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IMPROVING SECURITY AND FACILITATING

COMMERCE WITH MEXICO AT AMERICA’S

SOUTHERN BORDER

HEARING

BEFORE THE

SUBCOMMITTEE ON 

THE WESTERN HEMISPHERE

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS

FIRST SESSION

DECEMBER 9, 2013

Serial No. 113–111

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ADAM KINZINGER, Illinois 

MO BROOKS, Alabama 

TOM COTTON, Arkansas 

PAUL COOK, California 

GEORGE HOLDING, North Carolina 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

STEVE STOCKMAN, Texas 

RON DESANTIS, Florida 

TREY RADEL, Florida 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

LUKE MESSER, Indiana 

ELIOT L. ENGEL, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

JUAN VARGAS, California 

BRADLEY S. SCHNEIDER, Illinois 

JOSEPH P. KENNEDY III, Massachusetts 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

SUBCOMMITTEE ON THE WESTERN HEMISPHERE

MATT SALMON, Arizona, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

MICHAEL T. MCCAUL, Texas 

JEFF DUNCAN, South Carolina 

RON DESANTIS, Florida 

TREY RADEL, Florida 

ALBIO SIRES, New Jersey 

GREGORY W. MEEKS, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

THEODORE E. DEUTCH, Florida 

ALAN GRAYSON, Florida 

(III)

C O N T E N T S 

Page

WITNESSES 

The Honorable Alan Bersin, Assistant Secretary, Office of International Affairs and Chief Diplomatic Officer, U.S. Department of Homeland Security . 9

Mr. Eric Farnsworth, Vice President, Council of the Americas and Americas 

Society ................................................................................................................... 14

Ms. Lea Ma ́ rquez Peterson, President and Chief Executive Officer, Tucson 

Hispanic Chamber of Commerce ......................................................................... 22

Mr. Glenn Hamer, President and Chief Executive Officer, Arizona Chamber 

of Commerce and Industry .................................................................................. 27

Mr. Timothy C. Hutchens, Executive Vice President and Head, Federal Lessor 

Advisory Group, CBRE, Inc. ................................................................................ 34

Mr. Christopher Wilson, Associate, Mexico Institute, Woodrow Wilson International Center for Scholars ............................................................................... 40

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Alan Bersin: Prepared statement ................................................. 11

Mr. Eric Farnsworth: Prepared statement ............................................................ 17

Ms. Lea Ma ́ rquez Peterson: Prepared statement .................................................. 25

Mr. Glenn Hamer: Prepared statement ................................................................. 30

Mr. Timothy C. Hutchens: Prepared statement .................................................... 37

Mr. Christopher Wilson: Prepared statement ....................................................... 42

APPENDIX 

Hearing notice .......................................................................................................... 62

Hearing minutes ...................................................................................................... 63

The Honorable Matt Salmon, a Representative in Congress from the State 

of Arizona, and chairman, Subcommittee on the Western Hemisphere: Material submitted for the record ............................................................................ 64

(1)

IMPROVING SECURITY AND FACILITATING 

COMMERCE WITH MEXICO AT AMERICA’S 

SOUTHERN BORDER 

MONDAY, DECEMBER 9, 2013

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON THE WESTERN HEMISPHERE,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:18 a.m., at Tucson City Council, City Hall, 255 West Alameda Street, Tucson, Arizona, Hon. Matt Salmon (chairman of the subcommittee) presiding. 

Mr. SALMON. A quorum being present, the subcommittee will 

come to order. I am going to start by recognizing myself and the 

other members to present our opening statement, and then I will 

present the rules of the hearing and yield time to our witnesses. 

Good morning, and welcome to this hearing on our vital commercial relationship with Mexico and what we can do to enhance the 

flow of commerce while maintaining security along the southern 

border. I would like to give a warm welcome and personally thank 

Albio Sires, who is our ranking member on the subcommittee, for 

braving the scary skies right now this time of year with all the 

weather patterns across the eastern seaboard, and appreciate the 

fact that he was able to get here. I know he had some real difficulties, so thank you for taking the time. 

I would like to thank my colleagues from Arizona, Ron Barber, 

Kyrsten Sinema, and David Schweikert, for attending this meeting. 

I believe it is one of extreme importance to the State of Arizona, 

and particularly here in southern Arizona. 

The chairman of the full committee, Ed Royce, was going to be 

here, but his airplane, because of the weather across the country, 

got cancelled last night, and he sends his profound regrets. But he 

has been incredibly supportive of the Subcommittee on the Western 

Hemisphere, and I appreciate his trust in asking me to chair this 

subcommittee. I knew immediately when he asked me to chair this 

subcommittee that I wanted to focus on the growing trade and investment opportunities that exist throughout the western hemisphere. I pay particular attention to potential energy independence 

and security in North America. Thanks to our own energy renaissance and increased production in Canada, I have been pushing the 

Obama administration to finally approve the Keystone XL Pipeline, 

which promises to create jobs while making us less dependent on 

2

energy from areas around the world that are less friendly to our 

interests. 

Right now, Mexico is debating meaningful energy sector reforms, 

reforms that would open up their energy sector to private investment through a constitutional amendment. If passed, and most experts believe that it will, Mexico will be able to realize its real production potential, making North America—the U.S., Canada, and 

Mexico—truly energy self-sufficient. Mexico is moving ahead with 

reforms in the education and telecommunications sectors as well. 

Reforms in Mexico, including judicial reforms, are significant steps 

the Government of Mexico is taking to improve its economic landscape. 

As you all know, the economies of the United States and Mexico 

are deeply intertwined, linked by geography, cultural ties, and the 

North American Free Trade Agreement. Since NAFTA took force 

nearly 20 years ago, the stock of bilateral foreign direct investment 

has increased six-fold. In 2012 alone, bilateral trade in goods and 

services between our two countries topped $1⁄2 trillion. Our economic partnership with Mexico has the potential to play a key role 

in strengthening supply chains and boosting exports to the rest of 

the world. 

Our production-sharing relationship with Mexico is important to 

understand. Indeed, 40 percent—that is right, 40 percent—of the 

value of all U.S. imports of final goods from Mexico actually come 

from materials and parts produced in the United States. This 

means that approximately 40 cents out of every dollar U.S. consumers spend on Mexican imports actually goes to United States’ 

companies and workers. This is a direct result of production sharing that is made possible and enhanced by proximity and cultural 

ties with our Mexican and our Canadian neighbors. 

The same cannot be said for goods coming from anywhere outside 

of North America. For example, U.S. imports from China have an 

average of only 4 percent U.S. contact as compared to the 40 percent figure I mentioned with Mexico. Exports to Mexico from the 

great State of Arizona have increased by 225.2 percent since 

NAFTA took force. And Arizona is the sixth largest exporter of 

goods to Mexico among all the States in the Union. 

Mexico is Arizona’s top trading partner with upwards of $13 billion worth of trade crossing our shared border each year, and Mexican visitors spend over $7 million each day in Arizona translating 

to $2.3 billion annually for Arizona and tourism from Mexico. It is 

clear that in terms of job creation and economic opportunity for Arizona and the country, our relationship with Mexico and, of course, 

Canada is vital. 

The good news is that our commercial relationship with Mexico 

continues to grow. The bad news is that our ports of entry face significant challenges keeping up with this growth, resulting in wait 

times along the border that cost an average of $7.2 billion a year. 

The September 11th, 2001 attacks on our country, coupled with 

the costs of illegal immigration, particularly on the border States, 

forced the United States to reevaluate border management, meaning needed security improvements have often been made at the expense of maintaining efficiencies. I convene this hearing today specifically to get at what we need to do both in the public and private 

3

sectors to improve border infrastructure to better facilitate trade 

without letting down our guard on border security efforts. 

The United States is already partnering with Mexico on security 

through the Merida Initiative, a partnership that I support strongly. While Mexico has made important commitments to security 

along our border, the United States must continue pressing Mexico 

to step up efforts to address violence among the most dangerous 

parts of our border by increasing Mexican deployments able to conduct joint patrols with the U.S. Border Patrol. It is important that 

we not lose sight of the serious security concerns that continue to 

plague Mexico. 

Efforts to further secure our border can and should be achieved 

without hampering better and more efficient flows of commerce 

across our various ports of entry. Border security and efficient 

flows of commerce need to be mutually conductive efforts. Working 

to pass pro-trade policies that include—excuse me—that improve 

our important economic relationship with Mexico and serve to benefit both our economies should be a major goal for all Members of 

Congress, regardless of their political party. 

Here in Arizona, we know trade, particularly with our North 

America partners, is not a partisan issue, and I am so pleased that 

my Democratic colleagues are joining me here today for this bipartisan hearing. I would like to make a side note. This is my second 

time serving in Congress, and I have got to tell you I have never 

seen a more cohesive, friendly, let us get things done kind of attitude delegation. I mean that across the board with our Republicans 

and our Democrats. I believe that we have a very, very good relationship. And though you are hearing a lot through the media that 

the partisan rancor on Capitol Hill is at an all-time high, I am 

pleased to say that we actually, from our delegation, are friends 

and we work well together. 

I am disappointed that due to the weather delays, Assistant Secretary Alan Bersin of the Department of Homeland Security could 

not be with us today, but I would like to ask for unanimous consent 

that one of our staff members, Mark Walker, would be allowed to 

read the entire testimony. I believe it is very, very valid. So without objection, so ordered. 

Secretary Bersin has been involved in the important negotiating 

agreements with his counterparts in Mexico that will improve security and commercial flows along our southern border. His testimony 

is an important component of this hearing. And in addition, Secretary Bersin will be making himself available to answer questions 

from the members at a date to be determined in Washington, DC. 

I am also grateful for our distinguished panel of private witnesses: Mr. Eric Farnsworth of the Council of the Americas, Ms. 

Lea Ma ́ rquez Peterson, president and CEO of the Tucson Hispanic 

Chamber of Commerce and a rising star not just in Arizona, but 

I think here in the United States. I am pleased to have Mr. Glenn 

Hamer, president and CEO of the Arizona Chamber of Commerce 

and Industry, a dear friend and a great leader, Mr. Timothy 

Hutchens, executive vice president of the Federal Lessor Advisory 

Group, and Mr. Christopher Wilson from the Mexico Institute at 

the Woodrow Wilson Center. 

4

I would now like to recognize my dear friend, and colleague, and 

ranking member of the subcommittee, Mr. Sires, for his opening remarks. 

Mr. SIRES. Well, good morning, everyone. Chairman, thank you 

very much for inviting me. I cannot think of anybody better to 

serve with in Congress than my colleague as chairman here. This 

is my second time in Arizona. I have been to the golf courses in 

Scottsdale, but they tell me that the golf courses down here at 

more beautiful. [Laughter.] 

It is beautiful here, so I am looking forward to this hearing. 

Good morning, and thank you to our witnesses for being here 

today. The U.S. and Mexican bilateral relationship is critical to the 

economic and public security of both nations. Unfortunately, it also 

has to be amongst the relationships most taken for granted and 

least appreciated in U.S. foreign policy. This is in spite of the fact 

that our nations share a vast history, common values, and a nearly 

2,000-mile border. The U.S. is Mexico’s largest trading partner and 

largest foreign investor. Mexico, in turn, is the third largest U.S. 

trading partner after Canada and China. 

In 2012, combined annual trade between our two nations was 

$494 billion, and since the North American Free Trade Agreement 

took effect in 1994, U.S. trade with Mexico has increased over 500 

percent. Additionally, Mexico-U.S. migration remains today the 

largest bi-national migration in the world. These statistics are significant and set the backdrop for today’s discussion on improving 

security and facilitating commerce with our southern neighbors. 

Neither the U.S. nor Mexico lives in isolation. Clearly what happens on the one side of the border has political and economic repercussions on the other. This was clear surely after the global financial crisis that beset the United States and soon after the escalation of drug trafficking related violence that spread in Northern 

Mexico. The push and pull factors that dictate migration flows 

were turned upside down by local communities on both sides of the 

border due to negative economic activity. In that regard, the United 

States and Mexico have an undeniable and mutual responsibility to 

border security and facilitating the flow of goods and people in an 

effective and a humane matter. Advancing border security and 

trade facilitation are often thought to be mutually exclusive goals. 

On the one hand, border security entails risk management of 

border flows by identifying and preventing the illegal entry of illicit 

goods and unauthorized persons while enforcing policies that govern their exchange and transit. On the other hand, trade facilitation involves improving the efficiency and predictability of processing times at U.S. ports of entry for both goods and people. By 

their very nature then, border security affects efforts, creates speed 

bumps of ports of entry while trade facilitation aims to remove 

them, caught in the middle of the U.S. and Mexican economies 

with billions of dollars in lost economic output and the thousands 

of authorized persons crossing daily alongside countless unauthorized persons attempting to do the same. 

I would be interested to hear how U.S. consulates and border patrol, associated Homeland Security, and U.S. Agencies Division are 

aiming to address the tension that exists between border enforcement and trade facilitation. The tension between border security 

5

and trade facilitation does not only affect the flow of goods and 

services and those persons authorized to cross freely between our 

respective borders. A byproduct of this tension is a series of adverse unintended consequences resulting in border area crime, civil 

rights abuses, and loss of life. 

A more profound and distressing toll is taken by the thousands 

of unauthorized persons who by no fault of their own are compelled 

to leave their home and endeavor a life-threatening journey involving extortion and sexual assaults, over treacherous terrains in 

hopes of entering the United States. Although an effective deterrent, increasing force and monitoring would also compel many 

would-be unauthorized persons into the United States utilizing 

smuggling networks to resort to riskier means to enter the United 

States. 

While many of these migrants come from regions other than 

Mexico, like Central America, approximately half of the unauthorized immigrants in the United States are from Mexico. Most of 

these migrants endeavor this journey in the hope of a better life. 

Nevertheless, the possibility exists that persons wishing to inflict 

harm on the United States’ public can also enter through these 

means. Additionally, for those unauthorized persons that are captured, detained, and eventually repatriated, we must ensure that 

the enforcement of our laws is done in a humane manner, respectful of our Constitution and their civil rights. Deportees are at risk 

of becoming repeat offenders and victims of border crime syndicates. We shall seek balance between national enforcement and 

repatriation that lessens this likelihood. 

