by Nelson Balido
August 9, 2011
We now return you to your regularly scheduled programming…Now that the debt ceiling debate has cooled off – for the time being, anyway – and Congress has gone home until after Labor Day, it’s worth revisiting the legislation and policies that could give our nation’s trade community a leg up and could help this president and Congress inject some life back into this struggling economy.
The PORTS Act Introduced by Rep. Silvestre Reyes (D-Texas), this bill would dramatically increase staffing levels for Customs and Border Protection at our nation’s ports of entry.
There is perhaps no greater roadblock to trade efficiency than the lack of sufficient staff. Wherever I go along our borders – north and south – the one thing I hear consistently is that our ports are understaffed, leading to long delays in our commercial lanes as cargo waits to enter U.S. commerce.
Those delays result in real costs passed on to consumers and they diminish North America’s overall competitiveness as manufacturers’ ability to get products to market is compromised. According to a draft report prepared by the Department of Commerce, border delays in 2008 cost the U.S. economy nearly 26,000 jobs and $6 billion in output, $1.4 billion in wages, and $600 million in tax revenues annually. According to the same report, by 2017, average wait times could increase to nearly 100 minutes, costing the U.S. more than 54,000 jobs and $12 billion in output, $3 billion in wages and $1.2 billion in tax revenues annually. The cumulative loss in output due to border delays over the next ten years is estimated to be $86 billion.
Fatalistic? Perhaps. But we’re kidding ourselves if we think we can grow this economy without a real commitment to improving trade efficiency.
The Reyes bill is stuck in various subcommittees, which comes with the territory when your party is in the minority. But no matter the party affiliation, giving serious attention to our nation’s port staffing levels makes economic sense.
Coordinated Border Infrastructure funding A September 30 expiration of the previous highway funding levels under SAFETEA-LU is looming and there are two very different proposals emerging on what the next highway bill should look like.
In the House, Transportation Committee Chairman John Mica (R-Fla.) is calling for a six-year funding bill, which many in the business community, including the U.S. Chamber of Commerce, are opposing for its proposed deep cuts to transportation funding, which the Chamber says will cost the nation jobs.
In the Senate, Environment and Public Works Committee Chairman Sen. Barbara Boxer (D-Calif.) and Ranking Member James Inhofe (R-Okla.) have sketched out a two-year plan to fund transportation, but it’s murky, to say the least, where their plan will get the money it requires.
The BTA is calling for any funding package to include the Coordinated Border Infrastructure program. CBI funds are distributed to state departments of transportation for use in trade facilitation projects that are within 100 miles of an international border. These funds are of critical importance to states trying to upgrade their trade infrastructure and alleviate bottlenecks in and around their ports of entry.
Losing CBI funding could stop in their tracks projects designed to facilitate trade along with costing thousands of jobs in an economy struggling to emerge from this recession. CBI reduces congestion, improves trade efficiency and creates jobs.
Finalize new trade deals Finally, this Congress and the president can send a message that they’re serious about helping U.S. business access new markets by agreeing to implement trade deals with South Korea, Panama and Colombia.
The president has talked a lot about the need to double exports over a five-year period as a way to boost the economy, but new trade deals continue to languish while countries around the world are inking new agreements all the time.
This call for a commitment to free trade comes with a warning, however. The Senate Finance Committee is looking to tie a spike in the Merchandise Processing Fee to the adoption of the new agreements. Let’s not pass a fee hike on to importers when we should be finding ways to eliminate non-tariff barriers to free trade.
There’s a lot more Congress and the administration can do to help the economy that’s related to trade and our borders. But ultimately it takes a recognition that trade means jobs. More than 50 million Americans work for companies that engage in international trade, according to the U.S. Department of the Treasury.
If you’re for job creation, then you should be for trade.
Nelson Balido is the president of the Border Trade Alliance
July 1, 2011
When we discuss cross-border trade transportation in North America, it’s usually the trucking industry that gets all the headlines.
With the U.S. and Mexico attempting to resolve a longstanding dispute over cross-border trucking, and with the trade community lobbying Washington to increase capacity at our land ports and to boost staffing to keep the trucks moving, it’s easy to forget the important role that cross-border rail plays in NAFTA surface trade.
