GAO

United States General Accounting Office

Report to Congressional Requesters

July 1999 U.S.-MEXICO 

BORDER

Issues and Challenges 

Confronting the 

United States and 

Mexico

GAO/NSIAD-99-190

Page 1 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

United States General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-283037 Letter

July 1, 1999

Congressional Requesters

Your June 24, 1998, letter to us expressed concern about the overall 

well-being of the border region and what appeared to be limited progress in 

addressing border issues. You also expressed concern that the border 

region has had to shoulder a disproportionate share of the cost of 

U.S.-Mexican economic integration. As agreed with your offices, this 

interim report (1) outlines the nature of major border issues and (2) 

provides information on U.S. and Mexican efforts underway to address 

them. We are continuing our in-depth analyses of transportation and 

environmental infrastructure issues affecting the border region. These 

studies are aimed at identifying potential options to address these issues, 

within the context of the overall border situation. 

Results in Brief The United States has pursued a strategy of developing closer relations 

with Mexico, in recognition that a stable, democratic, and prosperous 

Mexico is fundamental to U.S. interests. The border region, defined as the 

area 100 kilometers (62 miles) deep on either side of the almost 2,000-mile 

long U.S.-Mexico border,1 is the bridge that binds the two countries. Thus, 

the border is critical to U.S. objectives. However, the U.S. border region 

has relatively high unemployment and poverty levels and faces a number of 

development challenges. And, while growing integration has increased 

trade between Mexico and the United States, it has also exacerbated some 

long-standing border problems. At the same time, many U.S. efforts to 

interdict illicit drugs and illegal immigration take place on the border. As a 

result, there is a confluence of seemingly competing objectives at the 

border that have important implications for the United States. (See app. I 

for additional background on border perspectives.)

The major issues on the border include the following:

• Drug enforcement: The 2,000-mile Mexican border is one of the main 

battlegrounds of the national war on drugs, as law enforcement agencies 

1

As defined by the 1983 Agreement for the Protection and Improvement of the Environment in the 

Border Area, known as the “La Paz Agreement.”

Letr
B-283037

Page 2 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

try to stop the flow of illicit narcotics into America. An estimated 60 

percent of the cocaine and 29 percent of the heroin sold across America 

in 1998 are believed to have come through the U.S.-Mexico border. 

Further, the cross-border movement of illicit drugs is associated with a 

high level of violence, as well as corruption of U.S. and Mexican officials 

and money laundering. Efforts to stop the flow have put pressure on the 

transportation infrastructure and contributed to congestion at the 

border crossings. (See app. II.)

• Illegal immigration: The border is the primary checkpoint for illegal 

immigration. The U.S. Immigration and Naturalization Service 

apprehended 1.5-million undocumented immigrants on the southwest 

border in fiscal year 1998. Illegal immigration has been shown to be 

associated with increased criminal activities and to raise the cost of 

some federal, state, and local programs. Attempting to assure that only 

eligible individuals enter the United States places a burden on border 

infrastructure and affects the cross-border flow of goods and services. 

(See app. III.) 

• Cross-border transportation: The border area provides the 

transportation infrastructure to facilitate trade between the United 

States and Mexico, which has more than doubled since the North 

American Free Trade Agreement went into effect in 1994. Nearly 4 

million trucks and 85 million passenger vehicles entered the United 

States from Mexico in fiscal year 1998. Processing the high volume of 

commercial and passenger traffic while at the same time interdicting 

contraband and illegal immigrants has contributed to congestion and air 

pollution and has placed pressure on the infrastructure of local 

communities along the border. (See app. IV.) 

• Environmental infrastructure and public health: The need for 

environmental infrastructure2 improvement is particularly acute on the 

Mexican side of the border, where many communities are without 

potable water and adequate sanitation. On the U.S. side, most border 

communities have environmental infrastructure, but some facilities 

require repair or expansion. Moreover, most locations are faced with a 

diminishing supply of clean and safe drinking water. Environmental 

infrastructure problems have contributed to public health concerns. 

Many diseases occur at rates much higher in the border region than in 

other areas of the United States and Mexico. Also, there is an increased 

2

Environmental infrastructure refers to the infrastructure designed to protect human health and the 

environment along the U.S.-Mexico border by preventing and/or reducing the pollution of air, water, and 

soil.

Letr
B-283037

Page 3 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

concern about the growing number of multidrug-resistant tuberculosis 

cases in the border region. (See app. V.)

• Economic development: Although the U.S. border region has 

experienced some recent economic growth, it still has relatively high 

unemployment and poverty levels. A number of initiatives are 

underway to address economic development issues. Projections of high 

population growth and a change in the rules governing the Mexican 

maquiladora industry could potentially affect the existing economic 

development challenges. 3 (See app. VI.) 

These problems are being addressed by a number of Mexican and U.S. 

federal, state, and local agencies that are responsible for specific aspects of 

each problem. In light of the transnational nature of the problems, various 

binational institutions, programs, and initiatives have also been created, 

such as the Border Environment Cooperation Commission, the High-Level 

Contact Group on Narcotics Control, and the New Border Vision. While 

such binational mechanisms have been able to make some improvements 

in certain areas, they have not been able to close the gap between what is 

needed and what exists. The limits on progress may be due in part to the 

differing levels of development and dissimilar governmental structures of 

the two countries. In recognition of the special economic development 

needs of the U.S. border community, the President on May 25, 1999, 

announced the Southwest Border Economic Development Initiative, which 

is designed to coordinate federal and local economic development efforts 

to raise the living standards and overall economic profile of the border 

region on a sustained basis. 

The total requirements and their associated costs for addressing the border 

issues described above are unknown, and there remains no single, 

binational plan to address border problems. As we continue our in-depth 

case study analyses of transportation and environment issues, we plan to 

identify potential strategies to overcome the institutional and 

programmatic challenges that impede improved conditions on the border.

Agency Comments We provided a draft of this report to officials from the following agencies 

that had activities discussed in this report: the Departments of Agriculture, 

3

The maquiladora program allows duty-free imports into Mexico of materials and components from 

foreign suppliers. These processed materials are assembled into finished products that must then be 

reexported from Mexico unless special approval is given to sell them in the Mexican market.
B-283037

Page 4 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Health and Human Services, State, Transportation, and the Treasury; the 

Environmental Protection Agency (EPA); the Immigration and 

Naturalization Service (INS); the U.S. Customs Service; and the Drug 

Enforcement Administration. 

All agencies provided material to update key pieces of information, as well 

as some technical changes that we incorporated where appropriate. 

Treasury and EPA officials commented that the report did not provide 

sufficient detail about some of the activities underway and 

accomplishments made in addressing the border issues. We intended this 

report to be a broad overview of the major border issues and what is being 

done to address them, rather than a detailed examination of each specific 

effort. We plan to provide greater detail in our separate reports on the 

transportation and environmental infrastructure issues.

We also discussed the draft report with officials representing Mexico’s 

Secretariat of Foreign Relations. Their primary concern was that the draft 

did not give sufficient description of the nature of the drug-trafficking 

problem, noting that U.S. demand for drugs is a factor. They said that the 

report should highlight to a greater extent some of the recent counterdrug 

initiatives they have undertaken. They also emphasized the importance of 

the New Border Vision, as a binational commitment to work for sustainable 

economic and social development along the border. They said that this 

effort will more effectively coordinate the multiple mechanisms already 

existing at the federal, state, and local levels. Where appropriate, we have 

added more detail in response to these comments. 

Scope and 

Methodology

To obtain information on the major issues on the U.S.-Mexico border, we 

conducted an extensive literature search and relied heavily on a number of 

issued GAO reports and government studies. We also reviewed documents 

and interviewed officials from the relevant federal, state, and local agencies 

and private sector organizations. In addition, we visited Mexico City, 

where we interviewed U.S. embassy and Mexican government officials. We 

also obtained and analyzed information from our ongoing case studies of 

transportation and environmental infrastructure issues at key sister cities 

along the border. 

This report is intended to provide a broad overview of the major issues on 

the border and their implications. Therefore, it may not include all of the 

programs and initiatives that may be underway to address specific 
B-283037

Page 5 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

problems at the border. Appendix VII contains additional information on 

our scope and methodology.

We are sending copies of this report to appropriate congressional 

committees and to the Honorable Dan Glickman, Secretary of Agriculture; 

the Honorable William M. Daley, Secretary of Commerce; the Honorable 

Donna Shalala, Secretary of Health and Human Services; the Honorable 

Andrew M. Cuomo, Secretary of Housing and Urban Development; the 

Honorable Madeleine Albright, Secretary of State; the Honorable Rodney 

Slater, Secretary of Transportation; the Honorable Robert E. Rubin, 

Secretary of the Treasury; the Honorable Thomas A. Constantine, 

Administrator of the Drug Enforcement Administration; the Honorable 

Carol M. Browner, Administrator of the Environmental Protection Agency; 

the Honorable Doris Meissner, Commissioner of the Immigration and 

Naturalization Service; and the Honorable Raymond W. Kelly, 

Commissioner of the U.S. Customs Service. We will also make copies 

available to other interested parties upon request.

Please contact me at (202) 512-4128 if you or your staff have any questions 

concerning this report. Other GAO contacts and staff acknowledgements 

are listed in appendix VIII.

Benjamin F. Nelson, Director

International Relations and Trade Issues
B-283037

Page 6 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

List of Congressional Requesters

The Honorable Henry Bonilla

The Honorable Bob Filner

The Honorable Ruben E. Hinojosa

The Honorable Solomon P. Ortiz

The Honorable Silvestre Reyes

The Honorable Ciro D. Rodriguez

House of Representatives 
Page 7 GAO/NSIAD-99-190 U.S.-Mexico Border Issues
Page 8 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Contents

Letter 1

Appendix I

The U.S.-Mexico 

Border in Perspective

10

Appendix II

Drug Enforcement

20

Appendix III

Illegal Immigration

25

Appendix IV

Cross-Border 

Transportation

29

Appendix V

Environmental 

Infrastructure and 

Public Health

35

Appendix VI

Current and Emerging 

Challenges to 

Economic 

Development in the 

Border Region

45
Contents

Page 9 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Appendix VII

Objectives, Scope, and 

Methodology

49

Appendix VIII

GAO Contacts and 

Staff 

Acknowledgments

51

Table Table I.1: Selected Maquiladora Industry Statistics, by City,

March 1999 13

Figures Figure I.1: U.S.-Mexico Border Region and 14 Sister Cities 11

Figure I.2: Mexican Maquiladora Plant 14

Figure I.3: A Colonia in Douglas, Arizona 15

Figure I.4: South Bay International Wastewater Treatment Plant 18

Figure II.1: Truck X-Ray 24

Figure III.1: U.S.-Mexico Border at San Ysidro, California, and

Tijuana, Mexico 27

Figure IV. 1: Commercial Traffic in Laredo, Texas 30

Figure V. 1: Agricultural Runoff Near Where the New River Enters

the Salton Sea 37

Abbreviations

BECC Border Environment Cooperation Commission

DEA Drug Enforcement Administration

EPA Environmental Protection Agency

INS Immigration and Naturalization Service

NADBank North American Development Bank

NAFTA North American Free Trade Agreement
Page 10 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Appendix I

The U.S.-Mexico Border in Perspective ApIenxdi

The border between the United States and Mexico extends for almost 2,000 

miles, from the Gulf of Mexico in the east to the Pacific Ocean in the west. 