The current paradigm between our nations is all too real, while 

also being broken down by the communities that straddle our 

2,000-mile border, and our brave men and women assigned to protect it. As potential legislation affecting the nearly 11,000 million 

undocumented immigrants remains stalled in Congress, policymakers in our Nation’s capital must be equally mindful and aim 

to break down this divide. 

I look forward to hearing from our panelists. Thank you very 

much. And I would also like to welcome my colleagues, which I 

should have done at the beginning, but I am grateful they are here 

with me. Thank you very much. 

Mr. SALMON. Thank you. I would like to recognize the gentleman 

from Tucson, Mr. Barber. 

Mr. BARBER. Well, thank you, Mr. Chairman, and thank you, 

Ranking Member, for having this hearing and inviting myself and 

my colleagues from the Arizona delegation. 

As a member of the Homeland Security Committee and ranking 

member on the Oversight Committee, I am very concerned about 

the issue that you have brought to the table today. And I really 

look forward to the opportunity to hear from the witnesses. 

But here is my take on it. We must expedite the legal flow of 

commercial traffic into our country. When you have to wait 21⁄2

hours at our ports of entry here in southern Arizona, you are not 

going to be coming as often as you might. Thirty percent of the revenue that is taken in at the major malls in Pima County, 30 percent of that revenue comes from visitors who come from Mexico. 

6

When they wait 21⁄2 hours, they are not going to come through this 

port of entry. They are going to find another place to come. 

We must also pay attention clearly, Mr. Chairman, to border security. I live in Tucson, but I represent a district that has 13 percent of the Mexico-Arizona border. We have done a lot of work to 

improve border security, but we have not completed the job. When 

the people I represent who live outside of the ports of entry, rural 

Pima County or rural Cochise County, I should say, from Douglas 

to the New Mexico State line, and in between the ports of entry 

going west, they live each day in fear of the cartels. We have to 

protect people living in those homes and on those ranches, but we 

also have to be smart about how we do it. 

To me it is about border security coupled with economic security. 

The commercial traffic that comes into our State if we do a better 

job of staffing the ports of entry will be incredible growth potential 

for our State and for the country. I have spoken to people down in 

Nogales and Douglas about the delays and what it means to them. 

The Fresh Produce Association, Bruce Bracker, I believe is here 

today representing that community and has, I think, a lot of great 

insights about what needs to be done to staff up the ports of entry. 

While we have appropriately increased the number of border patrol agents we have in the southwest border, we have done very little, Mr. Chairman, to increase the number of customs agents that 

staff the ports of entry. We are getting ready to open the Mariposa 

extension of the Nogales port of entry, a tremendous new asset to 

increasing commercial traffic. We need to be ready for the increased commercial traffic that is going to come from Mexico when 

the port at Guaymas is deepened and will rival Los Angeles as a 

major place where imports and exports come and go. If Arizona is 

not ready, we will lose a tremendous amount of economic benefit 

from that deepening of the port. 

But even now before that is available, we have problems at the 

ports of entry both in Douglas and in Nogales. Douglas, for example, a port of entry that was built in 1932 without any measurable 

improvements since that time, needs to be upgraded. We need more 

agents. We need a better infrastructure. 

Nogales, certainly a much more modern port. The DeConcini port 

of entry and the Mariposa port of entry are going to be, when they 

are completed—Mariposa—tremendous avenues for legal commercial traffic. And unless we staff them properly, we will never get 

the job done. When we look at the potential economic development 

and benefit to Arizona and to the Nation at large, those ports of 

entry have to be properly staffed. 

But going back for a moment to the issue of border security, we 

cannot have one without the other. I am very proud to say that the 

Homeland Security Committee passed a bill called the Border Security Results Act, a bill that I co-sponsored. And that bill was 

passed unanimously, Mr. Chairman, by every member of that committee, Democrat and Republican alike. That is the kind of bipartisanship we need in the Congress more, and we are getting it, as 

you have mentioned, in ways that do not meet the headline test. 

They do not get publicized because it is not great news when people get along, and cooperate, and get things done. 

7

But that Border Security Results Act could be a path toward improving ports of entry staffing and to securing the border in a 

smart way, which requires that stakeholders who live and work on 

the border, border patrol agents, law enforcement officials are consulted by the Department of Homeland Security before they develop a strategic plan to implement a better and improved border 

security plan. So we have great potential, and I hope that all members of the House of Representatives will soon have an opportunity 

to vote on that bill and to move forward with that important development of our border security and economic security opportunities. 

It is really a privilege to be with you today. Thank you, Mr. 

Chairman and Ranking Member, for inviting myself and our colleagues from Arizona to join you, and we look forward to hearing 

from the witnesses. I yield back. 

Mr. SALMON. Thank you, Mr. Barber. The chair recognizes the 

gentlewoman from CD 9, Ms. Sinema. 

Ms. SINEMA. Thank you so much, Mr. Chairman, and thanks for 

inviting me to join you all here today. It is great to be back in my 

hometown of Tucson, Arizona. And I really feel honored and privileged to be with all of you here today to talk about an issue that 

is important not just to our Nation, but, in particular, important 

to Arizona and southern Arizona. 

While Canada and China are the two largest trading partners at 

the national level for the United States, Mexico is Arizona’s largest 

export market and our top trading partner. In 2012, the year for 

which we have the most recent statistics, Arizona exported nearly 

$6.3 billion in goods and services to Mexico, and, of course, this 

number totals over 30 percent of all of Arizona’s exports. So the importance of having a smooth and efficient relationship with our 

largest trading partner cannot be over emphasized here in Arizona. 

I am proud to say that Congressman Salmon and I are working 

together with a host of business organizations in Arizona to increase Arizona’s export industry to all nations, but particularly to 

our largest trading partner and our closest neighbor, Mexico. However, I think we all can recognize that many hurdles prevent the 

efficient and effective movement of goods and services from Arizona 

to Mexico, and equally importantly from Mexico into Arizona. For 

instance, the unpredictable and lengthy wait times at Arizona’s 

ports of entry from Mexico have forced many of our produce companies to divert their import traffic to southern Texas. No offense to 

them, but we would like that traffic right here in Arizona. 

Congress must take action to ensure that the U.S. Customs and 

Border Protection Agency can operate all ports of entry in our 

country smoothly and efficiently to allow for the free and efficient 

flow of commerce back and forth across our border. Equally, Congress must also take action and pay attention to immigration in a 

fashion that ensures border security, and that adjusts our visa system to meet the demands of the U.S. labor market rather than continuing to rely on an antiquated and outdated visa quota system 

that fails to meet the needs of American businesses and employers. 

Nowhere is that felt more acutely than here in Arizona. 

So, Mr. Chairman, thank you again for inviting me to join this 

field hearing today, and I believe if this panel were granted the authority to come up with the solutions and address them with ConVerDate 0ct 09 2002 13:07 Mar 11, 2014 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\WORK\_WH\120913\86001 SHIRL
8

gress and the Senate, I think we would be able to solve this problem. So if there is a way for the Speaker to allow this group to 

make the decision, I think we would be able to solve this problem 

and get our State and our country back on a strong economic footing to increase trade, to protect our borders, and to grow our economic engine in America. Thank you, Mr. Chair. 

Mr. SALMON. Thank you. The chair now recognizes the gentleman from Fountain Hills, Mr. Schweikert. 

Mr. SCHWEIKERT. Scottsdale. 

Mr. SALMON. Scottsdale. 

Mr. SCHWEIKERT. Thank you, Mr. Chairman. And I will not 

argue with you about the golf courses, but——

Mr. SIRES. That is what they said. 

Mr. SCHWEIKERT. You know, just next time you come to Scottsdale, call me, we will work something out for you. 

Mr. SIRES. You got it. 

Mr. SCHWEIKERT. And, Mr. Salmon, to members and everyone 

here, one of the things our office has been specializing in is the 

other side of bilateral trade and regional trade, and that is also the 

externalities of transaction costs, whether it be regulatory, whether 

it be financial. And much of this, we have a great interest in what 

is happening not only directly south of the border, but in the entire 

region with modernization of banking systems, but also the promises that were woven within NAFTA 20 years ago of being able to 

have, you know, fair, open contracts, whether it be within telecommunication, within the next generation of the banking systems, 

and the transactional costs that that will bring. 

What is unique for all of us in this is we have an amazing opportunity just before us. Some of this is because of what is happening 

from the energy sectors in our country and also south of the border 

to actually have an entire region that actually has an amazing energy future and with that, the ability to become a key manufacturing hub for the entire world. But with that, we also have to 

overlay the honest discussions of security and what it means to our 

populations on both sides of the border. 

And I hope actually as we hear the different witnesses come up 

and speak we have a discussion that is more than just-in-time 

products, perishables, backing up, but also the discussions of what 

is the next generation solutions. Is it a, you know, subscription express type lane mechanisms to move those just-in-time perishable 

products, and if so, what should those partnerships end up looking 

like? And with that, Mr. Chairman, I yield back. 

Mr. SALMON. Thank you, Mr. Schweikert. 

Pursuant to Committee Rule 7, the members of the subcommittee 

will be permitted to submit written statements to be included in 

the official hearing record. 

Without objection, the hearing record will remain open for 7 days 

to allow statements, question, and extraneous materials for the 

record, subject to the length and limitation of the rules. 

As I mentioned earlier, Secretary Bersin was waylaid due some 

of our airline traffic problems. And without further ado, I am going 

to ask Mr. Walker to go ahead and read his testimony. And as I 

mentioned, before, he will make himself available when we get 

9

back to Washington to answer questions that we might have. Mr. 

Walker? 

Mr. WALKER. Mr. Chairman, let the record reflect that I am 

Mark Walker, staff director for the Western Hemisphere Subcommittee on the House Foreign Affairs Committee. And I have 

been asked today to read the statement as provided for the record 

of Alan D. Bersin, Assistant Secretary for the Office of International Affairs and Chief Diplomatic Officer of the U.S. Department of Homeland Security. 

STATEMENT OF THE HONORABLE ALAN BERSIN, ASSISTANT 

SECRETARY, OFFICE OF INTERNATIONAL AFFAIRS AND 

CHIEF DIPLOMATIC OFFICER, U.S. DEPARTMENT OF HOMELAND SECURITY 

[As read by Mr. Walker.] 

Chairman Salmon, Ranking Member Sires, and distinguished 

members of the subcommittee, on behalf of the Department of 

Homeland Security, Acting Secretary Rand Beers, I want to thank 

you for your continued support and the opportunity to testify today 

about trade facilitation in the border region. 

In the last 5 years, the United States and Mexico have revolutionized their security and trade relationship, achieving unprecedented levels of cooperation and success. This transformation has 

been largely built on a new understanding of borders, a new bi-national approach to border management, and direct sustained bilateral engagement at the most senior levels of government. Now, historical levels of cooperation are on display across the spectrum of 

both countries’ governments, and the U.S.-Mexican border is safer, 

more secure, and more efficient than it has ever been. 

The core of DHS interests lies in improving joint border management, which includes everything from investigations to disaster response, admissibility determinations to joint operations, and appropriate information sharing to the repatriating of Mexican nationals. 

The majority of the DHS programmatic efforts with Mexico are focused on expediting the legitimate flow of goods and people and 

interdicting and preventing the illicit trafficking of people, weapons, drugs, and currency. DHS continues to have a robust and mutually beneficial relationship with our counterparts in the Government of Mexico based on the doctrines of co-responsibility of our 

shared border and co-management of migration issues. 

The United States and Mexico share a historical unique relationship of migration, trade, and cultural exchange. The 1,969-mile border between the United States and Mexico is the most frequently 

crossed border in the world. Trade between the United States and 

Mexico continues to grow, totaling nearly $500 billion in goods during 2012 alone, making Mexico the United States’ third largest 

trading partner and second-largest export market. Mexico also has 

the largest number of airports—36—of any nation in the world providing last point of departure service to the United States. 

Conventional wisdom on the U.S.-Mexico border has told us for 

many years that trade and security are mutually exclusive, that an 

increase in one must lead to a decrease in the other. We have 

learned that this is a false dichotomy when managing the border. 

First, it fails to address the everyday experiences of people who live 

10

along the U.S.-Mexico frontier. Second, it ignores the growing importance to the prosperity of both nations of our bi-national trade. 

Third, it poses a false anachronistic choice between security and 

trade that results in grossly inefficient border management. 

We are now devising innovative solutions to address the difficulties we face head on and liberate us from the conceptual straitjackets of security versus trade or national versus local. Commerce 

and public safety can be mutually reinforcing from the standpoint 

of both Federal requirements and local interests. The fact that 

trade and security can enhance one another does not mean that 

they automatically will. We must regularly use smarter security 

practices and technologies on our border that allow us to process 

with maximum efficiency goods and travelers that we know are 

safe and legitimate, and focus our energies on people and shipments that could potentially pose a threat to our safety and our 

prosperity. 

The concerted reshaping of the U.S.-Mexico bilateral relationship 

begun in earnest through the Merida Initiative was deepened and 

memorialized in the 21st Century Border Management Declaration. 

Spurred by this declaration, we have begun to move decisively. 

Trusted partner programs for people in commerce, such as SENTRI 

and Global Entry/Viajeros Confiables, FAST and C–TPAT/Nuevo 

Esquema de Empresas Certificadas, or NEEC, must be expanded 

dramatically and utilized more systematically. These programs 

allow us to move quickly to process cargo and previously vetted 

travelers, which in turn allows a focus of time and energy on goods 

and people about which less is known. Local communities and businesses must partner with Federal authorities to expand the number of trusted travelers and cargoes so that we can expedite their 

movement at scale and focus regulatory attention in a targeted 

fashion. 

In 2013, C–TPAT and NEEC finalized the details of a joint work 

plan that will guide the work required toward achieving mutual 

recognition, or MR, in 2014. MR will benefit both Mexico’s and 

U.S.’ trade community and governments by increasing resource efficiency, transparency, and decreasing duplication of efforts while 

still bolstering security across both borders. 

