BRIDGES THAT DIVIDE US: FACILITATING US-MEXICO

UNCLAS SECTION 01 OF 08 MEXICO 000379

SIPDIS

SENSITIVE
SIPDIS

WHA/MX FOR MATT ROTH, BUCK WALDROP, DAN DARRACH; DOC FOR
MIGUEL HERNANDEZ, CAMERON CUSHMAN, GERI WORD, USTR FOR JOHN
MELLE, KENT SHIGATOMI

E.O. 12958: N/A
TAGS: ECIN ECON ELTN ETRD MX
SUBJECT: BRIDGES THAT DIVIDE US: FACILITATING US-MEXICO
COMMERCE

Summary
--------------


1. (SBU) The overall message conveyed to Assistant
Secretary of Commerce David Bohigian during his three-day,

SIPDIS
three-state tour of the U.S.-Mexican border was that there
is much that the two federal governments can do to help
improve cross-border commerce, to the benefit of consumers,
businesses, and communities. The U.S. and Mexican business
leaders and customs officials who met with Bohigian work
closely with their counterparts on the other side of the
border to address problems that arise. Their bilateral
efforts have lead to impressive results, but they
emphasized the need for increasing federal attention and
resources to reduce barriers to border commerce in order to
reap true benefits from the promises of NAFTA for both
American and Mexican companies and consumers.


2. (SBU) The main concern for all involved parties was the
long wait times for cargo-laden trucks and day trippers
when crossing the border into the United States. Business
leaders stressed the need for increased U.S. and Mexican
infrastructure at the ports of entry (POE) into the United
States, in terms of roads, inspection terminals, and
customs personnel. U.S. Customs and Border Protection
(CBP) officials noted that most of their facilities had
been built decades ago, before NAFTA and Mexico-based
factories (maquiladoras) producing goods for the American
market created an enormous upsurge in the number of trucks
using the POEs. Business leaders and CBP officials noted
that while programs such as Fast and Secure Trade (FAST)
and the Customs-Trade Partnership Against Terrorism (C-
TPAT) have in some cases reduced border wait times for
trucks, lack of infrastructure and overly-stringent
regulations impede the real progress that these programs
intended. Communities have also expressed concern over the
environmental cost of pollution spewing from vehicle
engines kept idling in the long lines. In the absence of
improved infrastructure, one proposed solution to long wait
times has been to keep POE inspection facilities open for
longer hours. CBP officials expressed openness to the
idea, as long as businesses pledged to change their
business QcultureQ by encouraging FAST/C-TPAT certification
and ensuring a steady stream of cargo traffic throughout
the extended hours. Coordination of POEs along the border
to share best practices can also improve the situation
without a large budget increase. End summary.

General Setting
--------------


3. (SBU) Bohigian and his team observed dedicated and
talented CBP officials at each POE, who worked closely with
communities on each side of the border. Each POE (El Paso,
Nogales, and San DiegoQs Otay Mesa) had developed
innovative methods to reduce the wait times for trucks
entering the United States, while maintaining their high
security standards. The need for balancing smooth trade
with comprehensive security measures was highlighted during
the tour of the Nogales POE, where CBP officials had just
seized 1500 pounds of marijuana from one of the cargo
trucks. Their willingness to address concerns of the
business community and their close ties with Mexican
customs authorities are admirable, especially given
constraints of the environment in which they operate.

Bohigian Listening Tour
--------------


4. (U) Building on a visit in October to Laredo/Nuevo
Laredo, Assistant Secretary of Commerce for Market Access
and Compliance David Bohigian and staff from the Department
of Commerce met with community and business leaders and CBP
officials in the towns and Points of Entry (POEs) of El
Paso/Ciudad Juarez, Nogales/Nogales, and San Diego/Tijuana
(Otay Mesa POE) from January 16-18. Bohigian stressed to
these communities that the USG is acutely aware of the
importance of cross-border trade and is looking for ways to
achieve Qfriction-free tradeQ, striving for an efficient
flow of goods and services across borders while balancing
this prosperity with the need for increased security along
the border. Bohigian noted improvements already made at the
Detroit/Windsor border crossing because of the extra lanes

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added, and asked his interlocutors for ideas from the
ground on what is working well and what needs improvement
at their POEs. He asked for help from business leaders in
collecting information on how long waits at the border and
other hold-ups in the supply chain affect their businesses
and, ultimately, American consumers.


