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tv   CSIS Hosts Discussion on U.S.- Mexico Border Management  CSPAN  February 27, 2017 9:00am-11:24am EST

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>> okay. if we could begin. if everyone to take their seats, please. good morning and welcome to the center for strategic and international studies. my name is michael, the director of the americas program here. for those of you who are here for the first time or tuning in for the first time, csis is a bipartisan nonprofit public policy center dedicated to promoting broad policy dialogue and research on foreign policy and security issues that matter most to our country and to the
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rest of the world. for the past six years, for the past six or csis has been named the world number one think tank on international security issues by the university of pennsylvania's think think tank index. in the first 10 months of our activity we focus most of our programming writing and research on mexico, venezuela, brazil, argentina and the caribbean. to underline the fundamental importance of the bilateral relationship between mexico and the united states, csis laster launched a special effort to look at mexico but we call it the u.s.-mexico futures initiative and with one of the most talented specialist on mexico leading this initiative. kimberly breier a studied and worked on mexico and latin america for more than 20 years in the public and private sectors. before joining csis last june she worked for five years as a vice president at a consulting
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firm that did country risk assessments for private clients, mostly on mexico issues. for the past two years, she has participated in the george w. bush centers north american competitiveness initiative focused on north america border infrastructure and energy policy. previously kim server more than a decade in the u.s. intelligence committee as a political analyst and manager. in 2005-2006 she worked at the white house on the national security council house on the national security council staff as director for mexico and canada. we could have no one better qualified to lead this initiative than kim. with that i'd like to rent the meeting over to kim who together with a group of other mexico experts will guide us through some of the critical border issues that been such an intense focus of public attention in recent weeks. before this we are required by law to make a brief security announcement. in case of any emergency please exit the building by the same entrance that you came in.
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there will be guidance from csis staff in cases happened and there also emergency exits in the back of the building. thank you all very much. kim. >> good morning, everyone. thanthank you, michael, thanks r coming, everyone, this morning. i think with a very timely topic this morning when we started to plan for this panel and we did know that we're going to be having it monday morning following the visit of secretary keller -- kelly and tillerson to mexico so we can be thankful for look dumb luck in the time this morning. i think i would've been timely either way. as michael mentioned csis begin a new initiative last year of the u.s.-mexico futures initiative, which was founded on the premise that the u.s.-mexico bilateral relationship is one of the united states most important and urgent relationship in the world. we believe the relationship should be governed by a clear strategic direction that values importance of the role of our
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southern neighbor and working with united states to address the full range of security and commercial priorities that we share. today we're here to talk about the u.s.-mexico border, the place where nation-states at our interests meet. in the past several months in the united states we'v weave wen having a national conversation about border security. that conversation is legitimate and necessary as providing security for the mac and people, the primary function of our system of government. in the modern world the transnational threats of all kinds having a secure border is essential. i want to add that a conversation about the u.s. border also touches on another major u.s. national interest, which is the commercial side. economic security is national security, and our border plays a key role in allowing flows of legal people and legal goods in and out of the united states. the image that we currently have in our minds of the border is one of a barrier but what we hope to do today is div type a little deeper into the functioning of the border, and
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its role in meeting the door responsible is at the same time being secure and impermeable by threats while being open enough to allow the 1 billion and legal goods and people that pass through the u.s.-mexico border every day of the year. we want to have a conversation today at about two national interest both security and commerce. to do that i want introduce another visual, another framework for thinking about the border. the border needs to be both a barrier and a conduit at the very same time. the image may work better for framing the debate is thinking about the border as a bow pics sometimes the valve needs to be fairly close to prevent threats of entering or exiting. at other times it needs to be open to allow for close in two directions. it's actually a very sophisticated valve. both of its function to be open and close are legitimately related to u.s. national interest. to help us think this all through we have two panels this morning featuring experts on various aspects of border
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functions from both the security and commercial perspective. we've invited speakers to give us little bit of ground truth. our panel to clean speakers from both the u.s. and mexican governments, american and mexican experts and people who are joining us from the states in which they live and work, texas and california, key border states. i want introduce our first panel which will be let off by pamela starr. pamela i'm thrilled to say it's a csis nonresident senior associate and traveled her today from california were she's an associate professor of international relations at the university of southern california. pam is one of the states leading expert on mexico and u.s.-mexico relationship and her full bio is in the packet which has been available to you on your way in. she will be joined by representatives of both the united states and mexican government. i want to first welcome josé martín garcia, currently the representative of the ministry of finance at the embassy of mexico.
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you have his full bio in your packet but one thing i cannot go without pointing out is that josé martín has been working in the mexican embassy 1992. i think it is more than fair to say that he is the institutional memory at this point of both governments, the united states and mexico, on border issues. we're also very happy to welcome mike huston who is joining us from the department of homeland security, and he is the director for the americas and coordinates their dhs engagement with other countries in the mr. including mexico well as overseeing policy development on border security issues. thank you very much for coming. >> so good morning, everyone. i want to thank you for rating this cold weather for me because i was going through an entire winter where it was cold in out that it was here. you still get cold weather here.
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the border is where the rubber hits the road and u.s.-mexico relationship, talking issues of trade, security, immigration, the core core issues and the bilateral relationship. my task today is to sort to provide a quick overview of bilateral relations today. i would like refer to the bilateral relationship today as being at a peculiar moment. neither good nor bad, but just something unusual that we haven't seen before. prior to the rise of candidate donald trump, the relationship was uniformly lauded by practitioners and analysts alike as being the best it'd ever been, characterized by close collaboration, mutual respect and partnership across the broad spectrum of issues in the bilateral relationship, including security mashes, a historically sensitive issue for mexico. with trump for us as candidate and i was president, to mexicans as immigrants, exiting
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immigrants as rapists and murderers and to mexico place full of bad hombres, his spreading to deport tens of thousands of undocumented mexican migrants, is promising to build the wall between the two countries and to rather extend the current security barrier between the two countries at insisting the end of mexico pay for it, and then threatening to pull the united states out of the north american free trade agreement, we can now say that the bilateral relationship is now more tense than it has been at least a generation, potential in nearly a century. this combination of deep institutionalized cooperation that still exist between the two countries with tension emanating from the top of the u.s. government is something we've never seen before in the u.s.-mexico relationship. precisely what we go from here is somewhat unclear, but what is clear to me is that the relationship is unlikely to return to life pre-trump in status quo anytime soon and, indeed, it's unlikely to look
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like anything we've seen previously for quite some time. simple but this is because mexico no longer trust the united states. it doesn't trust the united states to be a reliable partner and a reliable neighbor. it's been stunned by how quickly the generation of effort to transform the image of mexico and the united states from the problem to a partner has been reversed. it is shocked to discover the united states is once again willing to exploit the power differential to blakely attempt to coerce mexico into doing our bidding. it has been slammed economically by trump's rhetoric which is played into pre-existing economic weaknesses and mexico to generate a collapse of the peso, to undermine direct investment, to undermine consumer confidence and as result generate anemic growth and job creation. the shock of being disrespected and treated once again as an underling has revived in mexico a latent but powerful string of nationalism.
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while this new mexican nationalism is not as anti-american as in the past, it is profoundly felt, profoundly anti-trump and it is unlikely to wane anytime soon. mexicans have been reminded the united states is at once its greatest potential for life and its greatest potential adversary. as an aside people constantly ask me if the mexican reaction to the politics and rhetoric study trump administration might lead to the victory of the nationalist candidate and mexico, referring to the left-leaning candidate, and my aunanswer is i have no idea if e is going to win. he is well-positioned. it's unclear that he will win but is clear to me that whoever the next president of mexico would be a nationalist. whether he or she is elected. it simply because sentiment of electric. so politicians are playing into that. into this mix of use coercion and mexican nationalist response we have to add the profound
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weakness of president enrique pena nieto. what part of approval at just 12% is the most unpopular president since we have measured such things. this reflects corruption in his administration and in the administration of covers that are close allies to him. every flex rising crime rates and impunity and reflects an anemic economy that despite promises has not turned, found high gear. and it is punctual last month by a 20% increase in gasoline prices which has revived the fear of inflation amongst xe can consumers. in this context not responded to president trump's aggression or being seen as getting into american demands or if not protected interest of mexicans living in the united states would be political suicide. so what does this bilateral relationship mean for what is his broad context means for the poor issues and the bilateral relationship?
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let me take the issues one at a time. i think that would be the best way to approach it. let me start with security. this is the year of the bilateral relationship that is least likely to suffer from the current tension of relationship are rather let me say, the last that is apt to feel the impact of this. this is because mexico understands that the drug trade is as bigger bump for mexico as it is for the united states. violence associate with organized crime resents a huge security challenge for mexico. some mexico is not eager to and bilateral security cooperation. if that ends it's going to be more likely to come from your side pic of the united states threatens to cut it off, mexico will say okay then. mexico also understands the importance of cooperative with the united states on counterterrorism. it knows an attack on the united states emanating from mexico would be a disaster for mexican national interest. it understands that its geographic position makes mexico and essentials a good ally the
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united states and its weak power position means mexico doesn't have a lot of latitude to deny the united states an issue didn't essential to u.s. national security. while a different mexican government might approach secreted cooperation tivoli, taken with regard to fighting organized crime, they are likely to threaten the united states with noncooperation in this area. let me turn second to immigration. i realize immigration is not a topic of today's event, but to ignore it would mean that we would be, it would be really impossible to talk about security and commerce. this is true for at least four reasons. first, mexico's insisting any renegotiation of its trade agreement with the united states include security and immigration. second, this is the issue that currently dominates bilateral relationships. this is where policy is being made. trade policy is still theoretic.
