LAREDO — More than your average mayor, Pete Saenz has kept a close eye on the news over the last 10 months.

He watches CNN and Fox News. He reads the local Laredo Morning Times, The New York Times and The Washington Post. He scans for updates — even small ones — on NAFTA, the trade agreement that fuels Laredo's economy and which President Donald Trump's administration, with representatives from Canada and Mexico, has spent the better part of the last year trying to change.

“It’s very much a part of my routine. I stay very close to the news,” said Saenz. “It would be disastrous for us not to have NAFTA.”

Before NAFTA was signed in 1994, Saenz said, Laredo was a dusty South Texas town with a stubbornly high unemployment rate for its 100,000 residents.

Pete Saenz, mayor of Laredo, speaks at a NAFTA update presentation hosted by the Laredo Motor Carriers Association on Jan. 18, 2018, at the IBC Bank Annex. (Ashley Landis / Staff Photographer)

The agreement turned Laredo into a trade juggernaut that is the main artery for trade among Mexico, the United States and Canada. The city transitioned its lagging workforce into trucking, warehousing and customs jobs in the cross-border trade industry, growing to more than 250,000 residents. It became, Saenz said, "NAFTA on wheels."

"NAFTA opened to us a wide door of opportunity," said Saenz, whose city had an unemployment rate of 4 percent in March.

Similar economic revolutions have happened in border communities across Texas. But the longer NAFTA negotiations drag out, the more they worry about their livelihood.

When negotiations started in August, Trump’s hostile attitude toward the agreement and frequent threats to end it were the main concern. Now, observers say, it’s time.

In July, Mexico will elect a new president. The front-runner, Andrés Manuel López Obrador, is a leftist whose nationalist tendencies could bring the hard-won negotiations on telecommunications, regulatory practices and anti-corruption measures crashing down. So great is the concern that López Obrador recently sent his economic advisers to quell fears, saying he "fully supports" the trade agreement.

“There’s a sense of urgency, but realistically there’s impediments still and obstacles that you have to deal with,” Saenz said. “There’s so many moving parts, but it’s a big deal and we want it done.”

Impact on business

Armies of 18-wheelers carrying thousands of pounds of cargo line up like ants to roll slowly across international borders at the World Trade Bridge in Laredo, from Mexico into the U.S. and vice versa — nearly 14,000 times every day.

1 / 2Trucks pass through the World Trade Bridge from Mexico to the U.S. (left) and from the U.S. into Mexico on Jan. 18, 2018, in Laredo.(Ashley Landis / Staff Photographer) 2 / 2Trucks pass from the U.S. into Mexico across the World Trade Bridge in Laredo.(Ashley Landis / Staff Photographer)

The crossings help sustain Laredo’s operation of the bridge and other municipal functions, as well as the hundreds of businesses in the “two Laredos” on either side of the border that depend on trade.

Ermilo Richer’s 100-year-old family logistics company is among them. When his great-grandfather started the business, Richer jokes, “We probably put together a couple of boxes of crates per week, or every two or three weeks, and then crossed it to Mexico.”

Now, the business has grown from a small customs agency to a full-service logistics company that employs more than 150 people and has over a dozen locations spread across the U.S. and Mexico, including nearly 450,000 square feet of warehouse space in the U.S.

The business took a hit last year because Richer’s clients, who depend on NAFTA for easy flow of goods across the border, feared it would be dismantled and pulled back on investing.

But as the three countries made progress and representatives from the manufacturing, farming and automotive sectors began lobbying the administration, its rhetoric softened. Businesses hedged their bets on NAFTA’s staying power and continued investing.

Perhaps, Richer said, Trump and his administration realized the trade agreement’s gargantuan effects on the American economy.

“People got the idea of how he works now,” Richer said. “He opens his mouth, but they won’t let him do whatever he wants.”

Richer also thinks advocacy from local chambers of commerce and politicians has paid off. Texas Gov. Greg Abbott has sent two public letters to U.S. Trade Representative Robert Lighthizer, emphasizing NAFTA's importance to the state. Sens. John Cornyn and Ted Cruz, who recently visited one of Richer's warehouses, have added their voices to the chorus of NAFTA supporters.

But with Mexico’s elections drawing nearer, Richer said, the pressure on negotiators to close a deal is ramping up.

“It’s not crunch time,” he said. “But we’re getting close.

"It’s not just the border that will have an effect if NAFTA goes down or if international trade falls," he said. "There's hundreds of thousands of jobs that would be affected all over the United States."

NAFTA 'absorbed' into culture

About 150 miles away in McAllen, forklifts zoom back and forth across Bespoke Logistics’ 57,000-square-foot warehouse with loads of automotive parts, cans of paint and rolls of toilet paper. All around the warehouse are rows upon rows of clients’ products waiting to be shipped to their next destinations in the U.S. and Mexico.

“If NAFTA hadn’t been around, I don’t think places this big would have been around,” business development director Alvaro Barbosa said, noting that many of the surrounding companies in the 1,200-acre Sharyland Business Park are also involved in cross-border trade. Their neighbors include logistics companies and manufacturers that feed the “maquiladoras” that assemble products on the Mexican side.

1 / 4Francisco Garza drives a forklift through the Bespoke Logistics warehouse in McAllen. The warehouse acts as a midpoint for shipments going to and from the U.S. and Mexico.(Ashley Landis / Staff Photographer) 2 / 4Francisco Garza walks through Bespoke Logistics' warehouse in McAllen.(Ashley Landis / Staff Photographer) 3 / 4From left: Alvaro Barbosa of Bespoke Logistics; Jim McNamara of U.S.A. Border Logistics, L.L.C.; Carlos Lopez of Bespoke-Logistics; and Vicente Garza of Bespoke Logistics in their warehouse.(Ashley Landis / Staff Photographer) 4 / 4Daniel Sanchez sweeps the floor of the warehouse at Bespoke Logistics in McAllen.(Ashley Landis / Staff Photographer)

In his letters to the Trump administration, Abbott emphasized the job growth from cross-border trade in cities like McAllen that had long struggled with double-digit unemployment rates. Since NAFTA’s signing, he wrote in January, unemployment in the Rio Grande Valley has gone from 21.2 percent in 1993 to 6.2 percent, and the labor force has increased by 87 percent.