5. (U) The groups were grateful for the attention of the
Department of Commerce on facilitating border trade. Each
community described strong cultural and economic ties
between American border cities and their Mexican
counterparts and strong working relationships with their
neighbors across the border. They also demonstrated ways
in which border communities differ from each other, and how
NAFTA and increased security regulations have posed
distinct problems for each community. In speaking to three
different communities, however, it was evident that many of
the issues they face are quite similar. They all had
numerous suggestions on how to improve trade efficiency at
their POEs and along the border.

Infrastructure Woes along the Border
--------------


6. (U) The main problem all groups pointed to was the long
wait at the border to enter the United States encountered
by trucks and passenger vehicles. For trucks, waits of
several hours before reaching the point of inspection are
not uncommon. Once trucks reach the POE, primary
inspection usually takes only a few minutes, though trucks
tagged for secondary inspection are further delayed. The
delays at POEs come mostly from a lack of adequate
infrastructure, either at the POE itself or on the Mexican
side leading to the POE. Many of the POEs along the border
were built to handle cargo and pedestrian traffic at much
lower rates and have not undergone significant expansions
in a post-NAFTA economy. The Otay Mesa POE connecting San
Diego County to the maquiladoras of Tijuana, Mexico, was
built in 1944 and has greatly outgrown its capacity. The
Mariposa facility in Nogales was built to handle 300 trucks
per day, while the POE now handles around 1,200 trucks per
day.


7. (U) Expansion of POE facilities cannot sufficiently
solve wait time problems without corresponding investment
in road infrastructure leading to the POEs. At all three
POEs, for example, both CBP officials and businesses agreed
that the designated FAST lanes for trucks that are C-TPAT
certified could significantly reduce wait times. In
reality, however, a lack of sufficient road infrastructure
in Mexico leading up to these new FAST lanes keeps these
trucks waiting in long lines until they are able to enter
the FAST lanes. In El Paso, for example, an additional one
kilometer stretch of road could be built on the Mexican
side allowing FAST trucks to enter their lane earlier could
induce more companies to enroll in the FAST program.


8. (U) Infrastructure problems in El Paso have also caused
delays, such as the lack of dividers between the FAST lanes
and regular lanes. Non-FAST trucks are able to enter FAST-
designated lanes and then cut back into the non-FAST lanes
at the last moment, defeating the purpose of designated
lanes and increasing wait times for FAST trucks. Simply
installing QJersey barriersQ (common concrete barriers also
known as QK-railsQ) to divide the lanes would solve this
problem; however, according to CBP officials in El Paso,
lack of funding has so far held up this solution. Even
when FAST-trucks go through primary inspection without
problems, they mix with non-FAST trucks at the bottleneck
created by the one exit gate at the facility. CBP
officials are working to secure funding to build a second
exit gate designated for FAST trucks.


9. (U) In many cases, private/public initiatives in these
border communities have been instrumental in advancing
infrastructure concerns. In Nogales, for example, business
and community leaders worked with CBP officials to develop
plans for a new Mariposa POE facility, and then traveled to
Washington to lobby for the project. They secured the
promise to include funding for the project in the 2007
budget, though with the 2007 budget currently stuck in
Congress, the community is worried about the future of the
project. In El Paso/Ciudad Juarez and San Diego

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County/Tijuana, local groups are working together closely
to press for additional roads leading to FAST lanes, as
well as other infrastructure changes. They have even
proposed public/private partnership for funding some of
these projects.


10. (SBU) Comment: While local initiatives and partnerships
have been very effective in these border communities,
additional support from the federal government on both
sides is required for these projects to succeed. In the
case of building additional roads leading to U.S. FAST
lanes, for example, even if local private groups pledge
funding, local, state, and federal authorities on the
Mexican side must approve the concession for building such
roads. Embassy dialogue with the Mexican Secretariat of
Communications and Transport on this issue might help to
speed the process, and get the GOM to focus on improving
border infrastructure. End comment.