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we don't even have a commerce secretary in the united states, let alone a u.s. trade representative approved by the senate. and security cooperation is still running on its institutional inertia. as such, immigration is setting the context for the security and trade cooperation between the two countries. the trump administration policy thus far regarding deportations of undocumented migrants and extension of the southern wall and it's at the mexico pay for it has made mexico furious, poisoning the rest of the bilateral relationship. and finally the united states is very vulnerable to mexican pressure on this issue. let me just elaborate on that briefly. the united states cannot return deportees without the cooperation of their home country. mexico has been a highly cooperative partner when it comes to deporting mexican immigrants. mexico is also aggressively police the southern port on behalf of the united states. mexico last return 140,000
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central americans which were bound for the united states. but the administrations plans for more aggressive enforcement immigration laws and the rhetoric surrounding it has tested mexico's patients. in particular recent homeland security guidance memos laying out administration plans for aggressive enforcement of immigration law was bad enough given its content for the u.s.-mexico element but it also has a provision for non-mexican asylum seekers to be sent back to mexico if they arrive through mexico to wait their hearings. mexico went ballistic. it made it clear they will never accept a unilateral imposition by the united states on what mexico must do. this matters because beyond poisoning the climate for the -- back kelly tillerson visit to mexico last week which was trying to reduce tensions in the
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bilateral relationship come this threaten the position means it has the capacity to clock up the u.s. immigration detention system. thereby, getting the deportation process. mexico's former foreign minister and independent presidential candidate has been called for mexico to strike back to the united states by refusing to accept any deportee unless he or she can prove that she's mexican. the idea is since a large number of undocumented mexican immigrants to the united states do not have mexican documentation, the united states will be forced to turn them back. the mexican government has expressed zero interest in doing this. however, if the united states insists upon forcing mexico to accept non-mexica non-mexican c, mexico will be forced to check all of the papers of those being sent back across the border and will reject mexican citizen sedona paperwork, thereby doing exactly what jorge wants them to do which is to clock up the u.s. deportation system.
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-- clog. finally mexicans just stop returning central american migrants and let them pass, thereby dramatically increasing the number of migrants crossing the southern border. so why would the trump administration constantly and consistently act to poison such an important bilateral relationship in the area of migration? i have three potential explanations. one is the trump administration seller doesn't understand mexico, which is possible given the fact that you've got no latin america specialist of the national student council, let alone a matching specials and certainly none that are within the white house. second, he understands and doesn't give it i think this is the least likely of the three options. most likely i think he understands and is killing two birds with one stone. he is appealing to us domestic political constituency, and at the same time trying to keep mexico intentionally off-balance for trade negotiations.
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if this is the strategy, it's misguided because all he is doing is getting mexico's national hackles up in hardening the position when it comes to negotiating on trade. so let me briefly turn to trade. unlike security, commerce is an area where a nonproductive outcome is not the most likely scenario but it is a distressingly likely scenario. the two administrations monoline simply do not mesh. trump wants to bring jobs back to the united states from mexico and reduce the trade deficit with mexico, and has constantly returned to the idea of using taxes on mexican import to achieve these objectives. mexico has made it clear that it will not accept of this or any other outcome that and divides mexican national interest. and given the domestic political context in mexico, mexican negotiator simply cannot be seen to accept an outcome that harms mexican interests. texaco also has some very good
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cards to play in the bilateral trade relationship. this is an area where mexico's most volvo to trump administration pressures. the structure of the mexican economy makes it highly dependent on trade and capital flows with the united states but it's a place where the united states is vulnerable to mexican pressure. the united states is more dependent on trade and capital flows with mexico than most americans realize, and mexico is laying the groundwork for exploiting the many vulnerabilities the united states has. mexico first of all has experience targeting taxes on trade to whether will exact gratis political costs for the united states. they did this during the trucking dispute quite precisely, and they are setting the groundwork to do it again on the renegotiation of nafta. mexico is experiencing negotiating as well with argentina and brazil. there negotiating his new sources for agricultural inputs
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specifically corn. mexico currently import 80% of its gone going from the united states and is looking for new sources of those corns to go to target corn farmers with tariff provisions if need be. thirdly, without nafta, trade in the bilateral relationship would revert to wto compliant trade rates, tariff rates. to the united states that's 3% % but that's the rate the united states charges trade with the rest of the world. mexico has a slightly higher rate, 8%. so the united states exports to mexico would hurt more than mexican exports to the united states. at an agricultural goods, mexico's compliant rate is 20%. so this outcome would hurt the united states more than it would hurt mexico in terms of experts -- exports. and finally mexico's made it clear that it will respond to any u.s. import taxes with taxes of its own on trade. with my final comment, more
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productively, mexico is also aggressively playing the china carpet we've all heard the numbers that imports from mexico into the united states contain 40% u.s. content. china is only 4%. mexico is using that fact with the trump administration but mexico also realizes that the united states needs it to remain globally competitive. if the united states wants to reduce the trade deficit with china it needs to trade with mexico because we produce things together and produce things competitively together. and finally if taxes are imposed on trade with mexico, it's not going to leave those job to come back to the united states. it will lead those jobs to go to another low-cost producer in order to be able to complete -- compete globally. and with that i will finish my remarks. thank you very much. thank you very much, pamela. josé martine, i think you are up spent the morning everyone. it's great to be here. when kim and i spoke about this
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panel, she and i agreed that it would be perhaps good that i share with you some of the stories of the last 25 years. so that you can see how did we get here to this very stronghold between our administration of whatever we do at the border. well, almost 25 years ago when i arrived here we begin negotiating a tax treaty between mexico and the u.s. because we were starting negotiations on the free trade agreement, that now we call nafta. we negotiated tax component of nafta. the uniform regulations to implement nafta, and we created nine working groups at a time. but those working groups, we ran from i.t., not too tied to harmonize our data requirements for customs, to labs. for example, our labs in customs in both customs, actually with
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candidate to harmonize the methodologies and how did the analyze any goods that are results of the -- to come up with, the same result so that we would be classifying those exactly the same way. on verifications of origins, et cetera. then we moved on. after we completed the work, we created a brother working group to recall the u.s.-mexico border working group. and we divided the board in four regions. in these working groups or subgroups we focused on infrastructure projects. our main goal was to move cargo out of the urban areas. as you take a picture 25 years ago, and today you see that through time we have been moving only cargo out of the downtowns
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and all the cities, all our projects now or cargo bilateral trade moves through different areas with better planning and highways and bridges, et cetera. we create and enforce the working group because security has always been at peace, a very important, important piece of the equation here. also in the mid-90s actually we developed something something we called the north american trade automation prototype if we begin moving trucks from one site that you are one site to i think, with things were testing at the time. then, of course, we had the unfortunate events of 9/11, and we had to rethink everything we were doing and try to inject more focus on security. and we did. we created the u.s.-mexico partnership for security and prosperity.
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we created 10 working groups, three of those working groups were focused on the border and many of them on customs and security. our working groups were always developing initiatives, programs, that at the two components, security and facilitation at the same time. later i will mention some of these initiatives and you will see how each of them has a strong facilitation component but at the same time a stronger soccer security component. because we come in customs, in our dna we cannot accept that we're going to facilitate trade if we don't secure trade first. it's in our dna. in customs, not the red cross. where are not an ngo. we are customs. and so we have to focus on security first, both the u.s. customs and mexico customs, so that we can facilitate trade. and that's how we begin
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developing many initiatives. to give you an example, in the early 2000s actually after the 9/11 events that when the state framework of standards and the border customs initiative was developed with commissioner bonner at the time, we began working in many initiatives so that we can implement the customs trade partnership against terrorism in mexico with mexican companies. and to create our own program. then at the same time to provide facilitation for those companies that decided to work the extra mile, to walk the aftermath and then say we have to deliver on something for you because you have i think decrease your security standards. and for example, we develop this fast lanes of free and secure trade lanes. just to give you an example are just a number. today, 41% of the mexican exports in terms of value, 25%
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in terms of value to the united states move through fast lanes. that's more than what the u.s. imports from the uk, france and spain combined. more than what the u.s. imports from many european countries combined and nation countries. so these companies, the companies that secure the supply chain and move cargo through the border, they do it through these fast lanes and they get this benefit. then we decided that we have to take a next step, when the new administration arriving in the u.s., we moved forward with more interagency level cooperation that we created the 21st century border concept. but at the same time, of course, mexico customs and use customs
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continue working under their own arrangements, under their own agreements. we developed a declaration of principles actually mike and i redacted that. we worked on that document, and then bilateral strategic plan, a customs bilateral strategic plan with very specific initiatives that i will mention some of them. these bilateral strategic plans of all these components, security components, trade facilitation components and infrastructure modernization components. through these working groups that we created under this declaration of principles and bilateral strategic when we began on th the 20% reported. other working groups come in agency working groups that were created between the two governments. let me mention some of the initiatives that we have developed in the last, in a few years. so just to summarize what we've done, we've done in the last 25
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years and where we are today. cargo inspection. .. >> through this program, for example, a shipment that is inspected in laredo, texas, is not inspected when it arrives to mexico. and companies have actually shared with us the results, and
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they say that they are saving 50% in terms of costs and 60% in terms of time, wait times or processing times. we are looking at expanding that -- well, we opened the second one in january 2016 in alta mesa, and we are expanding that one as well for agricultural products. there's a third one coming in chihuahua, and we agreed that we would look at u.s. airports, more u.s. airports for cargo bound to mexico. but this is a magnificent program, and it shows exactly how can we work very well when we work together and having customs officers from both sides working together at the same facility, fully uniformed, fully armed because we have to go through these amendments in our legislation to allow for this. and the private sector, of course, is very happy about it, the companies that participate in them.
