“ Mexico-United States Border Efficiency Through Enhanced Infrastructure”   Alejandro Díaz-Bautista,  Ph.D.   Professor of...
<ul><li>The integration of the economies of North America since the signing of the North American Free Trade Agreement (NA...
United States - Mexico Border Geography <ul><li>Geography: </li></ul><ul><li>10 border states.  </li></ul><ul><li>1,952 mi...
Economic Integration in North America <ul><li>Mexico and the United States already share the highest level of economic int...
Border Infrastructure Projects  <ul><li>U.S.-Mexico infrastructure projects are aimed to have a positive economic impact o...
<ul><li>The economic and public policy analysis shows that the western and eastern regions of the United States-Mexico Bor...
<ul><li>As empirical evidence shows, each region like Baja California-Southern California offers something special because...
Wind Power in the Border Region <ul><li>In early March 2010, President Felipe Calderon inaugurated La Rumorosa wind-energy...
U.S. Mexico Border Region <ul><li>The U.S.-Mexico border region have a joint economy that ranks third in the world and its...
Increasing Economic Ties in the Border Region. <ul><li>Millions of Mexicans and Americans cross the border every workweek,...
Economic Analysis <ul><li>More than $28 billion in goods moves across the San Diego-Tijuana border annually in both direct...
<ul><li>In the San Diego Tijuana Border, the economic impacts of congestion costs to the regional economy are in the billi...
El Chaparral Project <ul><li>The economic impact of waiting times at the border crossing from Tijuana to San Diego, has be...
Otay Mesa II Project <ul><li>The Otay Mesa crossing has a demand of 12 million passenger vehicles per year (33,000 a day o...
<ul><li>The General Administration of Customs in Mexico mentioned that this system will allow approximately 90 million veh...
SIAVE Program <ul><li>On October 29, 2009 there was a lot of irritation and discomfort by thousands of border residents, a...
SIAVE Program <ul><li>The private sector in the Mexican Side of the Border mentioned that the Vehicle Valuation System (SI...
SIAVE Program <ul><li>In order to facilitate efficiency and increase trade, it is necessary to evaluate the operation of t...
NAFTA Agreement <ul><li>The North American Free Trade Agreement (NAFTA) was signed and effective in 1994. It's known as TL...
NAFTA’s Trade Impact at 16 <ul><li>In terms of trade, Canada, Mexico, and the United States have broadened substantially s...
Since the implementation of the North American Free Trade Agreement (NAFTA) in 1994 to the year 2009, 24 percent of total ...
Economic Integration in North America <ul><li>The economic relationship between Mexico and the U.S. is evident in the evol...
Economic Synchronization Between Mexico and the U.S. <ul><li>Castillo, Fragoso Pastrana and Diaz-Bautista (2004) studied t...
The North American Model <ul><li>The North American model is increasingly economic integrated as seen by the current econo...
( % annual variation) Sources:  INEGI and US Federal Reserve. Industrial Production in Mexico and the United States during...
Conclusions <ul><li>We need to continue to emphasize the need to expedite the process of crossing the border between Mexic...
Conclusions <ul><li>The analysis shows that in order to solve bilateral problems between Mexico and the United States, you...
“ Mexico-United States Border Efficiency Through Enhanced Infrastructure”   Alejandro Díaz-Bautista,  Ph.D.   Professor of...
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Dr. Alejandro Diaz-Bautista, North American Competitiveness Conference 2010 University of San Diego

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“Mexico-United States Border Efficiency Through Enhanced Infrastructure”.
Alejandro Díaz-Bautista, Ph.D.
Professor of Economics and Researcher at
El Colegio de la Frontera Norte (COLEF)

adiazbau@hotmail.com

Prepared for the The North American Competitive, Innovation & Clean Energy Conference, Wednesday, April 14, 2010 , 8:00 am - 5:30 pm, Main Theater, Joan B. Kroc Institute for Peace & Justice University of San Diego. San Diego, California.

