Minnesota companies do business in Mexico, and 20, including 3M, actually have operations here.

Still, Mexico ranks only 11th among Minnesota's export destinations, whereas in many Midwestern states, Mexico ranks closer to second or third. Ventura says he would like to see Mexico become Minnesota's third- or second-largest trading partner by next year. For that to happen, Minnesota companies will have to find out what Mexicans want, and learn how to deliver it.

George Allstein and Shirley Krens farm 1,000 acres of corn in Wheaton, Minnesota, 80 miles south of Fargo. They also own Aeromed, which makes life-support systems designed to transport critically ill patients on airplanes.

Allstein says he hopes this trip will lead to a lucrative contract with the Mexican military.

"We feel fortunate that we have a good start. The foundation is there, the interest is there. And as we're asked to attend these seminars and give our views, it's pleasing to know that they think that much about you that they invite you to come," says Allstein.

Allstein agrees that learning to market abroad is a long process. And Aeromed's agent in Mexico, Victoria Lindmark, says it's a matter of taking the time to teach Mexicans about the product.

"We have to learn that there is aeromedical transport and that there are the opportunities to transport somebody by aircraft, to keep them alive, and going until they reach a hospital, where this is sort of in the infant stages here," she says.

Minnesota's bigger companies hope this trip will open new markets. Twin Cities based ADC Telecommunications, for instance, already employs roughly 8,000 in Mexico to make telecommunications equipment. ADC wants the Mexican government to open up its wireless communications market. If it does, ADC could supply the equipment necessary to connect millions of Mexicans to the Internet without telephone wires. ADC spokesman Rob Clark says during this trade mission, the ADC group has made acquaintance with people who could help press the company's case with the Mexican government.

Gov. Ventura will meet this morning with President-elect Vicente Fox and hold meetings promoting Minnesota's medical technology industry. This evening, the trade delegation flies to Guadalajara, where the focus will be on expanding the state's agricultural exports.