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there's a bigger, much bigger, larger or more ambitious program, it's called the cargo harvest initiative. we are harmonizing all modes of transportation. today we are about to complete, actually in the next two or three weeks, four weeks, the harmonization of our rail manifest for northern cargo. so rail companies are filing, of course, electronically the same data set to both of us. that facilitates trade for railroad companies, but at the same time increasing compliance and increases security for both countries. and air. we, mexico actually implemented the new air cargo manifest in 2015, the u.s. is getting there. i guess in the next few months, the u.s. will catch up, and then we will have a harmonized air
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cargo manifest pretty soon. for maritime, that's the opposite. we decided, in mexico, to copy/paste the u.s. maritime cargo manifest, and we did, and it's going to be completed, again, in the next two or three weeks. and on truck, we have begun discussionses on how to harmonize our truck manifests. i would say by the end of this year, actually before the summer we will have completely harmonized rail, air and maritime. truck during 2018. so by 2018 we will have a completely harmonizedded cargo manifest -- harmonized cargo manifest. trade facilitated to all the apartments but at the same time increasing compliance and increasing security in our bilateral trade. we also reached a mutual recognition agreement between -- [inaudible] and the mexican authorized economic operator program. and we did the same with canada,
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the u.s. had the same with canada, and now we're talking about how to trilaterallize our arrangement so that a shipment from montreal to monterey, two cities with the same name in different languages, but they will actually reach, go through our customs processes in a harmonized way and completely secure way. we are sharing rail images of the border. 17% of our trade moves on rail. and let me go back around 15 years or 20 years when mexico privatized rail -- because it was a state-owned company, a very inefficient state-owned company, and when we privatized rail, at that time only 1% or less moved on rail. today 17%.
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and we projected in about ten years we'll reach around 30% of our bilateral trade to be moved on rail which is the same average that you have between u.s. and canada. so i guess we're heading towards a north american way of moving cargo, and that will impact all the sessions we make for infrastructure at the border. but knowing this and having nonintrusive inspections systems on both sides of the border, we are capable now of sharing images and increase, facilitate process for cargo but at the same time increasing security on both sides of the border. data exchange, we exchange billions and billions of data elements every day. for every shipment crossing the border, for information on passengers and cargo and vehicles, and this will -- our intention is to keep increasing this cooperation. infrastructure. you've heard about some of the
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projects we've launched last year, the city wanna airport -- the city wanna airport -- the tijuana airport bridge so that people in southern california, they don't have to travel long distances to get a, catch a plane to asia. you can get it from the tijuana airport. but at the same time, we open another port in chihuahua, on the chihuahua/texas border. but most importantly, i would say that infrastructure, our most ambitious program now is the alta mesa east. we are working on that. alta mesa east will be the first infrastructure project that we design together, we build together, and we will operate together. custom, cbp and the mexican immigration institute, we have completed the design of the processes for both cargo and pedestrians and passenger vehicles.
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so now our engineers from both sides are designing that port based on these processes that we have just developed. on the enforcement side, we have a strong enforcement working group, and we have a -- [inaudible] unit, we share data, we analyze data together. and with that we also have a program on risk management and targeting. we have, mexico, of course, has two analysts here at the national targeting center. there's connection between the national targeting center and our targeting center in mexico, and there's a 4/7 -- 24/7 cooperation. we do joint risk management for cargo approaching north america or departing from north america. i think i will stop there. we have a long list of things that we've been doing in the last 25 years, and that shows how this strong cooperation actually delivers in both trade
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facilitation and security. i would finalize by saying that what we've been doing, actually, is developing a north american customs platform. if you put all the pieces of this jigsaw puzzle together, at the end of the day what we're building or what we're constructing is a north american customs platform. and that's why we believe we should preserve that and expand that cooperation, because we both win by having this data exchange, risk analysis together, targeting, good infrastructure. and always with the vision of facilitating trade and improving security in all of our projects. that's what we've been doing. i'll stop right there. >> thanks, jose. mike? >> thanks. i actually, i'm hoping to kind of shoot the gap a little bit between pamela and jose martin's presentationings. i want to -- but to do that, i want to take a step back, and i realize for people who have been following mexico, the little
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narrative i'm going to talk through is not going to be surprising, but it's important to set the stage, i think, for what's happened in the last, you know, decade with our relationship. finish so the u.s./mexico border is the most-crossed border in the world, it's 2,000 miles long, but i think if we look back at what we've done in the past, it provides some really interesting insights into how we might look at things going forward. so the border was created as we currently have it roughly, right, and there was a minor adjustment following this, but in 1848 the treaty of guadalupe pay hidalgo which was the result of a war. so the border, from the moment of its creation, embodied this tension. there was a friction that existed at the border. over the ensuing 150 year, there was an asymmetry that developed economically, politically, but the border provided a point of parity, right? there was a place, it was the
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place where national sovereignty could be excerpted equally, because mexico had as much control of the border as the united states did. so even though we were political and economic differences, the border became this line of contention. from the mexican side then, the border and things north, it was viewed with suspicion. there were sovereignty concerns. it became sort of the symbol of the ominous figure in the north. for the united states -- but conversely, it was also a place of economic prosperity. so it sort of was a schizophrenic in a sense. from the united states' perspective, though, it was equally schizophrenic. we sort of looked down on the poor, corrupt neighbors to the south, yet relied on them for labor. i know my mother grew up in rural arizona and talks regularly, you know, she talks regularly about people coming across the border to help on the ranch. and that's just the way business
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was run back then. so the old adage about foreign countries that happen to be neighbors was, i think, is pretty accurate description. this played out in national policies. what was talked about in d.c. didn't really have a lot of resonance with what was actually happening at the border where we had communities that were interconnected, where people had lived there for generations x it was really the third country as people described. and so there was this very strange dissonance in the u.s./mexico relationship where politically there was one thing in the lives of the people who lived on the border, it was something else, and for the most part, it was largely ignored. that changed. we saw nafta came, we saw the increased buildup to the bush administration of the border infrastructure that we currently have. but the real change, sort of the ground shift in my personal
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opinion happened in 2007-2008 with the advent of the merida initiative. the thing that changed is both countries stood up and for the first time, i think, acknowledged the respondents and the challenges -- the responsibilities and the challenges that the other was facing. the bush administration stood up and said, yes, it is true that the money and the guns that goes to the cartels largely comes from the united states, because we are the largest consumer drug market in the world. and the mexican government stood up and said, yes, and it is true that our cartels are providing and producing those drugs and a source of violence. and we both then said we each can't solve this individually, we have to work collectively to do this. and the initiative was the framework that allowed that structure to be implemented. where the u.s. provided foreign assistance and the mexicans then matched and exceeded that effort with the money that they put into their own security and trade programs.
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and so that really, in my personal opinion, was the beginning of what we see now as a joint approach to dealing with common sets of issues. that was primarily security, though there was a lot of economic stuff built into it, but the narrative was primarily a security narrative. that then continued to mature through the, in the obama/calderon 21st century border declaration which happened in 2010. what that did was it took then this relationship that was largely security and started to infuse the notion of border management as part of our bilateral relationship, that it wasn't just the the big issues of security and economics, but actually that managing the border was an important part of our bilateral relationship and that we needed to do it together which was consistent with the language that had been used the talk about the merida initiative. and then we saw a further development of that with the high-level economic dialogue that was started where, again, we started talking about
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economic issues within the context of joint management. and so over the course of this about five-year period, we developed a series of intellectual or conceptual groundings that built a path for us to engage. i'm going to sort of tick them off a little bit, but i think they could be expanded or modified. this is just a short list. so the first is we reframed previously contentious issues as joint issues. we started talking about them jointly, that we had common shared interests, and that was an important part because it allowed each of us the political space to operate together. secondly, we accepted responsibility for those joint issues. each of us acknowledged we had a responsibility for the challenges that we were each facing and that we could only meet our own responsibilities by working with the ore partner. the other partner. third, we started to operationalize what had previously been political problems. we took it out of the sphere of politics and pushed it down into
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the area of collaboration and operation. and that has the magical effect be of allowing people to cooperate. because you're no longer debating the merits of a particular position, you're starting the try to figure out how to solve a particular problem. not at the political level, but at the operational level. and the third, and this is sort of my own parochial belief coming from dhs is we started to redefine what border flows were. we stopped looking at the border as sort of this line in the sand that runs east and west, and we started talking about flows as they go north and south. because we began to recognize that, for instance, trade and migratory flows coming up through mexico didn't always start in mexico. sometimes they started in areas further south or in other hemispheres, and they just came through. and so to secure those flows, we need to actually look beyond just the physical border and, in fact, our physical border became the last line of defense, not the first. the first line of defense often was much further away.
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from a dhs-specific perspective, these frameworks then allowed us to make a number of sort of connections that then allowed us to work with our partners on both security, migratory and economic issues. so what these are are, first, we began to see that borders are multidimensional and can't be managed by a single entity, that the idea that the united states alone could manage one side of the border didn't really match with reality. there is another side, and the mexicans are on that side, and we can really only manage the border together, right? because they have half of the responsibility. so that was one of the things. the second is we, as pamela noted, we started talking about national and economic security as a partnership. that our national and economic security is feint upon mention -- is dependent upon
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mexico's national security and canada, i would add, as well. third, as we started talking about security and facilitation as two sides of the same coin, for a long time it was framed as you could facilitate goods or secure goods, but you can't do both. we then said, no, no, no. actually, the more secure a person or a product is, the faster we can move it through. and so we removed the dichotomy which wasn't actually representative of reality anyway, and we began to frame flows, the more secure a flow is, the faster it goes. relatedly, we started using risk management. we started the recognize, i think very clearly, that not everything poses the same amount of risk, that some things are more risky than others. and, in fact, the more we know about something, the less risk is attached to it because we know about it and, therefore, it can move more rapidly. and so we began the process and we're still doing this with some of the harmonized manifests and the trade programs where we're actually starting to get deeper information about specific flows
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so we can move them more rapidly. and that's all based on risk management. and then last is this, the notion of joint responsibility and co-management, that it underlines, basically, everything we do. the reason i bring these, those particular things up is i think what we've shown is that we know as binational partners how to work together. we've sort of established what the processes and the ideas hook like. look like. and i think, you know, i think we've moved to the point where the relationship that we currently have may have bumps along the way, and i suppose that's likely no matter what, but that the idea that we would go back to 1950, i think, is silly, right? we've crossed some threshold where we may have challenges, but we're not going to go back, in my personal opinion, you know, to where we were a decade or two or three or four decades
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ago. and, third, i think the fact of the matter is, is because of our shared border our futures are interconnected, and there's really no way around that. and so maybe i'll just leave it at that, and then we can move from there. >> okay. thanks, everyone. i think to summarize what i just heard, which this is the thing that's fascinating about the u.s./mexico relationship particularly to at the border, n you start to dive into what is actually going on every single day between the two governments, you begin to realize that when the political relationship at the national level maybe isn't at its highest moment in memory, what is underlying it both as a positive and what may be at risk if we don't proceed in a way that tries to mend the breach. there's one question i wanted to ask either jose martin or mike. an a acronym slipped in, and i think we should probably explain
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it for the audience. i actually made a joke at a meeting once, i gave an entire sentence that was formed entirely of acronyms related to cross-border trade, and everyone in the room understood me. but could you talk a little bit about cp-pat and what it is? >> well, it's a u.s. program. i mean, before cp-pat there was this business anti-smuggling coalition. it was a private sector-driven initiative where the companies approached u.s. customs at the time, cbp didn't exist yet, so they approached u.s. customs, and they actually asked them, i mean, if i do this and this and that to secure my supply chain from point of origin to final point of destination, would you give me something in return, would you facilitate my process
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of my shipments. and u.s. customs said, yes. and at that time the business anti-smuggling coalition flourished somehow, no? and it thrived through the years in the '90s. then we have 9/11, and u.s. customs, the cbp, you know, newly created -- and actually commissioner bonner pushed this idea of customs needed to create its own program. so it took basc as it was and improved it with some additional elements. and actually he brought this idea up to the global arena at the world customs organization, and he with all the countries -- actually, i was a member of that group, there were six countries, and i used to travel a lot to brussels, and we developed a safe framework of standards that the wco developed.
