By Paola Avila
Threats to close the border did not materialize so we must be in the clear, right? Think again. The threat alone discouraged trade and travel and now looms over our economy with its one year postponement, affecting business planning and discouraging long term investments in our region. We know firsthand from the port closure last November that even a partial or temporary border closure leads to immediate economic losses with uncertainty lasting for days and even weeks.
Our Cali-Baja region is well aware of the economic cost of adding barriers or speed bumps to the already challenging movement of people and goods across our southern border. We have lived for decades with unpredictable and long border delays. Just last month these were made worse when the federal government diverted customs officers from our ports to assist Border Patrol in processing asylum seekers. This means we have to operate our commercial port with fewer lanes, resulting in longer lines at the border. Businesses across the 2,000-mile border have since reported significant transportation cost increases as well as production losses just from the increased wait times. This reaffirms economic data that an average border delay results in losses of nearly $1.3 billion in revenues, 3 million in potential working hours, 25,000 jobs, and $42 million in wages annually. And that’s just the San Diego region.
This is the cost of dividing an integrated supply chain, a shared workforce, and separating us from our principal consumer market. We often explain this connectivity as an interdependent economy where if one catches a cold, the other does as well, and likewise, one’s success spurs success for the other. There is a deep understanding that our region’s long-term viability depends on this interconnectivity. This economic relationship grew exponentially when the North American Free Trade Agreement was implemented in 1993, stimulating a $2.5 billion annual integrated supply chain in Cali-Baja. Today, the future of trade policy governing our cross-border commerce is uncertain. Unless Congress ratifies the United States-Mexico-Canada agreement, or USMCA, we risk losing the trilateral trading block which defines our competitiveness. This additional threat and uncertainty also carry a cost.
In Cali-Baja, we repeatedly face the contradiction of living in an interconnected society with the barriers that divide us. Our region has continually worked to reconcile these opposing forces. The economic growth brought by NAFTA combined with a lack of investment in infrastructure led to increased traffic at our ports of entry. The Otay Mesa Port of Entry was built in 1983 to accommodate commercial truck crossings creating bottlenecks at the San Ysidro port. In 1995, San Diego served as the inaugural site for the Sentri program to expedite travel for prescreened vehicles and passengers. We were also one of the first sites for a pilot program to allow joint cargo screenings by U.S. and Mexico customs agents. Today, we have our sights set on the finish line of the expansion of the San Ysidro port. Modernizing the busiest land port in the Western Hemisphere has taken more than 10 years and a $740 million investment. One of the Chamber’s greatest successes was securing support from the entire San Diego Congressional delegation to ensure funding was allocated in the federal budget. In back to back victories, we also celebrated the opening of the CrossBorder Xpress, an airport terminal connecting San Diego to the Tijuana International Airport via a bridge over the physical barrier that separates our countries. We tout this bridge as the greatest symbol of our region’s interconnectivity. It symbolizes what’s possible in our continuing work to bridge economic and political divides – which is the best path to resolving the challenges we face.
Rarely do we have all the answers to our region’s problems, yet in this case we do have options. We must refocus efforts on improving efficiencies at our ports by implementing technology, meet mandated customs staffing levels, construct a state-of-the-art Otay Mesa East Port of Entry, reestablish the rail port of entry at Tecate for moving cargo. And, we must ratify NAFTA’s replacement, the USMCA. This is complex to be sure, but if the history of our region tells us anything, it’s that together we can succeed.
Paola Avila is Vice President of International Business Affairs for the San Diego Regional Chamber of Commerce.
