Latin CEO / February 2001
By Larry Luxner
It seems fitting that Al Zapanta should occupy a corner office in Washington’s Ronald Reagan International Trade Center. An unabashed Republican, the 59-year-old president and CEO of the United States-Mexico Chamber of Commerce spent 18 years as a lobbyist for oil giant Arco. The far wall of his spacious suite is crammed with more than 50 framed photographs of him posing with GOP favorites like George Bush, Gerald Ford, Lee Atwater, James Baker and, of course, Ronald Reagan.
That’s a big deal for Zapanta, a self-described “Chicano kid from East L.A.” who attended California public schools and colleges, and later became a Green Beret in Vietnam. He went on to graduate from the Harvard School of Business and to earn a doctorate in international political economics from the University of Southern California.
In between his lobbying and academic activities, Zapanta has held numerous presidential appointments, including a 1976-77 stint as assistant secretary of the interior for management and administration. In the early ‘90s, Zapanta coordinated the Haiti Crisis Control Center in the Pentagon, and also participated in US peacekeeping missions, including those to Somalia and Spanish Sahara.
Zapanta now devotes much of his time to a US$5 million effort known as “Wiring the Border.” The ambitious project aims to create a virtual network of small- to medium-sized businesses in four US and seven Mexican border states. His objective: identify 200 enterprises along the border that have the greatest chance of increasing sales, profits and employment in the private sector by having access to online procurements, credit, capital, business and environmental research. Corporations involved in the effort include IBM, Soza & Company, Telmex and Roadway Express.
On Feb. 18, Zapanta will lead a high-level delegation to Mexico City. He hopes to bring up to 10 members of the Hispanic Congressional Caucus and CEOs of six major US corporations for three days of meetings with newly inaugurated President Vicente Fox and other Mexican officials.
Q: How influential is the US-Mexico Chamber of Commerce?
A: The chamber got started in the early 1970s because there was a need for a binational dialogue between the US and Mexican private sectors to discuss issues such as transportation, agriculture, textiles and the beginning of the maquiladora industry. We currently have 14 offices in the United States and six offices in Mexico, plus two binational offices in Mexico City and here in Washington. We have almost 2,500 corporate members representing about 80 percent of the trade between the US and Mexico.
Q: How do you view the Fox victory in Mexico?
A: It signifies a departure from the past – a coming of age. The people of Mexico elected Fox with an aspiration to deal with corruption. He’s got a clean slate. He can take on issues and problems that the PRI could not.
Q: As a Republican, do you think US relations with Mexico depend on who’s in the White House?
A: No. If anything, we’ve done just as well under a Democratic administration as under a Republican one. If you’re doing a business and fostering better economic ties, what’s the difference? What’s really critical is that US-Mexican relations are not driven by government regulations but by the private sector.
Q: Are Mexicans better off economically thanks to NAFTA?
A: Per capita income in Mexico remains the same as six years ago, due to the 1994 peso devaluation. But because NAFTA was in place, it stemmed the free fall of the Mexican economy, and within one year they were able to stabilize and pull out of the crisis.
Q: What do you say to NAFTA critics such as Ross Perot?
A: The numbers speak for themselves. We now have irrefutable empirical evidence that fears of major US job losses to Mexico due to NAFTA are unfounded. US employment has risen, and the level of unemployment has decreased, during the first three years of NAFTA. The 6.4 million net new jobs created over this three-year period led to a decrease in the number of unemployed from 8.5 million to 7.2 million, which was due only in the most marginal way to NAFTA. Over this period, it’s estimated that 31,000 new [US] jobs were created and 28,000 jobs were lost due to NAFTA. … Yes, there have been dislocations and plant closings, but 70 percent of all the textile manufacturing that went to Asia – mainly India and Pakistan – has returned to Mexico. And because of NAFTA, we were able to start the first bilingual, bilateral database of Mexican environmental laws. We’re doing this because we can help US companies know what they’ve got to do from a legal standpoint to put a plant in Mexico. They used to have to hire lawyers and translate documents, and none of that would stand up in a court of law.
Q: What are the most serious bilateral policy disputes at the moment?
A: Open borders for truckers, a [more free] telecommunications market and unresolved immigration issues. With transportation, the big problem is one of disparity in the wages of truck drivers on either side of the border. A trucker in Mexico makes US$10 a day, while a trucker in the US makes twice that in an hour. Once that can be resolved to a satisfactory level, it’ll move forward. … With regard to immigration, I’d like to see a border program, with US and Mexican workers moving freely across the international boundary within a 50 to 100 mile zone, in order to develop the maquiladora industry.
Q: Are you concerned that Mexico is becoming too tied into the US economy?
A: Mexico is very much part of the US market and economy, but not totally reliant as it was in the past. Before, it was very much like Venezuela, with 70 percent of foreign-exchange earnings coming from oil. Now it’s down to 30 percent. But things are not all rosy. Mexico still does not have a very strong small- and medium-sized business sector. That’s why our Wiring the Border project is so important, because it empowers small- and medium-sized enterprises and gets them into the supply and procurement chains of major US and Mexican corporations. The Internet can be a great leveler in this regard.
Q: How will the Fox Administration deal with Cuba?
A: The closer we are with Mexico, the more impact it’s going to have on Cuba. But we are not going to see Fox cut ties with Castro. He doesn’t have to, so why should he?