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so the customs trade partnership against terrorism is the revolution of basc where the private sector is very supportive of it as long, of course, if they get some facilitation in the process, no? so the program looks at the lighting, the background checks of your personnel and where do you get the packaging, what do yo do this, the whole supply chain from point of origin until it reaches its final destination to make sure that all of the security elements for that shipment are combined into that shipment so that when it reaches the u.s. border or, it's secure. so, and with the same framework standard, we began developing similar programs. in mexico we created something that was called the neec, and then we changed the name to we complied with or consistent with
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wco, with the organization, and now it's an economic operator program as all the countries in the world have it like that. i believe bonner's idea was a magnificent idea, brilliant idea. at the end of day, i'm not saying that the private sector is not to be trusted with the development of these programs. actually, it worked for many years. but after 9/11, the world changed somehow. so, and what bonner actually took that, improved that and make it globally. we cannot live in a world without supply chain security programs these days. we simply can't. and mexico has been extremely supportive of this, and that's why 41% of our exports to the u.s. are compliant. or authorized economic operator compliant at the same time. the problem we have together of this mutual recognition
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agreement, what we try to intend to provide the same benefits or equivalent benefits to companies participating on both sides of the border. so when they reach to our port, they will get the express lanes or fast lanes, or they will get reduced inspections based on risk management, of course, and that's what it is. but it was a brilliant idea, and the private sector continues to be very supportive. >> mike, did you want to comment on it? >> no, only to say that when i is have questions, i call jose too. [laughter] >> he really is the institutional memory. one thing that has come up, i think, very clearly in all the discussion, all of you have mentioned it, that there are many stakeholders in this relationship, and sometimes we think about the relationship being between, you know, the united states and mexico, and we talk about washington and mexico city. but part of the reason why we invited guests today from border states is to bring in the broader perspective on this and
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the broader conversation, both the private sectors and the people. and i wondered if any of you would like to comment on kind of the cross-border community relationships and how you see the development of particularly key points of entry, the communities on either side. >> i'll make one comment just really briefly and then let these folks comment. so the one thing i think that's interesting is i feel like, you know, the border communities themselves have always viewed themselves as unique, right? we have the columbus day celebration which has been going on forever which, if you've ever been, is a really sort of odd -- i don't mean that in a negative way, but it's a really unique celebration. i mean, it's really remarkable what that sort of symbolizes. and the border from san diego to texas is different. there's different geography, different traditions and people, and the border, you know, just -- everything looks different.
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but the fact of the matter is that the border communities understand the border better than everybody else. the challenge, of course, is that the border communities have not been, have not done as well in talking about the border as everyone else. their perspective, i think, is probably undervalued and probably underrepresented in the national dialogue. and i don't quite know how that gets fixed. i mean, when you have politicians at the national level in d.c. and mexico city talking about the border, it is often the case that the things they say don't always align with the way the people in el paso, ciudad juarez, we talk about the border, people in nogales would talk about the border. and i'm not saying that's. that's wrong. i do think, though, there's an opportunity for the border constituent groups to be more
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vocal and more forthcoming about the things they see, the perspective they have, what the border means to them and what the bilateral relationship means. and i do, i think that's an area where we have some room to grow in terms of -- i think we're making small steps in the border infrastructure conversations, for instance, the local voices are much more prominent. and that's good. that's the way it should be. we have, like, the bbbxg, bilateral bridges and border crossing working group, through the 21st century border process we have the working group where we can really talking about those issues. but infrastructure may -- and i guess on some trade issues there's good collaboration at the local level, but it's not the border communities themselves necessarily. but i think there's an opportunity for that to be injected more prominently in the dialogue. >> we, from a customs perspective, we have created port security committees. all ports of entry at the border, they have these port security committees. they meet regularly.
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our port directors from both sides, and they address security issues, very specific security issues. and we took approach because instead -- this approach because instead of having this 3,000-mile-long screwdriver from washington, d.c. and mexico city, we said, no, no, no, you have to address these issues locally, and you have the invite the trade community, and you have to discuss this. and this is what we've been doing. actually, we've been replicating this at our southern border. we're developing these port security committees because it's a good idea to address local issues, security issues and then see how can we solve them or how can we support in the process to solving. these committees have also evolved from what we have trade committees, so we maintain those both because at the port security committees sometimes we have to discuss some security issues, no? in confidential ways, somehow to address these security issues.
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but we also keep the trade issues, the trade committees, i'm sorry. >> let me just add that the border communities are unique. they are as different from the rest of their individual countries as the two countries are from, toward one another. what i mean by that is the border communities are seen as both distant and peripheral from their capitals, and they're not understood by the politicians, most politicians in the capitals. i think they really need to differentiate between border communities and border states, because border communities are also different than border states. i'm from los angeles which is completely different than being from san diego. our relationship with mexico is really on a tate-to-state level -- state-to-state level. we're not living on the border in los angeles. and the attitude about the border is distinct when you get into the border communities. and just to reemphasize what mike was with saying, they need
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to have a louder voice in how we go about managing the border because it's their reality, and it's not a reality that's well-represented in washington and mexico city. >> let me add something to that. in mexico customs we have a saying when new personnel arrives to headquarters and they start visiting the ports, so they have, some of them come with these great ideas to solve all the problems on the border. and we always say, you know what? if you've been to a port of entry, you've been to a port of entry, just one. you have to know each port of entry. so the local communities know much better than us, and we should rely on -- we should keep relying on their input and see how can we support them. ..
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[inaudible conversations]
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>> good morning, everyone. thank you, michael and thank you for coming everyone this morning. we have a tightly topic this morning when they try to plan for this panel, we didn't know we would have a monday morning following the visit of secretary kelley and tillerson. i think it would've been timely anyways. as michael mentioned tennessee sis began a new initiative last year, which we founded on the premise that the u.s.-mexico bilateral relationship is one of the united states most important to nurture relationships in the world. we believe the relationship should be governed by a clear strategic direction that values the importance of the will of
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our southern neighbor and working with united states to address the full range of security and commercial priority we share. today we are here to talk about the u.s.-mexico border of the place for nationstates in interest me. and the past several months in the united states even having a national conversation about border security. the conversation is legitimate and necessary as providing security for the american people as a primary function of our system of government. in the modern world have been a secure border is essential. i want to add however a conversation about the u.s. border also touches on another major u.s. national interest which is the commercial side. economic security is national security and plays a key role in allowing flows of legal people and legal goods in and out of the united states. the image we currently have in our minds of the border is one of the barriers but what we hope to do today is bag deeper into the functioning of the border
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and a dual responsibilities of the same time being secure and impermeable by thread more opening of too announced the 1 billion legal goods and people that pass through the u.s.-mexico border every day of the year. we want to have a conversation today about to national interests, security and commerce. to do that, i want to introduce another visual, another framework for thinking about the border. the border needs to be a barrier and conduit at the same time it the image i think may work better for thinking about the border as the needs to be firmly close to provide threats from entering or exiting at other times needs to be opened to allow for flows in two directions. it's actually a pretty sophisticated golf. both of its functions to be open and closed are legitimately related to u.s. national interests. to help us think this all through, we had two panels this morning featuring experts on
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border functions from both the security and commercial perspective with invited speakers to give us a little bit of ground truth. our panels include speakers from both the u.s. and mexican government, american and mexican experts and people joining us from the states in which they live and work in key border states. i went to introduce our first panel led off by pamela trained to come a csi is nonresident the nurses it and traveled here today from california where she is associate professor of international relations at the university of southern california. tim was one of the leading experts on mexico and the u.s.-mexico relationship and her full bio is in the packet which should've been available to you on your way in. she will be joined by representatives of both the united states and mexican governments. i went to first welcome josé martín garcia. if you don't know him, currently the representative of the ministry of finance at the embassy of mexico.
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you have a full bio in your pocket, but one thing i cannot go without pointing out his joée martín has been working since 1992 and it's more than fair to say he is the institutional memory at this point of both governments come in the united states, mexico and border issues. we are also happy to welcome mike trained for joining us from the department of homeland security and his director for the americas and courtney dhs engagement with other countries including mexico as well as overseeing policy development on border security issues. thank you for coming. >> good morning, everyone. i want to thank you for arranging this cold weather for me because i was having an entire winter where was colder in l.a. than it is here.