Federal authorities working with local communities must continue to support initiatives that are tailored for specific ports of 

entry and that reengineer processes to make more efficient use of 

existing infrastructure. Local efforts are customized to reflect the 

needs and circumstances of the local community as well as the resources available to it. The important point is that they result from 

a process of co-creation by and between the U.S. and Mexican public and private sectors. 

Our policy making and politics must take account of the international and domestic interests affected by border issues and the 

nature of border issues. Today the communities both at the border 

and in the interior most deeply touched by border policies developed in Washington and Mexico City often have little role in developing and implementing those policies. Not only does this fact lead 

them unrepresented on matters that ultimately affect them, it robs 

the policy making process of much needed local expertise and experience as well as political support. To generally secure our border 

11

and encourage trade, we must enlist the interests, insight, and 

imagination of local communities on both sides of the borders. 

[The prepared statement of Mr. Bersin follows:]


86001a-1.eps

Statement of 

ALAN D. BERSIN 

ASSISTANT SECRETARY - OffiCE OF INTERNATIONAL AFFAIRS AND 

CHIEF DIPLOMATIC OFFICER 

u.S. DEPARTMENT OF HOMELAND SECURITY 

Before the 

UNITED STATES HOUSE OF REPRESENTATIVES 

FOREIGN AFFAIRS COMMITTEE 

SUBCOMMITTEE ON THE WESTERN HEMISPHERE 

Hearing on 

Improving Security and Facilitating Commerce with Me.'Cico at America's Southern Border 

December 9, 2013 

Tucson, Arizona 
12


86001a-2.eps

Trade Facilitation in the Border Region 

Chainnan Salmon, Ranking Member Sires and distinguished Members of the 

Subcommittees: On behalf of Department of Homeland Security Acting Secretary Rand Beers, I 

want to thank you for your continued support and the opportunity to testify today about trade 

facilitation in the border region. 

Colltext 

In the last five years, the United States and Mexico have revolutionized their security and 

trade relationship, achieving unprecedented levels of cooperation and success. This 

transfonnation has been largely built on a new understanding of borders; a new bi-national 

approach to border management; and direct, sustained, bilateral engagement at the most senior 

levels of government. Now, historic levels of cooperation are on display across the spectrum of 

both countries' governments, and the U.S.-Mexican border is safer, more secure, and more 

efficient than it has ever been. 

The core of DHS interest lies in improving joint border management, which includes 

everything from investigations to disaster response; admissibility detenninations to joint 

operations; and appropriate infonnation sharing to repatriation of Mexican nationals. The 

majority ofDHS programmatic efforts with Mexico are focused on expediting the legitimate 

flow of goods and people and interdicting and preventing the illicit flows of people, weapons, 

drugs, and currency. DHS continues to have a robust and mutually-beneficial relationship with 

our counterparts in the Government of Mexico based on the doctrines of co-responsibility of our 

shared border and co-management of migration issues 

Borders 

The United States and Mexico share a historically unique relationship of migration, trade, 

and cultural exchange. The 1,969 mile border between the United States and Mexico is the most 

frequently crossed border in the world. Trade between the United States and Mexico continues 

to grow, totaling nearly $500 billion in goods during 2012, making Mexico the United States' 

third largest trading partner and second largest export market. Mexico also has the largest 

number of airports (36) of any nation in the world providing last point of departure service to the 

United States. 

Conventional wisdom on the U.S.Mexico Border has told us for many years that trade 

and security are mutually exclusive-that an increase in one must lead to a decrease in the other 

We have learned that this is a false dichotomy when managing the border. First, it fails to 

address the everyday experiences of people who live along the U.S.lMexico frontier. Second, it 

ignores the growing importance to the prosperity of both nations of our binational trade. Third, it 

poses a false anachronistic choice between security and trade that results in grossly inefficient 

border management. 

We are now devising innovative solutions that address the difficulties we face head on 

and liberate us from the conceptual straight-jackets of "security versus trade" or "national 
13


86001a-3.eps

versus local." Commerce and public safety can be mutually reinforcing from the standpoint of 

both federal requirements and local interests. The fact that trade and security can enhance one 

another does not mean that they automatically will. We must regularly use smarter security 

practices and technologies on our borders that allow us to process with maximum efficiency 

goods and travelers we know are safe and legitimate, and focus our energies on people and 

shipments that could potentially pose a threat to our safety and our prosperity. 

The concerted reshaping of the U.S.-Mexican bilateral relationship, begun in earnest 

through the Merida Initiative, was deepened and memorialized the Twenty-First Centllly Border 

Management neclaralion. Spurred by this declaration we have begun to move decisively. 

Trusted partner programs for people and commerce such as SENTRI and Global Entry/Viajeros 

Confiahles, FAST and C-TPA T INuevo F;squema de F;mpresas Certificadas (NF;F;C) must be 

expanded dramatically and utilized more systematically. These programs allow us to more 

quickly process cargo and previously vetted travelers, which in tum allows a focus of time and 

energy on goods and people about which less is known. Local communities and businesses must 

partner with federal authorities to expand the number of trusted travelers and cargoes so that we 

can expedite their movement at scale and focus regulatory attention in targeted fashion. In 2013, 

C-TPAT and NEEC finalized the details of a "Joint Work Plan" that will guide the work required 

towards achieving Mutual Recognition (MR) in 2014. MR will benefit both Mexico's and the 

U.S.'s trade community and governments by increasing resource efficiency, transparency, and 

decreasing duplication of efforts while still bolstering security across both borders. 

Federal authorities working with local communities must continue to support initiatives 

that are tailored for specific ports of entry, and that re-engineer processes to make more efficient 

use of existing infrastructure Local efforts are customized to reflect the needs and 

circumstances of the local community as well as the resources available to it. The important 

point is that they result from a process of co-creation by and between the U.S and Mexican 

public and private sectors. 

Conclusion 

Our policy-making and politics must take account of the international and domestic 

interests affected by border issues nature of border issues. Today the communities, both at the 

border and in the interior most deeply touched by border policies developed in Washington and 

Mexico City, often have little role in developing and implementing those policies. Not only does 

this fact leave them unrepresented on matters that intimately affect them, it robs the policymaking process of much needed local expertise and experience as well as political support To 

genuinely secure our border and encourage trade, we must enlist the interest, insight, and 

imagination oflocal communities on both sides of the borders 
14

Mr. SALMON. Thank you, Mr. Walker. I will excuse you, and I 

would like to seat the second panel. Before I introduce the panel, 

I want to inform the members that two of our witnesses may have 

to leave early because of prior commitments. 

I would like to begin introducing the panel starting with Mr. 

Farnsworth. Mr. Farnsworth is the vice president of the Council of 

the Americas and Americas Society. He is a foreign policy professional with experience in public, private, and non-profit sectors. 

Ms. Ma ́ rquez Peterson is the president and CEO of the Tucson 

Hispanic Chamber of Commerce and is an advocate of the southern 

Arizona business community. She received a B.A. in marketing and 

entrepreneurship from the University of Arizona, and an M.B.A. 

from Pepperdine University. I understand the University of Arizona is going to get a great ranking today, or has that already 

come out? [Laughter.] 

Number one, right? All right. That is what I am hearing. All 

right. Next is Mr. Hamer. He is the president and CEO of the Arizona Chamber of Commerce and Industry. He is overseeing the organization’s development in one of the most respected pro-business 

public policy entities in the State. Mr. Hamer is a graduate of Cornell University School of Industrial and Labor Relations and Arizona State University College of Law. 

Mr. Hutchens is a CBRE executive vice president and the head 

of Federal Lessor Advisory Group. He received his B.S. in economics from Johns Hopkins University and his J.D. from the University of Chicago Law School. 

Mr. Wilson is an associate at the Mexico Institute of the Woodrow Wilson International Center for Scholars. He oversees regional 

economic integration in U.S., Mexico, and border affairs. Mr. Wilson holds an M.A. in international affairs from American University. 

Let us begin. Mr. Farnsworth, you are recognized. 

STATEMENT OF MR. ERIC FARNSWORTH, VICE PRESIDENT, 

COUNCIL OF THE AMERICAS AND AMERICAS SOCIETY 

Mr. FARNSWORTH. Well, thank you very much, Mr. Chairman, 

and good morning to you and to the members of the subcommittee. 

And I really would like to thank you for the opportunity to testify 

today both because the issues are so important and also because 

it gets me out of Washington during winter and brings me here to 

Tucson. I really appreciate that. And as you know, this hearing 

today continues the outstanding efforts both of the full committee 

and also the subcommittee to address the most important issues 

that are facing us in the western hemisphere. 

And I really wanted also congratulate all of you for the outstanding introductory comments that were made. I thought they 

really captured the issues quite well, and I wanted simply to reflect 

that. 

The Council of the Americas has a long history of engagement on 

the U.S.-Mexico relationship, and we firmly believe that Mexico is 

critically important to the core prosperity and security of the 

United States. As the location of this field hearing suggests, the relationship is not limited to Washington and Mexico City. Intense 

15

interaction takes place at all levels of government and in the business community and civil society. 

Nonetheless, the depth of the bilateral agenda represents a fairly 

recent development. In trade alone, annual bilateral exchange has 

gone from less than $100 billion per year prior to NAFTA to today 

more than $1 billion in goods and services every single day. Mexico 

is now our second largest export market and, has been mentioned, 

our third largest trading partner. 

For 23 States, including Arizona, as well as many non-border 

States, Mexico is the first or second export destination. Beyond 

these tangible commercial benefits, NAFTA institutionalized the bilateral relationship within a broader North American context and, 

in our estimation, helped anchor Mexico to a path of economic reform, development, and democracy. 

This reality, as has been discussed a little bit already, has unfortunately been overshadowed by the security issues which people in 

the border communities and elsewhere know so well. But as the 

Council has highlighted through our border and competitiveness 

initiative, within North America, we do not merely trade products 

anymore, we now design and make them together. Joint production 

and supply chains have developed so that from a commercial perspective at least, national borders no longer define production. 

North America itself is the production platform. 

Businesses are generally optimistic about Mexico’s trajectory, 

and we are increasingly observing companies leaving China and 

other Asian sites setting up plants in Mexico as they seek to develop their own manufacturing base and cut high transport costs, 

reducing delivery times to the United States. This is hugely important because as has been mentioned, according to the National Bureau of Economic Research, every dollar of U.S. imports from Mexico includes 40 percent of U.S. content, while imports from China 

to the United States include barely 4 percent of U.S. content. 

Foreign direct investment is also pouring into higher-end manufacturing in central Mexico and elsewhere, making clear that the 

country is no longer a low-cost labor player. In fact, from 2009 to 

2012, foreign direct investment from the United States increased 

over 50 percent into Mexico. Yes, labor costs are lower than in the 

United States, but the production is also cutting edge. Who in 

Washington knows, for example, that Mexico has a successful and 

growing aerospace industry, or that the number and quality of 

Mexican engineers producing for the global market is highly competitive? 

Broadly, what we are seeing is design work done in the United 

States and Canada followed by high end manufacturing in Mexico 

and final production and path-to-market in the United States as 

Mexico moves up the value-added chain. Without the ability to do 

work in Mexico, overall production would be uncompetitive, and dependent U.S. jobs would evaporate. This turns the old NAFTA as 

job killer argument squarely on its head. 

To paraphrase the old television program, our strategic opportunity, if we choose to accept it, is to capitalize on this increasingly 

unified economic space and Mexico’s emerging economic dynamism. 

But to do so, we need to think bigger and bolder about the bilateral 

relationship. A joint competitiveness agenda should prioritize makVerDate 0ct 09 2002 13:07 Mar 11, 2014 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 F:\WORK\_WH\120913\86001 SHIRL
16

ing business easier at our common border as clearly this hearing 

is designed to do. Important security gains have been made during 

the last decade, but trade facilitation has received insufficient attention, in my view, even as cross-border supply chains have steadily integrated. As a result, long and unpredictable crossing times 

have produced bottlenecks and relatively few ports of entry have 

seen major upgrades. Recent discussions in Washington on border 

security sometimes overlook the urgent need to direct investments 

toward infrastructure improvements. 

As Mexico’s Ambassador to the United States, Eduardo Medina 

Mora, has said recently, ‘‘We have a 21st-century trade model, operating on a 20th-century policy format, with a 19th-century infrastructure.’’ The financing of needed investments could overcome 

budgetary constraints through the use of innovative mechanisms 

like public-private partnerships—Mr. Sires, I know you have had 

some direct experience with that in New Jersey in the housing sector, for example; very successful—mixed capital investment vehicles for project finance, and allocation of capital to multilateral development banks like the North American Development Bank. Infrastructure improvements must also be accompanied by staffing 

increases. We have heard a little bit of that already today. Although staffing for the U.S. Border Patrol has grown in recent 

years, the number of Customs and Border Protection officers has 

remained largely unchanged. 

More broadly, among other things like regulatory harmonization 

and simplification, governments should strengthen multilateral 

trade cooperation beyond just border issues. Mexican and Canadian 

entry into the Trans-Pacific Partnership negotiations was a critical 

step. Now we should also consider negotiating, together with Mexico and Canada, the Free Trade Agreement with Europe. Similarly, 

future economic association among the NAFTA and Pacific Alliance 

nations would be timely and, in our view, appropriate. 

Of course, Mexico must continue along the reform path in order 

to build its own competitiveness, including in the energy sector. 

And we saw some of the potentially dramatic changes that have 

been proposed just over this recent weekend. Meanwhile, 

unaddressed security issues affect the economic agenda because 

perceptions of insecurity in Mexico impact the willingness of entrepreneurs to bet on Mexico. At the same time, failure by the United 

States to address the demand for illegal drugs or the supply of 

weapons contributes to Mexico’s security difficulties. 

Nonetheless, as NAFTA turns 20 on January 1st, the United 

States is positioned to write the next chapter of global competitiveness. To do so, we have to begin to view North America as a more 

unified production platform and the U.S. border with Mexico as a 

line that unites, rather than divides, our two great nations. 

Mr. Chairman, I look forward to your questions. 