The border region, as defined by the La Paz Agreement of 1983,1

 is 100 

kilometers (62 miles) deep on either side of the border. As can be seen in 

the map (fig. I.1), there are four U.S. states and six Mexican states along the 

border. In Texas, which comprises roughly half of the border, the border is 

defined by the Rio Grande River. California, Arizona, and New Mexico 

have land border crossings. In all, there are 45 border crossings,2

 with 

estimates of around 278 million to 351 million persons legally crossing the 

border from Mexico into the United States in fiscal year 1998.3

1

The 1983 Agreement for the Protection and Improvement of the Environment in the Border Area, 

commonly referred to as the “La Paz Agreement.”

2

According to the State Department. This number includes two bridges that are currently under 

construction.

3

These numbers are based on the differing estimating techniques of the U.S. Customs Service and the 

Immigration and Naturalization Service, respectively, and include both vehicle and pedestrian traffic.
Appendix I

The U.S.-Mexico Border in Perspective

Page 11 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Figure I.1: U.S.-Mexico Border Region and 14 Sister Cities

There are 14 sister or twin cities on the border, accounting for around 92 

percent of the border population. While legally separate cities, in reality, 

sister cities often constitute binational and bicultural “single” communities. 

Many families in the region have members on both sides of the border. 

Further, many people live on one side of the border and commute daily to 

work or school on the other side.

Border Population The border region’s population has changed dramatically since 1965 when 

Mexico initiated the Border Industrialization Program to foster job growth 

in its northern region by sponsoring a maquiladora, or export assembly,

California

Arizona

New Mexico

Texas

Del

Rio

Eagle

Pass

Laredo

Mc Allen

Brownsville

Matamoros

Reynosa

Nuevo

Laredo

Piedras

Negras

Ciudad

Acuna

Ojinaga

Sunland

Columbus Park

Presidio

El Paso

Ciudad Juarez Las

Agua Palomas

Prieta

Naco Douglas Naco

Nogales

Nogales

San Diego

Yuma

San Luis

Rio Colorado

Tijuana

Calexico

Mexicali

Sonora

Chihuahua

Oklahoma

Tamaulipas

Nuevo

Leon

Zacatecas

Durango

Coahuila De

Zaragoza

Baja

Calif.

Norte

Baja

Calif.

Sur

Sinaloa

Gulf of

California

Pacific Ocean Gulf of

Mexico
Appendix I

The U.S.-Mexico Border in Perspective

Page 12 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

industry.4 As more jobs were created, more Mexican workers moved to 

border cities, which experienced significant population growth. For 

example, the population of Ciudad Juarez, Mexico, grew from 650,000 in 

1980 to an estimate of over 1.1 million by 1999. Tijuana, Mexico, grew from 

428,000 in 1980 to about 989,000 in 1995. Its twin city across the border, 

San Diego, went from 875,530 in 1980 to over 1.1 million by 1994. In 1997, 

the Environmental Protection Agency (EPA) estimated that the population 

of the U.S.-Mexico border region was greater than 10.5 million people, with 

about 6.2 million people in the United States and about 4.3 million in 

Mexico. The population on both sides has grown far faster than the 

population in either country as a whole. The population on the U.S. side of 

the border is increasing at an annual rate of 2.7 percent, compared to a total 

U.S. growth rate of 0.95 percent. The population on the Mexican side of the 

border is growing at an annual rate of 3 percent, compared to a total 

Mexican population growth rate of 1.8 percent. Current population 

projections forecast a doubling of the border population over the next 20 

years. 

The Maquiladora 

Industry

As of March 1999, the Mexican government statistical agency reported a 

total of about 3,200 maquiladora plants throughout Mexico, with total 

employment of 1,090,000. Mexico’s border region had a reported 1,751 

maquiladora plants with 651,580 workers, according to the statistical 

agency. The border states of Chihuahua, Baja California Norte, and 

Tamaulipas employed the most maquiladora workers in Mexico, together 

accounting for about 61 percent of maquiladora employment. The top 

locations for border maquiladoras included the cities of Ciudad Juárez and 

Tijuana. In March 1999, the number of workers employed in maquiladora 

plants in these two cities reached nearly 370,400 workers, or approximately 

34 percent of total Mexican maquiladora employment.5

 Table I.1 shows the 

number of plants and employees in the major border cities.

4

The maquiladora program allows duty-free imports into Mexico of materials and components from 

foreign suppliers. These processed materials are assembled into finished products that must then be 

reexported from Mexico unless special approval is given to sell them in the Mexican market.

5

For a detailed discussion of the maquiladora industry in historical perspective, see Lucinda Vargas, 

Business Frontiers, Issue 4 (Dallas, Tx: Federal Reserve Bank of Dallas, El Paso Branch, 1998).
Appendix I

The U.S.-Mexico Border in Perspective

Page 13 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Table I.1: Selected Maquiladora Industry Statistics, by City, March 1999

Source: Mexican National Institute for Statistics, Geography, and Information.

In 1994, the North American Free Trade Agreement (NAFTA) established 

new rules that affected the maquiladora program. For example, by 2001, 

Mexico will restrict the duty preferences available to maquiladoras for 

non-NAFTA-originating raw materials used in the manufacture or assembly 

of finished products. In addition, changes brought about by NAFTA and 

Mexican law will virtually eliminate all restrictions on foreign investment in 

the manufacturing sector, making it unnecessary to establish a maquiladora 

facility to assemble in Mexico. It is too early to predict what the effects of 

the changes in the maquiladora law will be for the border region. (See app. 

VI for details.) Figure I.2 illustrates a maquiladora plant in Tijuana, Mexico, 

near the Otay Mesa crossing.

City, state

Number of

maquiladoras

Number of

employees

Tecate, Baja California Norte 123 11,730

Mexicali, Baja California Norte 179 50,368

Tijuana, Baja California Norte 731 153,453

Nogales, Sonora 85 33,644

Ciudad Juarez, Chihuahua 254 216,945

Piedras Negras, Coahuila 44 15,687

Ciudad Acuna, Coahuila 57 33,426

Nuevo Laredo, Tamaulipas 54 21,533

Matamoros, Tamaulipas 118 56,734

Ciudad Reynosa, Tamaulipas 106 58,060

Total 1,751 651,580
Appendix I

The U.S.-Mexico Border in Perspective

Page 14 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Figure I.2: Mexican Maquiladora Plant

Poverty on the Border Relatively high levels of poverty exist in the border region. Many of the 

poorest counties in the United States are found there, especially in Texas. 

There are also low levels of educational attainment, a relatively young 

population, and a high percentage of new immigrants. Using Census data, 

we calculated that about 24 percent6

 of the population living in U.S. border 

counties in 1996 lived in poverty,7 compared with a national poverty rate of 

nearly 14 percent in this same year. In Texas alone, the population living at 

or below the poverty line is 35 percent, based on 1990 Census data. Income 

distribution also varies widely along the border. For example, according to 

Census data, about 16 percent of residents in San Diego County, California, 

were below the poverty line, as compared to about 52 percent in Starr 

County, Texas, in 1996. Three of the 10 poorest counties in the United 

6

Poverty rate estimates are our calculations based on Census data. The Census data has a 90-percent 

confidence interval.

7

The Census Bureau updates poverty thresholds each year for use in calculating all official poverty 

population figures. Thresholds are estimated by size of family and age of members. For example, in 

1996, the poverty threshold for a single person aged 65 or older was $7,525, while that of a family of four 

with two children under 18 was $15,911.
Appendix I

The U.S.-Mexico Border in Perspective

Page 15 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

States are located in the border area, and the federal government has 

designated 21 U.S. border communities as economically distressed.8

The poverty is more acute in the border areas called colonias. The term 

“colonia” generally refers to an unincorporated, low-income community 

endemic to the U.S.-Mexico border. These communities are characterized 

by substandard housing, inadequate roads and drainage, substandard or no 

water and sewer facilities, and no garbage disposal services. Although 

colonias are found in all four U.S. border states, they are most common in 

Texas and New Mexico. EPA estimated in 1997 that the colonias’ 

population includes over 390,000 people in Texas and over 42,000 in New 

Mexico. Figure I.3 illustrates an example of a U.S. colonia.

Figure I.3: A Colonia in Douglas, Arizona

Although poor by U.S. standards, Mexico’s northern border is considered to 

be one of the more affluent areas of the country. Compared to other areas 

8

An area of general economic distress is defined, for all urban and rural communities, as any census 

tract that has a poverty rate of at least 20 percent, or any designated Federal Empowerment Zone, 

Supplemental Empowerment Zone, Enhanced Enterprise Community, or Enterprise Community. 

Furthermore, any additional rural or Indian reservation area may be so designated after considering the 

following factors: (1) unemployment rate, (2) degree of poverty,(3) extent of outmigration, and (4) rate 

of business formation and rate of business growth.

Letr
Appendix I

The U.S.-Mexico Border in Perspective

Page 16 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

of the country, the Mexican side of the border has lower unemployment, 

higher incomes, more even income distribution, and more services. 

Although better off than much of the rest of Mexico, communities on the 

Mexican side of the border also confront deficiencies in basic services. 

According to a 1996 EPA study, about 12 percent of the population in major 

Mexican border cities lack access to safe drinking water, and only about 69 

percent live in residences connected to sewage collection systems. 

Furthermore, only 34 percent of the wastewater produced in Mexican 

border cities is treated.

What Are the Unique 

Challenges in 

Addressing Border 

Issues?

