News Column

Bordering on Progress

Balancing security and the desire for expanded trade is an increasingly tall order for Mexican and U.S. officials.

By Patricia Guadalupe
HISPANIC BUSINESS® magazine
May 2002

Discussions about the U.S.-Mexico border have taken on new meaning in the wake of September 11, as officials try to address heightened security concerns while improving commerce between the two nations. “Given the level of security the country is in now, facilitating movement at the border is even more important,” said Rep. Silvestre Reyes (D-TX) at the sixth annual U.S.-Mexico Chamber of Commerce border conference held last March in Washington, D.C. “The border plays an important role in the prosperity of the United States. We have to make sure we have a system that cargo and people can move through with ease.” Trade between the two countries, valued at $650 million a day, is an important issue on both sides of the border, according to President Bush. “The United States has no more important relationship in the world than the one with Mexico,” he said during a March meeting with his Mexican counterpart, Vicente Fox, at the United Nations Conference on Financing for Development in Monterrey, Mexico. “I want our borders to be modern and secure and to have the very best technology available, and I recognize the great vitality between our respective countries. A vibrant, prosperous Mexico is in the best interest of the United States,” he said after unveiling a new security accord with Mexico that would expand the use of high technology across the 1,951-mile border. Under the program, commuters and truckers who regularly cross the border will be issued electronic cards to facilitate speedier crossings. According to administration officials, the new cards will enable border guards to spend more time inspecting cargo and questioning individuals, helping ensure the normal flow of goods and travelers between the United States and Mexico. The accord provides for cargo inspections at other points as well – seaports, for example – to alleviate traffic bottlenecks at the border. Since the 1994 implementation of the North American Free Trade Agreement (NAFTA), the number of commercial vehicles crossing the U.S.-Mexico border has increased almost 50 percent and trade between the countries has almost quadrupled. The administration’s war on terrorism, however, has created havoc at the border, and commerce is suffering. Because of increased security, what had been a 10-minute trip between El Paso, Texas, and Juárez, Mexico, now takes more than two hours. “We’re talking about the border now more than ever [in Congress]. It’s a big issue,” says Rep. Ciro Rodríguez (D-TX). “As far as congressional action is concerned, we need to have more funding for an upgrade in technology and to hire more people at the INS [Immigration and Naturalization Service] and Customs departments.” Mr. Reyes, a former Border Patrol chief whose current congressional district includes the border city of El Paso, calls the situation at the clogged border “appalling.” “I hope [President Bush] keeps that picture in mind when he discusses the strangled border economy with Mexico’s President Fox,” he says. “It ought to be an embarrassment to talk about revitalizing the border economy out of one side of his mouth, while his administration’s new budget is designed to continue the historical negligence and delay in adequate placement of customs and immigration personnel and new technology to unclog our border.” Mr. Rodríguez says that INS budget increases are inadequate. “The INS and Customs need 900 new people and greatly improved technology. The Bush budget doesn’t have that.” The U.S.-Mexico border, notes Mr. Reyes, contains four of the 10 poorest counties in the United States. The Texas legislator recently introduced the Border Economic Recovery Act to address health, environmental, infrastructure, workforce development, and judicial issues. The legislation would increase funding for the Border Health Commission – which takes a binational approach to health-related issues – and for the Coordinated Border Infrastructure Program, which, among other things, improves highways and roads at border ports of entry. The legislation also seeks to increase funding for border inspectors and programs for workers displaced by NAFTA. Hispanic entrepreneurs who specialize in border concerns say they remain optimistic that the Bush administration is committed to resolving these issues. “We’re making good progress,” says Hector Holguin, founder of The Holguin Group in El Paso. Mr. Holguin is also president of Plaza de las Americas, which is being developed as an Internet site that will provide access to goods and services produced in Mexico’s 32 states (see “El Paso Maps Out a High-Tech Future,” September 2001). “I see a real commitment [in Washington] to invest dollars in programs for the border, and to do it quickly. The border area is growing three to four times faster than the rest of the United States,” in spite of recent economic malaise, Mr. Holguin says. The U.S.-Mexico Partnership for Prosperity (PFP) is one such program, a private/public border partnership agreement that the Bush administration first unveiled during President Fox’s visit to Washington a week before the terrorist attacks. The program largely aims to decrease immigration into the United States by assisting business development in central and southern Mexico, areas that have not enjoyed the same kind of economic gains northern Mexico has realized since the implementation of NAFTA. The plan calls for increasing the number of financing options available, thereby expanding access to capital in Mexico beyond the nine states (mostly along the border) that receive 95 percent of private capital destined for Mexico. Several U.S. agencies, including the Export-Import Bank and the Small Business Administration, are working with their Mexican counterparts to develop a list of programs for small and medium-size businesses. The Inter-American Development Bank recently provided a grant to Mexico to develop an international Automated Teller Machine infrastructure to improve access to banking services in rural Mexico. The program also aims to limit the cost of money sent by U.S. Hispanics to their Mexican relatives. Remittances to Mexico alone represent $9.2 billion annually, but $3 billion is spent in fees and other charges, according to a report by the Inter-American Development Bank’s Multilateral Fund. The report recommends creating a remittance oversight board, which the PFP supports. Additionally, Rep. Luis Gutiérrez (D-IL) is sponsoring the Wire Transfer Fairness and Disclosure Act, which would require wire providers to disclose all fees charged, including “currency conversion fees” – the less-favorable exchange rates charged to customers. The partnership program also calls for increasing Mexican home ownership. Under the program, the U.S. Treasury Department provides technical assistance to its counterpart across the border in an effort to create secondary mortgage markets to help bring down mortgage rates. Mexico’s current average rate is 20 percent. The PFP also calls for increasing the amount of foreign investment in Mexico by creating partnerships among financial institutions in the United States and Mexico to provide loans for small businesses. “Somebody asked me, because of the war on terror, is your interest in Mexico diminished. I said not at all. A strong and prosperous Mexico is good for America,” Mr. Bush said during his recent Monterrey visit. “Mexico is an incredibly important part of the futuro de los Estados Unidos. The border, la frontera, is a very important part of our relationship.”



Source: HISPANIC BUSINESS magazine


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