[The prepared statement of Mr. Farnsworth follows:]

17


86001b-1.eps

IMPROVING SECURITY AND FACILITATING COMMERCE WITH MEXICO 

AT AMERICA'S SOUTHERN BORDER 

FIELD HEARING BEFORE THE US. HOUSE OF REPRESENTATIVES 

COMMITTEE ON FOREIGN AFFAIRS 

SUBCOMMITTEE ON THE WESTERN HEMISPHERE 

TUCSON, ARIZONA 

DECEMBER 9, 2013 

ERIC FARNSWORTH 

VICE PRESIDENT 

COUNCIL OF THE AMERICAS AND AMERICAS SOCIETY 

*** As Prepared for Delivery *** 

Good afternoon, Mr. Chairman and Members. Thank you for the opportunity to testify 

on such a timely and important topic. This hearing today continues the outstanding 

efforts of both the full Committee and the Subcommittee to highlight the most pressing 

issues in hemispheric affairs, and I congratulate and thank you for your leadership. 

The Council of the Americas has a long history of engagement on the US.-Mexico 

relationship. From the time of our founding we organized and ran the U.S. section of the 

Mexico-US. Business Council (MEXUS), which was instrumental in advocating for the 

idea of a North American Free Trade Agreement (NAFTA). After working for several 

years on NAFTA implementation issues, MEXUS was re-organized into the North 

American Business Committee. The Council also served as the co-secretariat for the 

United States of the North American Competitiveness Council, a group of business 

leaders from Canada, Mexico, and the United States formed in 2006 and active until 

2009. Under Council leadership, the NACC coordinated advice from the private sector to 

present to the three North American leaders on ways to enhance North America's 

competitive position, promote increased employment, and improve higher living 

standards. 

In 2012, at the request of our chairman, Ambassador John Negroponte (US. Ambassador 

to Mexico at the time of the NAFTA negotiations), the Council launched the 

COUll('[[ of the AmencasiAmencas S,---'clety 

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18


86001b-2.eps

North American Border and Competitiveness Initiative. This initiative seeks to foster a 

public-private dialogue on improving management of the U.S.-Mexico border in the 

broader context of regional competitiveness. We have convened private meetings and 

public conferences along the breadth of the border, from Tijuana to Laredo. Our largest 

conference took place in EI Paso in August 2013, with both the Mexican and U.S. 

Ambassadors and other public and private-sector leaders emphasizing the economic 

opportunities in the bilateral relationship. Most recently, the Council provided input to 

U.S. and Mexican cabinet officials on the launch of the U.S.-Mexico High-Level 

Economic Dialogue in September 2013, including actionable ideas for the two 

governments to improve binational economic growth and development. 

2 

Even with pressing concerns in the Middle East, Asia, and elsewhere, there is no other 

country more important to our prosperity and security than Mexico (and vice-versa). The 

almost 2,000-mile land border inextricably links our economies and societies. As the 

location of this field hearing suggests, the relationship is not limited to Washington and 

Mexico City but rather characterized by a multiplicity of actors. This intense interaction 

takes place among all three branches of government at the federal, state, and local levels 

and, just as importantly, in the business community and civil society. 

Despite geographic proximity, however, the depth of our bilateral agenda represents a 

fairly recent development. A useful time frame to consider is the nearly 20 years since 

the North American Free Trade Agreement entered into force. In 1993, annual trade 

between the United States and Mexico amounted to $99 billion. That figure has 

quadrupled over two decades; we now trade more than a billion dollars in goods and 

services eve,}' day, making Mexico our second largest export market and third largest 

trading partner. For 23 states, including Arizona as well as many non-border states, 

Mexico is their first or second export destination. Beyond these tangible commercial 

benefits, NAFTA institutionalized the bilateral relationship and helped anchor Mexico to 

a path of economic reform, development, and democracy. 

This is not to say that the bilateral relationship does not face challenges, of course, which 

often cloud public perceptions of the depth and importance of the economic dimension of 

101~ l !:itreet .\JW 

SUlk25l1 
19


86001b-3.eps

3 

the relationship. The launch of the U.S.-Mexico High-Level Economic Dialogue in 

September is an auspicious step. Yet in many ways, governments are only slowly 

catching up to the sea change in our economic reality. The United States and Mexico do 

not merely trade products; we now design and make them together. In many industries, 

joint production and supply chains have developed to such an extent that, from the 

commercial perspective at least, national borders no longer define products. Every dollar 

of U.S. imports from Mexico, for example, includes some 40 percent of U.S. content. It 

is no longer accurate to think in tenns of U.S. or Mexican or Canadian products when 

North America itself has become the production platfonn. 

Our strategic opportunity is to capitalize on our increasingly unified economic space and 

Mexico's economic dynamism. The moment is ripe to think bigger and bolder about the 

bilateral relationship. As we celebrate the 20tl' anniversary ofNAFTA, we must address 

the remaining obstacles for cross-border business and jointly build North America as the 

most competitive region in the world. 

There is good reason to be optimistic about Mexico's future growth prospects. When I 

visited Tijuana in February, I was particularly impressed with the large industrial parks 

that testify to its booming manufacturing sector. From high-tech electronics, to medical 

supplies and equipment, to sophisticated production of auto components, Tijuana has 

become a vital part ofN orth American supply chains, creating jobs in both the United 

States and Mexico. The same is true, for example, in Ciudad Juarez and Nuevo Laredo. 

Across the border, the story we are hearing from our member companies is the trend 

toward "near shoring"-foreign and U.S. companies leaving China and other Asian 

manufacturing sites and setting up plants in Mexico as they seek to cut high transport 

costs through quicker delivery times. 

Foreign direct investment is also pouring into higher-end manufacturing in central 

Mexico, making clear that the country is no longer a low-cost labor play. Yes, labor 

costs are lower than in the United States, but the production is also cutting edge. 

Broadly, we are increasingly seeing design work done in the United States and Canada, 

Council0fth-; AmCllCa~/Am';lIcas S0Cl,;ty 

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20


86001b-4.eps

followed by manufacturing in Mexico and final production and path-to-market in the 

United States. Without the ability to do work in Mexico, overall production would be 

uncompetitive, and dependent U.S. jobs would evaporate. 

Despite these positive trends, governments must also do more to make business easier at 

our common border and sustain the enormous growth in bilateral trade and investment. 

Otherwise, we risk leaving opportunities on the table. 

4 

A joint competitiveness agenda should prioritize efforts to make business easier at our 

common border. Borders function as the windpipe of the u.s. economy; if they are 

constricted, the economy suffers. Important security gains have been made in the last 

decade, but trade facilitation has received insufficient attention, even as cross-border 

supply chains have steadily integrated. As a result, long and unpredictable crossing times 

have produced bottlenecks, and relatively few ports of entry have seen major upgrades. 

Recent discussions in Washington on border security overlook the urgent need to direct 

investment towards infrastructure improvements. As Mexican Ambassador Eduardo 

Medina Mora has said, "We have a 21 ,t-century trade model, operating on a 20th _century 

policy format, with a 19th-century infrastructure." 

The financing of needed investments could overcome budgetary constraints through the 

use of innovative mechanisms like public/private partnerships for proj ect development, 

mixed capital investment vehicles for project finance, and allocation of capital to 

multilateral development banks like the North American Development Bank. 

Infrastructure improvements must also be accompanied by staffing increases. Although 

staffing for the U. S. Border Patrol has grown in recent years, the number of Customs and 

Border Protection otlicers has remained largely unchanged, despite the increased volume 

of trade and travel. 

More broadly, among other things like regulatory harmonization and simplification, our 

governments should continue to strent,'then cooperation in multilateral settings. Mexican 

and Canadian entry into the Trans-Pacific Partnership negotiations was a critical step, 

offering a vehicle to explore new markets for jointly-produced goods and to update our 

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86001b-5.eps

5 

trade relationship to the 21 "-century standards Ambassador Medina Mora referenced. 

Now, to take full advantage of the economies of scale produced by NAFTA, we should 

also consider negotiating together with Mexico and Canada the free trade agreement with 

the European Union. Similarly, an early economic association among the NAFTA and 

Pacific Alliance nations including Chile, Colombia, and Peru in addition to Mexico 

would be both timely and appropriate. 

Of course, Mexico must continue along the refonn path in order to build its own 

competitiveness. Improved competition policy is needed, especially in the 

telecommunications sector, and energy costs are far too high. An opening of Mexico's 

heavily protected oil industry may prove to be the most difficult item on President Pena 

Nieto's refonn agenda but would be a potentially huge boost for Mexican 

competitiveness and North American growth. Meanwhile, security issues will continue 

to resonate until they are effectively addressed. This, in tum, hurts the economic agenda, 

because perceptions of insecurity in Mexico act as a drag on both investment and the 

willingness of entrepreneurs to bet on Mexico. At the same time, the failure of the 

United States to address the demand for illegal drugs or the supply of weapons directly 

contributes to Mexico's persistent security difficulties. 

Fortunately for the health of our bilateral relationship, an open and frank dialogue now 

characterizes our exchanges, even on these hard questions. Recognition of shared 

responsibility for our security and prosperity has fostered a greater level oftrust, which is 

a necessary factor contributing to the ability to achieve the overall agenda. 

As NAFTA turns 20 on January 1, 2014, the United States is well positioned to write the 

next chapter of global competitiveness. To do so we have to begin to view North 

America as a more unified production platfonn, and the U.S. border with Mexico as a 

line the unites, rather than divides, our two great nations. 

Thank you, again, Mr. Chairman, for the opportunity to be with you today, and I look 

forward to your questions. 

CounCil ,,!'the Amencas/Amerlcas S,-'oery 

I{)I~ T. Street, l\""\V 

Slllt,;25v 
22

Mr. SALMON. Thank you very much. 

Ms. Ma ́ rquez Peterson, you are recognized. 

STATEMENT OF MS. LEA MA ́ RQUEZ PETERSON, PRESIDENT 

AND CHIEF EXECUTIVE OFFICER, TUCSON HISPANIC CHAMBER OF COMMERCE 

Ms. MA ́ RQUEZ PETERSON. Thank you, Mr. Chairman, Ranking 

Member, and members of the subcommittee. Thank you again for 

your invitation to testify today. I am grateful for the committee’s 

interest in the small business experience along the Arizona-Sonora 

Border. 

In my role as the president and CEO of the Tucson Hispanic 

Chamber of Commerce, I represent over 1,000 member businesses 

in which 70 percent have less than 25 employees, which is reflective of the businesses in Arizona. Our chamber works with businesses in Arizona on reaching the fast-growing Hispanic market 

and assisting businesses in Arizona and Mexico interested in international trade. 

We have built a reputation in our geographic region for being a 

resource for businesses interested in exploring international trade 

in Mexico, and work closely with referral partners from Arizona 

businesses such as the U.S. Department of Commerce and the U.S. 

Small Business Administration. In addition, we assist Mexican 

businesses who are interested in investing or expanding into Arizona. 

The border States in the U.S. and Mexico have a population of 

14 million people. I believe that there are many best practices that 

we can learn from different States and regions. The more information we can share between business organizations, like chambers of 

commerce, the better we can collaborate, learn of resources, and 

advocate for changes in our respective State administrative codes. 

Ultimately, this will lead to a positive impact on our economy. 

The United States and Mexico are critical economic partners, as 

we have heard this morning. In May 2013, President Obama and 

President Pena Nieto announced the formation of the High Level 

Economic Dialogue. We share not only a 2,000-mile border, but a 

dynamic commercial relationship that generates more than $500 

billion in trade in goods and services and supports millions of jobs 

in both countries. The global competitiveness of both of our countries requires continued and deepened economic integration, commercial exchange, and policy alignment. 

At a local level, our chamber has focused on building relationships cross-border between these businesses. Our member businesses are from diverse industries, and approximately 65 percent 

are Hispanic owned or managed firms. The key to the economic recovery of our Nation and bolstering economic development within 

our border States is the support of entrepreneurship and the promotion of the value of our bilingual workforce. A key to the continued economic recovery of our Nation is that support of entrepreneurship. 

Arizona, like many of our border States, has a fast-growing Hispanic population, and experts expect that by 2035 the majority of 

the State’s population will be Hispanic. These dynamic attributes 

23

are an asset to our Nation, and the Hispanic market represents 

$50 billion in purchasing power in our State alone. 

The Tucson Hispanic Chamber hosts trade mission trips 2 to 3 

times a year to Sonora, Mexico. On our most recent trip in September, we had 21 attendees who represented our local businesses, 

our university, our community college, and our county. During the 

trip, we toured the manufacturing facilities of the Offshore Group, 

an Arizona business operating in Guaymas. We also toured the 

Port of Guaymas and discussed the impact on the Arizona economy, met with the Mayor of Guaymas, and signed an economic development agreement with the chamber of commerce in Guaymas. 

This 2-day trip provided our attendees with key contacts and the 

ability to follow up to develop resources within their respective industries. Our chamber is currently planning our next trade mission 

trip to Cananea, Sonora to study the expanding mining industry 

and explore opportunities. Mining continues to be a key industry 

for Arizona. We plan to invite Arizona suppliers who specialize in 

the mining industry, logistics businesses, and other service-related 

companies, to join us. 

Over the last 4 years, our chamber has developed a regional 

business presence in Mexico. Four years ago, our Arizona businesses were subject to the boycott as a result of Arizona’s SB 1070 

law. We worked closely with our fellow chambers of commerce in 

Sonora to advocate for the 65,000 Hispanic-owned businesses and 

our greater business community in Arizona during the time of the 

boycott. We focused on the economic interdependence of our Southern Arizona-Sonora region and the importance of a Federal response to immigration reform. 

Mexico is the main destination for exports in Arizona, California, 

and Texas. Additional business incentives, the removal of impediments, and identification of resources and tools are necessary to 

build export opportunities for our business community. Cooperation 

in transportation and freight systems between the U.S and Mexico 

is important. Several programs have been valuable in assisting retailers on both sides of the border, such as FAST and SENTRI, to 

name a few. Easing transportation challenges for consumers and 

businesses can assist our Arizona businesses in building cross-border relationships. The extension of the proposed I–11 corridor from 

Las Vegas to Phoenix through Tucson and Nogales will provide a 

more efficient method for goods to travel from Latin America 

throughout the United States. 

