As Trump Threatens To Ditch NAFTA, Tijuana Residents Face Uncertainty

Feb 9, 2017
Originally published on February 13, 2017 2:36 pm

It's hard to find a place in Mexico more transformed by the North American Free Trade Agreement than Tijuana. The border city has exploded in growth since the trade pact was signed in 1993, when about 100 international manufacturing plants dotted the hilly dry landscape. Today, according to Luis Hernández, the current head of INDEX, Tijuana's Maquiladora Association, there are now about 700 multi-national factories making everything from flat screen TVs to trucks to pacemakers

But President Trump's repeated threats to either scrap NAFTA or slap on a 20 percent tax on all goods leaving Mexico and entering the U.S. have many here worried.

Hernández says it's all concerning, but "we are not going to be responding to tweets, social media until they become more concrete."

No one seemed willing to respond to the current cross border tensions either. I tried talking to more than a dozen plant managers, either personally, or through industry contacts that in the past have easily granted me access inside the multi-national factories. This time, nada. One small manufacturer in Tijuana's growing medical device manufacturing sector agreed to a meeting, but when I showed up at the small industrial park not far from Tijuana's famed 5 and 10 busy urban intersection, guards at the gate informed me they were instructed not to let me on the premises.

Hernández says he's "not surprised" that companies don't want to talk. Not many are willing to risk the high profile wrath of a 140 character Presidential tweet. But Hernández insists despite the desire to keep a low profile, not one company has left Tijuana. He did say some have put projects or expansion plans on hold, although he declined to provide details.

While everyone waits for the new administration to unveil its plans to revamp NAFTA, trade continues unabated across the border, now at more than a million dollars a minute. While Tijuana officials say more than 200,000 jobs here are directly tied to the cross border economy, one recent study by the Wilson Center in Washington, D.C., puts that number at more than twice as much, more than 500,000 in neighboring California.

In addition to that trade, the jobs and all the personal cross border relationships are now being strained says Kenn Morris, who analyses industrial markets in Tijuana and throughout Mexico at his Crossborder Group.

"There's a sense of loss, of wondering why their next door neighbor and one of their best friends is actually no longer interested in that friendship anymore," Morris says.

In Tijuana those relationships are now in their third generation. Maquiladoras, or multi-national manufacturing plants, have long been in Baja, Calif., predating NAFTA by some 30 years.

"Managers here have more than 40 years figuring out how to work together, that's all being thrown out the window," says Morris.

Alejandra Mier y Teran feels that keenly. She grew up in Tijuana on the plant floor of her father's manufacturing firm. Enrique Mier y Teran, who many dubbed, the father of maquiladoras, opened one of Mexico's first export oriented manufacturing plant in the 1960s. The plant made women's hair pin curls.

"I was raised in both Tijuana and San Diego, my dad just called it SanDiJuana. it was one region to me," says Mier y Teran, who now lives in Chula Vista a suburb of San Diego and heads a local Chamber of Commerce there.

She's worried what a 20 percent tax on Mexican imports will do for U.S. consumer goods.

"It will just make things more expensive here," she says.

She says Trump's plan for scrapping NAFTA could make Tijuana a "ghost town" because many firms would just relocate jobs to China or Vietnam, not back to the U.S. as Trump claims.

Mier y Teran's father died last summer and she sadly admits that in some ways she's glad he's not around to see his life long work and dream of an integrated cross-border region being disparaged and dismantled.

Not everyone is as worried about the border city's economic vitality in Trump's new world order. David Mayagoitia Chair of the Tijuana's Economic Development Corporation says residents of the border have suffered tough times and economic downturns before. He remembers back in the 2001 when China entered the World Trade Organization and many firms left Tijuana for even cheaper labor costs in Asia.

"We lost about 30,000 jobs back then," Mayagoitia says.

He says a similar job loss could occur if NAFTA is ripped up. But, he adds, "we are resilient. We here at the border are used to change and we are ready to adapt."