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you still get cold weather here. the border is where the rubber hits the road in the u.s.-mexico relationship when we talk about issues of trade, security, immigration ,-com,-com ma core issues in bilateral relationship. given that, my task is to provide a quick overview of bilateral relations today. i like to refer to the bilateral relationship today has been a peculiar moment, neither good nor bad, but just something unusual we have been seen before. prior to the rise of candidate donald trump, the relationship is uniformly lauded by park missionaries and analysts alike has been the best it's ever been characterized by close collaboration, mutual respect and partnership across the broad spectrum of issues in the bilateral relationship including security matters, a sensitive issue for mexico. with trump versus candidate and now its president referring to mexicans as endocrine -- mexican
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immigrants as and murderers in mexico is a place full of bad hombres, undocumented migrants is prompting to build a wall between the two countries and rather to extend the security barrier and insisting that mexico pay for it in threat and to pull the united states out of the north american free trade agreement. we cannot say the bilateral relationship is now more tense than it has been in at least a generation, potentially nearly a century. this combination of deep institutionalized cooperation that still exists between the two countries for tension emanating from the top of u.s. government does something we have never seen before in the u.s.-mexico relationship. precisely where we go from here is unclear, but what is clear to me is the relationship is unlikely to return to a pre-trumping status quo anytime
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soon and indeed unlikely to look like anything we've seen previously for quite some time. simply put, mexico no longer trust the united states. it doesn't trust the united states to be a reliable partner and reliable neighbor. it's been stunned by how quickly a generation of effort to transfer an image of mexico and the united states are a problem to partner has been reversed. it's shocked to discover the united states is once again willing to explain the power differential in our bilateral relationship to blatantly attempt to coerce mexico into doing their bidding and it has been named economically by trumps anti-nafta rhetoric which has played into preexisting economic weaknesses in mexico to generate a collapse of the peso, to undermine direct investment, and to undermine consumer confidence in as a result, generate and unit growth and job creation. the shock of being disrespected and treated once again as an underling has an underling has revived in mexico late and a powerful strain of nationalism. the new mexican nationalism is
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not as anti-american as in the past. it is profoundly felt an anti-trump and unlikely to win anytime soon. mexicans have been reminded the united states was at once its greatest and adversary. people constantly ask me if the mexican reaction to the politics and rhetoric for the trump administration might lead to the victory of the nationalist candidates in mexico referring to the left-leaning candidate. my answer is i have no idea if he's going to win. he is well-positioned. it is unclear that he will win. it is clear whoever is the next president of mexico will be a nationalist, whether he or she is the lack of it. simply because of the sentiment of the electorate as the politicians are playing into that. into this mix of u.s. coercion and mexican nationalist roots on, we have to let the profound weakness of president henrique
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pena nieto for popular approval, he's the most unpopular mexican president since we have measured such things. this reflects corruption in his administration in the installation of governors that are close allies who had been rising crime rates and anemic economy that despite promises have not turned into -- high gear and is punctuated last month by 20% increase in gasoline prices which has revived the fear of inflation amongst mexican consumers. in this context, not responding to president trump's aggression or being seen as giving in to american demands or is not protect in the interest of mexicans living in the united states would be political suicide. so what is this bilateral relationship mean? what does this broad context mean for the core issues in bilateral relationships on the border?
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let me take the issues one at a time. i would be the best way to approach it. let me start with security. this is the area of bilateral relationship that is least likely to suffer from the current tension in the relationship are rather the last that is apt to feel the impact of this. mexico understands the drug trade is the date for the united states. violence associated with organized crime as in figure security challenge for mexico. mexico is not eager to an bilateral security cooperation. if it ends it will be more likely to come from the u.s. side and the united states threatens to cut it off, mexico will say okay, mexico also understands the importance of the united states on counterterrorism. and as an attack on the united states emanating from mexico would be a disaster for mexican national interest and understands its geographic position makes mexico an essential ally for the united
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dave and his weak power position makes mexico doesn't have a lot of latitude to deny the united states an issue deemed essential to u.s. national security. while different mexican government might occur security cooperation with united states differently, particularly with regard to fighting organized crime, they are unlikely to threaten the united states with non-cooperation in this area. then he turned second to immigration. i realize immigration is not a topic of today's event, but to ignore it would mean he would be impossible to talk about security in congress. first mexico renegotiation of this trade agreement with united states include security and immigration. second, this is the issue that currently dominates bilateral relationships. this is where policy is being made. trade policy is still theoretic.
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we don't even have a commerce secretary in the united states, let alone the u.s. trade representative approved by the senate. security cooperation is run on an institutional inertia. as such, immigration is that in the context for the security between the two countries. in the trump administration thus far regarding deportations of migrants and the extension of the wall and has made mexico serious. for the rest of the bilateral relationship. let me just elaborate they cannot return deportees without the cooperation of their home country. i've got a highly cooperative partner when it comes to deporting mexican immigrants. mexico is also aggressively policed its southern border on behalf of the united states. mexico last year returned with the central americans who are
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bound for the united states. the administration's plans for more aggressive enforcement of immigration laws and the rhetoric surrounding it has tested mexico's patience. in particular, and recent homeland security guidance memos laying out the administration's plans for aggressive enforcement of immigration law was bad enough given it content for the u.s.-mexico elements, but also such provisions for non-mexican asylum seekers to be sent back to mexico if they arrive through mexico to a fair hearing. mexico went ballistic and it made it clear that they will never accept a unilateral imposition by the united states on what mexico must do. this matters because beyond poisoning the climate for the killers -- but then together. the tillerson visit last week which was designed to reduce in the bilateral relationship.
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it has the capacity to clog up the u.s. immigration detention system thereby complicating the deportation process. mexico's former foreign minister and independent presidential candidate has been calling for mexico to start back to the united states for refusing to accept any deportees unless he or she can prove she's mexican. the ideas since a large number of undocumented immigrants in the united states do not have mexican documentation can the united states to be forced to turn them back. the mexican government has expressed zero interest in doing this. however, if the united states insists upon forcing mexico to accept non-mexican citizens of the mexico will be forced to check all of the papers of those being sent back across the border and will reject mexican citizens who don't have paperwork, thereby doing exactly what jorge wants them to do, clog up your deep rotation
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system. finally, mexico can just stop returning central american migrants and allow them to pass through mexico on their way to the united states thereby dramatically increasing the number of migrants on the southern border. so why would the trump administration constantly and consistently act to put in such an important bilateral relationship in the area of migration. i have three potential explanations. lunch is they don't understand mexico, which is possible given the fact that you've gotten a lot american specialists on the national security council little and mexican specialists and not within the white house. second, he understands and doesn't care. this is the least likely of the three options. most likely coming he understands killing two birds with one stone. he's appealing to his domestic political constituency and at the same time trying to keep mexico intentionally off talents for trade negotiations.
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if this is the strategy, it's misguided because all he's doing is getting mexico's nationalist been hardening position when it to negotiating on trade. let me briefly turned to trade. unlike security, congress is an area where non-productive outcome is not the most likely scenario, but it is a distressingly likely scenario. the two administrations bottom line simply do not bash. trump wants to bring jobs back to the united states from mexico and reduce the trade deficit with mexico and has returned to the idea of mexican imports to achieve these exact disk. mexico made it clear but not accept this or any other outcomes that undermine mexican national interests. given the political context, mexican negotiators cannot be seen for an outcome that harms interest. mexico also has some very good cards to play in the bilateral
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trade relationship. this is an issue where mexico is most vulnerable. they make it highly dependent on trade and capital flows with the united states. but it also plays with mexican pressure. the united states is more dependent on trade and capital flows of mexico than most americans realize i mexico's claim the groundwork for explaining the many -- >> will introduce her second panel here. the idea is to focus a bit more on the challenges the border infrastructure, points of entry and also the various models that we might look at everything through the future path of the two countries that want to take regarding points of entry in particular. first we have not learned, currently director for the head of the north american competitiveness initiative as the george w. bush presidential library in dallas. in keeping with transparency and full disclosure, i am fond of
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the work because i was fortunate enough to have been invited to participate a few years ago. that was also a former deputy assistant secretary for canada and mexico and he's going to lead us off and we will be followed by juan diaz was recently joined the sis is a nonresident associate. he's the regional manager of the texas a&m transportation institute. he spent more than 15 years researching freight transportation and logistics and his expertise is frequently sought out by the u.s. and mexican government. we have andrew redman is managing your other global strategies than he is here today at the san diego association of government to discuss the point of entry that you heard mentioned in our first panel, which is outside mesa east, the cutting edge new model for points of entry. in a past life, and andrew also
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worked as department of commerce in that nafta office. i would like to welcome our panel and handed over. thank you very much, kid. great to be here with you. great to be here in a hometown crowd. i would normally misplace and say it's great to be back in washington, but it's actually really nice to be back in dallas, texas during current stances. i was delighted to have this opportunity. thank you very much for the invitation here is the sis. it was very pleased to see that it's part of your presentation might remember a working group that is a great read of validation that i am happy to accept. sincerity mentioned the economic growth program at the george w. bush institute in dallas, texas.