11. (U) Local groups often focus on construction of new POE
facilities as solutions for backups, but CBP officials are
constrained not only by budgets but also by geography. One
port director said that the focus should be not on building
new POEs but on maximizing the existing facilities through
new technologies, expanding lanes, and increasing staffing
at POEs. Some suggest that the use of Qdouble stacked
inspection boothsQ (where two cars or trucks could be
inspected at the same time in one booth),while requiring
more CBP staffing, would allow more vehicles to be
processed without having to build new lanes.


12. (U) The investment of capital POE facilities or roads
would pay off not only in lower wait times for cargo (and,
thus, lower prices for U.S. consumers) but also in
increased security. One port director said that adequate
roads leading into his POE would make the wait time for
trucks entering the POE more predictable. This would allow
for the use of GPS tracking of trucks arriving at the
inspection booths. A noticeable difference between the
average time it would take a truck to reach the inspection
booth and the actual time it took a specific truck could
alert CBP inspectors to trucks that might have be
compromised along the way.

New Technologies, Policies Improving Trade
--------------


13. (SBU) New technologies and practices at the border have
had a positive impact on wait times for cargo entering
American POEs. However, they have also highlighted the
need for adequate infrastructure to support the new
technology. For example, the Automated Commercial
Environment (ACE) program, recently implemented at many
cargo POEs, includes a Web-based portal that allows CBP
inspectors to access information on importers and
manufacturers in order to create a risk assessment of the
cargo. Shipments that score high on this assessment are
sent to secondary inspection at the POE. At El PasoQs
Bridge of the Americas POE, ACE has greatly reduced the
average processing time for each cargo vehicle. However,
this improvement has lead to a marked decrease in the
percentage of companies participating in the C-TPAT/FAST
program at this POE, a program that increases the security
of cargo entering the United States. The lack of road
infrastructure leading into the FAST lanes reduces the
benefits of FAST.


14. (SBU) In addition, trucks going through ACE lanes are
currently less likely to be picked for secondary inspection
than FAST trucks, further reducing their wait time and
further reducing the benefits of FAST. The port director
said that 40% of FAST trucks, which undergo certification
for the shipments and logistics chains as well as driver
vetting, are chosen to undergo non-invasive inspection
(NII) such as gamma ray scanning, as opposed to 18% of non-
FAST vehicles. Since the inauguration of FAST in 2002, not
one FAST truck has been seized for illegal practices in El
Paso, a POE that led the nation in narcotics seizures in

2006. (Note: There may be a discrepancy regarding the
required percentage of FAST trucks that must undergo NII.
A port director at another POE said that POEs were once
mandated to perform NIIs on 40% of FAST trucks, but that
POEs can now conduct NIIs on FAST trucks according to their

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own discretion. At his port, for example, 25-30% of FAST
trucks undergo NII, which he considers a high percentage.)


15. (SBU) While the actual percentage of FAST trucks
singled out for NII is not public, business leaders have
noticed the difference. They say that they are willing to
make the financial investment necessary to have their
companies and trucks C-TPAT certified, but only if they are
able to maintain a competitive advantage in doing so.
Unless infrastructure and inspection concerns are met,
there is little incentive to join C-TPAT/FAST. Business
leaders also asked if something might be done to reduce the
backlog of applications for C-TPAT certification.


16. (U) Port directors along the border have welcomed new
technologies, such as gamma ray scanners, electronic
manifests, and the ACE program, that both speed up traffic
through their POEs and increase the security of the cargo
entering the United States. At the Otay Mesa POE, for
example, the ACE system has allowed for the port director
to create Qvirtual lanesQ when traffic becomes especially
backed up. Because ACE is Web based, the director can send
trucks away from the inspection lanes and into other parts
of the facility such as the dock while CBP officials
process them at separate computers, making room for more
trucks to move into the inspection lanes.


