The Mexican government said it intends to shift long-range plans to build a trade railway connection worth billions of dollars from Texas to New Mexico in the wake of Gov. Greg Abbott’s stepped-up border inspections last month, which were widely criticized as being financially damaging and may now leave a lasting impact on relations between Texas and its No. 1 trading partner.
Mexican Economy Minister Tatiana Clouthier said a planned rail and ports expansion — known as the T-MEC Corridor — to connect the Pacific port of Mazatlán to the Canadian city of Winnipeg would not use Texas, but instead the rail line would be routed along the far edge of West Texas up through Santa Teresa, N.M., about 20 miles west of downtown El Paso.
“We’re now not going to use Texas,” Clouthier said at a conference April 28 in Mexico City. “We can’t leave all the eggs in one basket and be hostages to someone who wants to use trade as a political tool.”
Clouthier was referring to what Mexican and U.S. officials and business leaders on both sides of the border have described as chaos generated by Abbott’s April 6 order requiring that all commercial trucks coming from Mexico to Texas go through “enhanced” safety inspections. Abbott said the move was necessary to crack down on human and drug smugglers.
Critics pushed back, saying the governor’s move was motivated by politics and noting that commercial trucks are already checked by U.S. federal authorities. They also noted that border security is a federal responsibility, and that while DPS officials can conduct vehicle safety inspections, they have no authority to conduct searches.
During a visit to Nuevo Leon, Mexico’s Foreign Minster Marcelo Ebrard told Milenio TV Sunday night that the stepped up inspections were “an extortion scheme, or rather it is extortion: I close the border and you have to sign whatever I say. That’s not a deal, a deal is when you and I are in agreement on something.”
Abbott’s office didn’t return a request for comment.
Jerry Pacheco, president of the Santa Teresa-based Border Industrial Association, called Clouthier’s announcement “a very positive step for New Mexico,” but cautioned that such a project will take years to complete and “anything can happen in that time.”
“I don’t think they’ve even gotten to finish a design yet,” Pacheco said. “So this is very much in the preliminary stages, but the very fact that we’re being discussed in the early stages is a positive thing. If this particular project doesn’t work out, there’ll be other projects that the Mexican government will have and they’ll speak favorably of New Mexico because they know we want to work with them in a constructive way.”
Pacheco said he’s already seen a sea change from the business community in Mexico and the United States.
“It’s been very interesting, but since Gov. Abbott’s truck inspections went away, our traffic numbers remain higher than normal in terms of northbound cargo shipments, which leads me to believe that what I thought would be a temporary fix is actually going to stick in the long term,” he said. Ciudad Juárez and El Paso business leaders “are referring to us now as a ‘very effective delivery route.’ ”
In many ways, Abbott’s inspections only boosted Santa Teresa, an already thriving community with a port of entry where companies also produce materials and components for factories in Mexico that assemble everything from computers, wind blades, consumer electronics and processed foods to automobiles and industrial equipment that they then ship back to U.S.-based businesses.
Industrial parks in Santa Teresa house big warehouses for products constantly crisscrossing the border, backed by a transportation network that includes an airport and railroad and distribution firms that manage the constant movement of goods in all directions. The entire industrial zone operates as one of the nation’s largest inland ports for truck-and-train transshipments across North America, although Laredo is the No. 1 crossing point for commercial rigs.
The Santa Teresa port has long offered a rapid alternative to congested border crossings in El Paso, where it generally takes two hours or more for northbound trucks to enter the U.S. In contrast, it takes it can less than 20 minutes in Santa Teresa, according to Pacheco.
“For businesses who haven’t used Santa Teresa Port of Entry, think of this alternative as a great, necessary idea,” said Franz Felhaber, president of Felhaber and Company Inc., a customs brokerage company that serves clients on both sides of the border.
I believe the technical term for all of this is “fuck around and find out”. Do things that are bad for business and business will look for opportunities elsewhere – that’s just Capitalism 101. I’m old enough to remember when Republicans cared about that sort of thing, but culture wars and identity have supplanted those values, so this is what we get.
Bloomberg News adds on:
It’s hard to quantify the economic impact of shifting a single rail line, it’s unclear what authority Mexico’s government has to dictate where the crossing would be, and the entire project is still in the very early stages and would take years to complete if it does come to fruition. And to be sure, Mexico has a history of announcing massive infrastructure projects that never get off the ground. But the minister’s comments underscore the frustration the government has with Abbott and the risk of jeopardizing a tight trading relationship.
Mexico is Texas’ largest trading partner, with more than $400 billion of goods crossing annually, everything from avocados that get turned into guacamole to chassis that get turned into pickup trucks. Exports from Texas are equivalent to 17% of the state’s economy, and about one-third of Texas exports go to Mexico.
The significance of the minister’s announcement is that “it’s not just necessarily them being hostile, but them taking a concrete step,” said Nitya Pandalai-Nayar, an economics professor at University of Texas at Austin. “Firms all over the country trade with Mexico, and many of them use Texas as the base for shipping to Mexico.”
You know the old joke about getting a donkey’s attention. Maybe this will get Greg Abbott’s.
Or maybe not. I have no doubt that Abbott and his minions will rabble-rouse over this – they’ll complain about “woke” companies and continue to throw billions of dollars at the border for the purpose of rounding up traffic violators and other misdemeanants, all for the purpose of ginning up the base. It’s been a successful electoral strategy for the most part (2018 being a notable exception), and they’re not going to change course now, or anytime soon without a strong reason to. That reason is, and can only be, losing a bunch of elections. The lesson that the business community needs to internalize is that the Republicans aren’t on their side any more. If they want their daddy’s Republican Party back, they need to get this current incarnation out of office. You and I know what they need to do, it’s just a matter of if they can figure it out. TPM, the Dallas Observer, Reform Austin, Daily Kos, the Current, and Dos Centavos have more.