Improving Infrastructure Crucial To Maintaining Border Economy
The latest data from the U.S. Census Bureau shows that Mexico is now the United States' largest trading partner, surpassing both Canada and China in volume of trade. Total trade in goods reached nearly $69 billion in May, and the first five months of this year are well ahead of the record pace set in 2022, which saw bilateral trade between the two countries exceed $779 billion.
The growing importance of the U.S.-Mexico economic relationship underscores the significance of the United States-Mexico-Canada Agreement (USMCA) and its predecessor, the North American Free Trade Agreement (NAFTA). It also reflects the post-pandemic movement toward nearshoring - bringing manufacturing and supply lines closer to our U.S. markets.
Texas is the nation's largest exporting state and the second-largest importing state. Our state shares the longest border with Mexico, so it goes without saying that the majority of U.S.-Mexico trade travels through Texas.
According to the Texas Department of Transportation, 68% of trade between the United States and Mexico passes through the Texas-Mexico border. The value of that trade quadrupled between 1994 and 2019, from $111 billion to $451 billion. Laredo is now the U.S.'s largest port, beating out Los Angeles, and handled $300 billion in trade in 2022.
Our ability to move goods and people safely and efficiently across the border is an issue of both economic prosperity and national security for the United States. Yes, we need a secure border, but we also need a border that facilitates - not hampers - U.S.-Mexico trade and the development of supply chains that make us less dependent on countries like China.
The continued development of the North American economic market depends on two things - good infrastructure and good policy. On the infrastructure side, our ports of entry are desperately in need of upgrades.
As part of the Bipartisan Infrastructure Law, last year the General Services Administration - which manages the nation's 167 land ports of entry - announced plans to modernize 20 ports of entry on the northern and southern border. Improvements include the deployment of enhanced scanning systems for vehicles and cargo that can better detect contraband and shorten inspection times. Unfortunately, only two of Texas' 28 border crossings - one each in El Paso and Brownsville, but not Laredo - are included.
In May, a bipartisan group of Texas members of Congress introduced the Land Port of Entry Modernization Trust Fund Act to expand and improve existing ports of entry. Another bipartisan group of Texas lawmakers - including Sens. Ted Cruz and John Cornyn and Reps. Tony Gonzalez and Henry Cuellar - is urging the Biden administration to speed up permitting for four international bridge projects in Texas.
"Infrastructure connections between Texas and Mexico play an essential part in our state's and our nation's economy," they wrote in a letter to Secretary of State Anthony Blinken. "These cross-border bridges will expand such trade, creating vital jobs and economic opportunities in the Texas border region."
At the federal level, these are positive steps for infrastructure. At the state level, Gov. Greg Abbott's policy of having the Texas Department of Public Safety conduct inspections of all commercial vehicles coming from Mexico has been disastrous.
The DPS inspections - which are in addition to the U.S. Customs and Border Protection inspections at ports of entry - have created costly delays and taken trucks out of service yet have produced no meaningful results. As the Express-News reported, among the 4,100 vehicles inspected during an eight-day period in April, DPS found no drugs, no weapons and no other contraband.
There are better ways for DPS troopers to protect the people of Texas, and there are more sensible and less costly ways to secure our border. Those of us who live and work on the border can help our leaders in Washington and Austin develop policies that will serve our national and state interests - if they will listen to us.
Texas has been a huge beneficiary of the growing trade relationship between the United States and Mexico. Let's invest in the infrastructure and implement policies that keep that trade flowing.
Dennis. E. Nixon is chairman and CEO of IBC Bank.