SBC Bulletin, June 30, 2022

Category: SBC Bulletins

Bulletin

June 30, 2022

We are finishing the first half of 2022 with many more questions about the future of our border than on December 31^st. Back then inflation was not a “thing”, gas prices were not part of the daily conversation, we did not have a war in Europe, and “global recession” was a little known item. We were ringing in the New Year with the clear hope that as the pandemic subsided we would see better days at our ports of entry in terms of smoother crossings and lower average wait times. The permanence of Title 42 was not being put into question, keeping border migration pressure at bay.

How things have changed in 180 days. Inflation is the worst it has been in 40 years in the U.S., and Mexico has not seen this inflation since the end of the 80s. Title 42 is hanging by a thread; war has caused unprecedented volumes of Eastern European and Russian migrants coming to our border, affecting how ports are managed; and port staffing shortages will be with us for the foreseeable future, affecting average wait times.

Despite all this, there are many telling examples of resilience. The port of Otay Mesa East is moving forward on both sides of the border. CBX just opened a state-of-the-art processing facility. Customs and Border Protection launched its simplified arrival project and is gearing up for a SENTRI reservation pilot program. The Baja California Government is all hands on deck with innovative border mobility projects. Our region has a strong committee behind the World Design Capital designation awarded to San Diego and Tijuana late last year.

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On behalf of the Smart Border Coalition I’d like to welcome the new Director for the San Ysidro Port of Entry, Mariza Marin. Ms. Marin is a veteran of the agency and knows the region well. Mariza has struck me as a very hands-on and practical decision maker, a leader at the right time in the right place.

She comes in at a very sensitive time when there is a growing concern about individuals not using the formal asylum/refugee process to enter the United States and resorting to aggressive tactics to cross the border at the San Ysidro Port of Entry. In the month of April alone, there were 1,600 foreigners who attempted to forcefully get to the agent booths to declare asylum. This is the main reason that CBP is using choke points approximately 30 yards before booths.

There is also the possibility of lifting Title 42, increasing the likelihood that we will see many more undocumented migrant attempts to cross the border.

Wait times have not been decreasing in a consistent way, adding to the uncertainty. By late May, the port had reached 90% of pre-COVID crossing volumes.

There is a process to seek asylum and that has been the result of CBP collaborating with NGOs such as “Al Otro Lado” (https://alotrolado.org/) and “Border Angels” (https://www.borderangels.org/), the Tijuana Airport Authority, Mexico’s Migration Institute, the City of Tijuana and the State of Baja California. This process may take up some months to deliver results, but it is in place. Perhaps authorities could work to curtail lead times and make it a more effective option.

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Customs and Border Protection will be starting a SENTRI reservation pilot at the end of July at the San Ysidro Port of Entry. Pedestrians in the 4:00 a.m. to 8:00 a.m. time frame will be able to use the CBP One App, upload their information, including their picture, and come across at a specified time.

This is the first port where this kind of technology will be tested. The goal is twofold: to optimize the use of CBP agents using a sophisticated AI system and making the crossing experience a more seamless one for travelers.

Pedestrians who reserve their spot will enter Pedestrian Crossing East (PedEast) as they always do, except that the line will be divided into the “regular” SENTRI crossers and those with reservations. Pedestrians will see a green light or red light when they arrive at the booth.

Hopefully, there will be a time when there will be no agents at the booth(s) used for pedestrians, and they will simply be able to take a quick picture which will be compared with a gallery in the CBP system.

We’ve said many times that this is the future of land border crossings. Once the model is proven at the pedestrian level in SENTRI, it would expand to other lane types. In a second phase it may be used to vet passenger vehicles.

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Kudos to Professor David Shirk of USD and his explanation of the “CaliBaja Regional Economy” report at our board meeting in May. The report is in some ways a response to the High Level Economic Dialogue going on at the federal level and asks the question: How can we better understand the health and areas of strength of our cross-border region?

The study uses NAICS (North American Industry Classification) codes and the concept of location quotient, meaning the concentration of jobs in a certain industry in our region when compared to the concentration in the same industry in the rest of the U.S. and Mexico.

CaliBaja shows much higher than average employee concentrations in several industries including audio audio/video equipment, manufacturing and medical devices, semiconductors and aerospace. The top ten cases add $17 billion annually to our regional economy!