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just a couple things about the bush institute, which is perhaps not widely known in washington. i talked a little more about her initiative, we've done it, we decided to focus on north america and what we are doing by way of next steps. the bush institute is a nonpartisan think and do tank located on the campus of the university in dallas, texas. founded by president and mrs. bush in 2009 to follow up on sensitive areas they felt particularly strongly about while in office. among other things, there's a military service initiative. some of you may have seen president rush on the today show this morning promoting his latest book, which is a table book of portraits of wounded warriors that he has painted and it's a very perfect teen book as part of its initiative to keep faith with the wounded warriors that he sent into harms way and
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the proceeds from the book will support military service initiative is one of the key initiatives at the institute of, which works with the department of defense, veterans administration and other stakeholders to smooth the transition from military to civilian life. there is a large program that follows up on the president's engagement and education reform within the united states and a number of leadership development programs directed in the united states. there is one for young leaders in emerging democracies like burma and south sudan and as one directed at encouraging women leadership in north africa and the middle east. and there's mine, the economic growth initiative, which began life as a series of conference in 2011, 2012, which led to a book that was published in 2012 by the institute called the 4% solution, which explored the policy agenda of required to
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return to the united states to attack the 4% annual growth. if you read the work, it is a very large agenda, which includes all kinds of tax levels, regulatory issues, labor market policies, and a whole gamut of things, including global engagement, openness, international trade, investment and immigration. so based on that, we thought we would focus our efforts in the first instance on the global engagement piece in the sun began about two years ago. when i came a year and a half ago, we were thinking about how to start and where to find a space that other think tanks and other organizations were not already focused on. it occurred to us that north america and nafta is really the
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cornerstone at how the united states engages with the global economy. it's really good dna that underlies u.s. trade agreements up to and including ttp in many ways and therefore it seems like a place that needed and focus. also, president roche out quite strongly that two years ago when i started to think about these things, nafta was misunderstood and that dynamic in the benefit of it for the united states are misunderstood in large part because the united states population, press and thought on his part. he asked us to focus on north america to develop a body of work pushed against the idea that north american integration has been harmful to the united states. we feel very strongly that there are still more benefit to be had from those relationships with our immediate neighbor. on the screen are quotes from the president's remarks in a
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presentation we made right after the election in september where we presented our north america analysis and recommendations. it is a win, win and the relationship and the economic relationship among our partners has been partnered for her country. in analyzing this problem, we did to kind of data-driven things and one where policy driven thing. the first data-driven thing was the competitiveness scorecard. you can find it on her website and what the scorecard is an amalgam is for databases and economic competitiveness, openness, ease of doing business and freedoms is typically in four rooms the world bank the
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heritage foundation economic freedom index and compiled by an organization which takes slightly more individually and pretty focus at an economic freedom. we took those for databases that may combine them into a single normalized database and we spliced those criteria according to word groupings, you can see on the screen. and then, we wrote those non-to the database available at the website. you can look at it, play with data with 101 countries over the last eight years now. what we did was through the that north america as a group. the combat escort from north america, which is a simple average of the scores for the three countries have a benchmark
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it on the website against the scores for other major trading groups and also major trading countries. spoiler alert, north america is the most competitive treated group. the aipac. we looked at the pacific alliance. we look at the ttp group and we look at sake of completion although it's kind of shooting fish in a barrel. at any case, the bottom line is north america is more competitive than the others. if you wait the scores by gdp, for example, then you get north america of far and away because the predominance of the united state are such that the weighted score for north america approaches the u.s. if you look at countries and compare them with north america, north america competes in the
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range of germany in the u.k. is a major trading company. the idea that north america is not competitive in the world is not borne out by these numbers at least. one thing that does appear when you look at the numbers of the range of scores among the north american countries. mexico for a number understands reasons particularly as additionalissues and tends to score a little lower than canada and the united states. the question arises, does not drag us down? that struck us as a particularly sensitive point and worth exploring further. we undertook the economic integration process because we felt unappreciated in those earlier numbers, that some portion of the highest for the united states has arises from the fact we are integrated with canada and mexico. we look at the process in terms
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of since 1990 and gdp, per capita gdp and employment levels in the three countries as the trade and investment relationships have intensified. so you can see here, for example at the left hand craft, trade among the north american countries has gone from $500 billion the year to $1.5 trillion a year. north america's gross gdp has expanded dramatically in the u.s. as the blues are not the bottom. so the idea that somehow the north american integration process upon their ability to grow, certainly our economy has grown dramatically during that period. you can play around with these as well in north american trade with the rest of the world i
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strayed that increase. north american trade with the rest of the world has increased by a larger growth margin in u.s. trade investment around the world has increased by significantly more. the idea that somehow we are pushed out a global markets as a result of the north american integration process is in order now by these numbers. so with those numbers and about around, we can mean an expert working group. we felt that it was very important to take a trilateral focus because we think the trilateral dynamic as important as opposed to a dual bilateral dynamic. i think almost uniquely among organizations like ours in the united states, are working group actually comprises experts from academia from all three countries. we brought the group together. kim was a member of the group from the out. the number number of times over the course of late 2015 and 2016, we met in dallas a couple of times.
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we met in san diego, tijuana. the solution has dirty been made to the cross-border express project. a number of other interesting things happening with cross-border infrastructure issues and cross-border community that exists there. we also took the group to winter which has a number of interesting things happening with infrastructure and refocus our discussion on energy issues, border infrastructure issues in human capital development. that group then gave rise to a series of policy recommendations, which the president ruled out for us in november last year. we were deliberately focused and didn't want to write another 300 page paper with 175 recommendations. and so, my kind of mantra and missile name was once a narrow
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focus, initiatives that could do together in partnership with the other groups that can be measured, that can take place in a specific period of time and public policy relatively easily, but that would have broad impact. we produce our two key investment and north american competitiveness. this is all on our website. we believe economic integration will strengthen the u.s. economy and create opportunity across the continent. i actually want to do these and focus on recommendation one. one relates to workforce development. we perceive that in our expert brought us to the conclusion that all three countries share an analogous labor gap in
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internal labor mobility is about the question of labor mobility among three countries. and we think that a way to deal with that with b. a public private partnership to create uniform or comparable standards for training certification of workers across different industries, across the north american space. we think that would facilitate the investment process and the process of recruitment and training and improve the integrity and the managerial coherence of supply chains without addressing the question of labor mobility. although in mexico city 10 days ago, the areas height and interest in this issue and this idea of labor standards across north america, and mexico as they start to get ready for the possibility that large numbers
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of mexicans may be deported from the united states and show us mexico with training certifications came to the united states and ensuring that those are simple and mexico is a challenge their thinking about. the key recommendation i want to talk about this morning and i don't want to hog the time and looking at the infrastructure problem and it was discussed to a certain extent in the prior panel. the issue of cross-border infrastructure and north american space is a particular challenge, largely because of the way the united states handles the permitting planning and financing of that kind of infrastructure. i was struck this conversation talking about the local voices in this to an away i think that an interesting conundrum coming from taxpayers. we don't necessarily want to make the federal government should take a large role in
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things. the fact of the matter is 25 years after not, is extraordinary that we don't have anything but the very beginning of a process among the government to plan infrastructure. there's no mac msn whereby you can like at america as a holistic whole word is the infrastructure need to be 20 connected years from now in order to support the economic activity that we hope and expect and want to take place. that is an extraordinary thing. we are the only trading group i mentioned earlier, the only one that does not have an infrastructure planning process and the only one that does not have an infrastructure bank, and infrastructure financing facility that can respond to the planning process. part of this has to do with the u.s. presidential permitting
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process, which requires you to have an affirmative determination by the department of state that a given piece of brass and cross-border infrastructure. we think that's dysfunctional and weird. and a piece of infrastructure should be in interest than last the president or department and science otherwise in a period of time. the issue of local control, you want communities to be involved in land use and such things, but it's still strange if you think about how the infrastructure -- border infrastructure is financed as a subset of highway infrastructure through the test run which is apportioned by the federal government according to a formula, which has no factor in a row whether the state's supporters hate and say you are
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asking and i won't ask because mexico and arizona, you are essentially asking them to pay extra for border infrastructure. which the state of oklahoma doesn't have to do. although border infrastructure is a national equity. it has economic impacts will be on the state in question. we think there needs to be a process to overcome these weaknesses and we think a great way to do that would be a border infrastructure bank analogous to the north american development inc. which is already an existing in san antonio, texas with an institution. and we think that they could take on the role of the database and providing the intelligence function and it could also rescue worker infrastructure from the clutches of the annual appropriation trust fund and
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enable their funding along with it -- privacy defending. the model of the north american bank exists at the present of reasonable way to do these things. for a relatively modest amount of money up front, to commit $300 million of each government if he brought canada and come to you a trick or something or $9 billion in investment in border infrastructure, which is just about comparable to the estimate in border infrastructure. and detroit windsor like to invite the proposed bridge, which the united states permitted which informed our friends if they want to build a bridge that they would pay for the whole thing.
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it adds insult to industry to be part of their contribution to the federal highway trust on triggering money it seems to me the kind of thing that crunchers shouldn't do in this kind of mechanism we remain committed to these things despite the unfolding political dynamic of mexico mentioned mexico city to business and government groups, to quite an interest that if audiences and does presentations have also made to my presentation and we continue to make the case that these are good, useful ways of gaining additional value and increasing productivity of our supply chain and labor force and ultimately increasing our income.
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i'm grateful for the opportunity to be here today and make these points and i appreciate everyone's attention and look forward to questions. >> dance, matt. next up we will have one via who will explain to us day to day how the border actually works. >> tanks, kim. thanks for the invitation and for being part and i hope i can add some value. so again, i will talk a little bit about what is going on on the ground as the ports of entry. i have been doing research and can altering borders from within 25 years now. probably not as not, but i'm getting there. anyway, what i would like to touch today is the u.s.-mexico trade more quickly over those and then the actual border crossing process because i am
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pretty sure there are some people in the rooms that are not familiar with the process itself. and then some potential alternatives. but also some other ones as well. so, as you can see here on the slide, most of the trade between u.s. and mexico is done by track. 83% is by truck and rail and in fact, probably 60% is done by itself. there's 25 border crossing that handle trucks at the u.s.-mexico border and from dose, i'll show you how many of those really handle most of that trade. this has been growing -- the trade has been growing increasingly fast between 95 and
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2016, 4.7 times and the exploits has been growing her point order and 5% respectively. it is humongous between 95 when nafta started and today it's five times more. with roughly the same number of ports of entry. again, this is the actual number of tracks come in the previous craft show you value, but this is the number of tracks. 5.5 million across the u.s.-mexico and this is one direction. the way the process works usually goes back and forth on a daily basis. again, this is almost twice in 1995. and then, this is the interesting thing. for in those 25 ports of entry, four of them handle three fourths or 75% of the total incoming trucks. so basically, port of entry includes two crossings, especially the two crossings and
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again only one right now, but hopefully another one soon. and then also the other one is fired. six crossings handles 75% of the total volume. you can ask why that is happening. the key question here is who makes that decision. who makes a decision of where to send that particular crossing. for those of you not familiar, laredo handles 4600 trucks a day roughly and that is again in one direction only. the reason why is because the shippers, carriers have made the decision that this is the place where they need to cross and its facilities there, warehousing, custom brokers that operate there that can handle the traffic and an efficient way. that again creates congestion.
