Salmon, Barber, Schweikert, Sinema hold trade field hearing

hearingOn Monday, Arizona Congressman Matt Salmon, Chairman of the Subcommittee on the Western Hemisphere, joined representatives Krysten Sinema, Ron Barber, and David Schweikert at a field hearing intended to identify and promote the best practices in U.S.-Mexico trade.

Witnesses included Alan Bersin, Assistant Secretary, Office of International Affairs and Chief Diplomatic Officer, U.S. Department of Homeland Security; Eric Farnsworth, Vice President, Council of the Americas and Americas Society; Glenn Hamer, President and Chief Executive Officer, Arizona Chamber of Commerce and Industry, and Lea Márquez Peterson, President and Chief Executive Officer, Tucson Hispanic Chamber of Commerce; Timothy C. Hutchens, Executive Vice President and Head Federal Lessor Advisory Group, CBRE, Inc., and Christopher Wilson, Associate, from the Mexico Institute, Woodrow Wilson International Center for Scholars.

“The United States and Mexico do not merely trade products; we now design and make them together. In many industries, joint production and supply chains have developed to such an extent that, from the commercial perspective at least, national borders no longer define products,” Bersin testified. “Every dollar of U.S. imports from Mexico, for example, includes some 40 percent of U.S. content. It is no longer accurate to think in terms of U.S. or Mexican or Canadian products when North America itself has become the production platform.”

Bersin reads into the record, “A joint competitiveness agenda should prioritize efforts to make business easier at our common border. Borders function as the windpipe of the U.S. economy; if they are constricted, the economy suffers. Important security gains have been made in the last decade, but trade facilitation has received insufficient attention, even as cross-border supply chains have steadily integrated. As a result, long and unpredictable crossing times have produced bottlenecks, and relatively few ports of entry have seen major upgrades. Recent discussions in Washington on border security overlook the urgent need to direct investment towards infrastructure improvements. As Mexican Ambassador Eduardo Medina Mora has said, ‘We have a 21st-century trade model, operating on a 20th-century policy format, with a 19th-century infrastructure.’”

Bersin noted, “Although staffing for the U.S. Border Patrol has grown in recent years, the number of Customs and Border Protection officers has remained largely unchanged, despite the increased volume of trade and travel.”

Bersin was only mildly critical of Mexico, which has driven its poor across its northern border. “Of course, Mexico must continue along the reform path in order to build its own competitiveness. Improved competition policy is needed, especially in the telecommunications sector, and energy costs are far too high. An opening of Mexico’s heavily protected oil industry may prove to be the most difficult item on President Peña Nieto’s reform agenda but would be a potentially huge boost for Mexican competitiveness and North American growth. Meanwhile, security issues will continue to resonate until they are effectively addressed. This, in turn, hurts the economic agenda, because perceptions of insecurity in Mexico act as a drag on both investment and the willingness of entrepreneurs to bet on Mexico.”

Still, he couldn’t hold the U.S. harmless for the violence people living along the border face. “At the same time,” he said, “the failure of the United States to address the demand for illegal drugs or the supply of weapons directly contributes to Mexico’s persistent security difficulties.”

Ron Barber said, “We need to be ready for the increase in commercial traffic and the larger land port and the massive expansion of the seaport in Guaymas, Sonora, could benefit Arizona or neighboring states, depending on who gets ready first.”

The other panelists offered little information. They mostly repeated the common request for easier and faster access through ports. Arizona has taken a backseat to Texas which has been aggressive in the expansion of their ports. Arizona has had little help from their representatives in the fight for access. Other than former senator Jon Kyl, Arizona’s representatives had focused more on accommodating illegal access rather than commercial access.