An important message was that we need to facilitate more seamless flows of people and goods across our border. Thus, improving cross-border infrastructure is critical. There is also the opportunity to expand into new industries such as shipbuilding and pharmaceuticals that currently have a large San Diego footprint but little or no Tijuana presence, though one could make the case for an interconnection based on the many employees in both of these industries who actually live in Tijuana, commuting to work every day.

We must have an ongoing initiative of economic studies on trade dynamics. This is a never-ending kind of project that takes great effort and resources. Measuring integration within each industry is possible but costly and time consuming. We could start by focusing on specific industries, working with suppliers and producers to understand how much of a cross-border integration there is.

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Theresa Andrews is a Senior Manager for Government Affairs at Illumina (https://www.illumina.com/), a great San Diego company that applies “innovative technologies to the analysis of genetic variation and function, making studies possible that were not even imaginable just a few years ago”. I had a conversation with her in recent days. The company is in the midst of creating a Chilean and a Brazilian genome project which will let them better understand the genetic makeup of both countries’ populations to facilitate earlier diagnostics and smarter treatments of certain diseases.

This begs the question: Why are we not doing a CaliBaja genome project? Why not use a study like this to start preventing or reducing the incidence of Tuberculosis or diabetes which are so prevalent in our region? The answer, I think, is three-fold. For one, our binational community is not as aware of the capabilities our regional companies have. We simply do not know them well enough to ask them to support our region in specific ways. Second, we tend to view our up-and-coming technology companies as ivory towers where the CaliBaja discussion is not even a consideration or that these companies are too busy with other pressing business matters to get involved with our region. Third, companies like Illumina may not see interest from federal governments. The current Mexican federal government has not been known to warm up to science or scientific discussion as much as previous governments.

However, this does not mean we could not approach our governments at the state level to find common ground on launching a project to better understand our community’s health.

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Congratulations to the South County EDC for launching its first binational forum at Southwestern College on June 1^st. The College’s President, Dr. Mark Sanchez, unveiled an initiative to attract students from UABC (Baja California Autonomous University) at in-state tuition rates, making it more affordable to get joint U.S. and Mexico degrees. He also called on UCSD and SDSU to expand their footprint with students from Mexico.

Tapping into talent on both sides of the border means translating challenges into academic programs for the skills and jobs of the near future. Many Hispanics are challenged to assess the best educational opportunities, and with 50% of all 7^th graders in San Diego County today being Hispanic, finding more practical ways to guide these young people will be critical.

Having multiple pathways for people to educate themselves that do not commit them to 4-year degrees was a discussion topic. Rachel Merfalen, Director of Business Experience for the San Diego Workforce Partnership, spoke on the topic of credentialing for yearly, monthly or bi-monthly programs for people in the lower and middle-income brackets looking for practical knowledge. Also, she recommended an articulation of a binational curriculum between U.S. and Mexican higher education institutions along our border.

Kurt Honold, the Baja California Economy and Innovation Secretary, stated that one of our region’s challenges is to teach subjects and topics that best reflect job availability. His remarks focused on several mobility projects that the state government believes will put less pressure on land ports of entry, beginning with the “CBX Trolley” concept of using a train to transport crossers to the San Ysidro Port of Entry and a CBX-like structure to make their way across. Honold also discussed a ferry from Ensenada to San Diego, and the Punta Colonet port and multimodal facility to lessen port traffic at Long Beach and Los Angeles ports. The latter are some of the 21 strategic infrastructure projects the State of Baja California is considering.

He sees great promise in the lithium industry for Baja California. Lithium can be mined in the Cerro Prieto area west of Mexicali. Honold sees a possibility in battery storage factories for both the U.S. and Mexican markets. He also described the evolution towards U.S. banks financing homes in Mexico for U.S. citizens. Finally, for what concerns Baja’s water needs, he stated that the State wants to facilitate the building of 4 desalination plants: one in Rosarito, 2 in San Quintín and 1 in Ensenada.

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The Center for U.S.-Mexican Studies at UCSD put on quite a show for its “U.S.-Mexico Forum 2025.” I don’t believe we had ever had this many experts on the binational relationship in San Diego. From scholars such as Giovanni Peri of UC Davis to María Isabel

Studer of Alianza UC-Mexico, to José Antonio Meade, former Mexican Presidential candidate, Senator Claudia Ruiz Massieu, former U.S. Ambasador to the United States Anthony Wayne, and many others, the two-day event also celebrated the work of former U.S. Ambassador to Mexico and Institute of the Americas Director Jeffrey Davidow and the accomplishments of José Galicot, one of our coalition’s board members.