17. (U) Otay Mesa also looks forward to implementation of
the e-manifest requirement for trucks entering California.
(E-manifests will be required at Arizona POEs starting
January 25 and later in the year at other POEs.) E-
manifests will give the POEs advanced knowledge of cargo
and its driver, the weakest link in the supply chain,
several hours in advance. This allows the POE to adjust
staffing for anticipated high volume hours and be prepared
for cargo or drivers that may pose a high security or
health risk. On the other hand, the El Paso port director
noted that e-manifests are only as trustworthy as the
manufacturer or logistics manager who creates the manifest.
He identified the need for increased cooperation with
manufacturers, such as through the C-TPAT/FAST program, to
ensure the trustworthiness of e-manifests.


18. (SBU) Comment: New technologies have allowed POEs to
become more efficient and more secure. However,
infrastructure and regulatory constraints have moderated
the impact of these successes. As one Ciudad Juarez
businessman noted, the FAST/C-TPAT program is a good step
forward in theory, but in practice, FAST trucks may
experience longer wait times at POEs than non-FAST trucks.
The benefits for a company enrolled in C-TPAT/FAST should
be, as one maquiladora described it, shipment
predictability, a reduction of non-value costs of shipping,
and better speed to the market. A further investment in
infrastructure and personnel on both sides of the border,
as well as at the offices responsible for processing C-TPAT
certification, could help FAST live up to its goals.
Getting manufacturers, logistics companies, and drivers C-
TPAT/FAST certified is a win-win situation for both the USG
and industry if the system works as it should. Companies
would recoup the expenses of becoming C-TPAT certified by
ensuring that their cargo makes it to their clients more
efficiently. At the same time, C-TPAT certified companies
promise a more secure supply chain and increase the safety
of the cargo and trucks entering the United States. End
comment.

Increasing Hours
--------------


19. (U) One common idea raised by business leaders along
the border was that POEs should be open for longer hours.
In general, port directors seemed open to this idea, and
indeed do accommodate the need for longer opening hours and
longer work weeks during peak season or after holidays.
Increased hours must be met, however, with a commitment on
the part of businesses and manufacturers to change their
shipping practices. All port directors noted that the
industries that use their POEs tend to follow the same
schedules: starting the work day at the same times, loading
trucks at the same times, and then arriving at the POEs at
the same high volume periods. Though businesses have asked
that the POEs increase their hours of operation, they have

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not made significant changes to their schedules, often
leaving the POEs having committed to extra hours of
operation and increased staffing that is being
underutilized. The Field Office director in El Paso used
the example of the Santa Teresa POE in New Mexico, which
recently installed a new FAST lane and increased its hours
of operations, at the request of maquiladoras on the other
side of the border. The new FAST lane is not being
utilized to its full capacity, she said, because companies
are not yet changing their practices to use the Santa
Teresa facility instead of El Paso. The experience at the
Mariposa POE in Nogales has been the same when they have
tried to extend hours.


20. (U) The Bridge of the Americas port director in El Paso
said that he had issued a challenge to community business
leaders: if they could increase the percentage of companies
participating in C-TPAT/FAST, he would increase the number
of hours the port stays open. He has asked for a guarantee
that the FAST lanes would see a volume of at least 20
trucks per hour. Because FAST trucks require less
attention than non-FAST trucks, the affect on staffing
requirements would be minimal. While the business
community stresses the need for round-the-clock operations,
they also claim that the FAST program needs to start
improving its benefits before they can ensure new members.
The port director in Nogales noted that on occasions when
he has expanded port operations to a seven-day work week,
businesses have not adapted to the new hours and volume has
been low. POEs also pointed out that businesses serving the
trucks, such as customs brokers, industrial parks,
stevedores, and fuel services, need to adapt their
practices to ensure normal truck traffic if hours were
extended.


21. (SBU) Comment: In communities such as El Paso/Juarez,
where over 90% of the cargo traffic originates at
manufacturers in Juarez, port directors are working closely
with local industry leaders to encourage them to change
their practices in exchange for longer opening hours at the
POEs. Ensuring the efficacy of the C-TPAT/FAST program
through the measures mentioned above could help them in
this endeavor. POEs such as Nogales, where most cargo
originates further south in Mexico, require more assistance
from federal authorities to encourage businesses to adjust
their practices to encourage extended opening hours at POEs
and apply for C-TPAT certification to reduce wait times.
The USG can work with the Mexican authorities and
transportation and industry organizations to promote such
incentives and programs. End comment.