The U.S. Government estimates that each additional billion dollars in new exports supports more than 6,000 new jobs. Exports to 

Mexico increased $18 billion in 2012 alone, thus potentially helping 

create over 107,000 new U.S. jobs. Almost 6 million U.S. jobs rely 

on trade with Mexico, according to the U.S. Chamber of Commerce. 

In Arizona, businesses export more $6 billion worth of goods to 

Mexico, and over 111,000 jobs in Arizona rely on trade. 

In closing, I would like to address specific needs of small businesses in our border States related to trade with Mexico. At the 

Tucson Hispanic Chamber, we have learned that making the business decision to export can have a transformational effect on sales 

and growth, but exporting can seem complicated, especially for 

smaller firms. We heard about a lot of challenges, which include 

24

difficulty accessing financing, trouble finding skilled workers, lack 

of information about foreign markets, and the high cost of establishing a physical presence in foreign countries. 

The Mexican Government is paying close attention and is a 

ready partner in collaborating with business organizations, such as 

the Tucson Hispanic Chamber. As part of President Enrique Pena 

Nieto’s economic policy, on January 11, 2013, his decree created the 

National Institute of the Entrepreneur. The INADEM goal, which 

is that organization, is to implement, execute, and coordinate the 

national policy on supporting entrepreneurs, as well as micro, 

small and medium enterprises, bolstering their innovation and 

competitiveness in order to increase their contribution to economic 

development and social welfare. Furthermore, it seeks to provide 

help toward the development of policies which foster entrepreneurial culture and productivity. According to the OECD, smalland medium-sized businesses in Mexico represent the vast majority 

of businesses. They account for 41 percent of GDP and generate 64 

percent of total employment. 

Mr. Chairman, coordination between the U.S and Mexico on the 

effort to bolster micro and small business activity in international 

trade would greatly enhance the economic recovery of our region 

and ultimately our Nation. Small business is such a vital part of 

both countries, especially along our mutual border States. I ask 

that the committee make efforts to understand the financial impact 

of an improved small business trade environment to our country. 

Thank you. I look forward to answering any questions. 

[The prepared statement of Ms. Ma ́ rquez Peterson follows:]

25


86001d-1.eps

Lea Marquez Peterson 

President/CEO 

Tucson Hispanic Chamber of Commerce 

House Committee on Foreign Affairs 

Monday, December 9'h

, 2013 

"Improving Security and Facilitating Commerce with Mexico at America's Southern Border" 

Mr. Chairman, Ranking Member, and Members of the Committee: Thank you for the invitation to testify today. 

am grateful for the Committee's interest in the small business experience along the Arizona -Sonora Border. 

In my role as the President/CEO of the Tucson Hispanic Chamber, I represent over 1000 member businesses in 

which over 70% have less than 25 employees. Our chamber works with businesses in Arizona on reaching the 

fast growing Hispanic market and assisting businesses in Arizona and Mexico interested in international trade. 

We have built a reputation in our geographic region for being a resource for businesses interested in exploring 

international trade in Mexico. We work closely with referral partners for Arizona businesses such as the U.S. 

Department of Commerce and the U.S. Small Business Administration. In addition, we assist Mexican businesses 

who are interested in investing or expanding into Arizona. 

As this esteemed committee is aware, there are ten border states between U.S. and Mexico. In the U.S., they are: 

California, Arizona, New Mexico and Texas. In Mexico, they include: Baja California, Sonora, Chihuahua, 

Coahuila, Nuevo Leon, and Tamaulipas. These border states have a population of 14 million people. I believe 

that there are many best practices that we can learn from different states and regions. The more information we 

can share between business organizations, the better we can collaborate, learn of resources and advocate for 

changes in our respective state administrative code. Ultimately, this will lead to a positive impact on our economy. 

The United States and Mexico are critical economic partners. In May 2013, Presicjent Obarna and President 

Perm Nieto announced the formation of the Levei Economic Dialogue. We SfH.l.re not only a 2,000 miie 

border but a dynamic commercial more thall $500 billion in trade ill goods and 

services and mi!lions!n The global of both at our countries 

requires am! economic integration, commercial and policy alignment. 

At a iocal !evel, our chamber has focused on Duilding rPI"iifll1shins cross border between businesses Our 

member businesses are from diverse industries and en,nrn,yon,"telv 65% are Hispanic owned or 

The key to U18 economic recovery of our nation and economic development within our is 

the and the promotion of the of our bilingual workforce. A key to the continued 

recovery nation is the support and the of Cl workforce. 

like many of our border slates. 11as a and experts that by 2035 

of the state's population will be are 8t: asset to our nation and 

markel represems $50 bi!lion ill purchasing power 

The Tucson Hispanic Chamber hosts "Trade Mission Trips" two to three times a year to Sonora, Mexico, On our 

most recent trip in we had 21 attendees who our local businesses. our 

college vve trle manufacturing facilities of the Offshore 

an Arizona toured the Port of Guaymas and discussed the impact on 

tile Arizona economy, met and an economic development agreement with the 

Chamber of Commerce in Guaymas our attendees with key c0ntF.lcts and the to 

follow 10 develop resources witbin Our Crlarfloer is planning our next 

mISSion to Cananea, Sonora, Mexico to opportunities, Mining 

continues be a industry for i\riLona. V\le to inv!le ,A,ri/:,:ona suppliers in the mining 

industry, !og;stics anrJ other serJice-reiateri companies 
26


86001d-2.eps

Over the last tour years. our chamber has 

our Anzona businesses were subject to the 

our follow Chambers of Comrncrce in Sonora 

on thc economic 

importance of a federal response to 

Mexico is the main destination for In Arizona. Caiifornia and Texas, ,A.dditional business 

removal of impediments, and irlA,ntifiicRtion of resources and tools are necessary to build export onnmtll"itir" for 

our business Gornrr:unity. 

systems between the U.S and Mexico is 

on both sides 01 the border. slIch as FAST, Ready 

for consumers and businesses can assist our 

extension of the i~11 corridor from Las 

The U,S. government estImates that each Btiditional billion dollars in new 

jobs. to Mexico increased $18 biliion dollars in 2012 thus 

new jobs. Almost six million U.S. Jobs on trade with 

Cornrnerce. in Arizona, uusinesses export 

Arizona rely on trade. 

to travel from lalin 

supports more than 6,000 new 

helping creale over 1 07,000 

U.S. Ch::lrrber of 

and over 111,000 jobs in 

needs of smal! businosses in our Border Stales related to trade with Mexico. 

We 

The Mexican government IS paying close attention and is a ready partner in with business 

or[,anilza!llO,ns such as the Tucson Hispanic Charr:ber. As part of President Ennque Pena economic policy 

'11,2013, the decree creating the National Institute of the Entrepreneur (Inslltulo t'3clonal del 

FITm",nrlerl,",. INADEM) was signed. 

Ttm IN./\DEM's gOl1i is to impiement. execute and cOOldinate the national 

well as small and medil,m enterprises, their innovation 

their to economic development and vJe!fare. Furthermore, 

development of policies vlftlich foster erltreprerlt-!Url3i culture <111d productivity 

as 

According to the OECD (Organisation for Economic Co-operation and Development), small and medium sized 

businesses in Mexico represent the vast majority of businesses. They account for 41 % of GDP and generate 64% 

of total employment. 

Mr. Chairman, coordination between the U.S and Mexico on an effort to bolster micro and small business activity 

in international trade would greatly enhance the economic recovery of our region and ultimately our nation. Small 

business is such a vital part of both countries, especially in our mutual border states. I ask that the committee 

make efforts to understand the financial impact of an improved small business trade environment to our country. 

Thank you. I look forward to answering any questions. 
27

Mr. SALMON. Thank you, Ms. Ma ́ rquez Peterson. 

The chair recognizes Mr. Hamer. 

STATEMENT OF MR. GLENN HAMER, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, ARIZONA CHAMBER OF COMMERCE 

AND INDUSTRY 

Mr. HAMER. Thank you, Chairman Salmon and members of the 

committee. Thank you for putting on the on button. Technical expertise is not my area of expertise. 

Chairman Salmon, members of the committee, thank you for 

holding this very important hearing today. There are a few things 

that we can do to better improve the economy of Arizona and the 

United States than to look for ways to increase our positive trading 

relationship with Arizona’s largest trading partner, Mexico. And 

how appropriate it is that we are now just less than a month away 

from the 20th anniversary of the implementation of the NAFTA to 

be discussing best practices and ways we can further facilitate this 

relationship. And we will talk a little bit about some of the things 

Congressman Kolbe has done, but I want to also commend Chairman Salmon for his sponsorship of the Outer Continental Shelf 

Trans-Boundary Hydrocarbon Agreement Authority Act. You want 

to talk about something that is timely. As the President of Mexico 

is, I believe, this week, there should be progress on his legislation 

to open up energy markets in Mexico. Getting this legislation 

through the U.S. Congress is vitally important not just for the success and the improvement of our economy, but also for Mexico’s. I 

will talk a little bit about that later, but I wanted to, from the outset, applaud Congressman Salmon for his leadership on that issue. 

We have now 20 years of positive experience under our collective 

belts with U.S., Mexico, and Canada. And it is exciting that we are 

now all part of the Trans-Pacific Partnership trade talks, an agreement poised to link the markets of Asia and the Americas, accounting for about 800 million people and a combined GDP of $27.5 trillion. The importance of trade with Mexico is not lost on the Arizona 

Chamber of Commerce and Industry or with the larger business 

community. We recognize the 6 million U.S. jobs that depend on 

trade with Mexico and the $12 billion in trade between Mexico and 

Arizona in 2012 alone. It was mentioned earlier today that onethird of our exports in Arizona occur with Mexico—one-third. That 

is a very significant number. 

To that end, the chamber in 2012 formed a Trade and Tourism 

Committee, which serves as our one-stop public policy shop for 

trade and international travel promotion. Our chamber has advocated for improved transportation links between our State and Sonora, increased international flights from Mexico, and better resources and infrastructure to process the trade flowing between our 

two countries. And I believe that has been a theme that we have 

heard here many times earlier today about the need to do more so 

we can better process the trade between our two countries. And we 

would also like to see additional educational exchanges. 

In 2013 alone, I have had the distinct pleasure of traveling to 

Mexico City with our Arizona Speaker of the House, Andy Tobin, 

as part of a bipartisan delegation of lawmakers and business leaders to visit with members of Mexico’s Congress. We were treated 

28

very warmly. Over the past several years, I have also had the great 

privilege to travel to Mexico City and to Guadalajara with a number of our excellent mayors, including the mayor of Tucson, as well 

as Mayor Stanton, who I had the privilege to be on a trade mission 

to Guadalajara a few months ago, where we were part of a new 

non-stop flight between Guadalajara and Phoenix. And by the way, 

every new flight between Mexico and Phoenix represents hundreds 

of thousands of dollars of new economic activity for our entire 

State. 

One thing that is sort of interesting is that the increased trading 

opportunities and the desire for Arizona to deeper relationships 

with Mexico is really part of our culture. Our professional sports 

teams also have recognized the importance of the Mexican market 

and the positive role sports can play in forging new relationships. 

I could tell you from my experience on the Guadalajara trade mission that having the Diamondbacks’ World Series hero, Luis Gonzalez, as part of your delegation makes an incredibly positive impression. Our NFL Arizona Cardinals have played a regular season 

game in Mexico City, and have a huge broadcast presence in Mexico where their games are broadcast to 18 cities throughout the 

country, including Mexico City and Guadalajara. Yesterday our 

friends in Mexico were able to hear the very good news of Carson 

Palmer and company slicing and dicing the St. Louis Rams. The 

NBA’s Phoenix Suns have not only participated in trade missions 

to Mexico, but they are also the first NBA team to conduct their 

own youth basketball clinics in that country. 

And I mentioned my former Southern Arizona Congressman, Jim 

Kolbe, fought right from the start for NAFTA. It is not hyperbole 

to say I am not sure if that agreement would be in effect today if 

not for his work. Congressman Kolbe was also critical in the expansion of the border travel zone, which governs how far Mexican nationals in possession of a valid border crossing card may travel before requiring additional documentation. Because of his work in 

1999, Mexicans crossing the border into Arizona may travel as far 

north as Tucson, where they can enjoy world-class resorts and 

shopping destinations. 

Along most of the U.S.-Mexico border, Mexican visitors may travel only 25 miles north before requiring an additional form. Earlier 

this year, the Department of Homeland Security expanded the border zone in New Mexico where business leaders there cited Arizona’s positive experience as a case study for increased travel access. 

The Maricopa Association of Governments, MAG, the Council of 

Governments for the greater Phoenix area, is now leading an effort 

for the entire State of Arizona to be considered part of the border 

travel zone as a means to further grow the tourism opportunities 

between Arizona and Mexico. 

Arizona, as you all know, is also home to the Arizona Mexico 

Commission. The AMC, chaired by Governor Jan Brewer—and the 

president, Larry Lucero, is here today—has since 1959 sought to 

promote a better relationship between Arizona and Sonora through 

twice yearly plenary sessions and cultural and educational exchanges. 

In just the last few years, Arizona has dramatically stepped up 

its efforts to promote our State’s outstanding business environment 

29

to the rest of the world. Mexico figures prominently in that strategy. Arizona in 2010 formed the Arizona Commerce Authority, 

which right now is being extraordinarily well run by Sandra Watson. This is a public-private entity to lead the State’s job attraction 

efforts, and we have put a lot of effort in the State to make Arizona 

the most competitive place when it comes to export-oriented industries. The push is on to open additional trade offices in Mexico. 

There has been a lot of discussion about doing some things in Mexico City on the State level as well as through several cities. 

I will close by saying, again, we need to do everything we possibly can to enhance this relationship. There is a lot that we need 

to do in terms of improving the number of customs agents. We 

have made a lot of great moves in terms of modernizing Nogales, 

but we need to make sure that it is properly staffed. We have 

heard about the backups. 