There were several working groups assembled, including trade, migration, security, education and climate change. There was a great deal of detail in the conversations, remarks and summaries I heard, but the following were the most interesting to me:

· Ambassador Tony Wayne: USMCA is not sufficient to address the U.S.-Mexico relationship. The High Level Economic Dialogue, the High Level Security Dialogue, and regional mechanisms should be working to their fullest extent. How the border works together has nothing to do with USMCA.

· Beatriz Leycegui, former Undersecretary for International Trade, Mexican Secretariat of the Economy: We need an integration agreement between the U.S. and Mexico if we are to implement sustainable job-creating trade. There are no sound democratic policies to make us more competitive as a region. We must have a common energy policy, a common vision to transition to renewables, clear rules of origin in the automotive sector and a common understanding of labor issues.

· We require an umbrella mechanism to evaluate and coordinate USMCA progress. No one is evaluating its progress as of today.

· We should add security, migration, education and climate change in the High Level Economic and High Level Security Dialogue mechanisms and the North American Leaders Summit.

· We must evolve from traditional diplomacy to public diplomacy, with multiple stakeholders and subnational, municipal, and county governments.

· We must revive local institutions in border areas. Crisis management is day-to-day at the border.

· The border must be seen as an innovation space.

· The net zero emission movement is becoming increasingly crucial for trade and supply chains. This is where subnational state, regional and local stakeholders have a huge role to play.

· Energy sustainability should be central in the U.S.-Mexico relationship. North America is the only region in the world with energy abundance.

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The One Border Alliance (OBA) is looking forward to supporting the State of Baja California business councils in the deployment of their 5-Year Business Development Policy. The policy paper will need to translate into concrete actions in a matter of months, and this is where the OBA could have an important role to play now that border crossings figure prominently in the Policy.

Tijuana EDC President Carlos Jaramillo is a key person in the deployment and someone who truly believes that unleashing the power of the border starts at our land ports. Other important organizations involved this are the local development councils and economic councils of Mexicali, Tecate and Ensenada.

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Speaking of Carlos Jaramillo, on June 15^th, several leading cross-border and business organizations got together to sign a Memorandum of Understanding to promote the binational region as the main destination for foreign investment; strengthen the binational region as a hub for innovation; support shared communication and collective events; and resolve investment restrictions and advance public policies that boost our global competitiveness.

The Smart Border Coalition was a signee, as were the San Diego Regional Chamber of Commerce, the Tijuana EDC, the Tijuana Development Council, the Tijuana Tourism Chamber, the Tijuana Business Council, the San Diego Regional EDC, the South County EDC, and the San Diego Tourism Authority.

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I want to welcome San Diego State University as the newest Smart Border Coalition member. The university’s membership in our coalition will introduce the perspective of a trail-blazing cross-border education and burgeoning research institution that is sensitive to our region’s students, our water and our energy, as well as our supply chains and border security. The school’s 2020 strategic plan "We Rise We Defy: Transcending Borders, Transforming Lives" is a testament to its belief in the power and promise of the border region.

The Innovation District the university is getting ready to open in Mission Valley will truly expand the CaliBaja region’s problem solving capabilities. SDSU’s recent announcement of a Science, Technology, Engineering and Mathematics (STEM) facility at the Brawley campus comes at an opportune moment when the lithium revolution is just beginning.

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The Border Trade Alliance (BTA, https://www.thebta.org/) had its board meeting last week in Washington, D.C. The BTA has been able to secure many productive relationships with industry, government, government agencies and many border communities throughout the last 30 years, all in the name of improving the U.S.-Canada-Mexico trading relationship.

The current President, Britton Mullen, has been a steadfast leader for the last 4 years, conveying helpful information in the policy, trade and legislative arenas. Our new chair is Lance Jungmeyer, Executive Director of the Fresh Produce Association of the Americas

(https://www.freshfrommexico.com/), a powerful group with interests in Mexican agriculture and its distribution in the U.S. The outgoing chair, Sergio Contreras, had a very challenging yet successful 2 years, what with the implementation of USMCA, travel disruptions during the pandemic, a new administration in Washington, D.C., and other pivotal events.