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  • “ [The goal of this slide is to put in perspective the size, population and economic power of the border states’ region]” In the 10 states of the Mexico-U.S. border region, we have a population of 92 million, which represent almost 1/4 of the combined populations of both countries. In this sense, one fourth of the population in each country is directly more influenced by the neighboring country’s culture.
  • Dr. Alejandro Diaz-Bautista, North American Competitiveness Conference 2010 University of San Diego

    1. 1. “ Mexico-United States Border Efficiency Through Enhanced Infrastructure” Alejandro Díaz-Bautista, Ph.D. Professor of Economics and Researcher at El Colegio de la Frontera Norte (COLEF) adiazbau@hotmail.com Prepared for the The North American Competitive, Innovation & Clean Energy Conference, Wednesday, April 14, 2010 , 8:00 am - 5:30 pm, Main Theater, Joan B. Kroc Institute for Peace & Justice University of San Diego. San Diego, California.
    2. 2. <ul><li>The integration of the economies of North America since the signing of the North American Free Trade Agreement (NAFTA), the internationalization and globalization of the economy, new infrastructure and investments in the border region, remittances, binational shopping and migration have changed how citizens and regions relate to each other in North America. </li></ul>
    3. 3. United States - Mexico Border Geography <ul><li>Geography: </li></ul><ul><li>10 border states. </li></ul><ul><li>1,952 miles of border. </li></ul>
    4. 4. Economic Integration in North America <ul><li>Mexico and the United States already share the highest level of economic integration between the most unequal pair of rich and poor neighboring countries anywhere in the world. A longstanding economic relationship continues to grow all along the 1,952-mile U.S.-Mexico boundary and its 14 large sister border cities. </li></ul><ul><li>At least 10 million people live along the border (92 million in the 10 Mexico- United States border states), and its twin cities share common airsheds and watersheds. The U.S.-Mexico border is the world's busiest, with an estimated 270 million legal crossings from Mexico each year. </li></ul>
    5. 5. Border Infrastructure Projects <ul><li>U.S.-Mexico infrastructure projects are aimed to have a positive economic impact of around 12 million people living along the U.S. Mexico border. </li></ul>
    6. 6. <ul><li>The economic and public policy analysis shows that the western and eastern regions of the United States-Mexico Border, such as Baja California and California, Sonora- Arizona and Texas – Nuevo Leon and Tamaulipas must look beyond traditional political and national boundaries and develop new strategies to promote infrastructure development, competitiveness and economic growth of their economies. </li></ul><ul><li>There are at least 40 megaregiones around the world and 10 new megaregiones within the United States, with 3 important megaregions on the U.S. Mexico Border. </li></ul>
    7. 7. <ul><li>As empirical evidence shows, each region like Baja California-Southern California offers something special because of its comparative and competitive advantages. </li></ul><ul><li>For example, San Diego provides the human and intellectual capital in the form of an educated workforce, and applied research centers and academics, while Imperial County provides land, water and renewable energy development and generation. While, Baja California offers a sophisticated manufacturing sector with low costs, and also new infrastructure developments in renewable energies like the wind power plant at La Rumorosa, and universities such as the UABC and research centers such as el Colegio de la Frontera Norte. </li></ul>
    8. 8. Wind Power in the Border Region <ul><li>In early March 2010, President Felipe Calderon inaugurated La Rumorosa wind-energy project in Baja California state, prompting the executive to declare that Mexico is becoming the most advanced country in Latin America in harnessing this type of energy. </li></ul><ul><li>Mexico will become the most advanced nation in Latin America in renewable energy and will rank among the top 15 in the world. </li></ul><ul><li>Wind energy can be a viable option as long as it is accompanied by other improvements in infrastructure. Mexico is economically and environmentally competitive when [wind energy] is accompanied by improvements in the electric grid. </li></ul>
    9. 9. U.S. Mexico Border Region <ul><li>The U.S.-Mexico border region have a joint economy that ranks third in the world and its population is outpacing averages in other areas. </li></ul>
    10. 10. Increasing Economic Ties in the Border Region. <ul><li>Millions of Mexicans and Americans cross the border every workweek, depend on each other for their livelihoods, and live and work over the same watersheds. Americans have been crossing into Tijuana from San Diego since it was founded more than a century ago, sampling food and culture. </li></ul>