You have the power to change that. We need to do more things 

along the lines of what Chairman Salmon is doing in terms of increasing our ability to take advantage of the energy revolution, 

which could truly make North America energy independent. 

Thank you for the opportunity to testify this morning. Thank 

you, Chairman Salmon, for your leadership. 

[The prepared statement of Mr. Hamer follows:]

30


86001c-1.eps

IMPROVING SECURITY AND FACILITATING COMMERCE WITH MEXICO 

AT AMERICA'S SOUTHERN BORDER 

TESTIMONY BY GLENN HAMER 

PRESIDENT AND CEO 

ARIZONA CHAMBER OF COMMERCE AND INDUSTRY 

BEFORE THE HOUSE COMMITTEE ON FOREIGN AFFAIRS, SUBCOMMITTEE ON THE WESTERN 

HEMISPHERE 

DECEMBER 9, 2013 

TUCSON, ARIZONA 

Chairman Royce, Chairman Salmon, members of the committee, my name is Glenn Hamer and I 

am the president and CEO of the Arizona Chamber of Commerce and Industry. On behalf of 

Arizona's job creators, I thank you for the opportunity to provide testimony at this important 

field hearing examining best practices in U.s.-Mexico trade. I believe you have come to Arizona 

at a critical time in our state's relationship with our neighbor to the south, a relationship that 

continues to improve and strengthen thanks to outstanding leaders like the Tucson Hispanic 

Chamber of Commerce's president and CEO, Lea Marquez Peterson, who you will hear from 

later in this panel. 

We are less than a month away from the 20th anniversary of the implementation of the North 

American Free Trade Agreement, a trilateral trade pact that created incredible market access 

for manufacturers, increased consumer choice and was integral to the creation of over 2 million 

jobs here in the U.S. in the agreement's first six years from 1994-2000, a time of unprecedented 

U.S. economic growth.' 

With 20 years of positive experience under our collective belts, the U.s., Mexico and Canada are 

now part of the Trans-Pacific Partnership trade talks, an agreement poised to link the markets 

of Asia and the Americas, accounting for 792 million people and a combined GDP of $27.5 

trillion. 2 The NAFTA nations together are stepping strongly into the next generation of 

international trade. 

The importance of trade with Mexico is not lost on the Arizona Chamber of Commerce and 

Industry or the larger business community. We are fully cognizant of the six million U.S. jobs 

that depend on trade with Mexico and the $12 billion in trade between Mexico and Arizona in 

2012 alone.' A productive, meaningful relationship with Mexico is critical to our country and 

our state's economic health. 
31


86001c-2.eps

To that end, the Chamber in 2012 formed a Trade and Tourism Committee, which serves as our 

one-stop public policy shop for trade and international travel promotion. Under the auspices of 

this committee, our Chamber has advocated for improved transportation links between our 

state and Sonora, increased international flights from Mexico and better resources and 

infrastructure to process the trade flowing between our two countries. Earlier this year, Sonora 

Gov. Guillermo Padres Elias was a featured speaker at our Arizona Manufacturers Council 

Manufacturer of the Year Awards. The governor reminded everyone in attendance of the 

unique and special relationship between our two states and why our two states' economic 

futures are so intertwined. 

In 2013 alone, I have had the distinct pleasure of traveling to Mexico City with our Speaker of 

the House Andy Tobin as part of a bipartisan delegation of lawmakers and business leaders to 

visit with members of Mexico's Congress, and I have traveled to Guadalajara with Phoenix 

Mayor Greg Stanton to kick-off new air service between those two cities by Volaris Airlines, a 

Mexican low-cost carrier, adding to the already robust offerings to and from Mexico by U.S. 

Airways from their Phoenix hub. 

Our professional sports teams have also recognized the importance of the Mexican market and 

the positive role sports can play in forging new relationships. I can tell you from my experience 

on the Guadalajara trade mission that having the Diamondbacks' World Series hero Luis 

Gonzalez as part of your delegation makes an incredibly positive impression. Our NFL Arizona 

Cardinals have played a regular season game in Mexico City and have a huge broadcast 

presence in Mexico, where their games are broadcast to 18 cities throughout the country, 

including Mexico City and Guadalajara. The NBA's Phoenix Suns have not only participated in 

trade missions to Mexico, but they are the first NBA team to conduct their own youth 

basketball clinics in that country. 

That Arizona is actively courting new business opportunities in Mexico might come as a surprise 

to some, but not to longtime Arizonans, who can point to a rich legacy of cross-border 

leadership. 

Former Southern Arizona Congressman Jim Kolbe from right here in Tucson is a nationally 

recognized expert in the importance of trade between the U.S. and Mexico. His contribution to 

the U.S.-Mexico relationship is so consequential that it is not hyperbole to say that without Jim 

Kolbe, there might not be a NAFTA. 

Congressman Kolbe was also critical in the expansion of the border travel zone, which governs 

how far Mexican nationals in possession of a valid Border Crossing Card may travel before 

requiring additional documentation. Because of Rep. I(olbe's work in 1999, Mexicans crossing 

the border into Arizona may travel as far north as Tucson, where they can enjoy world-class 

resorts and shopping destinations. Along most of the U.S.-Mexico border, Mexican visitors may 

travel only 25 miles north before requiring an additional form 4

, though earlier this year, the 

4 http://vvww.cbp.gov/xp/cgov/travel/id visa/i-94 instructions! 
32


86001c-3.eps

Department of Homeland Security expanded the border zone in New Mexico, where business 

leaders there cited Arizona's positive experience as a case study for increased travel access.' 

The Maricopa Association of Governments, the council of governments for the greater Phoenix 

area, is now leading an effort for the entire state to be considered as part of the border travel 

zone as a means to further grow the tourism opportunities between Arizona and Mexico. 6 

Rep. Kolbe's work for the border and Arizona continues. He is now co-chairing the 

Transportation and Trade Corridor Alliance, which is charged with linking Arizona to the global 

economy by improving our state's trade and logistics offerings by identifying ways to increase 

the value of our trade corridors. 

Arizona is also home to the Arizona Mexico Commission. The AMC, chaired by Gov. Jan Brewer, 

has since 1959 sought to promote a better relationship between Arizona and Sonora through 

twice yearly plenary sessions and cultural and educational exchanges. The AMC has been at the 

forefront of travel visa policy, trade promotion and transportation. It is because of the AMC 

that the governors of Arizona and Sonora have had a direct line of communication for over 50 

years. 

In just the last few years, Arizona has dramatically stepped up its efforts to promote our state's 

outstanding business environment to the rest of the world. Mexico figures prominently in that 

strategy. Arizona in 2010 formed the Arizona Commerce Authority, a public-private entity to 

lead the state's job-attraction efforts.' The ACA, in partnership with the AMC, has re-opened 

the once shuttered Arizona state office in Hermosillo, Sonora, ensuring that once again Arizona 

has a presence in our neighboring state's largest city. 

The push is on to open additional trade offices in Mexico. Speaker Tobin has touted the value of 

the state once again having a permanent office in Mexico City, and Mayor Stanton and the City 

of Phoenix are poised to open an office in Mexico's capital city next year. Arizona leaders know 

that so much more can be done to grow the $6.3 billion in goods Arizona exports to Mexico, 

$1.8 billion of which comes from the metro Phoenix area. 8 

There are so many positive things happening between Mexico and Arizona and our state 

leaders are redoubling their efforts to forge closer ties with our southern neighbor. Mexico 

finds itself in a unique period in its history that creates new opportunities for Arizona. Mexican 

President Enrique Pena Nieto is a reformer who understands that Mexico must embrace change 

if it is to assume its rightful place as an economic power. The president has already taken on his 

country's entrenched educational bureaucracy and is now moving to liberalize his country's 

petroleum market. 

84eb 0019bb2963f4.html 

7 Legislation was passed in 2011 making permanent Gov, Brewer's 2010 executive order forming the ACA. 

8 http://lJIfWw.azcentrai.com/community/phoenix/a(ticies/20':'31120phoenix-to-open-trade-office-in-mexico.htmi 
33


86001c-4.eps

I want to commend Chairman Salmon for his sponsorship of the Outer Continental Shelf 

Transboundary Hydrocarbon Agreements Authorization Act. If the bill becomes law, it would 

implement the Transboundary Hydrocarbons Agreement signed by the u.S. and Mexico last 

year, which establishes the framework for developing the oil and gas reserves that cross the 

maritime boundary between the two countries. It's a critical component for the further 

modernization of Mexico's energy sector and it gives U.S. energy firms a chance to explore 

further the Gulf of Mexico. We are fortunate, Chairman Salmon, to have you at the helm of this 

subcommittee so you can bring your border state insight to these important issues. 

There are also a handful of exciting public-private partnerships ready to launch that would 

knock down non-tariff barriers to trade between our two countries, including allowing U.S. 

Customs and Border Protection officers to clear freight and produce in Mexico rather than at 

the border port of entry. I believe that once thorny issues, such as whether CBP officers can be 

armed while working on Mexican soil, can be overcome and that our two countries can 

implement creative solutions for processing trade and reducing border congestion. 

This is not to say that challenges do not remain. While Arizona's business community is excited 

about the progress being made to overhaul the country's major port for Mexican produce, the 

Mariposa Port of Entry in Nogales, by improving its layout and capacity, we are concerned 

about the staffing resources that will be deployed to the port. As we near ever closer to the 

passage of a package of immigration reform bills, I would urge you and your colleagues to look 

for opportunities to improve the human resources devoted to our ports of entry, not just the 

areas between our ports that are the responsibility of the Border Patrol. Adequate staffing is so 

vitally important to reducing the miles-long backups of legitimate trade into Mexico. Southern 

Arizona is known for the beauty of the San Xavier del Bac Mission, otherwise known as the 

White Dove of the Desert. We don't want the Mariposa Port to be known as the White 

Elephant of the Desert. 

We also must greatly improve our transportation links in the border region. Congress took a 

positive first step by designating the highway between Las Vegas and Phoenix as Interstate 11, 

an integral link in the so-called Canamex trade corridor linking all three NAFTA nations, which 

will also connect the country's two largest metro areas not connected by an interstate. But we 

must also reduce the bottlenecks that prevent freight from reaching the interstates in the first 

place. Mariposa Rd., also known as Arizona 189, needs to be expanded or reconfigured in such 

a way that trucks leaving the port of entry can bypass the congestion of Nogales and head north 

on Interstate 19. 

In a time of austere federal and state budgets, we understand that there are no easy solutions 

to the challenges of port staffing and transportation infrastructure, but please know that you 

have a willing partner in Arizona's business community in addressing these challenges. 

Once again, on behalf of the Arizona Chamber of Commerce and Industry, I very much 

appreciate the opportunity to be here today and I would be happy to take any questions you 

might have. 
34

Mr. SALMON. Thank you, Mr. Hamer. 

Mr. Hutchens, you are recognized. 

STATEMENT OF MR. TIMOTHY C. HUTCHENS, EXECUTIVE VICE 

PRESIDENT AND HEAD, FEDERAL LESSOR ADVISORY 

GROUP, CBRE, INC. 

Mr. HUTCHENS. Thank you, Mr. Chairman. I would also like to 

thank the ranking member when he returns and the rest of the 

committee for the opportunity to appear before you today. 

In his invitation to appear today, Chairman Royce indicated that 

the purpose of the hearing was to examine the U.S.-Mexico trade 

relationship, including existing trade mechanisms, and the projects 

that are being considered, and what can be done to streamline commerce with Mexico. A critical element for a strong cross-border 

trade with Mexico is sufficiently-sized, well-equipped, and adequately-manned land ports of entry that promote the efficient 

movement of people as well as goods across the border by taking 

advantage of the latest technologies. This applies to all modes of 

cross-border traffic, including pedestrians, automobiles, trucks, and 

rails, as each of these will benefit cross-border trade if they are 

handled efficiently and effectively. 

As the volume of commerce with Mexico has increased over the 

past 15 years, the capacity and technology of our LPOEs has not 

kept pace with this increasing demand. This is seen most often, as 

we have heard several times today, in long lines and extended wait 

times that are now common at many of our southwestern border 

LPOEs, especially for truck traffic. Further, while these long lines 

evidence the need for border station improvements. What they do 

not show is the loss of trade as shippers and manufacturers either 

scale back operations or direct trade and commerce elsewhere. Addressing this deficiency on both sides of the border is critical if we 

are to continue to enhance and encourage increased trade with 

Mexico. 

This is not to say that we have completely ignored the need for 

improvements to our LPOEs on the southwestern border during the 

last decade. In recent years, in fact, primarily as a result of the 

Stimulus Act, we have invested over $950 million in improvements 

to our border facilities around the country, not just on the southwestern border, and added significant new technologies. The primary expenditure of these funds on the southwestern border has 

been on the completion of phase one of the redevelopment of the 

San Ysidro LPOE and the significant corollary improvements at 

Otay Mesa. 

And this investment is paying off in the increased flow of goods 

in both directions across the border in the San Diego area to the 

tune of almost $1.2 billion a day in cross-border trade in that region. What is needed now is a similar investment in other key 

southwestern border stations in California and here in Arizona as 

well as in Texas and New Mexico that are important to U.S.-Mexico trade. Given the need for this investment and the scarcity of 

Federal dollars to address this need, I believe the government must 

actively consider, where appropriate, engaging with the private sector to seek alternative development services and funding for the redevelopment of these border stations. 

35

There was a reference to public-private partnerships. What I am 

discussing are not public-private partnerships because that is a bad 

word at OMB. We refer to these as public-private collaborative efforts to stay within the bounds of their rules. But in these types 

of transactions, which are an alternative to the Federal design bid 

build approach to standard construction, the government would 

enter into a ground lease of an aging asset with a private development team who in turn commits to using its own financial resources and technical expertise to replace or significantly renovate 

the facility in question in full compliance with government requirements. 