Similarly, over the years, El Paso’s unemployment fell from double digits to 4.5 percent this month.

In Brownsville, Mayor Tony Martinez said the city “absorbed” the trade agreement into its culture, which helped drive down unemployment. Drastically changing NAFTA, he said, would be like “turning the clock back on time.”

Like Martinez, Barbosa would prefer to keep the agreement intact with some updates, but even if no deal can be reached and the agreement goes away, he said that won’t be the end of cross-border trade or businesses like his that depend on it.

Foreign businesses will still need the expertise they provide to get their goods into the United States, the world’s richest market. There may be a period of adjustment and business may slow down, he said, but it won’t disappear.

“No matter what happens, how many treaties are signed or canceled, international trade is not going to cease,” Barbosa said.

Trade deal gone 'upside down'

For others along the border, however, changes are needed to fulfill NAFTA’s potential for American workers.

Scott Hays moved his family to Harlingen in 1994, lured by the promise of increased manufacturing along the border, where materials could easily be sent to Mexico for low-cost assembly. He helped start a second location of Houston-based ITD Precision, which makes metal stampings for the automotive, oilfield and electronic industries.

1 / 6Jehu Salas hangs seatbelt parts that were manufactured inside the ITD Precision factory in Harlingen. J. Scott Hays, vice president of operations, moved the factory to Harlingen from the Houston headquarters in 1994 because of NAFTA.(Ashley Landis / Staff Photographer) 2 / 6Linda Barrera removes pillar loop seatbelt parts from a machine inside the ITD Precision factory in Harlingen.(Ashley Landis / Staff Photographer) 3 / 6J. Scott Hays, vice president of operations at ITD Precision, holds a seatbelt part that was manufactured in the ITD Precision factory in Harlingen.(Ashley Landis / Staff Photographer) 4 / 6J. Scott Hays, vice president of operations at ITD Precision, moved the factory to Harlingen from the Houston headquarters in 1994 because of NAFTA.(Ashley Landis / Staff Photographer) 5 / 6Sylvia Chavez packages seatbelt parts manufactured at the ITD Precision factory in Harlingen.(Ashley Landis / Staff Photographer) 6 / 6Workers assemble seatbelt parts made at the ITD Precision factory in Harlingen.(Ashley Landis / Staff Photographer)

More than 20 years later, Hays, the company’s vice president of operations, has grown the Harlingen location to 123 employees and expanded its services, but he sees imbalances in the trade agreement as more manufacturing has moved into Mexico.

“We’ve gotten upside down on it,” he said. “The American manufacturing was the most important thing. Now, most manufacturing is on the Mexican end.”

The original “twin cities” idea, with border communities in Texas manufacturing the products and areas on the Mexican side assembling them, has dissolved as manufacturing has moved farther into Mexico, Hays said.

The Trump administration’s negotiators say increasing the percentage of American content required for goods included in the trade agreement would increase demand for U.S. manufacturing, but that’s become a main sticking point of the talks.

Tony Bennett, president of the Texas Association of Manufacturers, said changing how much of a product’s content is required to be made in the U.S. from 62.5 percent to the administration’s preferred 85 percent could backfire and drive manufacturers to other countries altogether.

They’d have to pay tariffs, but it would still be cheaper than producing more parts of the products in the U.S., he said.

“There’s going to be various winners and losers, but I’m having to listen to my large industrial sectors that employ tens of thousands of people,” Bennett said of reaching a NAFTA deal. “There’s a lot of small vendors and suppliers that actually feed into the big industry. But what happens to these businesses if some of the larger automotive plants move to some other country other than the U.S. or Mexico?”

Hays wants to see changes that would attract more companies to the border, where they’d be ideally located for international trade between Mexico and the U.S.

“This border should be covered with manufacturing,” he said. “I look out at Harlingen Industrial [Air]park, and it should be full.”

Time to make a deal

Observers say changes need to come quickly if they’re going to come at all, particularly given the volatile election cycles in the U.S. and Mexico.

“It’s probably in the next couple of weeks if it’s going to happen,” said Federico Schaffler, director of the Texas Center for Border Economic and Enterprise Development at Texas A&M International University in Laredo. “I’m very skeptical. There might be some political will, but I don’t know if you can align all three nations if there are certain things that are not negotiable.”

With López Obrador a front-runner in Mexico and a potential shake-up that could bring more Democrats to Capitol Hill in November, Schaffler said Trump administration officials would be wise to strike a deal this month to give the Republican-controlled Congress enough time to approve it.

“The United States needs a win or at least something that looks like a win so they can sell it before the midterm elections,” Schaffler said. “If the House and Senate changes from Republicans to Democrats, it’ll be a whole new ballgame.”

That may mean taking the progress already made and leaving more controversial topics like interstate dispute settlement and higher wage guarantees for American workers for another year, Schaffler said.

For South Texas businesses like Barbosa’s Bespoke Logistics, whose success depends on NAFTA, that sounds like a good deal.

“We truly believe that something must be done by the end of May,” he said. “You cannot prolong it. You cannot go into June with the presidential elections. This may be historic.”

Border-Mexico correspondent Alfredo Corchado contributed to this report.