The transnational nature of the border issues, the differing levels of 

development in the United States and Mexico, and the dissimilar 

governmental structures make border issues difficult to address. Many of 

the major border issues are essentially not “domestic,” but transnational 

issues that transcend political boundaries. For example, El Paso, Texas, 

and its sister city, Ciudad Juarez, have a serious air pollution problem. The 

mountains surrounding the cities create a single air basin, causing airborne 

pollution to stagnate over the area. Only by working together to mitigate 

the sources of the pollution will either city enjoy clean, healthy air. The 

situation is essentially the same for many other important border issues, 

such as drug interdiction, immigration, congestion at border crossings, 

availability and management of water, and health concerns (such as the 

high levels of tuberculosis in the border region). Addressing these complex 

transnational issues requires coordination and cooperation among 

numerous U.S. federal, state, and local agencies, and with their Mexican 

counterparts.

Transnational Nature of the 

Issues

The United States and Mexico recognize the transnational nature of the 

major issues on the border and have worked to build a closer bilateral 

relationship. To this end, they have created numerous binational 

institutions to foster joint action. Among them are the U.S.-Mexico 

Binational Commission, established in 1981, and the Border Liaison 

Mechanism, which was created in 1993. The Binational Commission meets 

annually at the Cabinet level and works on a wide range of issues, such as 

drugs, immigration, and border cooperation, that are critical to 

U.S.-Mexican relations and the border region. The Border Liaison 

Mechanism is chaired by the consuls-general or consuls in the sister or pair 

cities. It brings together the U.S. and Mexican sides---local federal, state, 

and municipal officials, as well as business and community groups---in 

order to develop joint actions to help resolve local problems, such as 
Appendix I

The U.S.-Mexico Border in Perspective

Page 17 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

cross-border law enforcement issues, health concerns, and coordination of 

port security and operations. 

The U.S. and Mexican governments have recently developed an initiative 

called the New Border Vision. In May 1997, President Clinton and 

President Zedillo proposed to devise a comprehensive and long-lasting 

strategy to transform the border into a model of bilateral cooperation. 

They agreed on the need to promote sustainable economic and social 

development as well as to improve the well-being and safety of families and 

communities along the shared border.

Disparity in Development 

Levels 

A second challenge in addressing border issues is the disparity between the 

United States and Mexico in terms of level of development. This, in turn, 

results in differing levels of resources available to address border 

problems. Many parts of Mexico’s northern border are poor by U.S. 

standards, yet the northern border is relatively well off as compared to 

other parts of Mexico. In addition, the Mexican government has been 

focused on improving its overall economy, reducing government spending, 

and dealing with less-developed regions in the south. This means that the 

amount of funding that is available from Mexico for border projects is 

limited. For example, the United States and Mexico agreed to jointly 

finance a new wastewater treatment plant in South Bay, California, and a 

plant expansion at Nogales, Arizona, to treat waste generated on the 

Mexican side of the border. As a result of limited resources and higher 

priorities elsewhere in the country, Mexico contributed $17.8 million of the 

total cost of $321.9 million for both projects. The United States financed 

Mexico’s share of project costs and agreed to 10 annual installment 

payments to repay the loan. Figure I.4 illustrates the new South Bay 

wastewater treatment plant, just inside the border near San Diego, which 

exclusively treats wastewater from Tijuana, Mexico.
Appendix I

The U.S.-Mexico Border in Perspective

Page 18 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Figure I.4: South Bay International Wastewater Treatment Plant

Differences in Government 

Structure 

Differing U.S. and Mexican governmental structures also create a challenge 

to joint action. Mexico has had a centralized government structure in 

which authority is generally contained in Mexico City. Policy and resource 

allocation decisions that affect border issues are typically made in Mexico 

City. Thus, Mexican states and local governments in the border region 

generally have not had the authority or resources to address border issues. 

While Mexico is beginning to delegate more authority to state and local 

officials, this shift in authority is made more difficult because local officials 

can only serve one 3-year term. The resulting turnover among officials 

makes building institutional expertise and continuity difficult, and new 

relationships have to be developed between U.S. and Mexican 

counterparts. It also means that there are no assurances that the initiatives 

of one administration will be carried out by its successor.

In the United States, the federal government shares authority and 

responsibility with the states on matters such as natural resources 

management, the environment, transportation, and health issues. For 

instance, most highways in the United States are planned, built, and 

maintained by the states. Decisions about the location of a new highway 

are typically made by state and local officials. Because of these differences 
Appendix I

The U.S.-Mexico Border in Perspective

Page 19 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

in government responsibilities, on certain issues, the Mexican counterparts 

to U.S. state and local authorities have not had the authority to make 

decisions on actions to address common border problems. The U.S. 

officials have had to negotiate with Mexican federal officials, who have 

many priorities in addition to the northern border. 
Page 20 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Appendix II

Drug Enforcement ApxIendi

The need to stop the flow of illicit narcotics from Mexico to the United 

States has had major implications for the U.S.-Mexico border area, where 

much of the enforcement effort takes place. This drug enforcement mission 

affects the processing of both people and cargo that cross the border. The 

cross-border movement of drugs has been accompanied by other criminal 

activities on both sides of the border, including the corruption of law 

enforcement officials, violence, and money laundering. The United States 

and Mexico consider drug trafficking to be a major threat to their 

respective national security and have attempted to address drug-trafficking 

issues through coordination and the development of a binational 

counternarcotics strategy. Much of the U.S. efforts are focused on 

providing assistance to U.S. law enforcement organizations along the 

border to enhance their drug interdiction capabilities. The principal U.S. 

agencies combating the flow of drugs across the border are the U.S. 

Customs Service, the Drug Enforcement Administration (DEA), the 

Department of Defense, and the Immigration and Naturalization Service 

(INS).

What Is the Nature of 

the Drug Problem?

At present, Mexico is the principal transit route for most of the cocaine and 

much of the heroin and foreign-produced marijuana that is consumed in the 

United States. U.S. agencies estimate that about 60 percent of the almost 

340 metric tons of cocaine entering the United States in 1998 passed 

through Mexico and, despite Mexican drug eradication efforts, Mexico 

remains a major source country for marijuana and heroin sold in the United 

States. According to DEA, almost all of the estimated 6 metric tons of 

heroin produced in Mexico in 1998 will reach U.S. markets. In February 

1999, the DEA Administrator testified that a study DEA has underway 

indicates that as much as 29 percent of the heroin used in the United States 

is smuggled in by Mexican drug-trafficking organizations. DEA also 

estimates that the majority of the methamphetamine available in the United 

States is either produced in Mexico and transported to the United States or 

manufactured in the United States by Mexican drug traffickers.

The drug-trafficking problem in the United States and Mexico is associated 

with corruption of law enforcement officials, violence, and money 

laundering: 

• A major impediment to U.S. and Mexican counternarcotics efforts is the 

corrupting influence that drug trafficking activities have on law 

enforcement. According to one U.S. estimate, Mexican narcotics 

traffickers spend billions of dollars a year to suborn Mexican 
Appendix II

Drug Enforcement

Page 21 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

government officials at all levels.1 Recognizing the impact of corruption 

on law enforcement agencies, the president of Mexico (1) expanded the 

role of the military in counternarcotics activities and (2) introduced a 

screening process for personnel working in certain law enforcement 

activities. However, neither of these initiatives can be considered a 

panacea for the narcotics-related problems confronting the two 

countries. In fact, since these initiatives, a number of senior military 

and screened personnel were found to be either involved in or 

suspected of conducting drug-related activities. 

Drug-related corruption of law enforcement is not limited to Mexico. 

Some U.S. Immigration and Naturalization Service and U.S. Customs 

Service employees on the U.S.-Mexico border have engaged in a variety 

of illegal drug-related activities. Such activities have included waving 

drug loads through at the border crossings, coordinating the movement 

of drugs across the border, transporting drugs past U.S. Border Patrol 

checkpoints, selling drugs, and disclosing drug intelligence information 

to drug traffickers.2

• Violence is also an outgrowth of the illicit drug situation that affects 

both sides of the border. Organized crime groups from Mexico have 

relied on violence as an essential tool of their trade. For example, 

between September 1996 and February 1999, DEA recorded 141 threats 

or violent incidents against U.S. law enforcement personnel, their 

Mexican counterparts, public officials, or informants in Mexico or along 

the border. According to DEA, much of the drug-related violence, which 

has become commonplace in Mexico, has spilled over to communities 

within the United States.

• Money laundering is another byproduct of drug trafficking. According 

to the Department of State, Mexico continues to be the primary haven 

for money laundering in Latin America. Drug cartels launder the 

proceeds of crime in legitimate businesses in both the United States and 

Mexico, favoring transportation and other industries that can be used to 

facilitate drug, cash, and arms smuggling or to further money-laundering 

activities. In May 1998, Customs concluded Operation Casablanca, the 

largest and most comprehensive drug money-laundering investigation in 

the history of U.S. law enforcement. This 3-year investigation netted 

1

See Drug Control: Update on U.S.-Mexican Counternarcotics Activities (GAO/T-NSIAD-99-98, Mar. 4, 

1999).

2

See Drug Control: INS and Customs Can Do More to Prevent Drug-Related Employee Corruption

(GAO/GGD-99-31, Mar. 30, 1999).
Appendix II

Drug Enforcement

Page 22 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

about $100 million in illicit drug proceeds and culminated in the arrest 

of 168 individuals from 12 of Mexico’s largest banking institutions.3 

Additionally, three Mexican banks were indicted for participating in the 

money-laundering scheme.

What Efforts Are 

Underway to Counter 

the Drug Threat?

The United States and Mexico have attempted to address drug-trafficking 

issues by (1) coordinating their efforts, particularly through periodic 

meetings of senior government officials and (2) developing a binational 

counternarcotics strategy. The United States has also increased its 

counternarcotics assistance to Mexico, and U.S. law enforcement 

organizations have received additional support along the southwest border 

in order to enhance drug interdiction capabilities. 

The United States and Mexico have established a number of formal and 

informal mechanisms to increase cooperation and coordination between 

the two countries on law enforcement and narcotics-related issues. The 

two principal formal coordinating forums are the U.S.-Mexico High-Level 

Contact Group on Narcotics Control and the senior Law Enforcement 

Plenary. The contact group, led by the U.S. Director of the Office of 

National Drug Control Policy and the Mexican Foreign Secretary and the 

Attorney General, met twice in 1998. An ad hoc meeting between the 

Mexican and the U.S. Attorneys General occurred in July 1998 and resulted 

in the creation of a process for enhanced consultations and cooperation in 

sensitive cross-border operations. Additionally, Mexico created the 

Bilateral Task Force, a special unit within the Mexican Attorney General’s 

office responsible for investigating and dismantling the most significant 

drug-trafficking organizations along the U.S.-Mexican border.