The government would in turn lease the redevelopment improvements for a lease term not to exceed 20 years pursuant to a lease 

which itself is approved by the relevant congressional oversight 

committees. This approach will reduce, if not eliminate, the need 

for current appropriations dollars and can offer many key additional benefits besides just the improvements. These include insulating the Federal Government from cost increases that are so common in Federal construction projects since they are fixed priced 

projects; an ongoing obligation on the part of the private sector to 

actually maintain these facilities for the full term of the lease; freeing up the U.S. CBP personnel to focus on their core mission of border operations and border security; significantly shortening the development timeline for these projects by as much as 3 to 5 years 

over Federal appropriation; enhancing border security from the resulting physical, locational, and technological improvements that 

these projects will entail; and significant environmental benefits, 

primarily from reduced vehicle emissions at the border stations as 

wait times are reduced. 

The funding for these projects would ultimately come from two 

sources, the lease payments that would be due from the Federal 

Government in future years and, in most instances, by the implementation of a tolling operation at the affected border station. Tolling appropriately shifts a portion of the costs of the—excuse me. 

Tolling appropriately shifts a portion of the costs to the key beneficiaries of the new and improved border stations, the users. Modern technology—and this is important—affords the ability to implement fully automated tolling regimes at our border stations which 

will not impact or add any further burden on the CBP as they operate these border stations. 

Questions have been raised about whether this approach would 

constitute an evasion of the congressional budget process, and I 

would answer that it does not. It is far from it. Far from being an 

evasion, current law permits the ground lease of these facilities, 

and before any CBP occupancy lease can be signed, it must approved by various House and Senate committees to ensure compliance with oversight and budget priorities established by Congress. 

As I noted, this approach would be particularly effective for larger projects, such as the critical need that CBP and GSA have identified for the LPOEs at Calexico, California, which is also a project 

supported by the local stakeholders, by the Mexican Government, 

and by California Governor Jerry Brown. The Calexico downtown 

port of entry is located too close to the border, and its aging facilities have limited space, resulting in difficulties in both trade and 

36

security, yet this facility handles over 4 million vehicles and 5 million pedestrians a year. Calexico East, while relatively new—it was 

built in 1997—is currently handling almost 8,000 cars and 1,000 

trucks a day, approximately double its original intended capacity. 

My written statement includes more information about Calexico, 

but I believe this project could serve as a model for similar projects, 

including needed projects here in Arizona. In the case of Calexico, 

it is also important to note that the Mexican Government has already earmarked funds for the corollary improvements which need 

to occur on the other side of the border to make the border station 

improvements function and work as intended. 

On a final note, it has been argued by some that current budget 

guidelines do not allow this type of an occupancy lease that I am 

proposing because these assets are special purpose assets of the 

government. I would counter this by noting that the intent of this 

budget guideline and the requirements that assets leased have a 

private sector market is to prevent the government from leasing 

goods and services—goods and materials—excuse me—that can 

only serve a governmental purpose. 

A good example of this is war materials, and, in fact, this restriction was introduced specifically to prevent the leasing of warships—excuse me—of airplanes and warships during the Vietnam 

era. In the case of LPOEs, we are essentially talking about buildings and roads, items that are in use in the private sector throughout the Nation. Of course, the government use here, as it is whenever the government leases an asset, is for governmental use, but 

the key is that the assets are not unique. 

I believe the approach I have discussed could have both immediate long-lasting benefits for enhancing trade as well as increased 

border security, and I would encourage the committee to consider 

it further. 

[The prepared statement of Mr. Hutchens follows:]

37


86001e-1.eps

TIMOTHY HUTCHENS 

EXECUTIVE VICE PRESIDENT, FEDERAL LESSOR ADVISORY GROUP, CBRE, INC. 

HOUSE COMMITIEE ON FOREIGN AFFAIRS 

SUBCOMMITIEE ON THE WESTERN HEMIPSHERE 

Monday, December 9,2013 

"Improving Security and Facilitating Commerce with Mexico at America's Southern Border" 

Mr. Chairman, Ranking Member and Members of the Committee: Thank you for the invitation to testify 

today. I am grateful for the Committee's interest in best practices in U.S. - Mexico trade and am 

pleased to have this opportunity to discuss the impact of improvements to the U.S. Land Ports of Entry 

facilities on improved trade with Mexico along with alternative approaches to the funding and 

development of such improvements. 

A key, although sometimes overlooked element in encouraging trade with our neighbors to both the 

North and the South is the efficient movement of goods and people across our borders and the role the 

physical facilities that make up our Land Ports of Entry (LPOE) can play in encouraging or discouraging 

that movement. 

A significant majority of goods traded with Mexico, including both imports and exports, are moved by 

truck or rail through the 52 LPOEs that serve the U.S. - Mexico border. A significant majority of all 

people entering the U.S. from Mexico also come through these LPOEs. Of the 52 LPOEs on the U.S. -

Mexican border} eight are rail with the remainder serving pedestrians, autos and trucks. These 44 

border stations include 27 in Texas,three in New Mexico, seven in Arizona, and seven in California. The 

key border stations serving cross border truck traffic include Otay Mesa, Tecate, Calexico East, San Luis} 

Nogales, Santa Teresa, EI Paso, Del Rio, Laredo, Eagle Pass, Hildalgo, Progreso, and Brownsville. These 

thirteen LPOEs consistently serve 98% of all cross border truck traffic between the U.S. and Mexico. 

These border stations along with the border stations at San Ysidro, Calexico, and Mariposa also serve 

over 90% of all auto and pedestrian traffic. 

Cross border trade is a significant driver of economic activity along the Southwestern border and in the 

country as a whole. In connection with the opening of new pedestrian only vehicle lanes at San Luis in 

September of 2012, GSA Regional Administrator Ruth Cox confirmed the importance of the LPOEs to 

both the u.s. and Mexican economy when she stated, "Improving the infrastructure at our land ports of 

entry on the United States - Mexican border is vital to the economic vibrancy of both countries." 

Statement of Ruth Cox at the dedication of the new POV lanes at San Luis, September 06, 2012. Looking 

at cross border trade in the largest market, San Diego - more than $1.2 billion dollars worth of trade 

crosses the border each day. Taken as a whole, Latin America now accounts for 42% of all U.S. exports, 

more than any other region further emphasizing the importance of U.S. - Mexico trade to the U.S. 

economy. 

While both the U.S. and Mexico have made significant investments in their respective LPOEs over the 

years, additional investment in both the facilities and their operations would benefit and strengthen 

U.S. - Mexico trade. The last significant investment in our border facilities occurred as a result of the 

American Recovery and Reinvestment Act which provided approximately $980 million dollars for 

improvements to border facilities and border security technology. In its 2010 budget submission, while 
38


86001e-2.eps

it acknowledged the importance of the stimulus act investment in our border facilities, CBP also 

acknowledged that "the infrastructure and facilities supporting many of our ports of entry are outdated 

and aging." Testimony of Jayson P. Ahern, Acting Commissioner, USCBP, before the Senate Judiciary 

Committee, September 11, 2009. 

The most significant detriment to cross border trade presented by outdated, undersized and/or 

understaffed LPOEs is excessive wait times and limited hours of operation. Excessive wait times and 

limited hours of operation impact both the overall volume of trade and the timing of shipments 

between the two countries. This not only hurts economic activity, but has detrimental environmental 

impacts as well. Expanding and improving border facilities will reduce wait times thereby encouraging 

expanded economic activity in both the u.s. and Mexico. Given the positive impact that improvements 

to our border facilities will have on our economy, such investments should be viewed not just as a cost 

and expense of Government, but as investment in the economic infrastructure of the u.s. in much the 

same way as investments in roads and bridges and other key components of u.s. infrastructure. 

Given the ever increasing demands on limited federal budget dollars, it is important that Congress and 

the President consider alternative approaches to funding the design and development of improvements 

to the border facilities which are critical to U.S. - Mexico trade. One such approach, which is similar to 

the techniques that the Government is considering for the redevelopment of the SW Federal Center 

and the design and construction of a new headquarters for the FBI in the Washington DC metropolitan 

area, would be to engage the private sector to provide development capability and financing for critical 

border station infrastructure projects. This approach would engage and benefit from private sector 

development expertise while leaving USCBP free to focus on its core mission of border operations and 

security. The implementation of this approach can also benefit from tolling operations that would 

defray a portion of the costs of these critical projects. 

The key benefits of this approach include, but are not limited to: 

A transaction structure which can serve as a model of public private cooperation that can be 

duplicated across the country; 

A project approach that will result in the completion of millions of dollars of improvements to 

critical border stations with little or no outlay of federal construction funding; 

Project schedules that will place these critically needed improvements in service three (3) to five 

(5) years faster than federal construction, assuming appropriations are even available for the 

federal construction; 

Projects that will significantly ease ever increasing border congestion for pedestrian, autos and 

trucks; 

Projects that will significantly enhance border security by providing USCBP and the agencies it 

works with to protect our borders/ the modern facilities they need to effectively carry out their 

mission; 

Undertakings that will provide major environmental benefits especially through reduced vehicle 

emissions as border wait times are lessened; 

Projects that will spur economic growth along the Southwestern border and Northern Mexico; 

A project implementation plan that relies on the design and development expertise of the 

private sector freeing up USCBP to focus on its primary mission - border security; 
39


86001e-3.eps

A project approach that insulates and protects the Government from development and 

operating cost overruns; and 

Where possible, the implementation of tolling in a fashion that will significantly reduce lease 

and operating costs to the Federal Government while not overburdening pedestrian and noncommercial vehicles. 

The proposed approach contemplates that existing LPOE infrastructure would be leased to a nonfederal entity (such entities may include local and/or state development authorities which have 

significant stakes in cross border trade best practices) selected to re-develop the LPOE. The intent of 

this approach is to use the existing contracting authorities and have the U.S. Government, acting either 

through GSA or DHS as appropriate, enter into a 45 to 50-year site lease. This site lease would be 

subject to the requirement that the private sector lessee re-develop the applicable LPOE in accordance 

with a pre-agreed scope. At the same time, the lessee would enter into a 20-year facilities use 

agreement pursuant to which the lessee will lease the renovated facilities to the Government and 

would also agree to provide facility operations and maintenance for the LPOE for the full term of the 

Lease. The facility use agreement could be extended at the option of the Government for an additional 

20-year term. DHS-CBP would, of course, continue to provide all border security and border crossing 

functions within the leased facilities, but would be relieved of the obligation to operate, maintain and 

repair the facilities themselves during these lease terms. 

This unique approach to these critical facility redevelopment projects will result in a significant capital 

infusion from the private sector and at the same time bring to bear the expertise of the private sector in 

facility design, development and operation as the projects are implemented. 

The test case for the implementation of this approach to border facility re-development can take place 

with the Calexico East and West Land Ports of Entry. These facilities currently handle 5.2 million 

pedestrians, 7.08 million personal vehicles, and 322 thousand truck crossings per year. While relatively 

new, the Calexico East LPOE which handles all of the truck crossings is undersized and operates a 

limited daily schedule, leading to long delays and significant potential loss of cross border trade. The 

Calexico West LPOE is one of the older facilities on the Southwestern border with very limited space 

and facilities to handle its almost 9 million border crossings per year. In addition, this facility is 

positioned immediately adjacent to the border resulting in a less than desirable security mechanism. As 

a critically important project, the Government has funded and executed the design for a renovated 

facility, but funding for the actual construction is behind the original planned schedule and is not 

currently budgeted making this an ideal project for the suggested approach. 

A local joint venture including elements of the City of Calexico, the County of Imperial, and various 

private development entities including the project architect GSA used for the Government-funded 

design, a general contractor and a tolling company have submitted a proposal to GSA for its 

consideration. The graphic on the following page illustrates the general outline of the transaction. The 

approach outlined would incorporate all of the benefits outlined above along with the assumption of 

facility operations during the full term of the lease. I would encourage the Committee to work with the 

relevant Government agencies, including U5CBP, GSA and OMB to fully investigate, and if appropriate 

pursue, this or similar projects as a best practice in promoting and enhancing U.S. - Mexico trade. 

Thank you. I look forward to your questions. 
40

Mr. SALMON. Thank you, Mr. Hutchens. 

Mr. Wilson, you are recognized. 

STATEMENT OF MR. CHRISTOPHER WILSON, ASSOCIATE, MEXICO INSTITUTE, WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS 

Mr. WILSON. Chairman Salmon, Ranking Member Sires, members of the subcommittee, thank you for this opportunity to join 

such a distinguished panel of experts to address the important 

issue of U.S.-Mexico trade and border management. In my testimony I will focus on the development of a multifaceted approach 

to border management that promotes security, trade and competitiveness and a high quality of life for those living in the border region. I will present a summary of my full written testimony, which 

I have submitted to the subcommittee for inclusion in the record. 

Over the last 20 years, there have been two clear turning points 

in border management, and a third one may well be underway. 

First was the implementation of the North American Free Trade 

Agreement in 1994, which lowered barriers to trade and investment and caused tremendous growth in cross-border flows. This 

trend of quickly rising legitimate cross-border traffic during the 

first years of the post-NAFTA era ended in 2001. Whereas between 

1993 and 2000, bilateral trade grew at an average annual rate of 

17 percent, between 2000 and 2008 trade growth cooled to just 5 

percent per year. 

Security improvements at the border ports of entry following the 

terrorist attacks of 2001 were real and significant, but they came 

with a cost to businesses and border communities: The long and 

unpredictable wait times to cross the border. The unique nature of 

U.S.-Mexico trade causes congestion at the border to have a magnified impact on regional manufacturers. The key is that the 

United States and Mexico do not simply buy and sell finished products; they build them together. 

The manufacturing sectors of our two countries have become 

deeply integrated and, as a result, materials and parts often flow 

back and forth across the border multiple times as goods are manufactured. This means that any cost associated with crossing the 

border—paying a trucker to wait in line, using a customs broker, 

et cetera—is often paid multiple times during the production process. These costs, which amount to a border tax, eat away at the 

competitiveness of these goods and provide an inadvertent boost to 

the relative competitiveness of manufacturers outside our North 

America region. 