    11. 11. Economic Analysis <ul><li>More than $28 billion in goods moves across the San Diego-Tijuana border annually in both directions. It is estimated that Mexicans spent $6 billion a year in San Diego County, or more than $1 of every $8 in retail sales. More than 10% of all Tijuana residents cross the border five to seven times a week; during Christmas day they spend approximately 50 to 65 million dollars. </li></ul>
    12. 12. <ul><li>In the San Diego Tijuana Border, the economic impacts of congestion costs to the regional economy are in the billions of dollars and forecasts indicate that costs will double in the next 10 to 15 years if no new infrastructure projects are built. </li></ul>
    13. 13. El Chaparral Project <ul><li>The economic impact of waiting times at the border crossing from Tijuana to San Diego, has been estimated at: losses of over 8 million trips annually, 1.28 billion dollars of potential revenue, 3 million work hours, between 2 and 2.5 trillion dollars and job losses between 28 to 35 thousand people. </li></ul><ul><li>The Integrated Project at the Tijuana San Diego Border, called Chaparral will have a new port of entry building with 225 thousand square feet, 29 entry lanes, two for passenger buses and more for six lanes to exit. </li></ul><ul><li>The cost of the project is estimated at around 577 to 740 million dollars of construction, and construction was planned to begin in 2009, and estimated to be completed in 5 years, around 2014. </li></ul>
    14. 14. Otay Mesa II Project <ul><li>The Otay Mesa crossing has a demand of 12 million passenger vehicles per year (33,000 a day on average) with waiting times that average 2 hours. </li></ul><ul><li>Waiting times the United States-Mexico border crossing for trucks is estimated at an average of over 4 hours, adding to the costs of trade between Mexico and the United States. </li></ul><ul><li>The new Otay Mesa II project will have a capacity of 1.6 million trucks a year (4,400 per day on average) and is expected to increase its capacity by 2025. </li></ul>
    15. 15. <ul><li>The General Administration of Customs in Mexico mentioned that this system will allow approximately 90 million vehicle crossings at the border entry, which undergo a process of risk measurement by checking every vehicle that crosses into Mexico. The system weighs the vehicle, takes a picture, and the data are taken from the plates. The system will be crossing information to know if the vehicle has any reports of theft or has been used in a wrongful act. </li></ul>
    16. 16. SIAVE Program <ul><li>On October 29, 2009 there was a lot of irritation and discomfort by thousands of border residents, at the long rows waiting to enter Tijuana Mexico from San Ysidro, California, as the new SIAVE program started. </li></ul><ul><li>It is estimated that rows of up to 500 cars were formed during peak hours at Puerta Mexico, affecting the daily activities for border residents. </li></ul>
    17. 17. SIAVE Program <ul><li>The private sector in the Mexican Side of the Border mentioned that the Vehicle Valuation System (SIAVE) at Mexico’s ports of entry are considered slow and have indicated their dissatisfaction with the bottlenecks that occur at the border. </li></ul><ul><li>Many people who live in Tijuana and work in the United States are forced to wait long hours to cross the border, wasting productive time. </li></ul><ul><li>The private sector have asked the federal authorities to expedite the SIAVE system. Comercial, medical cluster, real estate, carriers and the tourism sectors have been economically affected. </li></ul>
    18. 18. SIAVE Program <ul><li>In order to facilitate efficiency and increase trade, it is necessary to evaluate the operation of the SIAVE on the border and also analyze the conditions for the implementation of new a Strategic Economic Zone in the border, which has been proposed by leaders of business organizations, as well as academics and the state governments in the border. </li></ul>
    19. 19. NAFTA Agreement <ul><li>The North American Free Trade Agreement (NAFTA) was signed and effective in 1994. It's known as TLCAN in Mexico and ALENA in the French-speaking parts of Canada. NAFTA eliminated most tariffs or import taxes on goods moving from one of the three countries to another. </li></ul><ul><li>After 16 years, most economists believe this has been good, overall, for the economies of all 3 countries. </li></ul>
    20. 20. NAFTA’s Trade Impact at 16 <ul><li>In terms of trade, Canada, Mexico, and the United States have broadened substantially since NAFTA’s implementation, though researcher and trade experts disagree over the extent to which this expansion is a direct result of the deal. </li></ul><ul><li>Trade with NAFTA partners now accounts for more than 80 % of Canadian and Mexican trade, and more than a third of U.S. trade. </li></ul>
    21. 21. Since the implementation of the North American Free Trade Agreement (NAFTA) in 1994 to the year 2009, 24 percent of total cumulative FDI in Mexico has been concentrated in the six states bordering the U.S.