The United States and Mexico have also developed the Binational Drug 

Strategy, released in February 1998, which contained 16 general objectives. 

Among them were the goals of reducing the production and distribution of 

illegal drugs in both countries, increasing the security of the border, and 

focusing law enforcement efforts against criminal organizations. Since the 

issuance of the binational strategy, a number of joint working groups, made 

up of U.S. and Mexican officials, have been formed. One result of these 

meetings was the development of joint performance measures and 

3

See Drug Control: Update on U.S.-Mexican Counternarcotics Efforts (GAO/T-NSIAD-99-86, Feb. 24, 

1999).
Appendix II

Drug Enforcement

Page 23 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

milestones for assessing progress toward achieving the objectives of the 

binational counternarcotics strategy.

At the border crossings, the U.S. Customs Service is the primary agency, 

assisted by INS Inspections, responsible for stopping the flow of illegal 

drugs through U.S. ports of entry. In addition to conducting routine 

inspections to search passengers, cargo, and conveyances4

 for illegal drugs, 

Customs’ drug interdiction program includes investigations and other 

activities unique to specific ports. In conducting its drug interdiction role, 

Customs’ major challenge is to effectively carry out its interdiction and 

trade enforcement missions while at the same time facilitating the flow of 

persons and cargo across the border. In fiscal year 1998, Customs seized 

31,769 pounds of cocaine, 830,891 pounds of marijuana, and 407 pounds of 

heroin along the U.S.-Mexico border. To help deal with the drug problem at 

the border, Customs is installing various state-of-the-art X-ray systems to 

inspect cargo and vehicles and is evaluating other forms of new technology 

in high-risk areas. Many of these efforts are being supported by the 

Department of Defense and involve support of and coordination with other 

law enforcement agencies. Figure II.1 illustrates a truck exiting the truck 

X-ray at the Pharr, Texas crossing.

4

Conveyances include cars, buses, trucks, aircraft, and vessels.
Appendix II

Drug Enforcement

Page 24 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Figure II.1: Truck X-Ray

The Border Patrol is the principal agency within INS responsible for 

detecting and apprehending drug smugglers along the border between the 

ports of entry. According to the Office of National Drug Control Policy, the 

Border Patrol seized 22,675 pounds of cocaine and more than 871,000 

pounds of marijuana during fiscal year 1998. The INS also reports that it 

was responsible for the arrest of more than 8,600 persons for 

narcotics-related violations along the southwest border during this period. 
Page 25 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Appendix III

Illegal Immigration ApIenxdi

Each year, hundreds of thousands of illegal aliens enter the United States 

across the U.S.-Mexico border. As a result, Congress has mandated 

increased efforts to facilitate border processing of legal entries and prevent 

or deter illegal crossings. Jobs in the United States have been the major 

draw for Mexican migrants.

What Is the Nature and 

Extent of Increasing 

Immigration on the 

Border?

Mexican citizens and others who want to be admitted to the United States 

must present documents to INS inspectors at ports of entry along the 

border. Of the 915,900 persons who were granted legal permanent resident 

status in fiscal year 1996, 163,572, or 15 percent, were from Mexico—an 

increase of about 82 percent from fiscal year 1995. In addition, an unknown 

number of Mexicans, likely to exceed 1 million, come and work in the 

United States for short periods of time and then return home, according to 

a Brookings Institution study.1

 

INS has the dual role of facilitating legal entry into the United States and 

stopping illegal entry. Last year, for example, an average of 960,000 entries 

were processed daily along the border. In 1996, INS estimated that the 

Mexican undocumented entrant population had grown by an average of 

150,000 annually since 1988 and that 2.7 million undocumented entrants 

had established residence in the United States. In fiscal year 1998, INS 

made 1.5 million apprehensions on the southwest border.

What Is Being Done to 

Address Border 

Immigration Issues?

INS’ Inspections and the U.S. Border Patrol, also part of INS, are the two 

components chiefly responsible for deterring illegal entry along the 

southwest border. In attempting to inhibit unlawful entrants, the Attorney 

General announced a five-part strategy in 1994 to strengthen enforcement 

of the nation’s immigration laws, including enhancing border monitoring. 

The primary focus of enforcement efforts shifted from apprehending illegal 

aliens in the United States to deterring their entry. Moreover, Congress 

increased the U.S. Border Patrol’s budget from $362 million in fiscal year 

1993 to $727 million in 1997. As a result, existing resources have been 

reallocated along the border, and border control personnel have been 

increased. For example, the number of Border Patrol agents on the border 

rose from 3,389 to 7,357 between fiscal year 1993 and 1998. This growth 

1

The Brookings Institution, Immigration in U.S.-Mexican Relations: A Report of the U.S.-Mexican 

Relations Forum (Washington, D.C.: Jan. 1998).
Appendix III

Illegal Immigration

Page 26 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

was due largely to the 1996 Illegal Immigration Reform and Immigrant 

Responsibility Act’s requirement that the U.S. Border Patrol hire 1,000 

agents annually through 2001. However, a study commissioned by the 

Office of National Drug Control Policy estimated that the U.S. Border 

Patrol would need over 16,000 agents to deter unauthorized crossings along 

the southwest border.2

 This number is more than twice the 7,357 agents 

working the border as of September 1998. We recently reported that INS is 

unlikely to meet the 1,000-agent annual hiring quota mandated by Congress, 

and the executive branch has not requested additional positions in its fiscal 

year 2000 budget.3

 Figure III.1 illustrates U.S. Border Patrol agents 

monitoring the double wall dividing San Ysidro and Tijuana to deter illegal 

crossings, among other things.

2

F. Bean, R. Capps, and C. W. Haynes, An Estimate of the Number of Border Patrol Personnel Necessary 

to Control the Southwest Border (Austin, TX: Center for U.S.-Mexico Border and Migration Research, 

University of Texas, July 1998). We have not reviewed the methodology used to arrive at this figure.

3

In March 1999, the INS Commissioner testified that nearly 48 percent of the Border Patrol agents had 

less than 3 years of experience, and law enforcement experts had indicated that it is risky to allow an 

agency’s overall ratio of inexperienced officers to exceed 30 percent. Also, according to an INS official, 

INS lacks adequate facilities to support the increased numbers of agents along the southwest border. 

Therefore, according to INS, maintaining staffing at the fiscal year 1999 level will give INS time to 

develop more experienced agents and allow INS to allocate the funds it needs to improve facilities. 

Illegal Immigration: Status of Southwest Border Strategy Implementation (GAO/GGD-99-44, 

May 19,1999).
Appendix III

Illegal Immigration

Page 27 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Figure III.1: U.S.-Mexico Border at San Ysidro, California, and Tijuana, Mexico

One method the United States is using to enhance and expedite 

enforcement efforts at border crossings is increasing the use of biometric 

technology, whereby biometric identifiers, such as photos and fingerprints, 

can be digitally scanned and read by a computer. INS has developed 

IDENT, an automated system that catalogues apprehended illegal aliens' 

fingerprints, which can help identify the number of aliens apprehended 

while attempting to reenter the country. The State Department is also 

currently phasing in another identification system to speed processing 
Appendix III

Illegal Immigration

Page 28 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

times for legal entry of Mexicans who frequently cross the border into the 

United States. The border crossing cards that had previously been used are 

now being replaced with laser visas, new high-tech biometric cards that 

include photos and fingerprints. 

One area of current concern in U.S. border enforcement efforts is a U.S. 

Congress-mandated4

 automated entry/exit control system at land and 

seaport points of entry that will collect arrival and departure data on every 

non-U.S. citizen crossing the border. Critics of the mandate, fearing huge 

bottlenecks at the border, want a system that balances law enforcement 

and trade facilitation. The system was to be established by September 30, 

1998, on both the Mexican and Canadian borders. However, Congress has 

extended the deadline to March 31, 2001.

While the United States and Mexico are willing to work together on some 

border issues, there are some differences in emphases: the United States 

wants to reduce the level of unauthorized migration, while Mexico wants to 

protect its citizens. The United States’ present policy is to immediately 

deport illegal immigrants who are apprehended, unless they might have a 

legitimate claim to asylum or have committed a crime. Mexico’s focus 

emphasizes actions the United States should take, particularly better 

protection of the human rights of migrants and avoidance of abrupt 

changes to immigration policy. In particular, the Mexican government is 

concerned that the 1996 Illegal Immigration Reform Act will (1) result in a 

concerted effort to identify and deport undocumented workers and some 

documented workers and (2) make it more difficult for Mexican nationals 

living illegally in the United States to acquire legal status.

In another effort to deal with border entry issues, the U.S. and Mexican 

governments established a Border Safety Initiative in June 1998 to prevent 

injuries, deaths, and violence along the border. With increased 

enforcement at border entry points, aliens have shifted their crossing 

patterns to more dangerous river and desert crossings. This initiative 

warns potential illegal aliens through various media of the dangers in 

crossing the border at particular routes and targets search and rescue 

operations in hazardous areas. At a February 1999 meeting in Merida, 

Mexico, the United States and Mexico agreed to a memorandum of 

understanding on combating border violence.

4

Section 110 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (P.L.104-208, 

Div.C).
Page 29 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Appendix IV

Cross-Border Transportation ApIVexndi

As commercial and private vehicle traffic associated with growing 

economic integration has increased, it has put stress on the local 

infrastructure. Long lines at some crossings impede local traffic 

movement, contribute to air pollution, and can raise business costs if 

merchandise and parts are delayed. Traffic congestion is caused in part by 

inadequate infrastructure at some crossings, resource management issues, 

as well as how the ports of entry are managed. Another major factor 

affecting congestion is the need to facilitate commerce and the movement 

of people across the border while at the same time protecting the nation 

against illegal immigration and contraband goods.

What Is the Nature and 

Extent of the 

Cross-Border 

Transportation 

Problem?

The growing volume of trade between the United States and Mexico has 

placed pressure on the local transportation infrastructure of border 

communities. Total trade between the United States and Mexico has 

increased from $75.8 billion in 1992 to $157.3 billion in 1997, and that year 

just under 10 percent of total U.S. imports entered the country from 

Mexico. Approximately 75 percent of U.S.-Mexico trade (measured by 

weight) crosses the southwest border by truck. According to the U.S. 

