A Mexican Railroad Play From the U.S.

11/31/2015 The Wall Street Journal 

trainKansas City Southern gets almost half its revenue from Mexico. Its stock has been hurt by several factors, but looks cheap with prospects for a climb.

Ask a Mets fan: It’s the right time to go back to Kansas City, to paraphrase Bob Dylan.

We’re speaking of Kansas City Southern (ticker: KSU), the U.S. railroad that distinguishes itself by gathering nearly half its revenue from an emerging market: Mexico. Via a rail hub in the Midwest that extends to California ports and through Texas to Mexico, Kansas City Southern hauls everything from refrigerators to new cars to oil-and-gas liquids and agricultural products. Low oil prices are a benefit and a curse: lower fuel costs help the bottom line, but lower energy shipments don’t.

What’s battered the stock of late is the emissions-cheating scandal at Volkswagen(VLKAF), which means fewer Mexican-made VWs will ride Kansas City Southern’s rails in the immediate future while the mess gets sorted out. In the latest quarter, revenue fell nearly 7%, with pressure in the automotive, and industrial and consumer-products categories.

The railroad’s shares, also affected by worries about energy shipments and Mexico’s economic woes, are down 31% this year, including a nearly 8% decline in October. The drop reflects a lot of bad news. Profits, projected to fall 7% this year to $4.45 a share, are expected to recover to $4.94 in 2016, though sales may rise only slightly to nearly $2.6 billion.

Read more…

Perilous Crossing in Arizona

10/27/2015 Los Angeles Times 

Border - Mexico

With a significant slowdown in the surge of migrants streaming across the Southwest border, it stands to reason that the number of deaths among those braving the crippling heat of Arizona’s desert frontier with Mexico would also decline. But it didn’t.

In fact, even more people died attempting the perilous crossing: 117 bodies have been recovered along migration routes in southern Arizona since Jan. 1, compared with 108 bodies during the same period last year.

What happened?

The answer lies in the nationality of the person generally found dead on the U.S.-Mexican border: In 85% of cases, they are Mexican, according to Pima County Medical Examiner Greg Hess. Most of the migrants who crossed the U.S. border last year were from violence-ridden countries in Central America who often turned themselves in to U.S. border agents and filed asylum petitions that allow them to remain in the U.S. until their cases are adjudicated.

But Mexican migrants tend to have different circumstances. Most who cross the border illegally face immediate arrest and deportation — and as a result, they often choose to evade detection by making their way up the deadly hot byways of the Arizona desert.

Read more… 

NEW ESSAY | Homeland Security as a Theory of Action: The Impact on U.S./Mexico Border Management

By Alan D. Bersin and Michael Huston

Anatomy of a RelationshipThe terrorist attack on 9/11 in effect closed America’s borders.  The drawbridges were raised, airports and seaports shut down and cross-border traffic at land ports of entry was reduced to a trickle.  Defense and security and enforcement became the exclusive orders of the day.

The U.S. reaction generally and particularly on the Southwest Border was understandable, though it remained more instinctive than considered.  We had experienced a new vulnerability in our “homeland,” a concept that seemed foreign, strange and distant before 9/11.  Reflexively we retreated behind our borders and hunkered down behind the boundaries of Fortress America.

It soon became evident that the costs of “hunker down security,” i.e. the impact of closing the borders, would deliver an unacceptable, catastrophically self-defeating blow to our economy.  The events of 9/11, accordingly, initiated a wrenching turn in the way Americans viewed globalization and the manner in which their government understood and practiced internal security and external defense.  Policymakers were compelled to formulate new theories of action and respond to a dramatically altered threat environment.  Specifically, policy makers grappled with the challenge of how to secure the homeland in a world that was increasingly borderless.  The evolving policy and operational results may be the lasting legacy of September 11, 2001.

This paper examines these developments from the perspective of the relationship between Mexico and the United States and their shared management of a common border.  Although the emergence of a U.S. homeland security doctrine has significantly affected all trade and travel to and from the United States, it has had special importance for and a distinctive impact on U.S. – Mexico bilateral relations.

The above text is an excerpt from the introduction to the essay. This essay is part one of our series “The Anatomy of a Relationship: A Collection of Essays on the Evolution of U.S.-Mexico Cooperation on Border Management.” 

