EL PASO, Texas (Border Report) – Border business leaders hope next week’s North American summit addresses pressing supply-chain issues and that their region becomes part of the solution.
President Joe Biden is scheduled to meet on Nov. 18 with the leaders of Mexico and Canada in Washington, D.C. Biden, Andres Manuel Lopez Obrador and Justin Trudeau are scheduled to talk post-pandemic recovery, economic development and supply chain issues, and immigration. It’ll be the first in-person meeting between the leaders of these three countries in five years.
“There’s nothing more important than meeting your counterpart face to face. We sometimes do things that irritate each other and hopefully any rancor or misconception they may have about each other can be clarified at a meeting like this,” said Jerry Pacheco, president and CEO of the Border Industrial Association.
While making sure the COVID-19 pandemic is finally under control might be a big part of the summit, dealing with the supply chain issues it’s left behind is also pressing, he said. Retailers are having trouble filling their shelves and manufacturers are waiting for parts as container ships circle labor-strapped West Coast ports and not enough truckers are around to deliver what gets offloaded.
“We have to invest in our ports. They have to be modernized. Look at what’s happening at the Port of Los Angeles, the Port of Long Beach. All our ports, including here on the border need to expand their capacity because international trade and that demand we’re seeing is only going to increase,” Pacheco said.
He sees border facilities such as the Santa Teresa, New Mexico, port of entry as part of the solution to trucking shortcomings. Union Pacific runs an intermodal ramp on a 2,200-acre site at Santa Teresa which is part of a 23-state rail network. That opens the door for rail shipping from West Coast ports to manufacturing centers in Juarez, Mexico.
“Biden and AMLO (Lopez Obrador) need to talk about improving ports of entry along the U.S.-Mexico border; they have to be committed to putting some funding to do that,” Pacheco said.
Thor Salayandia, president of the Juarez Chamber of Industry and Manufacturing, also hopes the North American leaders address supply chain issues at their summit.
“We need an economic boom after this pandemic,” he said. “Border industry needs to be a growing part of the North America supply chain. Otherwise, materials will continue coming in from overseas and our role will continue to be limited to running assembly lines.”
Salayandia hopes Biden, Trudeau and Lopez Obrador will advance plans to re-shore production from overseas closer to home. That could minimize supply shortcomings while helping some of the region’s small and mid-sized businesses grow as they become suppliers, he said.
Tempering the expectations
But Tony Payan, director of the Center for the U.S. and Mexico at Rice University’s Baker Institute, warns this summit is primarily symbolic.
“It’s good that they’re meeting. It’s good for the image and to ‘re-set’ the trilateral relationship after Trump, but I don’t expect any concrete commitments on pointed issues like immigration, security, climate change or even trade,” Payan said.
Something as straightforward as the pandemic recovery could be marred by the different approach taken by each leader.
“Canada closed its border with the U.S. while Trump had a nonchalant approach to the pandemic. Biden was more disciplined but faced a lot of resistance from governors and Republicans. Mexico has essentially allowed the virus to burn through its population,” he said. “There might be some coordination in terms of the pandemic, but it’s kind of late.”
Addressing the supply chain issue sounds simple, but the three countries are far from united on trade issues. Payan said Biden hasn’t lifted Trump-era tariffs on Canadian imports of aluminum and steel, and his penchant for pushing manufacturers to produce electrical vehicles makes Mexico nervous.
Mexico is one of the world’s largest manufacturers of conventional automobile components – that occupies the assembly lines of half of the maquiladoras in Juarez – and dislikes the idea of U.S. subsidies for electric car production.
“Mr. Biden has been very clear on what he wants. He wants more electrical vehicles built and consumed in the United States and he’s going to grant those subsidies. Mexico may say it’s being left out and that those are violations of the U.S.-Mexico-Canada Agreement,” Payan said.
The two countries likely will continue to have different views on drugs and immigration. Mexico opted out of the Merida Initiative counternarcotic initiative and is pushing work visas in the United States for its citizens. The United States wants to stem the flow of synthetic drugs coming across the border; Biden wants to expand immigration options but depends on a divided Congress to do that.
A binational deal in restoring the “Remain in Mexico” program with Mexican cooperation would’ve been a possibility up to a short time ago, but with immigration apprehension numbers still high but declining, the urgency may not be there anymore.
“At the end of the day, the numbers are now receding enough so that it may not even come to that,” Payan said.