I had the opportunity last week to visit with stakeholders in Calexico, Calif. to discuss the issue of rail trade in Baja California and how it could enhance the entire region’s competitiveness. As the private and public sector representatives gathered around the table at the Calexico Chamber of Commerce heard, the stakes surrounding rail are high.
We heard from a major automaker that its ability to access rail near its assembly facility in Mexico and move cargo northbound will be a deciding factor in whether the company increases its investment in the region or looks elsewhere to expand operations.
But navigating the bureaucratic maze that is international rail is no easy task. There are lots of cooks in the kitchen, including federal and state governments and private sector concessionaires. And getting Mexican rail lines up to snuff to handle the volume from that country’s maquila sector is likely to come at a steep price. In the face of tight credit markets and a volatile economy, financing for rail line overhauls could prove to be out of reach.
We did, however, receive some encouraging words from leaders at the North American Development Bank, who expressed their desire to engage in our rail infrastructure discussions going forward.
Traditionally known for their work in environmental infrastructure, specifically in wastewater and solid waste management, the NADBank is looking for ways to get involved in trade facilitation projects that also have an environmental component.
For example, the NADBank in 2010 financed its first land border port of entry, the San Luis II port linking San Luis, Ariz. and San Luis Rio Colorado, Sonora, where the new commercial port of entry helped improve air quality by speeding the passage of truck traffic.
I believe there is a clear pro-environment case to be made for the NADBank getting involved in upgrading Mexico’s border region rail infrastructure. If modernized rail can help shift truck traffic away from overburdened land ports, then not only will trade efficiency be enhanced but air quality will improve as a result of fewer idling trucks waiting to enter the United States.
A critical element of North American competitiveness is manufacturers’ ability to get their products to market efficiently and securely. If aging infrastructure is an impediment to businesses’ success, then we’ll see companies start to migrate overseas, taking jobs with them as the NAFTA economy suffers.
The Border Trade Alliance is proud to have the rail industry represented in our membership. We’ll continue to be an advocate for the industry’s cross-border interests in the NAFTA marketplace. I’m excited for future discussions on upgrading our border region rail infrastructure as we work together to make the border region an attractive destination for investment.
Nelson Balido is the president of the Border Trade Alliance
BTA shares ideas for improving U.S. – Mexico trade in Mexico City Meetings
SAN ANTONIO- Border Trade Alliance leaders recently held high-level talks with Mexican customs officials in Mexico City where the parties discussed ways to improve trade facilitation across the U.S.-Mexico border. The Aduanas officials also agreed to meet with BTA on a regular basis to ensure that these productive discussions continue.
BTA Chair Kathy Neal and BTA President Nelson Balido led the discussions that centered on how the U.S. and Mexico can work collaboratively to find new ways to expedite trade and travel and strengthen the border region economy.
The BTA also interfaced with an economics officer from the U.S. Embassy in Mexico City to round out the group’s visit to the Mexican capital.
The meetings took place at Mexico’s Aduanas headquarters where officials received Neal, Balido and BTA Executive Committee Member Teclo J. Garcia, who represented the City of McAllen. The meetings were the result of several months of planning utilizing the BTA’s unique relationships in Mexico and with officials at the Mexican Embassy in Washington, D.C.
All told, the BTA visited with eight officials from the Administración General de Aduanas.
The BTA was able to present to the Mexican leaders an overview of the BTA’s mission, a discussion of how the organization functions and how it can help foster talks and relationships in the U.S.
Additionally, the BTA raised several issues directly concerning security, human resources and infrastructure challenges at crossing points along the border. Mexican Customs was able to present to the BTA its plans for border crossings in the future and gave status reports on port security programs it has recently installed.
The diplomatic but frank conversations were appreciated by both sides. The Customs leaders agreed to meet with the BTA regularly and continue the open dialogue with the organization’s leadership.
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About the Border Trade Alliance:
Since 1986, the BTA has served as a grassroots, non-profit organization that provides a forum for discussion and advocacy on issues pertaining to the environment, border development, quality of life and trade in the Americas. A network of public and private sector representatives from the United States, Mexico and Canada, BTA’s core values include a commitment to improving the quality of life of border communities through trade and commerce.