Coordinating Agencies
--------------


22. (U) United States-Mexico border POEs handle an enormous
volume of travelers and cargo each year. The port director
at NogalesQs Mariposa POE offers this comparison: two of
the United StatesQs busiest airports, JFK and LAX, handle
approximately 18 million passengers per year, combined. In
2006, NogalesQs POEs handled over 16 million travelers,
plus their vehicles and cargo, with no advanced
notification and with significantly less manpower. The
unique nature of land border POEs processing cargo demands
involvement not only of customs authorities but also of
myriad federal and state authorities. El Paso POEs, for
example, include officials from the federal Department of
Transportation (DOT),Texas and New Mexico DOTs, Center for
Disease Control, Food and Drug Administration, and U.S.
Department of Agriculture. Trucks entering the United
States through the El Paso POEs must undergo separate
inspections at separate facilities by both the U.S. DOT and
the Texas DOT after going through CBP inspections,
resulting in a duplication of efforts and bottlenecks. The
California and Arizona POEs did not seem to have the same
problem, and cited proactive relations between federal and
state officials.


23. (SBU) Comment: CBP authorities mentioned that
duplication of efforts between US and Texas DOTs cannot be
addressed at a local level. Encouraging cooperation
between federal and local authorities could help address
some of the backups at POEs. Infrastructure changes, such
as following NogalesQs example of QsuperboothsQ that house

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CBP, Arizona DOT, and Federal Motor Carrier Association
officials for Qone-stop shoppingQ, at other POEs might also
help reduce the number of stops trucks must make upon
entering the United States, and thus reduce bottlenecks and
wait times. End comment.

Sharing Best Practices
--------------


24. (SBU) The QsuperboothsQ of Nogales and the Qvirtual
inspectionsQ of Otay Mesa are examples of the forward
thinking, innovative ideas born of necessity at these POEs.
Yet while Washington-mandated practices were generally
uniformly carried out along the border, these resourceful
practices originating at individual POEs were not
duplicated by their colleagues elsewhere along the border.
In some cases, this may be due to the different
circumstances of each POE. There is more physical space at
flat Otay, for example, than there might be at Nogales.
Solutions that work at one POE may not be immediately
transferable to others, but they can be adapted to suit the
specific needs of individual POEs. Other best practices
that merit consideration include OtayQs designation of a
lane for the exclusive use of empty trucks to increase
efficiency, a practice that might benefit El Paso, where
empties make up about 50% of cross-border cargo traffic.
El PasoQs connections with the local business community and
local authorities are also a model that can be adapted to
other POEs. (Comment: Federal authorities in Washington
should encourage regular opportunities for port directors
along the Mexican and Canadian borders to exchange ideas
and best practices. The ingenuity that local CBP port
directors and field office directors bring to solving
problems on the ground should be built upon to benefit the
entire border rather than just individual POEs. End
comment.)

Communities Divided by Bridges
--------------


25. (U) Border communities depend on each other for
economic success. The extent of these communities
interdependence is evident on a trip to a Costco or Walmart
on the U.S. side of the border, where the majority of cars
have Mexican license plates, even though these stores are
available on the Mexican side, too. Community leaders in
El Paso/Juarez described the bridges spanning the Rio
Grande as Qthe only obstacleQ between their cities. The
mayor of Nogales, Sonora, reminded Washington that bridges
between Sonora and Arizona are Qmade of people, not just
steel.Q Locals refer to either Nogales, Arizona or Nogales,
Sonora as QAmbos NogalesQ--translated as Qboth NogalesQ--
reflecting the close ties of the communities.