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it creates congestion and the reason -- one of the reasons why it's even those supposedly the transportation after nafta was agreed the transportation, trucks from mexico across into the u.s. there is still a lot of complications doing that. in the upper part of the graphic, you can see a ship from mexico into the u.s. so a lot of tracks, they pick up the truck load in mexico city, close to the border in laredo and drops the box they are and then a transfer will cross that particular shipment into the u.s. and there is a long-haul truck. why is that? because truckers that want to have very expensive newer truck to be stuck at the border for two, three, four hours.
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that's another reason. the other reason is there is still some paperwork that needs to be filed at the border in order to cross. and then, the movement is a similar story, adding one more wrinkle, which is the mexican custom broker has to file papers in order to move into mexico. there's an additional stop. the nafta plan was the one below, which is similar to what happened that the canadian border. you can just cross that the canadian tractor and go went to detroit or even further and then move back with another load. so there is a lot of roles that impacts the position. the mexican cannot have a load in detroit and move in houston and take another one and go back to mexico.
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that is another issue that impacts the way this is handled at the border. that creates several problems. you have a lot of empty movements back-and-forth because you need to move those track errors or trailers to pick up another vote. so that creates issues for cbp, customs and border protection because they have to handle a higher number of tracks to be good. moving from left to right in his graphics, you can see the first infection is by mexican pastimes. it is not 100% checked. it's random, only one in 10 trucks or inspect it, to make sure the paperwork is correct. that particular track moves into the u.s. to the federal compound
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which is by customs and border protection. there is a potential of going into inspection and there is another failed agencies that work inside the federal compound and include this safety administration parties transportations, agricultural inspections as well. there's a bunch of other federal agencies that work inside the compound. on top of that, when the truck leaves the compound, it goes to a safety inspection facility. they have to be checking every single track that goes into the u.s. are into the texas, california, arizona or new mexico. even though they are to get that, that's their inspection.
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that is interesting because i got a call for weeks ago from a reporter because the politician that all trucks from mexico were coming without being inspect it. the three inspection at least. one of mexico in on top of that there is also filing that needs to be done in order to move into the u.s. it creates congestion and has several impacts not only at the trade community in terms of environmental issues. obviously, most of the areas of the border are very polluted. they are not at payment because of the congestion in the border. this is just a picture of one of the crossings in texas. so those are the key and packs
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better impact dean again at the border above all, but at the national level. as we heard earlier this morning, these costs are always brought into the final consumer. it is interesting, i don't know if you are familiar with the alameda corridor in los angeles. this is a project 20 years ago now that was developed in order to move cargo added support beach and land. the way the project was justified was what was the cost of people here in washington, for example, or new york or chicago of handling -- better handling that products coming in from l.a., long beach. what is the impact? it was a national case that was brought into why there has to be
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some funding for that project. as we heard this morning, the story of the border hasn't been broadcasted to everyone because again, the impacts you see at the border are negatively impact in our economies. we had the allies for years. i divide them into hardware and software. basically infrastructure development and changes in processes. obviously, it takes longer time because there's a bunch of different agency involved in the process, but also could be relatively easier. the first one is to the original border crossing infrastructure or improve the existing one. that's another one. i mentioned with 25 crossing the handled tracks, but only six of them handled the vast majority
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of. what can we do to do that? for example, if josé was mentioned, but are you secure trade program, which requires a special lane for those shipments to move into the u.s. but sometimes the infrastructure is not well positioned in order to handle a specific lane. so if you can work with mexico and expand that further south, so there is actually a complete lane all the way from mexico into the u.s., that would be more efficient. so that would improve also the use of f.a.s.t. program. again, that is something we have encouraged and supported entries have the additional land that is very valuable to be able to do that. again, that is something that could be even done much faster. also improving the corridors
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improving the corridors to the fourth century. in sam's day mike again we were here from california with the additional toll road that leads to mesa. that is interesting. it has to be done on the mexican side. and that is something that was touched on that little bit in the the morning, but one of the reasons why things at the border don't move as fast as we would hope is because they are so multiple stakeholders. most of them with different object is. you know, there is the security aspects, trade aspects, the health aspects. there's a bunch of different agencies that work and then you have two countries. and then you have federal comments date and local level, so that complicates everything and that's why it's important even though we've been working 25 years into approving the process. it takes a lot of coordination.
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moving into the software options, again, modify the process that i just mentioned. again, this is important. some of those inspections could be done jointly as we mentioned earlier. and also streaming the process saturday was touched on because that is sent to it takes a long time to get permits together and moving. as i mentioned earlier, this is just a brief list of the federal stakeholders and i was going to put another column on the other side. dhs then there's also d.o.t. so again, all these different agencies that have to be coordinated in order to develop ports of entry or international border crossings.
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the funding mechanisms i guess as matt mentioned, the construction and south, the creation of these by national banks will be a great infrastructure brink. that is something we have proposed in our research in order to come out to have additional funding. also, the operation. there is sent in going on because with cbp usually comes back to us and say we can build a new infrastructure, but we need manpower to operate that. that is expensive because you need to have agents in both the u.s. and mexico for that particular port of entry. you cannot tend land, but if you don't have enough to open them, they will be creating congestion. cbp has these donation programs right now. hopefully those will calm permanent and you can have basically a private sector for
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public sector can run to cbp and order to have additional staff on that particular port of entry. adding or improving infrastructure again to prove the process and matt are detached on the permit process, but also the whole process here and ordered to come up with that. there is just a list of potential items needed in order to make sure it could be built. again, improve the travel programs, the f.a.s.t., free and secure trade for program. as i mentioned that infrastructure, but also the processes. as you saw from the diagram that shows the trucks coming into the border in the gray edge and the other part, that rakes the supply-chain security. so that is one item that needs to be handled.
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it is not the same of crossing from canada where most of the industry and people are close to the border. if you are coming the way for mohawk to the border, it is very difficult to have a secure supply chain. there has to be some way to secure that in order to come all the way to the radio, for example. josé told us about the progress they been doing at the airport and then i think also doing something in the near future. that has been great. savings have been tremendous in terms of not only time, but the cost for the shippers and receivers. finally, the elimination of the duplicate safety inspections. again, doing almost the same inspection of the vehicle safety. so why do you need have both of
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them? again, that takes time and money to do that. the single fire lane, i didn't know that you are doing that, so that is great. basically that is one we've been proposing for years. you don't need to file the same information in two different systems, two different times. hopefully they'll come up in 2018. as i mentioned, the donation acceptance program hopefully again is not a pilot, but goes all the way to implementation on a break other basis that not already went to. that is all i have. i'll wait for questions at the end. again where the opportunity.
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>> good morning, everybody. look at that. great to be here. this has been a fan tossed a program anything talking a little bit about one specific new border crossing may be an offense gave them some practical examples that pick up on a lot of what is discussed so far. as mentioned, pleased to be supporting with advocacy support here in washington as well as mexico city for this specific project. let me start one step. the san diego association of governments, which actually was first created in 1966, when the government in san diego county came together and created a comprehensive planning organization to do some long-range planning. in 1980, they changed the name.
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it is comprised of the 18 cities does the government of san diego county altogether to do this regional decision-making. .. >> nine of them are in california. sonny sedro is the largest border crossing between san diego and tijuana. existing crossing which juan mention is the largest
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commercial poe linking california and mexico. and at peak operation come for trucks across every minute, here in 2015 about $42.5 billion worth of $5 billion worth of merchandise crossed the border. obviously a very busy and active port of entry. sonny sedro recently had some improvements which initially reduced wait times to cross the border, although after the initial reductions, the wait times have come back up. sonny sedro is a passenger pedestrian crossing. it's not a commercial crossing. so even that expansion when it is fully completed in 2019 doesn't answer the need for more infrastructure on the commercial side. so there's an aerial picture of what the area looks like. and it was a need for a third crossing between tijuana and san diego and the scarcity of federal -- federal funds is
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important point. that plans for the future port of entry. back a first 2006 and analysis was undertaken that showed the border wait times were costing the region money. they're missing out a lot of economic activity. millions of dollars in fact. and the best that he is now being updated pic you can find more information on the webpage which is sandag.org. so starting in 2006, runs really quickly, a timeline where you can see where things started with initial legislation to allow for tax authority. some initial agreements between united states and mexico and then i think things really become solidified in 2014 when mexico's undersecretary for infrastructure in the sector of communications and
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transportation and california secretary of transportation brian kelly signed and m.o.u. to build and then bring the new port of entry into operation. so g come back to the aerial sh. the crossing will link the borough in tijuana with east mesa in san diego county. the poe itself is the lime green section. the initial baseline concept is to have 10 northbound commercial lanes, then northbound passenger lanes, and eight southbound lanes. but there's an innovation analysis currently underway that sandag is undertaken that will look at some of the details and make final recommendations on exactly what should be built. but basically as you can sense, 10, 10, and eight, this is a really large crossing and one of the goals i think picking up on something juan said, rather than
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having to reconfigure what is what's happening at san ysidro, they will try to build this making had and planning for continued expansion. the border wait times in the san diego area, particularly at peak range from two to four hours. and the goal of ome is to reduce that to a 20 minute wait time. that's 20 minutes for me to find point on either side of the border to the crossing. it doesn't include whatever time it might take customs to review the contents because obviously that's not something that sandag would be able to control. so as i said there are three group innovation and the unique points in three ways. so in terms of leadership, the ome project is a collaboration between local regional government on our side, and the federal government on the mexican side which in and of itself is unique. you can imagine there are some
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challenges that come from those different levels. the structure will reflects the difference in the way that we build and maintain infrastructure inroads in the u.s. versus the way it's done in mexico. you can see there are several u.s. federal agencies are involved even though it's led by regional government. that doesn't mean the federal government is involved. you have transportation, state, tsa, customs and border protection. at the state level on the u.s. side you have the department of transportation california and sandag of course. on the mexican side you have communications and transport, foreign ministry, customs and internal revenue service, and you have the national and migration institute in mexico. and then you have both the state of baja and the city of tijuana.