Read the essay. 

NEW SERIES | The Anatomy of a Relationship: A Collection of Essays on the Evolution of U.S.-Mexico Cooperation on Border Management

Anatomy of a RelationshipThe conventional wisdom among those who study the border is that following the terrorist attacks of September 11, 2001, the United States unilaterally imposed significant additional security requirements on the management of the U.S.-Mexico border, and that the measures taken to meet these requirements have made the border more difficult to cross for not only illicit but also licit traffic, including the trade and travel that is the lifeblood of cross-border communities. There is much truth in this interpretation, but it largely portrays Mexico as a passive receptor of U.S. policy, which could not be further from reality.

Rather, the increasing relevance of transnational non-state actors—terrorist groups, organized crime networks—posing border and national security threats in the region have demanded increased international cooperation to monitor and mitigate the risks. At the same time, the U.S. and Mexican economies have become ever more deeply integrated, causing significant growth in cross-border traffic and placing the efficient management of the U.S.-Mexico border as a first-order national interest for both countries.

The post-2001 border management framework has pushed away from the traditional understanding of the border as a line in the sand and moved toward an approach that seeks to secure and (in the case of licit travel and commerce) facilitate flows. This focus on transnational flows has expanded the geographic scope of what were traditionally border operations and thus required an internationalization of border management, the development of partnerships and cooperative methods of border administration.

Over the past decade and a half, the United States and Mexico have transitioned from largely independent and unconnected approaches to managing the border to the development and implementation of a cooperative framework. With contributions from government officials and other top experts in the field, this collection of essays explores the development of cooperative approaches to the management of the U.S.-Mexico border. The essays will be released individually throughout the fall of 2015 and published as a volume in early 2016.

Visit the Series. 

Stanton: Opening doors to Mexico paying off for Phoenix economy

10/7/2015 Ahwatukee Foothills News

GrantonCities that can compete in the 21st century economy have something in common: They’re global. That’s why in Phoenix we’ve pushed harder than ever to rebuild relationships with Mexico, increase exports and create more jobs through trade. And our hard work is paying off.

The day after I returned from Sonora, Mexico, to celebrate the inauguration of Gov. Claudia Pavlovich, we announced our own reason to celebrate: ProMexico will open a trade office in Phoenix.

ProMexico is the Mexican government’s global economic development agency. It promotes Mexican trade interests and encourages exports by helping companies do business internationally — and now it will serve as a resource to Arizona companies in the global marketplace.\

This is a big step forward for our economy, and also symbolically for our relationship with our largest trading partner and neighbor. The Mexican government is now investing directly in our state’s economy. That is a turning point for our relationship which, frankly, suffered amidst our state’s past political divisiveness. From 2007 to 2012, Arizona was the only state to see its exports fall — and so far this year, Phoenix has the biggest increase in export value of any U.S. city.

Read more…

Phoenix retailers could split $181M next year if Mexico border zone is expanded

10/8/2015 Phoenix 

faucet gold coinPhoenix-area retailers could be splitting an extra $181 million in sales as early as next year if a proposal being pushed by Maricopa Association of Governmentsand other business and economic organizations moves through the Homeland Security bureaucracy.

“We want to help build retail sales, and the associated boost MeUin the economy, by expanding the border zone with Mexico,” said Youngtown Mayor Michael LeVault, chairman of the MAG Economic Development Committee. “If the Arizona border zone for vetted Mexican visitors were extended to the whole state, it would be a big boost to the region’s economy.”

Read more..

EXCLUSIVE: Stanton signs Mexico City trade deal for Phoenix biz

10/8/2015 Phoenix Business Journal

hand shakeNo choreographer could have done it better. While Gov. Doug Ducey was giving his International State of the State, Phoenix Mayor Greg Stanton and five other Arizona mayors were in Mexico City wrapping up agreements to make it easier for Arizona companies to do business south of the border.

Stanton and Mexico City Mayor Miguel Angel Mancera Espinosa signed a memorandum of understanding Oct. 6 creating a Global Cities Economic Partnership between the two cities.

The deal is another link in development of the “economic mega-region” promoted by Ducey in his remarks Oct. 5.

Read more…