26. (U) In meetings with business and local and federal
authority representatives, border communities stressed to
Bohigian again and again how interdependent the people and
the economies of their cities are. In El Paso, local
authorities cautioned Washington from viewing their city as
a separate entity from their neighbor across the river.
They noted that the loss of jobs in Ciudad Juarez
negatively impacts businesses in El Paso that depend on
Mexican customers to buy their goods and services. Leaders
in San Diego and Tijuana noted that they have conducted
joint trade missions in Asia. They expressed their worries
over the impact of the Western Hemisphere Travel Initiative
(WHTI),which in 2008 will require U.S. citizens to present
a passport upon reentering the United States through a land
border POE. Mexican businesses fear that the WHTI will
lessen the number of Americans crossing into Mexico for
tourism and shopping, while American businesses fear that
the longer lines that inspection of U.S. citizens
passports will create may discourage Mexicans from heading
north for shopping.


27. (U) In addition to worries about long waits for people
crossing the border, these communities remarked that long
waits for trucks result in a negative environmental impact
due to air pollution from idling trucks. Insufficient road
infrastructure in Mexico results in crowding already
crowded streets in urban areas, and trains stopping at the
border for crew changes and inspections cut cities in half.


MEXICO 00000379 007 OF 008



27. (SBU) Comment: While local groups sometimes think they
could solve border problems on a local level without the
interference of federal authorities, the security and
prosperity of these communities depend on forward-thinking
initiatives on the part of the federal governments of the
United States and Mexico. Representatives from consulates
along the border (as well as local CBP officials) already
participate in most of the local organizations discussing
cross-border issues affecting their communities. The
Embassy can bring these communitiesQ concerns to the
attention of federal authorities. In addition, officials
in Washington can continue to solicit the cooperation and
suggestions of these groups and address their concerns.
Increased public awareness campaigns organized in
conjunction with local American groups and with Mexican
tourism representatives, for example, might help to both
alleviate fears regarding the WHTI implementationQs effects
on local economies while also facilitating a smoother
transition to the new system. End comment.

Looking to the Future
--------------


28. (U) Infrastructure and practices at border POEs have
been slow to adapt to greatly increased demand on their
personnel and facilities brought about by NAFTA.
Improvements at the border must look at new changes that
are already affecting cross-border commerce. For instance,
increased trade with Asia, and especially with China, has
increased the stress on American ports. Asian exporters
are looking to Mexico to avoid waits at seaports such as
Long Beach, California. Anticipated investment in Mexican
seaport and railroad infrastructure, such as at Punta
Colonet, will also put more stress on land ports along the
border. The USG should coordinate such projects with the
GOM to anticipate such changes and adapt infrastructure and
staffing at border POEs accordingly.


29. (U) New technologies also provide a unique opportunity
for the USG and GOM to work together to facilitate trade.
The use of electronic seals of cargo, such as those used
for in-bond shipments landing in the United States but
intended for consumers outside the United States, could be
expanded for cargo from Mexico destined for the United
States, both on trucks and rail containers. Electronic
seals would both reduce the need for invasive inspections
and reduce the security risk of cargo shipments headed into
the United States. Several border groups are already
investigating the use of new technologies to improve cross-
border trade, and the USG should seek to encourage and test
these innovations.

Conclusion and Comment
--------------


30. (SBU) Quantifying the value of time saved crossing the
border is a difficult task, but it is important in
understanding how interdependent the economies and citizens
of Mexico and the United States are increasingly becoming.
By engaging in productive dialogue with each other and with
local organizations, the USG and the GOM can advance both
short- and long-term projects to facilitate cross-border
commerce to benefit both our countries. Improving
conditions at border crossings can be accomplished by
responding to concerns of business leaders and efforts of
CBP officials on the ground with a combination of increased
monetary and personnel resources from the USG to improve
POE infrastructure; USG efforts to coordinate
infrastructure improvements with the GOM and to press for
equivalent changes at Mexican POEs; and coordination
between all USG POEs to share some of the best practices
that they have individually developed to facilitate trade.
A renewed and future-oriented commitment to facilitating
cross-border trade will directly benefit not only border
communities but also American and Mexican companies and
consumers while continuing to ensure the safety and
security of our nation.


31. (U) A/S BohigianQs office has cleared this cable.





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GARZA