    22. 22. Economic Integration in North America <ul><li>The economic relationship between Mexico and the U.S. is evident in the evolution of some of their economic indicators since 1993. For example, it is apparent that, since 1993, Mexico's GDP shares its trend behavior with the U.S. GDP. </li></ul><ul><li>Nevertheless, during the 1980s and the beginning of the 1990s the synchronization of the real sectors of both economies was unclear. </li></ul>
    23. 23. Economic Synchronization Between Mexico and the U.S. <ul><li>Castillo, Fragoso Pastrana and Diaz-Bautista (2004) studied the synchronization between the economies of Mexico and the United States with special reference to the manufacturing sector. The authors examined the dependency between the assembly plant industry for export in Mexico and the performance of the economy of the United States. </li></ul><ul><li>Herrera (2004) found also synchronization of GDPs in Mexico and the U.S. became evident with the implementation of the NAFTA. </li></ul>
    24. 24. The North American Model <ul><li>The North American model is increasingly economic integrated as seen by the current economic crisis. </li></ul><ul><li>An economic downfall in the U.S. has a contemporary economic impact in Mexico. </li></ul><ul><li>Withdrawing from NAFTA would affect the economies in the U.S. border communities, and rip apart North American supply chains and information systems, and devastate North American exporters. In short, it would cause incredible damage to the economies of North America in the long run. </li></ul>
    25. 25. ( % annual variation) Sources: INEGI and US Federal Reserve. Industrial Production in Mexico and the United States during the Fox and Calderon Administrations
    26. 26. Conclusions <ul><li>We need to continue to emphasize the need to expedite the process of crossing the border between Mexico and the United States. On the Mexican side, it is essential to improve the operation and implementation of the Vehicle Valuation System (SIAVE). </li></ul>
    27. 27. Conclusions <ul><li>The analysis shows that in order to solve bilateral problems between Mexico and the United States, you have to take the same actions, in a coordinated manner, on both sides of the border. </li></ul><ul><li>Although the border line and fence exists between both countries, new infrastructure projects have been implemented to increase trade, transport and economic efficiency. </li></ul><ul><li>The analysis shows the large economic, security and social links between the two countries and the high level of economic integration for both economies, especially in the border. </li></ul>
    28. 28. “ Mexico-United States Border Efficiency Through Enhanced Infrastructure” Alejandro Díaz-Bautista, Ph.D. Professor of Economics and Researcher at El Colegio de la Frontera Norte (COLEF) adiazbau@hotmail.com Prepared for the The North American Competitive, Innovation & Clean Energy Conference, Wednesday, April 14, 2010 , 8:00 am - 5:30 pm, Main Theater, Joan B. Kroc Institute for Peace & Justice University of San Diego. San Diego, California.

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