Officials: Arkansas small businesses see benefits from trade with Mexico

Small business owners from around the state convened in Rogers on Monday (April 22) to meet with U.S. Rep. Steve Womack. R-Rogers, to discuss trade with Mexico. The business owners returned from a trade delegation trip in central Mexico headed by Melvin Torres, director of Western Hemisphere Trade for the World Trade Center Arkansas in Rogers.

Torres said the ongoing negotiations for the United States-Mexico-Canada (USMCA) treaty that will replace the North American Free Trade Agreement (NAFTA) between the three countries was a key focus of the trip and Monday’s briefing with Womack was timely.

Mexico is important to businesses in Arkansas, according to Torres, who said 80% of goods exported from Arkansas to Mexico are from small businesses like Lycus Limited of El Dorado or CreekKoolers of Rogers, whose owners were part of the trade delegation.

Torres said Arkansas exports almost twice as much to Mexico as it imports and the passage of the USMCA is important for the continued growth of small businesses around the Natural State. He said one-third of all exports from Arkansas go to either Canada or Mexico.

“Exports from Arkansas businesses are growing 3.5 times faster than to any other country. While Canada is our largest trading partner right now, Mexico is growing faster and in a few years I predict it will replace Canada as the biggest export market for Arkansas,” he said. “Two of the businesses who recently traveled to Querétaro came home with contracts.”

Womack told the group he had no timeline for the passage of USMCA. While the White House continues to pressure House Speaker Nancy Pelosi, D-San Francisco, to call for a vote, Womack said there is no indication of when that will happen as both sides still have concerns on steel tariffs.

“There has been lots of rhetoric, followed by lots of work and more rhetoric. … I think we will get to a yes vote but it’s too early to say when that will happen. It will be tough on the Democrats to not pass this and I want to see it cross the finish line because it’s so important for Arkansas to have access to these markets,” Womack told the group.

He said if the U.S. can pass USMCA the other players will despite pushback from Canada and Mexico on steel tariffs.

Tasha and John Sinclair, owners of Lycus Limited in El Dorado, said 22% of the company’s sales go to India, but there is untapped potential in Mexico and South America. Lycus manufactures ultraviolet light absorbers for use in plastics, coating, adhesive, polyester films, cosmetic product protection and other personal care applications.

Because the product is used in so many applications, the Sinclairs have been on a fact-finding mission for several years to see how their product is being used, while looking for additional clients and distribution opportunities. They recently made a trip to Columbia with Torres and met with botanical business owners who can benefit from some of their products. Tasha Sinclair said rose growers who farm in massive greenhouses suffer from pests that grow from ultraviolet lights. Lycus has products to help them shield ultraviolet light exposure.

Tasha Sinclair said the company has two clients in Mexico who purchase film products, but there is more opportunity for the company to explore and that’s why they made the trip to Querétaro. She said the company is putting together a proposal for representatives in Mexico and the Sinclairs are taking Spanish lessons to bone-up on the business vocabulary to help bridge the language barrier.

Flip Kindberg of Bella Vista owns SkyGenie in Fort Smith, a business he purchased about six years ago. He said the company is over 50 years old and makes safety harnesses used by aerial firefighters, utility companies, construction workers, rescue teams and the U.S. military.

Kindberg’s business is located in the industrial park near Planter’s Peanuts in Fort Smith and he employs less than a dozen workers with some of the work outsourced. The Fort Smith plant does some assembly and woven textile work. He sells primarily through distributors and said he made the recent trip to Mexico to build contacts. He said there are representatives from dozens of other countries who attended the trade summit.

“I could have a product being sold into Mexico through my distributors, but I wanted to make the contacts myself and look for future growth opportunities in the direct export business. I have lots of follow up to do from all the contacts I made on the trade delegation,” Kindberg told Talk Business & Politics.

Kent Watson, founder and owner of Fayetteville-based Metova, also made the trip and took part in Monday’s briefing. Metova creates software development for mobile self-serving industries in addition to applications for connected homes and vehicles and the Internet of Things. Watson said he sells services and that piece of the trade talks has not been very clear.

He said Metova operates a professional services office in Guadalajara, Mexico, which creates applications for Metova customers. He said workforce shortages for technology have impacted his business and that’s why he has had to look outside the region, state and country to source talent to run his growing business. Watson said small businesses don’t have time to get swept up in the chess game played by Congress and asked Womack how they can have their voices heard on the importance of passing the USMCA.

Womack urged businesses to reach out to their elected officials in the House and Senate and state their case. He said division in the U.S. House is stark on many issues. One thing he is doing personally is visiting with Democrats from other states in their home districts to look for common ground. He said there was no compromise on immigration and that the result is status quo. Womack said USMCA will get done, but in the meantime, “Rome is burning and our country is fiddling.”