Customs Service, in fiscal year 1998 approximately 3.9 million trucks 

entered the United States from Mexico, a 30-percent increase from fiscal 

year 1996. At some ports of entry, such as Laredo, Texas, and Otay Mesa, 

California, as many as 2,500 commercial vehicles a day enter the United 

States. Commercial and passenger traffic volume can also be seasonal. 

For example, Nogales, Arizona, handles a high volume of fresh vegetables 

during the winter months. Cross-border passenger traffic generally 

increases around major holidays, particularly Christmas and Easter. The 

number of passenger vehicles entering the United States from Mexico also 

rose 12 percent during the 1996-98 period, from 76 million to 85.4 million. 

Currently, there are 45 ports of entry along the U.S.–Mexico border, 

according to the State Department;1

 however, the number is not static. A 

new port of entry recently opened in Brownsville, Texas, and new bridges 

are scheduled to open in Eagle Pass this year and Laredo, Texas, next year. 

The value of imports that crossed the U.S. border from Mexico in 1997 was 

$75.5 billion—Customs statistics show that South Texas district ports of 

entry processed $38.8 billion, the West Texas district handled $14.7 billion, 

the Arizona district processed $8.5 billion, and Southern California handled

1

This includes two bridges currently under construction.
Appendix IV

Cross-Border Transportation

Page 30 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

$13.5 billion.2 These numbers illustrate the burden placed on the 

transportation infrastructure of the different communities along the 

border. Figure IV.1 illustrates trucks waiting for paperwork in the U.S. 

import lot in Laredo; the trucks on the bridge are heading into Mexico.

Figure IV. 1: Commercial Traffic in Laredo, Texas

Traffic associated with southwest border ports of entry has led to 

congestion of both commercial and passenger vehicles at some crossings, 

particularly older crossings that were built in downtown areas. This traffic 

has taxed the local and regional transportation infrastructure, and the 

resulting lines of traffic, which can run up to several miles during peak 

periods, are associated with air pollution caused by idling vehicles. Federal 

and local officials have also expressed concerns about how congestion 

affects safety around the ports of entry. Congestion can also have a 

negative impact on businesses that operate on a just-in-time schedule and 

rely on regular cross-border shipments of parts, supplies, and finished 

products. Custom brokers and local trucking companies also have an 

effect on the flow of traffic because their work is part of the process of 

moving goods across the border. Custom brokers process paperwork for 

2

The U.S. Customs Management Centers on the southwest border are South Texas, West Texas, Arizona, 

and Southern California.
Appendix IV

Cross-Border Transportation

Page 31 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

exporting and importing goods; and trucking companies ship goods across 

the border.

Processing the high volume of commercial and passenger traffic while 

interdicting illegal contraband and immigrants and ensuring commercial 

vehicle safety presents a challenge for the multiple agencies working on the 

border. Customs and INS are the main, frontline agencies at the ports of 

entry that have contact with the public. Customs is the lead agency that 

processes commercial traffic, and its inspectors are responsible for 

searching vehicles for illegal drugs, illegal imported goods, and illegal 

immigrants. INS primarily focuses on processing pedestrians and 

passenger vehicles while also looking for contraband and immigration 

violations. Other agencies that may be at the ports of entry, depending on 

the goods imported, are the federal and/or state departments of 

transportation, the Food and Drug Administration, the Agricultural Plant 

and Health Inspection Service of the Agriculture Department, and the U.S. 

Fish and Wildlife Service. Customs subjects commercial vehicles entering 

the United States to a mandatory primary inspection. Inspectors check 

shipping documentation, track the truck’s and driver’s recent crossing 

history, and review vehicle and driver permits. At some ports of entry, 

Customs staff, assisted by National Guard staff, examine vehicles using 

canines, tools, and scopes. Trucks may then be selected for additional 

secondary examinations, such as full truck X-rays. There are also other 

inspections that may take place, such as a hazardous materials check or 

inspections by the Departments of Transportation and Agriculture, or the 

Food and Drug Administration. The result is that inspection facilities can 

be crowded during peak periods as trucks are off-loaded and inspected, or 

drivers wait for paperwork to be approved. At some ports of entry, 

Customs officials said that insufficient staffing also impedes the crossing 

process and leads to backups because not all available primary entry lanes 

can be opened to let trucks into the inspection compound. 

A recent binational study published by the Joint Working Committee 

quantified costs associated with trade-related traffic between the United 

States and Mexico. The study estimated that wear on the U.S. border state 

highway systems was $113 million in 1995, while wear on U.S. nonborder 

highway systems was estimated at $62 million. 
Appendix IV

Cross-Border Transportation

Page 32 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

What Is Being Done to 

Address the 

Cross-Border Traffic 

Problem?

The U.S. and Mexican governments have several binational mechanisms to 

coordinate port of entry activities. These mechanisms take place at the 

national, state, and local levels. The primary binational mechanism at the 

national level is the U.S.–Mexico Binational Group on Bridges and Border 

Crossings. This group works out agreements for existing and potential 

bridges and border crossings and is coordinated by the U.S. State 

Department and its Mexican counterpart. The Joint Working Committee is 

another group that works on transportation planning at the local and 

national levels, with representatives from U.S. and Mexican states and 

federal governments. The Border Governors’ Conference, which 

represents the four U.S. and six Mexican border states, focuses on 

addressing issues and opportunities of the border region, and promoting 

initiatives to improve the region’s quality of life. The Western Governors’ 

Association works on issues that affect the four U.S. border states, such as 

border congestion and air pollution, among other issues. At the local level, 

the Border Liaison Mechanism is coordinated by U.S. and Mexican 

consulates, and we have learned of informal U.S. and Mexican counterpart 

port of entry committees.

Perspectives differ on cross-border traffic problems. Mexican and U.S. 

federal and state government officials have told us they believe existing 

ports of entry should be used to their full capacity throughout the day 

before new ones are built. However, in both the United States and Mexico 

there is local interest in building new ports. In Texas, for example, toll 

revenues from bridges that cross the Rio Grande River provide a key 

source of revenue for local communities, counties, and private owners. 

The potential for receiving crossing revenue has, according to some 

observers, led to interest in building new crossings. According to local 

officials, rural areas and small cities have fewer resources to cope with the 

effects of cross-border traffic flow problems but may derive economic 

benefits from a port of entry. 

Within the federal agencies at ports of entry, there are programs to improve 

interdiction efforts as well as port of entry management and operations. A 

recent undertaking is the Border Coordination Initiative, which is designed 

to increase cooperative interdiction efforts between Customs and INS. 

Some ports of entry also have instituted Port Quality Improvement 

Committees that bring together all agencies responsible for facilities and 

operations. In addition, some ports of entry have tried extending hours and 

opening more lanes to improve the flow of traffic as staffing and operating 

budgets have permitted.
Appendix IV

Cross-Border Transportation

Page 33 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Federal and local funding have been earmarked for various border 

infrastructure projects. Congress established the Southwest Border 

Stations Capital Improvements program in 1988 and appropriated $361 

million for it, nearly all of which has been spent. Recently, the 

Transportation Equity Act for the 21st Century (TEA-21) authorized funding 

for border infrastructure projects as well as for high priority corridors, 

which may include border projects, totaling $140 million for each of fiscal 

years 1999 through 2003.3

 In Texas, a position was created for an assistant 

executive director for border trade transportation, along with a new border 

transportation initiative. 

While many groups have reported on these problems and potential ways to 

solve them, and mechanisms are in place to serve as tools for coordinating 

operations along the U.S.-Mexico border, problems that have existed at the 

border crossings continue. In 1991 and 1997, we reported that private 

sector groups and federal, state, and local government officials were 

concerned about the adequacy of inspection facilities to accommodate 

increased commercial traffic expected with NAFTA, as well as with the 

adequacy of border-related road and highway infrastructure.4

 In 1994, the 

Border Infrastructure and Facilitation Task Force made short- and 

long-term recommendations for changes to bring about operational, 

infrastructure, institutional, and regulatory/legislative improvements. In 

addition, the binational Joint Working Committee issued its report in 1998, 

covering a wide range of border infrastructure issues and including an 

inventory of capacity estimates for ports of entry and analysis of the 

economic impacts of U.S.-Mexico trade on border communities. The 

Border Trade Alliance, a public-private coalition of individuals conducting 

business across U.S. borders, has also compiled a Southwest Border Port 

Capital Improvements Report for Fiscal Year 2000 that identifies potential 

port of entry capital improvements. Finally, the Western Governors’ 

Association recently released a study on border congestion. The study’s 

potential solutions to border congestion problems include better 

monitoring and staffing of vehicle inspection lanes at border crossings, 

adding additional inspection lanes where deficient, establishing average 

maximum queue times as an official goal, establishing a unified port of 

entry management system to coordinate efficient and rule-compliant 

3

P.L. 105-178, secs. 1101, 1118-19.

4

See U.S.-Mexico Trade: Survey of U.S. Border Infrastructure Needs (GAO/NSIAD-92-56, Nov. 27, 1991) 

and Commercial Trucking: Safety Concerns About Mexican Trucks Remain Even as Inspection Activity 

Increases (GAO/RCED-97-68, Apr. 9, 1997).
Appendix IV

Cross-Border Transportation

Page 34 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

movement of goods and people across the border, and encouraging users to 

cross the border at off-peak times.
Page 35 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Appendix V

Environmental Infrastructure and Public 

Health ApxVendi

Environmental problems and their impact on public health have been a 

long-standing concern in the border region. The United States and Mexico 

have not been able to keep pace with the growing environmental 

infrastructure1

 needs associated with the expansion of the border region’s 

economy and population. While most incorporated border communities on 

the U.S. side have an environmental infrastructure, in places it is in need of 

repairs, upgrading, and/or expansion. The need for an environmental 

infrastructure is far greater on the Mexican side of the border, where many 

communities lack a clean and safe drinking water supply and proper 

sanitation facilities. Inadequate infrastructure on either side, however, 

creates health concerns on both sides of the border. Unsanitary living 

conditions are a leading cause of gastrointestinal and other diseases that 

are prevalent on the border. Moreover, there is a serious shortage of water 

in some locations. Many communities lack the resources and human 

capital to deal with these problems.

What Is the Nature and 

Extent of the 

Environmental 

Infrastructure and 

Public Health 

Problem?

Communities on both sides of the border face environmental problems 

associated with water and wastewater treatment, solid and hazardous 

waste disposal, and air pollution. During the 1993 debates over NAFTA, it 

was estimated that as much as $8 billion would be needed to meet the 

border region’s environmental infrastructure needs during the next 10-year 

period. 

