Ambassadors from the European Union (EU) visited Arizona last week to discuss the importance of international cooperation on trade and economic development with Arizona business leaders, traveling to the United States-Mexico border to see the collaboration between the states of Arizona and Sonora, Mexico, firsthand.
Diplomats from 18 European countries attended a panel in Phoenix led by Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry (ACCI); Sandra Watson, president and CEO of the Arizona Commerce Authority; and Jaime Molera, co-founder and partner at Molera-Alvarez government and public affairs firm.
Watson began the discussion by describing the business climate in Arizona, highlighting the strong trade relationships the state has with Canada and Mexico and the large number of nonnative residents in the region.
“We have an environment here that really embraces people from outside of our state,” Watson said. “About 70 percent of our adult population is actually from somewhere else. (It’s) very easy to do business in the state of Arizona, very easy to be accepted in the business community here in Arizona, and if you want to get involved, you automatically can be involved.”
The Arizona business community is always seeking outside investment and business expansion in a variety of industries, Watson said. Being next door to California, the world’s seventh-largest economy, but with lower real estate costs and lower corporate tax rates, gives companies interested in doing business in California an incentive to come to Arizona instead, she said.
“Our proximity to California is a real advantage,” Watson said. “Our focus has been to go outside of our market, and the way we like to approach economic development in the state of Arizona is that we are selling not only the assets of Arizona but the assets we have access to.”
Goran Lithell, deputy chief of mission at the Swedish embassy in Washington, D.C., said that Sweden and the EU are worried new tariffs imposed by the U.S. could have a negative impact on international trade.
“As a country dependent on export and import… we are very concerned about the tariffs that are being introduced,” Lithell said. “What do you foresee? Will you be able to continue down the same path?”
There is currently a national dialogue about the tariffs, but Governor Doug Ducey is encouraging Arizona businesses to stay focused and continue to advance opportunities for growth, Watson said.
“(The governor) has remained very, very focused on developing the right business relationships,” Watson said. “We actually feel that we can continue to work to advance those business opportunities in the manufacturing and technology and innovation areas. We have not seen (the tariffs) as a hindrance at all in our market. We continue to reach out and work with these global companies.”
Right now, Arizona has more open jobs than people to fill them, Hamer said. The state unemployment rate is at a historic low — 4.7 percent — while business in Arizona continues to outpace other states, he said.
“We don’t love tariffs,” Hamer said. “We look at tariffs as taxes. We want free, fair and reciprocal trade.”
Hamer said, despite uneasiness created by the new tariffs, he believes the Trump Administration is pivoting in a productive way to develop trade deals that work on a broader level to benefit the EU and other U.S. trade partners, starting with the new United States-Mexico-Canada Agreement (USMCA), President Trump’s replacement for the North American Free Trade Agreement (NAFTA).
The United States and the EU must “work together to reign in some of the practices in China that I believe the entire free and industrialized world would agree are not productive,” Hamer said. “Overall, the (USMCA) is a positive.”
Mexico is a good role model for other countries in terms of trade agreements, Hamer said.
Mexico is now the second-most important exporter to the EU in Latin America, while the EU has become Mexico’s third-largest trading partner and second-highest source of foreign direct investment for Mexico worldwide, according to the Mexican government.
Earlier this year, the EU and Mexico reached a new, modernized trade agreement to replace their Global Agreement, simplifying customs procedures and effectively making almost all exchanges of goods duty-free. This move is expected to benefit the EU’s top industries, which include pharmaceuticals, machinery and transport equipment.
After a productive discussion in Phoenix, the EU delegation headed down to Nogales, Arizona, on the Mexican border, with representatives from the Arizona-Mexico Commission (AMC) to learn more about the supply chain between Arizona and Sonora, which adjoins Arizona’s entire southern border.
“It was really about putting our best foot forward and showcasing what we have in Arizona, what the border… looks like and the good relationship that everybody involved has to have,” said Juan Ciscomani, senior advisor for regional and international affairs at AMC. “One of the biggest takeaways for them was the amount of trade that goes through this port, and also the way that it’s done.”
Arizona and the state of Sonora do so much business together that out of nine U.S. Consulate offices in Mexico, two of them are in Sonora. Arizona has five Mexican Consulate offices in the state, which Ciscomani said is “remarkable” given Arizona’s relatively small population of about 7 million.
The AMC works closely with the ACA to connect with foreign businesses interested in trading with Arizona and find out how they can benefit from the partnership between Arizona and Mexico.
“In some cases, it’s very attractive for them,” Ciscomani said. “For example, for Germany, who has a big, big investment in different areas, but mainly in the automotive industry in Mexico. For Germany, whatever relationship the U.S. — or Arizona in this case — has with Mexico is very important to them. And the ambassador there mentioned that.”
Boris Ruge, deputy chief of mission for the German embassy in Washington, D.C., told CBN that Arizona’s proximity to California and Mexico puts the state on the map for German businesses.
“We try to make the case that what is needed and what is beneficial to both sides — the United States and Germany, as part of the European Union — is to make sure that we maintain an open system of international trade, allowing for trade to grow, establishing the connections that allow for investment to happen,” Ruge said, echoing concern from other EU diplomats about the new U.S. tariffs. “The key is, we’re going to fix it by working together. We’re not going to fix it by working against each other.”
Similarly, Ciscomani made it clear that the Arizona business community sees its border with Mexico as an asset rather than an issue. This is the first time the AMC has hosted such a large delegation from Europe, but Ciscomani said he considers it a beneficial way to create new, productive relationships with foreign businesses.
“If you really want to get a clear picture of what Arizona brings to the table, you’ve got to visit the border,” Ciscomani said. “I think it’s one of the areas that Arizona should feel very proud about, that we should promote.”
By welcoming European diplomats with open arms and showing them the foundations of the state’s robust foreign affairs, Arizona can continue to showcase and promote the advantages of doing business in the state, he said.
“We really did roll out the red carpet just so they could feel the Arizona love and want to come back,” Ciscomani said. “And a lot of these people — I think most of them — are career diplomats, so they’re going to get stationed somewhere else… and wherever they end up, we’ve got a friend there.”