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President Trump has made it clear he wants to scrap or at least drastically change the North American Free Trade Agreement. At one point, the administration talked about slapping a 20 percent tariff on goods coming from Mexico, but it's still unclear exactly what he will do. That uncertainty has put a lot of businesses and workers in Mexico on edge, especially in a place like Tijuana, on the border with California.

NPR's Carrie Kahn recently traveled there and is with us now. Hey there.


MCEVERS: What are people saying in Tijuana?

KAHN: Let me tell you. It was really hard to get people to talk on tape. International businesses are incredibly cautious right now. No one wants to raise his or her head too high and bear the wrath of a 140-character tweet. I tried nearly 20 companies, some that I've talked to in the past, Kelly, and no one would talk to me.

I did get one owner of a small company to agree to meet me at his plant. But when I got to the industrial park at the arranged time, the guard says they were instructed not to let me in.


KAHN: I did talk to several industry leaders, and they say despite the uncertainty right now, no companies have left Tijuana or pulled out of commitments. Many, though, are holding off on some projects or expansions.

MCEVERS: So tell us about the economy in Tijuana. I mean it's right on the U.S. border. It's across from San Diego. How closely are the two countries' economies tied together?

KAHN: At the border - incredibly intertwined. I really think that it's hard to find a place in Mexico that has been more transformed by NAFTA. When the free trade pact was signed some 22 years ago, there were about a hundred companies in Tijuana. Now there are at least 700...


KAHN: ...And more than 200,000 jobs dependent on the economy. And it's not just jobs in Tijuana. One recent study says that more than half a million jobs in California across the border are dependent on trade with Mexico, and that keeps growing as Tijuana's economy becomes more diverse over the years. It's no longer just TVs and trucks. There's aerospace and a growing medical device manufacturing. But there's still also the low-end manual labor stuff that keeps U.S. consumer goods cheap.

And I just want to tell you about one worker that I met at a factory. All he does, Kelly, is package items brought over by California businesses. He gets the items, the box, the bubble wrap or peanuts or whatever, just packages it all up, slaps a U.S. delivery label on it and then gets shipped back across the border.

MCEVERS: So what's he packaging? I mean what stuff are we talking about?

KAHN: Wait for this. Are you ready?

MCEVERS: (Laughter).

KAHN: For the last few months, he's just been packaging Donald Trump bobbleheads.

MCEVERS: (Laughter) No.

KAHN: Seriously. They're made in China. They're shipped to San Diego, trucked across the border. He packages them, then sends them back to San Diego, and they're sent around the country. And the irony of the situation is definitely not lost on him.

MCEVERS: Wow. So I mean this is a place - Tijuana and Mexico - that's been really plugged-in to the United States. I mean I know it was hard for people to talk, but some people must have told you that they're nervous, yeah?

KAHN: Yes. And Tijuana is really fascinating because it's not just goods crossing the border every day. It's generations of border crossers and international business and goods. And there's not that much illegal traffic - I just want to add - like in the decades before because there are two walls there at the border between San Diego and Tijuana.


KAHN: But free trade in Tijuana predates NAFTA when there was the maquiladora program that gave international companies a tax break for locating right there at the border. I just want to tell you about one woman whose dad is dubbed the father of the maquiladoras. He started the first one back in the '60s, manufacturing women's hair curl pins. I'm not even exactly sure what that is. I think they're curlers. And she's always grown up just thinking of this region as one place, Sandijuana (ph) or Calibaja (ph).

And she now runs the chamber of commerce on the U.S. side, and she says it's just heartbreaking to hear the disparaging remarks about Mexico. And her dad died last summer, and she said in some ways, she's kind of glad he's not around to see his life's work being so disparaged and misrepresented and possibly dismantled.

MCEVERS: NPR's Carrie Kahn back at base in Mexico City, thanks a lot.

KAHN: You're welcome.

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