Water and Wastewater 

Treatment 

A diminishing supply of clean and safe drinking water supply and 

inadequate water distribution systems, as well as untreated wastewater, 

pose serious health risks for communities on both sides of the border. In 

Mexican border cities, about 12 percent of the population does not have 

access to drinking water, according to Mexico’s National Water 

Commission. In addition, while 69 percent of the population live in 

residences connected to sewage collection systems, some of which are 

very old and have exceeded their useful life, the wastewater treatment 

plants in Mexican border cities treat only 34 percent of wastewater in the 

aggregate. In some areas, raw or insufficiently treated wastewater 

1

Environmental infrastructure refers to the infrastructure designed to protect human health and the 

environment along the U.S.-Mexico border by preventing and/or reducing the pollution of air, water, and 

soil.
Appendix V

Environmental Infrastructure and Public 

Health

Page 36 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

eventually flows into surface and drinking water sources that are shared by 

both countries. Sewage disposal has been a particularly severe problem at 

Ciudad Juarez and Matamoros, cities with combined populations of well 

over 1 million residents, where no wastewater treatment capability 

currently exists. However, Ciudad Juarez is currently building wastewater 

treatment facilities.

On the U.S. side of the border, the vast majority of U.S. municipalities have 

EPA-approved, publicly owned wastewater treatment plants. In some 

communities, however, water and wastewater systems are at or near 

capacity and will need to be upgraded or expanded in the future. The 

colonias, however, face significant environmental infrastructure problems. 

These colonias, located mainly in Texas and New Mexico, typically have 

substandard housing and inadequate roads and lack access to clean 

drinking water and wastewater disposal systems. These problems are 

particularly severe in Texas, which has an estimated 1,200 colonias. 

Agricultural runoff and irrigation return flows are a source of pollution in 

some U.S. border communities. The New River, which flows through 

Mexicali, Baja California, and the Imperial Valley of California before 

emptying into the Salton Sea, is one of the most polluted rivers in the 

United States. The pollution is caused in large part by runoff from farms in 

the Imperial Valley. Figure V.1 illustrates an irrigation canal polluted from 

agricultural runoff.
Appendix V

Environmental Infrastructure and Public 

Health

Page 37 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Figure V. 1: Agricultural Runoff Near Where the New River Enters the Salton Sea

Population and industrial growth also threaten the water supplies in arid 

regions along the border. For example, San Diego/Tijuana, according to 

some studies, will face serious drinking water shortages early in the next 

century. Authorities from the two cities hope to meet future needs with 

transfers of Colorado River water from agricultural areas in California’s 

Imperial Valley and Mexico’s Mexicali Valley. They are tentatively 

discussing the joint construction of an aqueduct for this purpose. In El 

Paso/Ciudad Juarez, the anticipated water shortages are related to the 

inadequate source of water. El Paso and Ciudad Juarez depend on the 

same aquifers for water, and these aquifers are rapidly being depleted. A 

binational study of the depletion of the aquifer is now underway, with a 

view toward taking corrective action.

Solid and Hazardous Waste 

Disposal

Many communities in the border region, particularly in Mexico, lack the 

infrastructure for collecting and properly disposing of solid waste. 

Mexican border cities often have waste management institutions that are 

beset with administrative deficiencies and lack adequate legal authority to 

regulate and collect user fees for services. These institutions often have 

too few reliable trucks to collect all the garbage. As a result, only 86 

percent of household waste is collected, and only 53 percent of what is 

collected is deposited in sanitary landfills. In some Mexican communities, 
Appendix V

Environmental Infrastructure and Public 

Health

Page 38 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

waste is incinerated in the open, impairing visibility and diminishing air 

quality. In Nogales, Sonora, the burning of manure in the stockyards has 

posed a serious health risk to residents on both sides of the border.

In the U.S. border region, solid waste disposal problems are mainly 

restricted to the colonias, where solid waste collection is often inconsistent 

and inadequate. While officials of some U.S. border communities recognize 

the significance of the problem, they are concerned that extending solid 

waste collection to colonias may strain the capacities of current landfills. 

Hazardous waste disposal is a growing problem in the border region. In 

Mexico, maquiladora plants generate the most hazardous waste in the 

border region. The Mexican government has required that this waste be 

returned for proper disposal to the country of origin of the raw materials, 

which is usually the United States. However, there are concerns about the 

proper disposal of hazardous waste generated by Mexican businesses. 

Mexico currently has only one hazardous waste disposal facility. The 

Mexican Secretariat for Environment, Natural Resources and Fisheries has 

identified several hazardous waste disposal problems in Baja California, 

including a lack of treatment, neutralization, or incineration systems for 

hazardous and toxic waste. The Secretariat has made the development of a 

hazardous waste infrastructure throughout Mexico a priority.

Air Pollution Air quality is also a major concern in the border region because many 

residents of border cities are exposed to health-threatening levels of air 

pollution from a variety of sources. According to a 1996 Border XXI 

report,2 13 border cities exceeded or are expected to exceed at least one of 

the ambient air quality standards set by their respective federal 

governments. Rapid urbanization and industrialization are responsible for 

most of the air pollution problems in the border region. The citizens of El 

Paso, Texas, nearby Sunland Park, New Mexico, and Ciudad Juarez have 

long been exposed to high levels of air pollution. According to a local 

binational task force for improving air quality,3

 the sources of this pollution 

are emissions from the increasing vehicular traffic in the area, dust from 

unpaved roads and the surrounding desert, open burning, fireplaces and 

2

See p. 43 for a description of Border XXI.

3

The Paso del Norte Air Quality Task Force was established in 1993 as Appendix I to the 1983 La Paz 

Agreement, with a mission to implement projects and promote policies to improve air quality in the 

area.
Appendix V

Environmental Infrastructure and Public 

Health

Page 39 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

wood-burning stoves, and industrial activity. The region’s arid climate and 

high elevation also contribute to the problem. In addition, the cities occupy 

a mountain pass known as the Paso del Norte, which is surrounded by 

mountains on three sides, forming a natural amphitheater that traps the 

pollution.

Obstacles Communities 

Face in Addressing 

Environmental Needs

Initiating and sustaining needed environmental infrastructure projects have 

long been problems for Mexican border communities as they face financial, 

administrative, and institutional obstacles. Local communities on the 

Mexican side of the border are dependent on a revenue-sharing system 

from the federal and state governments to finance infrastructure projects. 

However, the revenue available to most communities is uncertain because 

it is dependent on allocations made annually by legislative decree. 

Communities can turn to Mexico’s National Bank of Public Works and 

Services as a source of credit for environmental infrastructure projects; 

however, the interest rates are too high for most communities. 

Municipalities do not have the option of raising capital outside of Mexico’s 

domestic market, as the Mexican Constitution prohibits states and 

municipalities from incurring financial obligations in foreign currencies 

and/or with foreign creditors. This status is changing; for example, the 

Mexican Ministry of Finance assisted the North American Development 

Bank (NADBank) in establishing a nonbank financial subsidiary through 

which the NADBank is able to lend directly to municipalities in dollars.4

 

Mexican border communities’ strong dependence on the federal 

government has also limited their ability to gain the experience necessary 

to plan, develop, and manage public works projects. Further, when the 

local administration changes every 3 years, personnel in key management 

positions are removed and the institutional capacity that is developed is 

lost as well. As part of a federal effort to decentralize governmental 

decision-making, communities are now expected to assume more 

responsibility for planning and providing public services to their residents.

On the U.S. side, colonias also face financial and institutional obstacles to 

environmental infrastructure development. Since colonias are 

unincorporated settlements, they lack the basic financial and institutional 

mechanisms available to U.S. cities. Therefore, they do not have the tax 

bases and credit sources needed to borrow money. Further, jurisdictional 

4

NADBank is discussed on p. 41.
Appendix V

Environmental Infrastructure and Public 

Health

Page 40 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

disputes about service areas among cities, counties, and rural water 

districts have left the colonias without basic services.

Linkage Between the 

Environment and Public 

Health

Contamination of air, water, and soil by solid waste, raw sewage, and 

untreated wastewater, which facilitates the growth of parasites, bacteria, 

and other pollutants, is suspected to be a key factor contributing to the 

presence of certain diseases in border populations. These include 

respiratory diseases, elevated blood lead levels in children, cancer, 

hepatitis A, and infectious gastrointestinal diseases. An outbreak of a 

disease on one side of the border poses a potential threat to both countries 

because of the daily flow of people back and forth between the United 

States and Mexico. The high level of poverty in the border region is also a 

likely factor in the high level of diseases found in the region.

According to the Interhemispheric Resource Center,5 about one-third of the 

U.S. tuberculosis cases reported for the first 10 weeks of 1998 were from 

the four U.S. border states. During that same period, Mexico’s border 

states, representing about one-sixth of Mexico’s population, accounted for 

about 61 percent of the country’s new tuberculosis cases. Health officials 

of both countries have been particularly concerned about the increased 

number of multi-drug-resistant tuberculosis cases in the border region. 

Further, according to Texas officials, neural tube birth defects, which affect 

the brain and spinal column, occur more frequently in the Texas border 

region than in the rest of the United States. Examples of these birth defects 

include anencephaly, or babies born with partial or missing brains; and 

spina bifida, a severe deformation of the spinal cord. Also, between 1994 

and 1997, cases of hepatitis A, a gastrointestinal virus borne by 

contaminated food and water, occurred on the U.S. side of the border at 

rates from 2 to 5 times the national average. 

In addition, on the Mexican side of the border, communities have been 

confronted with a disproportionately high level of intestinal infectious 

diseases which are extremely rare in the United States.

5

The Interhemispheric Resource Center is a nonprofit organization in New Mexico that was founded in 

1979. This information on tuberculosis was reported in the May 1998 issue of its monthly bulletin, titled 

Borderlines.

Letr
Appendix V

Environmental Infrastructure and Public 

Health

Page 41 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Many people who live on the U.S. side of the border also lack access to 

affordable healthcare. This situation contributes to the lower rates of 

immunizations of children on the U.S. side of the border. The rate for 

measles is 50 cases per 100,000, versus a U.S. national average of 11 per 

100,000. The rate for mumps has been documented as high as 41 per 

100,000, versus a U.S. national average of 2 per 100,000. The U.S. side of the 

border also has a shortage of healthcare providers. In 1998, 27 of Texas’ 43 

border counties were designated as Health Professional Shortage Areas for 

primary medical care.6

What Is Being Done to 

Address 

Environmental and 

Public Health 

Problems?

