Obama looks to Asia as trade markets beckon south: One-up on China seen as objective

November 13, 2012

Washington Times, 9/12/2012

President Obama’s postelection trip to Southeast Asia presages a greater  second-term focus on that region, but some foreign-policy analysts say that  shouldn’t distract from the need to build better alliances with U.S. neighbors,  which could be key to restoring the nation’s sluggish economy.

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WTO Rules on Dolphin-Safe Tuna Labeling

May 16, 2012

 

 

WTO rules against ‘dolphin safe’ tuna labels

The Hill, 5/16/12

The World Trade Organization’s appeals court on Tuesday ruled against U.S. “dolphin safe” tuna labels, in a move that will likely enrage U.S. environmental activists. The ruling could be one of the most controversial in years. The tuna/dolphin case in the early 1990s sparked protests against the WTO’s predecessor, the General Agreement on Tariffs and Trade.

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WTO final ruling in favor of fair access of Mexican tune exports to the United States

Embajada de Mexico, 5/16/12

The World Trade Organization’s (WTO) Appellate Body ruled in favor of Mexico and of the environment by finding that the dolphin-safe label contravenes the United States’ WTO obligations.  The ruling recognizes efforts undertaken by Mexico and Mexican fisheries to promote dolphin and marine ecosystem sustainability.

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The summary of key findings in the dispute settlement can be read here, at the WTO’s website.


Trans-Pacific Partnership (TPP) Talks Advance in Texas

May 16, 2012

Office of the United States Trade Representative, 5/16/12

The United States said today that TPP partners – Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam – made better-than-expected progress at the twelfth round of negotiations that formally concluded today outside Dallas, Texas.

U.S. negotiators have reported to U.S. Trade Representative Ron Kirk that the progress achieved during this round has further narrowed differences in the text and the teams can now see a clear path forward toward conclusion of most of the more than 20 chapters of the agreement. A few TPP negotiating groups will continue to meet in Texas for the remainder of this week.

The TPP agreement is an important element of the Obama Administration’s efforts to support the creation and retention of high-quality jobs for Americans by increasing exports to the vibrant economies of the Asia-Pacific region. The United States and its eight partners are determined to expeditiously complete a comprehensive, next-generation agreement. During this eleven-day negotiating round, the teams focused heavily on making as much progress as possible on the texts of the agreement.

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AL DÍA: U.S.-Mexico Goods and Services Trade Reaches Half Trillion Dollars

May 16, 2012

Mexico Institute, 5/16/12

Christopher Wilson

Perhaps it is a metaphor for the bilateral economic relationship in general. Without celebration or even much recognition, U.S.-Mexico goods and services trade probably reached the major milestone of a half trillion dollars in 2011.

This incredible volume of commerce is testament to a vast network of cross-border ties that have intimately linked the economies of the United States and Mexico, forging a natural economic alliance between the two countries. In recent years, the incredible expansion in mutually beneficial bilateral commerce has gone relatively unnoticed behind the headlines about drugs and violence, despite its very real positive impact on the lives of Americans and Mexicans alike.

Bilateral trade is made not only of finished products like cars, washing machines, tomatoes and grains, but also the parts that factories on each side of the border use to build everything from small electronics to massive airplanes. In fact, it is this trade in industrial inputs that most deeply binds the U.S. and Mexican economies as the integrated North American manufacturing sector works across national boundaries to build final products for sale on the world market.

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Chihuahua City is big dog in Mexico aerospace

May 14, 2012

The Washington Times, 5/14/12

When a jumbo jetliner touches down almost anywhere in the world, the last thing on the pilot’s mind is that the plane’s brakes likely were made in the capital of one of the most crime-riddled states in Mexico. Behind the headlines of warring drug gangs and a soaring murder rate in Mexico, a fast-growing high-tech economy centered on the aerospace industry has sprung up in recent years.

In Chihuahua City alone, 36 aerospace plants have opened since 2007 as a growing number of international parts makers use the city as a base for tapping a massive airplane-production market in the United States. “Our first objective was to get into the U.S. market and get a deal with U.S. customers,” said Nicolas Maillard, director of the French-owned Manoir Aerospace plant in Chihuahua City, 235 miles south of El Paso, Texas.