The group also coordinated the 8^th Annual “Building a Competitive U.S.-Mexico Border Conference” with the Mexico Institute at the Wilson Center (https://www.wilsoncenter.org/). The day’s events featured expert panels, perspectives from Capitol Hill, and a special luncheon with U.S. Ambassador to Mexico Ken Salazar and Mexican Ambassador to the U.S. Esteban Moctezuma. Please see the link for some of the main conversations that took place: https://www.youtube.com/results?search_query=eighth+annual+building+a+competitive+US-Mexico

Here are some highlights:

· With Texas Governor Abbott’s unilateral decision to slow down trade in April based on Mexico supposedly not doing its part to inspect cargo coming in to Texas, New Mexico wants to be the new trade darling. This was evident in New Mexico Senator Ben Lujan’s (R-NM) remarks to open the conference. He underlined his state’s investment in and high hopes for the Santa Teresa/San Jerónimo border with Chihuahua.

· The CILA and IBWC Directors, Adriana Reséndez and María Elena Giner, sounded the alarm about drought in the Colorado River and the Rio Grande, as well as the fact that 80% of water sanitation systems in Mexico have infrastructure deficits. They both agreed that water reuse is an enormous opportunity that must not be wasted.

· Governor Maru Campos of Chihuahua spoke about the New Mexico-Texas-Chihuahua Binational Infrastructure Task Force, a group of public and private stakeholders looking to improve border crossings and border community collaboration. Campos also touted the new Anapra bypass that will connect Ciudad Juárez with San Jerónimo on the border with New Mexico.

· Senator Kyrsten Sinema (D-AZ), made some taped remarks on her initiatives to fix border management and immigration systems. She spoke about her role in getting $300 million for border security technology and funding for a regional migrant processing center.

· Katherine Dueholm of the State Department addressed President Biden’s Infrastructure, Investment and Jobs Act budget and the $2 billion it has earmarked for border infrastructure, stating that it is a once-in-a-generation opportunity. The

devil is in the details, however. Priorities for the $2 billion have not been established yet but are forthcoming.

· Ambassador Esteban Moctezuma emphasized the need for Mexico and the United States to work together for a shared future, and the opportunity to better integrate our border. He referred to the San Diego-Tijuana region as a “cross-border trade and innovation hub” that could be an example to other border city pairs, and underlined the importance of the 21^st Century Border Management Initiative, stating that it had helped spawn some wonderful projects such as CBX and Unified Cargo Processing where officials from Customs and Border Protection and SAT (Mexico’s tax authority) process cargo together, avoiding separate processing areas in each country.

· Ambassador Ken Salazar spoke about the need to elevate the understanding of the U.S.-Mexico relationship. He added that the last 5 years had been characterized by poor dialogue between the U.S. and Mexico but that as of last year and 2022, the relationship had been put “on steroids”. He said that our countries were aligned, “more than ever” and that there were 4 important areas of work: economic development (particularly in the energy sector), security, migration (unprecedented flows of people to border) and the Bicentennial celebration of U.S.-Mexico relations.

Salazar talked about our countries’ need to make a pledge for electric vehicles to represent 50% of all car sales by 2030; the promise of the Tehuantepec Isthmus as a trade corridor with the Southern U.S. states; and a new vision of the border as a land of opportunity.

Though I do not see the relationship as rosy as the Ambassadors described it, I salute the noticeable efforts to improve the relationship over the last 10 months. I think that Ambassador Salazar has been the key player in this evolution.

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I want to congratulate SANDAG’s Zach Hernandez, Associate Regional Planner, for conveying the latest yearly border crossing stats. SANDAG has done a phenomenal job of communicating this information in a practical and easy to use format. We have now been given the opportunity to review stats on a monthly basis using a California-Baja California Border Crossing and Trade Data Story Map: https://storymaps.arcgis.com/stories/00cdebbb2e5c476eae013afef5443af3

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Our next online Stakeholders Working Committee meeting will convene on July 7th from 9:00 a.m. to 11:00 a.m. in Tijuana. There are in-person and a virtual options. For the in-person option, we will see you at Business Hub, 9^th floor. The address is Blvd. Gustavo Salinas #10485, 9th Floor, Colonia Aviación, 22014 TIJUANA. You can register at