The United States and Mexico have created institutions to deal with 

environment and health issues. The oldest of these key institutions is the 

International Boundary and Water Commission, created in 1889, which is 

responsible for maintaining the boundary between the United States and 

Mexico and managing issues involving the waters of the Rio Grande and 

Colorado rivers.7

 The Commission’s responsibilities also include designing, 

constructing, operating, and maintaining certain wastewater treatment 

facilities along the border. In recent years, the Commission has 

participated in the development or expansion of three treatment plants, 

one serving Tijuana, Baja California; one serving Nogales, Arizona, and 

Nogales, Sonora; and one serving Nuevo Laredo, Tamaulipas.

Concern about the environmental impact of increased industrial 

production and transportation led to a NAFTA environmental side 

agreement. This agreement established two binational organizations--the 

Border Environment Cooperation Commission (BECC) and NADBank--to 

promote the planning and financing of environmental infrastructure 

projects in the border region. These organizations were created to help 

border communities develop and finance environmental infrastructure 

projects that will address hazardous human health and environmental 

conditions.

6

The U.S. Department of Health and Human Services defines an area with fewer than one primary care 

provider for every 3,500 residents as a federal Health Professional Shortage Area if physicians are not 

within a reasonable distance. The designations may apply to primary medical care, dental services, or 

mental health services.

7

This organization was known as the “International Boundary Commission” until it was reconstituted as 

the International Boundary and Water Commission on February 3, 1944.
Appendix V

Environmental Infrastructure and Public 

Health

Page 42 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

BECC’s primary purpose is to certify that project proposals meet criteria 

for technical and financial feasibility and sustainability. In establishing the 

scope of projects to be considered, the board of directors limited the types 

of projects to water, wastewater, and solid waste based on guidance in 

BECC’s charter. BECC emphasizes the importance of sustainability 

because, in the past, projects have been built in poor border communities 

with grants and other assistance but then could not be properly maintained 

due to the communities’ limited financial resources. BECC also provides 

technical assistance to border communities with project development 

activities, including devising plans, creating project designs, and 

performing environmental assessments. As of May 1999, BECC had 

approved over $11 million in technical assistance grants to border 

communities. BECC also works to ensure public support for projects. 

The Border Utility Management Institute, a new program of NADBank, is 

directed at addressing the problem of the municipalities’ limited 

experience in undertaking public works projects by providing funding for 

the development of the financial and administrative capacities of utility 

managers and their staffs. NADBank is also directing its technical 

assistance grant monies to address the problem of turnover in local 

administration management, with over 90 Institutional Development 

Program projects in the region.

Projects certified by BECC qualify to be considered for financial assistance 

through NADBank and/or other funding sources. NADBank’s primary role 

is to facilitate financing for the development, execution, and operation of 

environmental infrastructure projects that have been certified by BECC. 

The United States and Mexico have agreed to provide $225 million each to 

capitalize NADBank, which can be used to make loans and loan guarantees 

to border communities for border infrastructure projects. NADBank also 

administers EPA’s funds through its Border Environment Infrastructure 

Fund, which provides grant money for water and wastewater 

environmental infrastructure projects. The EPA grant funds may be used 

for projects on the Mexican side, within 62 miles of the border, if there is a 

transboundary impact of the infrastructure deficiency.

As of June 1999, BECC had certified 27 projects. NADBank has been 

involved in providing construction funding for 14 of these projects. 

NADBank’s participation has been mainly in the form of loans and Border 

Environment Infrastructure Fund grants. According to NADBank, it has 

provided loans to 7 projects, for a total of $11.1 million, while providing a 

total of $119.3 million in Border Environment Infrastructure Fund 
Appendix V

Environmental Infrastructure and Public 

Health

Page 43 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

construction grants. For example, NADBank provided a $4.6 million loan 

and $11.1 million in a Border Environment Infrastructure Fund 

construction grant for a $31.2 million wastewater treatment plant in Ciudad 

Juarez, Chihuahua. The loan for this project accounts for 41 percent of the 

total NADBank funds used for loans. These amounts represent a small 

percentage of the billions needed to meet the border area’s environmental 

infrastructure needs.

Border environmental infrastructure development involves many federal, 

state, and local agencies. EPA has played a central role as a source of grant 

funds for environmental infrastructure projects on both sides of the border. 

Other federal agencies, including the Department of Housing and Urban 

Development and the Department of Agriculture, provide grants for 

environmental projects in poor and rural areas such as colonias. Border 

State governments also provide loans and grants for environmental 

infrastructure development through state revolving funds and tax-exempt 

municipal bonds for environmental infrastructure financing.8

Coordination efforts between the United States and Mexico under the La 

Paz Agreement have involved EPA and the Mexican Secretariat for 

Environment, Natural Resources and Fisheries. In 1992, the two 

governments issued the Integrated Environmental Plan for the Mexican 

Border Area, which linked long-term economic growth and environmental 

protection. The United States and Mexico subsequently developed an 

expanded planning and coordination mechanism known as Border XXI. 

Border XXI is intended to be a comprehensive program designed to achieve 

a clean environment, protect public health and natural resources, and 

encourage sustainable development. It emphasizes three strategies:

(1) public participation in project development; (2) decentralized 

environmental management and building the capacity of local and state 

institutions to deal with environmental problems; and (3) interagency 

cooperation to maximize available resources, avoid duplicative efforts on 

the part of government and other organizations, and reduce the burden that 

coordination with multiple entities places on border communities. The 

U.S.-Mexico Binational Commission also has a Working Group on the 

Environment and Natural Resources.

8

State revolving funds were established by the Water Quality Act of 1987 as a primary source of 

financing for wastewater treatment facilities and related purposes at the state level. They provide 

states with federal seed money in the form of grants to capitalize their revolving funds. The states use 

their revolving funds to make loans at or below market interest rates to local governments, and, as 

loans are repaid, the funds are replenished.
Appendix V

Environmental Infrastructure and Public 

Health

Page 44 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Border public health issues are being addressed by a number of 

organizations. For example, the U.S.–Mexico Binational Commission’s 

Health Working Group provides an annual forum for reviewing progress on 

priority health issues. The Pan American Health Organization, an arm of 

the World Health Organization, convenes and oversees the U.S.–Mexico 

Border Health Association, which was created in 1943. The Association is a 

mechanism for health professionals along the border to foster 

communication on both sides of the border, identify local health needs, and 

recommend ways to meet those needs. 

In addition, Congress authorized the establishment of the U.S.-Mexico 

Border Health Commission in 1994 (P.L. 103-400). The Commission’s goals 

are to (1) institutionalize a domestic focus on border health and (2) create a 

venue for binational discussion to address public health issues and 

problems that affect U.S.-Mexico border populations. Congress 

appropriated $800,000 in fiscal year 1998 to assist in the creation of the U.S. 

Section of the Border Health Commission. The 13 U.S. Commissioners 

have been selected, but 8 remain to be appointed by the President.9

 Efforts 

are underway to explore the potential for Mexico’s eventual participation, 

with the goal of making the Commission a binational forum. 

Another binational effort is the Ten Against TB [tuberculosis] Campaign, 

led by the 10 border state health officers in the U.S. and Mexico. It is 

addressing the problem of tuberculosis on the border, working with federal 

and nongovernmental partners. The Ten Against TB Campaign has 

developed a four-part strategy to improve surveillance and epidemiology, 

laboratory analysis, health promotion, and case management. In addition, 

at a meeting on February 15, 1999, in Merida, Mexico, Presidents Clinton 

and Zedillo signed a Memorandum of Understanding on Cooperation in 

Prevention and Control of Tuberculosis, recognizing that the reemergence 

of tuberculosis is a major threat to global health.

Finally, the U.S.-Mexico Binational Surveillance Project has been 

implemented to develop a more comprehensive binational surveillance 

system for public health problems. Funded by the National Center for 

Infectious Diseases and the Centers for Disease Control and Prevention, 

the project targets three partner city units: San Diego-Tijuana, El Paso/Las 

Cruces-Ciudad Juarez, and McAllen-Reynosa. 

9

Five of the commissioners are mandated by statute: the Secretary of Health and Human Services as 

chair, plus the four border states’ Border Health Officers.
Page 45 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Appendix VI

Current and Emerging Challenges to 

Economic Development in the Border Region ApVexndiI

In addition to the existing problems of relatively high unemployment and 

poverty on the U.S. side of the border, large projected population growth, 

internal migration within Mexico, and a change in the rules governing the 

Mexican maquiladora industry could potentially affect economic 

development challenges already existing on the border. Efforts to address 

job dislocations due to NAFTA trade shifts and to alleviate the high level of 

poverty in the border region are already underway, including regional 

economic development initiatives. To what extent they address border 

development is not yet clear. In addition, the changes in the maquiladora 

industry rules in 2001 could potentially change business incentives to 

locate in the border region. 

Initiatives to Address 

Unemployment and 

Economic 

Development

Although the United States as a whole has made great economic progress 

in the past few years, some communities in the border region have not 

shared in this prosperity. For example, unemployment in the U.S. border 

region between November 1997 and November 1998 was 7.4 percent, 

compared with 4.8 percent for the United States as a whole. Approximately 

24 percent of the population living in U.S. border counties lived in poverty 

in 1996,1

 and only about 61 percent of the population 25 years and over held 

a high school diploma.2 Moreover, the population of the U.S.-Mexico border 

region, which in 1997 was 10.5 million, is expected to double in the next 20 

years. 

The U.S. government is addressing worker and job dislocations in the 

border through programs such as the NAFTA Transitional Adjustment 

Assistance Program and the U.S. Community Adjustment and Investment 

Program administered by NADBank. The NAFTA Transitional Adjustment 

Assistance program was designed to assist workers in companies affected 

by U.S. imports from Mexico or Canada or by shifts in U.S. production to 

either of those countries. The program provides cash payments, job 

training, or allowances for job search and relocation expenses. 

Another program designed to deal with the job dislocation effects from 

NAFTA trade is the U.S. Community Adjustment and Investment Program. 

This program helps stimulate financing by providing loans, loan guarantee 

fees, and grants to create or retain private sector jobs in communities 

1

Poverty rate estimates are our calculations based on Census data. The Census data has a 90-percent 

confidence interval.