Shiny, precision-shaped steel discs produced by the plant are shipped to companies in Ohio and Kentucky, where they are added into the assembly line for brake systems on the Boeing Co.’s commercial airplanes. With the average cost of manufacturing labor running about $6 per hour in the city, a new era of high-tech growth is taking root. “The real advantage is the cost of labor,” Mr. Maillard said. “In France, labor would account for about 30 percent of the cost of production on an item like this. Here, it’s roughly 10 percent, and we’re closer to the market we’re trying to reach.”

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Op-ed: Mexico’s secretary of economy: We deserve a seat at trade table

May 4, 2012

The Dallas Morning News, Bruno Ferrari, 5/4/12

While governments and the public have been concentrating on challenges to global financial recovery, a historic economic alliance has been budding in meetings held around the world. The alliance is called the TPP, for the Trans-Pacific Partnership, an ambitious accord to promote a significant expansion of trade among Pacific nations, and this week Dallas hosts the 12th round of TPP negotiations.

What exactly is the TPP? It is composed of nine nations — the United States, Australia, Brunei, Chile, Malaysia , New Zealand, Peru, Singapore and Vietnam. Their aim is to create a free-trade zone that not only eliminates tariff and nontariff barriers to goods and services but also develops regional supply chains to speed the production, sale and movement of goods, coordinates regulatory regimes, helps small- and medium-sized firms export more, and ensures state-owned enterprises compete fairly with private companies.

The TPP negotiations are the most important trade talks in the world, and the TPP accession process requires consensus. The United States should take the lead to give Mexico a seat at the table.

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AL DÍA:Traveling the Texas-Mexico Border

March 7, 2012

3/7/2012, Eric Olson and Chris Wilson of the Mexico Institute are currently driving the  Texas-Mexico border, beginning in El Paso/Ciudad Juarez, ending in Brownsville/Matamoros, and blogging along the way.

We are back from our trip to the Texas-Mexico border and thought we would offer some preliminary conclusions about border management.

There are several positive developments worth noting: There are still no signs of terrorist traffic according to any of the officials and non-governmental sources we met. Improved systems and technology now provide CBP with more information about the people and commercial products seeking to enter the United States than was the case before 2001.

The identity of each individual crossing the border is established and checked against a plethora of law enforcement and intelligence databases. We saw signs of significant engagement between CBP, the private sector and local government in efforts to improve the flow of legitimate travel and trade. Several ports of entry (POEs) have been opened and/or expanded, increasing the capacity for the efficient crossing of goods and people.

There is clearly space for creative problem solving at both the policy (ie Washington) and enforcement (ie border) levels. We saw creative procedures to rapidly convert  vehicle lanes into pedestrian checkpoints to handle peak times, the nearly complete remotely monitored Boquillas crossing, and strong interagency cooperation in some locations.

Though there is much to celebrate, there are also significant challenges that remain in the effort to support security and commerce at the border. These are a few areas that appear ripe for improvements:

