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The Border Economy Needs Help

Tuesday, November 17, 2020
The Border Economy Needs Help

The Border Economy Needs Help

Texans would never consider shutting down travel between Dallas and Fort Worth or Austin and San Antonio because of COVID-19.  Even in the early days of the pandemic marked by uncertainty and rapid spread, Texas only instituted a 14-day self-quarantine for travelers entering the state from Louisiana, not a shutdown of routine travel across the state border.

The ties between Texas border cities and their sister cities in Mexico are deeper and more complex than the examples cited above.  Brownsville and Matamoros, McAllen and Reynosa, Laredo and Nuevo Laredo, Del Rio and Ciudad Acuña, El Paso and Ciudad Juarez are all united by history, culture, business and family.  Each of these neighboring cities are, in fact, one metropolitan area, divided by a river. 

Crossing the border - in both directions - is a routine and often daily occurrence for residents who go to jobs, attend school, eat at restaurants, go shopping, seek medical and professional services and visit friends and relatives.  Or was routine, until the pandemic hit.

On March 21, the U.S., Mexican and Canadian governments temporarily restricted all so-called non-essential travel across their borders.  Those "temporary" restrictions have subsequently been extended each month, most recently on Oct. 19 with another extension to Nov. 21. 

If the concept of "temporary" seems to be ambiguous when it comes to the border closure, so is the term "essential."  For someone sitting in an office in Washington, D.C., Mexico City or Ottawa, essential travel might only mean moving trucks across the border that carry agricultural products, manufactured goods and other components of our North American economic supply chain. 

But if you live along the border, essential has additional definitions.  It means keeping struggling businesses open and hard-hit families connected.  It means access to financial, legal, wellness and other services.   And it means giving communities the opportunity to recover from the pandemic rather than exacerbate its most devastating effects simply because of geography.

In many Texas border cities, bridge toll revenues generate a significant proportion of total municipal revenues.  Mexican visitors also account for a significant proportion of local sales taxes.  The steep decline in cross-border travel has consequently had a disastrous impact on city budgets and the provision of essential services that are needed now more than ever. 

As we approach the holiday season, the impact of the border closure will be heightened.  With international bridges operating below capacity, the annual legal migration of thousands of U.S. citizens and lawful U.S. residents, known as paisanos, will add to bridge traffic congestion and extended wait times to leave and return to the country.  But the bigger issue is that without "non-essential" Mexican holiday shoppers, border businesses - already hurting - will be devastated.  A report from the Dallas Federal Reserve found that Mexican shoppers are responsible for 40 to 45 percent of retail activity in Laredo, 35 to 40 percent in McAllen and 30 to 35 percent in Brownsville.

If closing the border is harming border communities, it also isn't helping arrest the spread of COVID-19.  El Paso and Ciudad Juarez are now hotspots for the pandemic, in spite of more than seven months of the border being closed to so-called non-essential travel.

While the restriction on non-essential travel applies to land borders, it doesn't apply to airports.  If you travel to or from Mexico by plane, you don't need an essential reason and there is no quarantine requirement.  Want to take a vacation or go shopping? No problem.  But if you want to walk or drive across an international bridge, you have to meet a limited number of criteria for essential travel. 

A blanket border closure to non-essential travel, in addition to being ineffective in stopping the pandemic, does enormous harm to communities on both sides of the Rio Grande. Closing the border has only worsened the impact of the pandemic.  Re-opening the border, especially with the holidays near, would give our border communities some desperately needed economic relief.

Dennis. E. Nixon is Chairman and CEO of IBC Bank.