2

As reported by the Southwest Border Region Partnership, January 20, 1999.
Appendix VI

Current and Emerging Challenges to 

Economic Development in the Border Region

Page 46 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

evidencing significant job losses due to changes in trade patterns with 

Canada or Mexico after the passage of NAFTA. Authorizing legislation and 

a fiscal year 1999 appropriation provide up to $32.5 million to fund the 

program. There is a similar program in Mexico. While the Community 

Adjustment and Investment Program is not directed at the border alone, 

program officials report that all U.S. NADBank border counties are now 

eligible for the program (a total of 43 eligible border counties). As of May 

1999, the Community Adjustment and Investment Program, including its 

agency program with the Small Business Administration, had facilitated 88 

loans or guarantees for border communities, totaling $20.1 million. In 

addition, the program had approved one direct loan in El Paso, Texas, 

amounting to $1 million. The program’s pilot grant project was located in 

Dona Ana, New Mexico, and granted $600,000 to the New Mexico Border 

Authority to aid in the reemployment of displaced workers in the region.

The U.S. Department of Housing and Urban Development and the U.S. 

Department of Agriculture also have efforts underway to deal with border 

poverty: the Empowerment Zone and the Enterprise Community program. 

This program provides tax and regulatory relief to attract businesses to 

distressed urban and rural communities. Several border communities in all 

four states have been designated Empowerment Zones or Enterprise 

Communities. For example, the Arizona Border Region Enterprise 

Community developed a plan that addressed economic, environmental, and 

education/training improvements for its community.3

 In Texas, the Rio 

Grande Valley Empowerment Zone reports that it has already achieved 

several objectives, including business development activities such as 

providing loans, a high-skills training program serving over 866 individuals, 

and eight waste/wastewater projects.4

 

Organizations such as the Border Trade Alliance, and the Texas 

Comptroller, have called for a unified approach to solving the region’s 

problems. Specifically, the Border Trade Alliance supports the Southwest 

3

The Arizona Border Region Enterprise Community includes the counties of Cochise, Yuma, and Santa 

Cruz.

4

The Rio Grande Valley Empowerment Zone includes the counties of Cameron, Hidalgo, Starr, and 

Willacy. In a review of the progress of six Empowerment Zones, including the Rio Grande Valley 

Empowerment Zone, we reported that the Rio Grande Valley Empowerment Zone had initiated action 

on all 10 of the economic development activities planned. See Community Development: Progress on 

Economic Development Activities Varies Among the Empowerment Zones (GAO/RCED-99-29, Nov. 25, 

1998). For more information on other border region rural and urban Empowerment Zones and 

Enterprise Communities, see the Departments of Agriculture and Housing and Urban Development 

websites, respectively, at http://www.ezec.gov and http://www.hud.gov/cpd/ezec/ezeclist.html.
Appendix VI

Current and Emerging Challenges to 

Economic Development in the Border Region

Page 47 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Border Region Partnership, a grassroots organization proposing to resolve 

regional problems through economic and community development 

strategies. The recommended objectives of the Partnership are to (1) 

develop a strategic plan, including benchmarks, that addresses the five 

major development issues: infrastructure, economic development, 

education, health, and the environment; (2) create a community 

development bank and community development fund for revolving loans 

and grants for business and infrastructure; (3) increase job creation and 

retention opportunities; (4) provide technical assistance, capacity building, 

and leadership training to communities; (5) actively seek partnerships and 

investment; and (6) become sustainable within 5 years.

On May 25, 1999, the White House announced the launching of the 

Southwest Border Economic Development Initiative, which includes the 

formation of an Interagency Task Force on the Economic Development of 

the Southwest Border. The mission and goal of the Task Force reflect the 

need to coordinate the federal and local economic development efforts to 

raise the living standards and overall economic profile of the southwest 

border region on a sustained basis. 

The Interagency Task Force will include members from numerous relevant 

federal agencies, such as the Departments of the Treasury, Agriculture, 

State, Labor, and Housing and Urban Development. It will seek to mobilize 

a more integrated, rapid response by federal agencies to community 

economic development strategies by (1) analyzing existing programs and 

policies of member agencies; (2) consulting and coordinating activities 

with state and local authorities, community leaders, Members of Congress, 

and other stakeholders; (3) developing short- and long-term options for 

promoting sustainable economic development; and (4) integrating 

executive branch initiatives and programs into concrete, effective actions. 

According to the announcement, the first step in implementing these 

efforts will be to establish demonstration projects in pilot communities. 

Pending Changes in 

Maquiladora Rules

The Maquiladora Decree that governs the maquiladora program was 

revised by the Mexican government to accommodate new rules established 

by NAFTA in 1994. The maquiladora rule changes, which will be fully 

implemented by 2001, may affect business incentives to locate in the 

border region. NAFTA provides for the gradual elimination of restrictions 

limiting maquiladora production sales into the domestic Mexican market
Appendix VI

Current and Emerging Challenges to 

Economic Development in the Border Region

Page 48 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

by 2001.5 NAFTA also provides for the phased elimination of U.S. import 

duties on maquiladora products, provided those products meet the NAFTA 

rules of origin. In the year 2001, Mexico will restrict the duty preferences 

available to maquiladoras for raw materials originating outside NAFTA 

countries used in the manufacture or assembly of finished products.6

 

Changes brought about by NAFTA and Mexican law, which together 

eliminate virtually all restrictions on foreign investment in the 

manufacturing sector, will make it unnecessary to establish a maquiladora 

facility to assemble goods in Mexico. 7

Observers of the border economy, such as the Federal Reserve Bank of 

Dallas, the Texas Comptroller’s Office, and the U.S. Department of 

Commerce, agree that several scenarios involving the maquiladora industry 

are possible as a result of the changes brought about by NAFTA. These 

changes range from a virtual elimination of the maquiladora program to 

modifications to business practices. For example, expected elimination of 

duty preferences for non-NAFTA suppliers to the maquiladora industry 

could make U.S. and Canadian suppliers more competitive with the 

existing non-NAFTA suppliers, possibly leading to a shift in trade. In 

anticipation of Mexico’s policy change on duty relief, maquiladora 

producers have encouraged non-NAFTA suppliers, such as Asian suppliers, 

to relocate to North America in order to guarantee that duty-free treatment 

would remain unchanged. However, it is too early to predict what the 

effects of the changes in the maquiladora law will be for the border region.

5

Provided that certain Mexican customs and other requirements are met. For example, products sold 

into the Mexican domestic market must also satisfy nontariff requirements, such as Mexican official 

standards, and must be of the same quality as the finished products produced for export. 

6

Currently, maquiladora companies may obtain duty-preferences on inputs obtained from any supplier 

country. After 2001, maquiladora companies will only be able to receive duty-preferences on inputs 

from NAFTA countries.

7

Although maquiladoras will no longer exist under NAFTA as a separate sector, production-sharing will 

likely continue due to Mexico’s comparative advantage in low-wage labor. 
Page 49 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Appendix VII

Objectives, Scope, and Methodology ApVenxdIi

Concerned about the U.S.-Mexico border area’s ability to deal with a variety 

of issues associated with the increased economic integration with Mexico 

and the ability of the area to access federal funding, members of the House 

Congressional Border Caucus asked us to undertake a broad review of 

border issues. As agreed with the requesters’ offices, the objective of this 

interim report is to present an overview of major border issues. 

Specifically, we identified (1) the nature of major issues faced at the border, 

and (2) the U.S. and Mexican efforts underway to address them. 

To obtain information on the nature of major issues faced at the border, and 

the U.S. and Mexican efforts underway to address them, we conducted an 

extensive literature search and reviewed a variety of government studies 

and documents, including State Department information on U.S.-Mexico 

relations. Based on this preliminary review, we selected the following five 

major issues as a focus for this work: (1) drug enforcement, (2) illegal 

immigration, (3) cross-border transportation, (4) environmental 

infrastructure and public health, and (5) economic development. To 

establish the nature of the issues and the efforts being made to address 

them, we relied heavily on the results of related past GAO studies that 

addressed specific U.S. programs and activities. We also interviewed 

agency officials and/or reviewed documents from the Departments of 

State, Agriculture, Commerce, Defense, Health and Human Services, and 

Housing and Urban Development; and Drug Enforcement Administration, 

INS, and the Office of National Drug Control Policy, as well as numerous 

state and local agencies and private sector organizations. The information 

on foreign laws in this report does not reflect our independent legal 

analysis, but is based on interviews and secondary sources.

Our ongoing detailed evaluation of the transportation and environmental 

infrastructure issues also included interviews with officials and review of 

documents from the Departments of Agriculture, State, and Transportation; 

EPA; INS; U.S. Customs Service; Food and Drug Administration; General 

Services Administration; and state, local, and private sector officials. We 

also attended various conferences on border environment and 

transportation infrastructure issues and visited Mexico City, where we 

interviewed U.S. embassy and key Mexican government officials, including 

officials in Mexico’s Secretariat for Foreign Relations. In addition, we 

obtained and analyzed data on activities at major border crossings and 

environmental infrastructure projects during case studies at key sister 

cities along the border, including San Diego-Tijuana, El Paso-Ciudad 

Juarez, Laredo-Nuevo Laredo, Nogales-Nogales, Brownsville-Matamoros, 

Calexico-Mexicali, and Douglas-Agua Prieta. At these locations, we met 
Appendix VII

Objectives, Scope, and Methodology

Page 50 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

with U.S. and Mexican federal, state, and local governmental officials; a 

variety of officials representing the private sector and nongovernmental 

organizations; and representatives from various U.S.-Mexico coordinating 

mechanisms. The meetings with U.S. and Mexican consuls general and 

consuls at the key sister cities provided excellent perspective on the wide 

range of border issues. As we continue our in-depth case study analyses of 

transportation and environment issues, we plan to identify potential 

strategies to overcome the institutional and programmatic challenges that 

impede improved conditions on the border. 

We performed our review from February through June 1999 in accordance 

with generally accepted government auditing standards.
Page 51 GAO/NSIAD-99-190 U.S.-Mexico Border Issues

Appendix VIII

GAO Contacts and Staff Acknowledgments ApxVendiI

GAO Contacts Elliott C. Smith, (214) 777-5700

John Hutton, (202) 512-7773

Acknowledgments In addition to those listed above, Patricia Cazares-Chao, Allen Fleener, 

Phillip Herr, Jeff Kans, J. Lee Kaukas, Leyla Kazaz, Ed Laughlin, Patricia 

Martin, Rona Mendelsohn, Miguel Salas, Patricia Sari-Spear, Larry Thomas, 

and Linda Kay Willard made key contributions to this report. 

(711409) Letr
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