Reports of drug violence and debates over immigration reform often obscure the larger story of Mexico’s dynamism and the benefits of its growing integration with the U.S., two border-town congressmen said in Atlanta.
Not only is the trade volume impressive – $1 million worth of goods crosses the border every minute – but the jobs dividend from trade with Mexico far outweighs that of other partners.
That’s because the U.S. and Mexico make things together: Imports from Mexico contain on average 40 percent American inputs, compared with just 7 percent for China.
“When we export from Mexico we succeed; when we import from Mexico we succeed, and that’s unlike any other trading relationship we have,” said Beto O’Rourke, a freshman Democrat from El Paso, Texas, at a World Trade Center Atlanta luncheon.
On the first leg of a roadshow backed by the U.S. Commerce Department to clear up misconceptions about America’s third largest trading partner, Mr. O’Rourke told Global Atlanta that his city was hit hard when the North American Free Trade Agreement was enacted 20 years ago.
Many of his 700,000 constituents still harbor painful memories of manufacturing jobs evaporating, but El Paso has started to benefit from its crossroads status, with one in four jobs in the district now relying on trade with Mexico.
He added that while El Paso is just across the border from Juarez, a town notorious for drug violence, the Texas city has been ranked as the safest city of its size in America for three years running.
“When Washington D.C. talks about Mexico, it is as though it is a threat,” with concerns over drug smugglers, human traffickers and even terrorist groups dominating the conversation, Mr. O’Rourke said. “We on the border and hopefully those in the room see something far different.”
Brownsville, a port city at the southern tip of Texas, is also “attached at the hip” with its cross-border counterpart, Matamoros, said Filemon Vela, another first-term Democrat whose district is home to 1.2 million people.
Nearby are 11 bridges across the Rio Grande with a new rail bridge underway to streamline the flow of goods to the Brownsville port, which is home to major foreign-owned facilities for recycling steel ships and refurbishing oil rigs.
“You might as well be one town except for the river,” he said.
But the benefits spread far beyond the border to states like Georgia, where $7.8 billion in trade (including $2.5 billion in exports) with Mexico supported thousands of jobs in 2013, according to the congressmen, both members of the Border Caucus in the House.
Walter Bastian, U.S. deputy assistant secretary of commerce for the Western Hemisphere, said negotiations of sweeping free trade agreements under way with Europe and Asia in no way reflect a neglect of Mexico, which is at the table in the 11-country Trans-Pacific Partnership negotiations.
The Commerce Department has been part of an interagency effort at the highest levels of government to invest strategically in U.S. commercial ties with Mexico, including the launch of the High-Level Strategic Economic Dialogue launched last year, he said.
“The bottom line is, we are not neglecting Mexico. My time in the department has been measured in many decades, and we’ve never had the focus on it in the past that we have on it today,” Mr. Bastian said.
The U.S. also encourages Mexico’s efforts to lower barriers with its neighbors, including through the formation of the Pacific Alliance, a bloc including Mexico, Colombia, Chile and Peru.
Still, there is more to be done to lower barriers. Even with the current level of integration, inefficiencies at the U.S.-Mexico border cost time and money for shippers, said Amgad Shehata, vice president of international public affairs at United Parcel Service Inc. and another panelist.
He urged the countries to harmonize customs processes and regulations to cut transit times and free up capacity as they undertake the more contentious and expensive work of building new infrastructure.
As an illustration, he said UPS drivers can go from North Dakota to the Mexico border unimpeded but that regulations require three different drivers to take the cargo across multiple checkpoints when they get there. Such complication doesn’t fit the closeness of the bilateral trade relationship, Mr. Shehata said.
“It’s time that we fix the issues within our family,” he said.
The congressmen argued that the U.S. should allocate more money for port-of-entry infrastructure and customs personnel rather than spending $46 billion (as proposed in one Senate bill) on drones, fences and other security assets aimed at keeping people out.
“It is at best an unsound, inefficient use of resources, and at worst it militarizes a situation which is already largely solved,” Mr. O’Rourke said, adding that net immigration from Mexico to the U.S. was “zero” last year.
Mr. Bastian agreed that time equals money when it comes to U.S.-Mexico trade.
“We’ve got to speed up the transit of products and people back and forth across the border, he said.
He added that Atlanta is a city that “knows Latin America,” noting that it hosts more headquarters of companies from the region than better-known hubs like Miami, Los Angeles and Houston. Mr. Bastian worked here frequently in the early days of the Americas Competitiveness Forum, which launched here in 2007.
With its many universities, Atlanta exemplifies one of the biggest advantages of the U.S. economy: intellectual capital.
“It’s not only our ability to innovate, it’s our ability to commercialize that innovation,” said Mr. Bastian, who was honored with a Global Impact Award by the Metro Atlanta Chamber last year.
He told Global Atlanta that further connections between research universities in the U.S. and Mexico would go a long way toward fixing the perception gap Mexico faces and making both economies more competitive.
This is all the more important as Mexico undertakes economic reforms, begins major infrastructure investments and moves forward with a plan to privatize its oil sector.
Mr. Shehata is looking forward to those as well a additional customs reforms set to be considered next January.
“It’s such an important economic relationship that we have to get it right. There is no other option,” he said.