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so obviously lots of government entities which cooperate well together but as you can imagine, it's complicated when you have that many people needing to sit at the table. the technology i think is to be really the most exciting point. ome will bring new technological features to the border that ideally would be applicable in other future crossings between the u.s. and mexico or elsewhere the road system will be a controlled access toll road with a variable tolling scheme. that's a little bit new. and that obviously is how you control the wait times. you create a system where drivers can make a cost-benefit analysis, do i want to wait two to four hours, or do i want to base whenever the toll might be? -- do i want to pay -- how'd you do that? how'd you know it is a 20 minute wait time or how do you vary the tolls? sandag will establish a regional intelligent transformation --
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transportation system. that will include sensors to track transportation data that relates to the entire border area. because again in order to know what is a total of what incentive is to do, you have to know it's happening at other crossings as well. this will now enable sendak to monitor the whole border and create real-time data which drivers will then use to make the decision on what to cross. it also will allow sandag to figure out the available lanes in each direction, how to configure them, how to determine the appropriate toll rates to maintain that 20 minute goal, and to advise users of wait times. the poe itself will also have some innovations including the possibility of reversible or flexible lanes and potentially as josé martine mentioned this morning, a combined customs
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review facility where the two governments would review cargo together on the u.s. side, but review or both. the reversible flexible lanes gives much greater flexibility to adjust traffic flows, again to ensure that 20 minute wait time. you could change the number of lanes receiving passengers versus commercial, or as i said initially you're starting with the goal of 10 and 10 but you could moderate that and you could also even change the number of lanes going northbound or southbound to take into account traffic demands. those are all things i think nothing i described is unheard of conceptually. even in the d.c. area we have streets that have reversible lanes and we have variable tolling on the beltway, for example, but this would be the first time all these things have ever been incorporated into a a border crossing. as i mentioned sandag is really doing an innovation study to look at different options,
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figuring out the possibilities and the costs of different types of configurations. when i showed you the aerial view with a lime green box the poe and you can see anything, well, that is the we design the slight but also in fact true that we are not sure exactly what the green box looks like yet. so the last part, and not insignificant of course is the financing. ome is being developed through a combination of federal and state grants. sandag local tax of 40 which allows it to toll and private capital weather will be offering and a private bond market once the project is a little further along. the toll revenue will be split between sandag in mexico based on a formula that still needs to be negotiated, and it will depend in part on the costs of the construction and the payment mechanisms. so the slide there is not to scale at least not decided that
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that's exactly what the breakdown would look like. the subject is the cost or higher on the u.s. side. the tolls will all be collected on the u.s. side so it will be one sort of toll area on the controlled access road, what are you going north or south, but the revenues will be shared according to a formula. mexico has identified funds to obtain belated need for access road on its side. on the aside, sandag has a good most of the right-of-way for the roads. some of the roads have already been built and the sr 11 which is the access road is operating to a point not quite all the way to the border yet and sandag is working on getting the right-of-way for the actual ports of entry. so these next couple of slides so to show graphically everything comes together, what steps need to be done. as it may change of the intelligent transportation system. you have the agreements on how
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the toll revenues will be split up. eventually you get to talking to customs about operating and maintaining and staffing. and when you put the whole puzzle together then you have a pc can go to the private market and raise funds -- a piece that can go -- and once you have everything in place then you can start construction. so ome in our view and in sandag view most importantly represents an innovative way to build, fund and operate border crossings to facilitate trade between our two countries. and it brings together safety, security and efficiency considerations in a bilateral format, required, which requires intense collaboration. and as i mentioned earlier the lessons learned from this poe would be applicable elsewhere on the border, and really represent the best in public public collaboration and cross-border
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partnership. thank you. >> i'm going to stay in mice if you don't mind. i was sitting here thinking the question i'd ask you and i think it already exists, but is there an app for that? will there be an app you can put on your phone and find out how long it's going to take to get across? >> that's a good question. i am sure there will be. i don't think we've gotten to that point yet, but since there are apps for that sort of thing in other areas, i'm sure there will be. >> areas also funded by federal highway and the fact we develop a border wait time measuring system for most other crossings in texas, it's on the website and when developing an app already for that. in tijuana there's another app, i think developed by local university, but it requires additional data in order to be more efficient. cbp has its own app, but even
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cbp acknowledges that it's not very accurate. >> i thought it would open to questions from the audience on this point is the are any. the microphone will come to you. please identify yourself and please ask your question in the form of the question. thank you. >> thanks very much for doing the panel. my name is brian, a reporter with bloomberg bna. i was wondering if you think that a nafta renegotiation has been discussed early for the past 18 months or so on the campaign trail, and since, the fact when seen a lot of concrete proposals materialized, is kind of a problem or reasonable venue or forum to advance the infrastructure bank in kind of
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comprehensive plan, which you referenced aimed at that kind of integration and you said we are deficient in terms of, on that respect when compared to other trade blocs. and secondly i'm wondering if you think nafta renegotiation is a proper reasonable venue to advance more oil and gas liberalization, you know, of course in the wake of these constitutional changes and kind of watershed mexican energy reform? >> angst for the question. so addressing them perhaps in reverse order, i think that energy is often referred to as the missing chapter of nafta. when nafta was negotiated in 1992-93 mexico's energy sector was significantly different than it is today. so the mexicans were not able
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are not willing to negotiate energy at that time. so the reforms that have taken place in mexico more recently certainly create an opportunity for an integrated north american energy market that didn't exist before. i myself have always thought that while the oil related aspects of the mexican energy reform are the most kind of interesting perhaps or the most spectacular because of the history of that set of issues, in terms of the amount of money to be made and the potential economic benefit, the liberalization of mexico's electricity markets and market for generation and distribution of electrical power are perhaps more significant. here you have enormous opportunities for cross-border integration, where the policy environment is perhaps less important than some of the technical challenges that are at stake. but there's an enormous opportunity there you look at
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across the north american space even within the three north american countries, there are priced kind of frontiers, areas where the market is obviously walled off from one reason or another, usually for technical reasons, not so much a policy reasons, but enormous opportunities to equalize prices across the north american space. mexico is a low-cost energy producer and, therefore, there are opportunities for greater efficiency and reducing cost across the north american space. my own view would be that is the proper approach to take in any approach to the north american arrangement, is ask ourselves how can we become more competitive globally as a regional production space? how can we remove cost from the production chains in order to make ourselves more productive, increase the productivity of our workforce and increase our competitiveness across the globe? the opportunities, not just in the energy space.
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the north american development bank which despite its busiest mexico institution, not a trilateral institution, was created after the formal negotiation of nafta in 1993 in order to address concerns about the virgin at by mental conditions, particularly between the united states and mexico. so that is an institution that exist as a supportive institution of the nafta arrangement, but it isn't per se a nafta, it wasn't called for by the nafta treaty arrangements. so i would envision the opportunity there for the idea of a border infrastructure bank which i hope would be trilateral, include canada, mexico and the united states. a formula to be negotiated engines of how much capital. the board would have to be structured appropriately. you would use the same kind of process would have to be gone through as was gone to great the development bank.
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the opportunity is there. again, any rearrangement of the nafta arrangements, that kind of, we've seen these different presentations. embedded in andrews recitation was huge amount of uncertainty about coordinating the process across the board and you with the revenue flows. that is a perfect role for institutions like this that could provide that fiduciary transparency for the revenues and be a fiduciary agent that would be kind of jointly controlled by both countries. and then juan carlos presentation likewise i think is on lot of opportunities of their four weathers a missing piece and that missing piece to my mind is that structure that doesn't have to be a treaty commitment, but certainly supports implementation of the treaty. and as i say, any review to my way of thinking can any review of the nafta arrangement that is
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directed at enhancing the global competitiveness of the region makes total sense. >> did that successfully evade your question? [laughter] [inaudible] spewed again, assuming we are talking about a of the nafta arrangements that is designed to enhance the global competitiveness of the region, i think all the tools we discussed here today have to be deployed. again, whether they perform a part of a revised to your arrangement or not is something that the negotiators would have to work out. but assuming that's the objective, i think we've seen here this morning actually a pretty good agenda for how you are going to do that. >> we have time for probably one more if there is one more question. anyone?
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okay. thank you, everyone for coming. what you think a group and hope we have left you with a sense today that diving deeply into the border, this is a hugely complex living thing that is between the united states and mexico, and i really do think is the concept we need to have as we try to figure how to move this agenda forward. >> you were entitled to his last words i don't want to deprive you of that. you said valve. i've often thought in terms of a filter. you have to design a folder very carefully to block the things you don't want to pass and let the things you do want to pass. the only time where it got appreciative nod and a bit of a chuck was just talking a bilateral meeting of wastewater management officials. [laughter] and i said filter and they said yeah, i get that. spirit i'm sticking with vowels. thank you so much for joining us, everyone. [applause]
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>> [inaudible conversations] [inaudible conversations] [inaudible conversations]
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[inaudible conversations] if you missed any of this discussion at u.s.-mexico border issues, you can watch it online in the c-span video library. c-span.org and search u.s.-mexico border. the u.s. senate would be dabbling in for the week in about 40 minutes from now that lawmakers they will continue debate on the nomination of wilbur ross to be commerce secretary. at three eastern nebraska republican center ben sasse will deliver the annual reading of george washington's farewell address. later at seven eastern lawmakers will hold a final confirmation vote on the commerce secretary nominee and i will be followed by procedural vote on the nomination of ryan sankey to be the next interior secretary.
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you can watch the senate like when the gavel and at noon eastern. also later senators are expected to debate several other administration nominees including ben carson to be housing secretary. also rick perry for energy secretary. you can watch all that right here on c-span2. tomorrow president trump will be delivering his first address to a joint session of congress. during a call with reporters this morning he announced a proposed $84 billion increase in military spending and we suspect that will be one of the items he will be followed up on during his address tomorrow night which you can watch live on c-span begin at 9 p.m. eastern also online at c-span.org and you're the option of listening live on the free c-span radio app. up next, joe hockey just joint to united states, discusses america's place in the world throughout history and about u.s.-australia relations in light of the trump presidents, international trade policy and what america f m

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