  1. Metrics: The amount of time a shipment or individual waits in line before entering the country varies considerably from POE to POE and from one day to the next. Long and unpredictable wait times add costs to US and Mexican businesses alike, while also deterring the cross-border shoppers that are the lifeblood of US border city retailers. Unfortunately, data on border wait times is inconsistent and unreliable. A single, sound methodology for the collection of this important data has not been implemented. In order to identify best practices in border management techniques and to assign resources to the POEs that need them most, accurate and comprehensive data on wait times is essential.
  2. Risk Management: Many CBP officers have several years of experience at our nation’s border, allowing them to instinctively identify suspicious anomalies in an individual or vehicle. They can be even more effective when additional information about a particular shipment or person is made available ahead of time, or even as the individual arrives at the POE. License plate readers, for example, allow the officer to crosscheck some information volunteered by an individual with electronic records. Voluntary trusted traveler and trusted shipper programs provide CBP with data needed to more accurately assess the risk presented by someone seeking entry to the United States. Frequent crossers can enroll in these programs by providing CBP with additional documents, undergoing background checks, and taking steps to secure their supply chains. In return, they are offered expedited processing at the borders, which incentivizes their participation in the programs.
    While these programs are successful in some places, it appears that more could be done to encourage enrollment. Many ports are unable to provide the reduced wait times that would be an incentive to join the trusted traveler and shipper programs. For some, costs and complicated steps for enrollment can be prohibitive. Greater experimentation in the promotion and implementation of these programs (SENTRI, CTPAT, FAST, and the use of Ready Lanes for those with WHTI compliant documents) would be a useful tool in developing best practices for improving security while facilitating commerce.
  3. Intelligence-based Enforcement: Federal law enforcement at the border cannot be expected to shut down all illicit traffic. Despite major advances in border management since 2001, it appears quite clear that a significant amount of illicit traffic continues to cross US borders. Comparing the anecdotal information we received about drug seizures in the border region to the estimated amount of drugs imported and consumed in the United States suggests that the vast majority of drugs such as cocaine, are, in fact, successfully smuggled across the border. One possible response to this reality could be a massive increase in inspections at the border. In the days immediately after 9/11, this was the approach to border security. The Canadian and Mexican borders were virtually shut down, closing the United States off from its number one and three trading partners. In addition to halting commerce, it stopped the flow of individuals, keeping students away from their schools, shoppers out of our stores, and family member apart from their relatives.

    A better response would be to acknowledge that neither northbound nor southbound illicit traffic can be stopped entirely at the physical border and instead focus on risks and threats before they reach the border.  In terms of terrorism, this means that groups must be monitored overseas and their members identified before entering North America. Several steps have been taken to do this, and we were told that there is no evidence of terrorist activity along the southwest border. Drugs, guns, and illicit money are also significant issues; their traffic feeds organized crime-related violence in Mexico and damages communities in the United States. Increasing the number of US investigators focused on the collection and distribution points of illicit trafficking networks and further strengthening our support of Mexico’s police, prosecutors, and judges seems like a more effective way to fight illicit traffic than increasing the Border Patrol or National Guard presence along the border.

  4. Balance: Border management changed significantly after September 11, 2001. CBP’s primary mission is to prevent terrorists and instruments of terror from entering the United States. This is obviously crucial to our national security. Nonetheless, a narrow focus on combating terrorism on the Southwest border can lead to a type of tunnel vision. On a daily basis, CBP must facilitate commercial traffic (also part of its mission) and disrupt the flow of unauthorized immigrants and smuggled goods (not directly mentioned in the CBP mission). In the best of cases, CBP supervisors, agents, and officers find ways to balance the need to protect our nation’s security and economy. We met with several people who clearly understood this and sought creative ways to meet the challenge of CBP’s dual mission. Others seemed inflexible, using the primacy of the security mission as a justification for tolerating long wait times for trucks, cars, and pedestrians attempting to cross.  Relationships with local border communities, their governments and the private sector suffered as a result.

    Effectively balancing CBP’s missions to ensure security and a competitive border isn’t easy, but we saw signs that it is very much within reach. Greater balance is also needed between Border Patrol, who protect the areas between the ports of entry, and the Office of Field Operations (OFO), who protect the ports of entry. Over the past two decades, Border Patrol has grown exponentially while OFO has experienced modest growth. Marijuana is trafficked both between the POEs and through them. The same is true for the entry of unauthorized immigrants. When it comes to hard drugs, however, like cocaine and methamphetamine, the vast majority of traffic appears to be through the official ports of entry. Some we met with attributed the imbalance to a lack of understanding among some Members of Congress over the difference in responsibilities between the Border Patrol and OFO. Others suggest that a national constituency has developed for Border Patrol without a corresponding increase of public support for OFO. Whatever the reason, it is time for a rebalancing of these forces to better reflect the current risks and vulnerabilities (in terms of economics and security) at the border.

–Christopher E. Wilson


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