Immigration, NAFTA changes could muddle technology community, Arizona economy

NAFTA graphic

Author: Steven Zylstra, President and CEO of Arizona Technology Council
Published in Arizona Capitol Times, March 17
th, 2017.

There has been a significant shake-up in international trade and foreign policy since President Trump took office. The economic implications of President Trump’s trade and foreign policy shifts could be disruptive to the technology community and to Arizona’s economy. Among the top issues to watch will be the modernization of the North American Free Trade Agreement (NAFTA) and immigration reform, particularly as it relates to visas for the high-skilled workers needed to support the technology sector.

I recently flew to Washington D.C. with my TECNA/CompTIA colleagues and fellow Arizona technology community representatives to speak with our state’s congressional delegation. Among the topics of discussion were H-1B visas, NAFTA modernization and the United States pulling out of the Trans-Pacific Partnership (TPP) trade deal. We all expressed concern regarding the status of high-skilled immigration reform under the Trump administration. However, we are hopeful that an update of NAFTA could strengthen and modernize the trade agreement significantly if handled properly.

H-1B visas are incredibly important to the competitiveness and growth of U.S. technology companies. In Arizona, and across the country, there is a shortage of workers with the necessary science, technology, engineering and math (STEM) skills and education to fill critical technology positions. Our goal for some time has been to double the number of available H-1B visas for high-tech jobs, but there is concern that the Trump administration will restrict them.

With a large demand for a workforce with strong STEM skills, a lack of STEM interest and education in the United States and a reduction in H-1B visas, the Arizona technology community fears that many companies could be forced to outsource work. This is a problem for Arizona because it will negatively affect our economy, as many technology companies could be forced to move key projects out of the United States.

Of course, part of the problem is that some of the best and brightest from around the world also come to the U.S. to be educated.  What we want is to keep those highly talented students in the U.S., working for our companies, contributing to our economy and intellectual base, and moving toward productive citizenship.

The other topic of interest during the trip was the NAFTA agreement signed by Canada, Mexico, and the United States in 1994, creating a trilateral trade bloc in North America. The agreement is now over 20 years old and could be much improved by an update that incorporates important new benefits and protections, particularly for the tech sector.

Additionally, President Trump has already pulled the United States out of the TPP, but there were elements secured in the TPP establishing digital economy obligations that should be included in an updated NAFTA agreement.

These elements include ensuring a free and open internet, prohibiting customs duties on digital products (e.g., software, music, video, e-books), ensuring non-discriminatory treatment of digital products transmitted electronically, and guaranteeing the free flow of information through cross-border data flows.

Finally, NAFTA does not currently address data transfer and storage, as it was originally written and signed when these concerns did not exist. Renegotiations could adopt data storage and transfer regulations that help protect the storage and privacy of company data.

The issues and concerns above are significant to the technology community, but there are other bipartisan issues that affect us all, and Arizona’s economy. As a member of the Arizona District Export Council and its Trade Policy Committee, I was fortunate to help plan and attend a recent meeting that featured a bipartisan panel of five Arizona congressional delegation members and six industry leaders. The panel was focused on trade.

While there were differences in opinions, there was clear consensus regarding the importance of international trade to the Arizona economy and it started a healthy discussion about border taxes and tariffs, immigration and the importance of H-1B visas.

Our trip to Washington D.C. was a success because the technology community in Arizona and around the nation made our voices heard. The prosperity of the technology community and the local economy is the goal of the Arizona Technology Council, and the decisions on international trade and H-1B visas are critical to that success. We are encouraged by an open dialogue on the issues, and we will continue working to ensure that the Arizona technology community’s voice is heard.