Thankfully, the story does not end with the slow growth of the 

early and mid-2000s. After falling sharply during the Great Recession, U.S. exports to Mexico have rebounded, growing at an average annual rate of 19 percent per year, which is faster than the 

growth in U.S. exports to China. Much of the recent growth is due 

to changes in the global economy: Currency values, quickly rising 

wages in China, high shipping costs, et cetera. But also in recent 

years, border management has become somewhat more efficient. 

Much remains to be done in this respect. 

In my judgment, the framework for border management currently in place is strong. Building on the Smart Border Agreement 

41

of 2002, President Obama and then President Calderon launched 

the 21st Century Border initiative in 2010, which was reaffirmed 

by President Obama and President Pena Nieto in May 2013. The 

concept of a 21st century border asserts that not only can security 

and efficiency at the border coexist, but that a robust, multifaceted 

border management strategy can simultaneously improve security, 

efficiency, environmental sustainability, and the quality of life of 

residents living in the border region. It is within this framework 

then that there exists the opportunity to realize the full potential 

of the U.S.-Mexico partnership for a secure and competitive border. 

While significant progress has been made toward this goal, I will 

outline a few important remaining challenges that the subcommittee may wish to consider. Additional issues are included in 

the written testimony. 

Most cross-border infrastructure was built in the years before 

NAFTA fundamentally altered the nature of the U.S.-Mexico economic relationship, increasing the volume of traffic and magnifying 

the importance of connectedness between our two countries. Investments are needed to update and expand port of entry infrastructure. 

On staffing, infrastructure can only be utilized if the ports of 

entry are adequately staffed. While the size of the Border Patrol 

has increased five-fold since the early 1990s, the number of Customs and Border Protection officers working at the ports of entry 

has not experienced similar growth. 

Trusted traveler programs—trusted traveler programs, which 

Global Entry, SENTRI, FAST, C–TPAT, and the Mexican NEEC 

Program are of critical importance. They offer expedited passage 

across the border to those individuals and companies that have voluntarily undergone extensive background checks and committed to 

high security standards. By facilitating the flow of designated low 

risk travelers, border officials increase overall throughput while 

freeing up staff resources to focus attention on individuals and 

shipments that present a higher or unknown level of risk. Global 

Entry and SENTRI are growing quickly, but C–TPAT and especially FAST, which are the commercially-oriented programs, are 

facing challenges in increasing their levels of enrollment and use. 

Increasing the portion of commercial traffic in these programs may 

be among the most cost-effective way to reduce congestion and 

boost U.S.-Mexico trade. 

Finally, cooperation with Mexico. Last, but extremely importantly, border crossings are, by definition, bi-national projects, but 

border management benefits enormously from coordinated and cooperative efforts. Efforts are needed to ensure that dedicated trusted traveler lanes extend as far back into Mexico as needed so the 

benefits of limiting border congestion can be maximized. Intelligence sharing for strengthened border security has improved significantly over the past several years, but additional progress is 

possible there. 

In an ideal world, U.S. and Mexican officers would work side by 

side to run streamlined ports of entry together. To move toward 

this ultimate goal while continually achieving more concrete shortterm progress, ongoing bilateral consultation, confidence building, 

and capacity building efforts are all needed. 

42

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Wilson follows:]


86001f-1.eps
43


86001f-2.eps

came with a cost to businesses and border communities: long and unpredictable wait times to 

cross the border. 

The unique nature of U.s.-Mexico trade causes congestion at the border to have a magnified 

impact on regional manufacturers. The key is that the United States and Mexico do not simply 

buy and sell finished products, they build them together. The manufacturing sectors of our 

two countries have become deeply integrated, and as a result materials and parts often flow 

back and forth across the border multiple times as a good is manufactured. This means that 

any cost associated with crossing the border--paying a trucker to wait in line, using a customs 

broker, etc.--is often paid multiple times during the production process. These costs, which 

amount to a border tax, end up embodied in the selling price of products manufactured in 

North America, eating away at the competitiveness of these goods and providing an 

inadvertent boost to the relative competitiveness of manufacturers outside our region. 

Numerous studies have estimated the costs of congestion at the border to the U.S. and 

Mexican economies, and while the specific numbers vary, one message comes through the 

research very clearly: both the United States and Mexico experience billions of dollars of lost 

output each year. To be clear. these costs represent not only tightened security protocols, but 

also shortfalls in investment in border infrastructure and U.S. Customs and Border Protection 

staffing levels at the ports of entry.' See the table in the appendix for details from the studies 

on the costs of congestion. 

Thankfully, the story does not end with the slow growth of the early and mid-2000s. After 

falling sharply during the Great Recession, US. exports to Mexico have rebounded sharply, 

growing at an average annual rate of 19 percent per year, faster than the growth in US. exports to 

China (17%). Much of the recent growth is due to changes in the global economy--currency values, 

quickly rising wages in China, high shipping costs, etcetera. Border management has also become 

more eftlcient in recent years, though much remains to be accomplished. As efforts are made 

toward this end, it is important to recognize that the multiplier effect outlined above also applies to 

declines in the cost of crossing the border. That is, as steps are taken to improve the tlow of legal 

commerce across the border, the benefits will be multiplied because of the tendency of comanufactured goods to incorporate parts and materials from both sides of the border, necessitating 

multiple crossings during the manufacturing process 

In my judgement, the framework for border management currently in place is strong Building on 

the Smart Border Agreement of 2002 , President Obama and then President Calderon launched the 

21st Century Border initiative in 2010, which was reaffinned by President Obama and President 

1 :Mikhail Pa\ 10v. Customs and Border Protection., DHS, '-Meeting Land Port ofEnll) ModcmiLation Needs in 

Constrained Budgetary Envirollll1CnC" presentation to the Join '''oIking COllUllittcc. :M..'Hch 14-15, 2012: Govcnuncm 

Accountability Office. Border Security: Despite Progress, \Veaknesses in Traveler Inspections Exist. GAO-08-329T. 

Washington, DC: January 2008. 

2 
44


86001f-3.eps

Pena Nieto in May, 2013. The concept of a 21st Century Border asserts that not only can security 

and efficiency at the border coexist, but that a robust, multifaceted border management strategy can 

simultaneously improve security, efficiency, environmental sustainability and the quality of life of 

residents of the border region 

It is within this framework, then, that there exists the opportunity to realize the full potential of a 

U.S.-Mexico partnership for a secure and competitive border. 

While significant progress has been made towards this goal, will outline a few important 

remaining challenges that the Subcommittee may wish to consider. 

• Setting goals: Over the past year, Congress has devoted significant attention to the 

need for clear goals regarding border security. A similar conversation regarding border 

efficiency may likewise be necessary. There currently exists no consensus over how long it 

is reasonable to expect an individual or a truck to wait in line before crossing the border. 

The variability in levels of traffic and the need to prioritize security make it impossible to 

achieve perfect uniformity over time or across ports of entry along the border, and the 

design of any wait-time goals must take this into consideration. 

• Measuring progress: Data on wait times needs to be made more reliable in order to 

better diagnose the costs of border inefficiency and to benchmark progress on making 

border wait times shorter and more predictable. New methodologies, mainly based on RFID 

chips and Bluetooth devices, can resolve current issues in measuring wait times, and 

progress is being made toward this end. 

• Infrastructure: Most cross-border infrastructure was built years before NAFTA 

fundamentally altered the nature of the US-Mexico economic relationship, increasing the 

volume of traffic and magnifying the importance of connectedness. Investments are needed 

to update and expand port-of-entry infrastructure. 

• Staffing: Infrastructure can only be fully utilized if the ports-of-entry are adequately 

staffed. While the size of the Border Patrol has increased five-fold since the early 1990s, the 

number of Customs and Border Protection officers working at the ports-of-entry has not 

experienced similar growth. Recognizing the costs of congestion and the need for additional 

CBP statl'to reduce long lines at the border crossings, the CREATE Homeland Security Center at 

the University of Southern California put together a study, finding each additional CBP officer 

would lead to a two million dollar increase in U.S. GDP and would create thirty-three American 

jobs' 

2 Bl)all Roberts et aI .. "The Impact 011 the U.S. Econollly of Changes in \Vait Times at Ports ofElltr)." University of 

Southem Ca1ifomia CREATE Homeland Security Center, April-t., 2013. 

1.1!1Q . .L(£(eale. Llsc.(;dujrnp%JOFlikll~~QR~J_Lmi[' 

3 
45


86001f-4.eps

• Trusted traveler programs: Trusted traveler programs--Global Entry, SENTRI, 

FAST, C-TPAT, and the Mexican NEEC program-are of critical importance. They offer 

expedited passage across the border to those individuals and companies that have 

voluntarily undergone extensive background checks and committed to high security 

standards. By facilitating the flow of designated low-risk travelers, border officials increase 

overall throughput while freeing up staff resources to focus attention on individuals and 

shipments that present a higher or unknown level of risk. Global Entry and SENTRI are 

growing quickly, but C-TPAT and especially FAST (the commercially oriented programs) are 

facing challenges in increasing their levels of enrollment and use. Increasing the portion of 

commercial traffic in these programs may be among the most cost-effective way to reduce 

congestion and boost U.S.-Mexico trade. 

• Public Private Partnerships: Public Private Partnerships and other non-traditional 

funding mechanisms to build and staff cross-border infrastructure can complement and 

leverage government investments. Some example of such projects exist along the southern 

border and new pilot projects are underway. At some point, though, additional legislative 

action will likely be needed to create a clear and permanent legal framework defining and 

regulating the role of private (and subnational government) investment in border 

infrastructure and management. 

• Cooperation with Mexico: Last, and extremely importantly, border crossings are, by 

definition, binational projects, and border management benefits enormously from 

coordinated and cooperative efforts. In the case of the southern border, coordination is 

needed to make sure the construction of new or expanded crossings are completed within 

similar timeframes. Efforts are needed to ensure that dedicated trusted-traveler lanes 

extend as far back into Mexico as does border congestion so that their benefits can be 

maximized. Intelligence sharing for strengthened border security has improved significantly 

over the past several years, but additional progress is possible. In an ideal world, U.S. and 

Mexican officers would work side by side to run streamlined ports of entry. To move toward 

this ultimate goal and to continually achieve more concrete short-term progress, ongoing 

bilateral consultation, confidence-building, and capacity-building efforts are all needed. 

In conclusion, there is a strong opportunity to create jobs, economic growth, and increase the 

competitiveness of North American manufacturers through improved border management. 

Moderate investments in border infrastructure and staffing are needed, but much can also be 

done by improving efficiency and U.s.-Mexico cooperation at the border. The payoffs for each 

of these actions would be considerable. 

4 
46


86001f-5.eps

Appendix 

Table 1. The Costs of Congestion 

Region of Region of Wait Tirne YeaTof Cost to Regional Costs in 

Crossings Economic (nun.) Potential Economy (bi11ions Jobs Source 

Impact Impact of US D) 

San Diego- U.S. and 2007 $7.2 62.000 SANDAG,2007 

Ttiuana Me.\.ico Update 

Imperial U.S. and HDRIHLB IV AG Valley - 2007 $!A 11.600 

Mexicali Mexico 2007 

Tijuana Mexico 180 2007-2008 $1.9 57.000 Del Castillo Vera, 

COLEF. 2009 

Ciudad Mexico 132 2007-2008 $1.5 87.600 Del Castillo Vera, 

Juarez COLEF.2009 

Nueyo Mexico 174 2007-2008 $3.7 133,800 Del Castillo Vera, 

Laredo COLEF.2009 

Nogales Mexico 66 2007-2008 $0.2 18.000 Del Castillo Vera, 

COLEF.2009 

US-Me'\ico U.S 63 2008 $5.8 26.000 Accenture Draft 

Border March 2008 

US-Me,ieo U.S 99 2017 $12.0 54.000 Accenture Draft 

Border March 2008 

EI Paso/Cd EI Paso/Cd. 2008 peak Cambridge 

Juare:t Jumu times: 45 2035 $54.0 850,000 Systematics Inc .. 

-220 hUle 2011 

US-Me'\ico U.S 2011 $7.8 Hummer. 

Border Bloomberg, 2013 

.'\Iotc 

5 
47

Mr. SALMON. Thank you. It is now time for the members of the 

subcommittee to be able to ask questions. Before I ask the first 

question, I would like to introduce this letter from the Fresh 

Produce Association of the Americas regarding our ports of entry 

and some of the concerns that they have, without objection. 

I am going to start out by yielding myself 5 minutes for questions, and I would like to start out with you, Ms. Ma ́ rquez Peterson. How has the emphasis on border security affected the competitiveness and productivity of industries located along the U.S.-Mexico border and throughout the United States, in your estimation? 

Ms. MA ́ RQUEZ PETERSON. Mr. Chairman, certainly the conversation about border security is very complex, and a lot of the businesses that we work with are primarily small businesses that are 

interested in trade cross-border. Where we have seen the challenges occur is really the wait times and impediments of regulation 

when people are considering doing cross-border trade. 

I do not believe that particular border security details have perhaps impacted them as much as the lack of resources in the Customs officers, which increases their wait time at the border, and 

certainly impacted our retailers in southern Arizona, manufacturers, and entities, like the Fresh Produce Association. 

Mr. SALMON. To what extent do you think the U.S. Government 

has included the views or ideas of U.S. manufacturers and importers in the design of its border security efforts or ports of entry improvements? 

Ms. MA ́ RQUEZ PETERSON. So, Mr. Chairman, that is a very interesting question. I think at the State level, which is primarily where 

I operate, there is an Arizona Manufacturing Council, which Glenn 

is very familiar with. I think more conversation could be occurring. 

The conversation, such as the tour that we recently hosted to the 

Offshore Group where they are an Arizona entity allowing and 

helping American businesses who want to manufacture in Mexico. 

I believe more dialogue could occur at that point. There are some 

great resources that I think they could be giving you day-to-day experiences. 

Mr. SALMON. Have manufacturing industries presented proposals 

on how trade facilitation could be enhanced? And, if so, what are 

the proposals? 

Ms. MA ́ RQUEZ PETERSON. So, Mr. Chairman, I am not aware of 

proposals specifically for the manufacturing industry in the State 

of Arizona, but perhaps Glenn Hamer can speak to that a little bit 

more. 

Mr. SALMON. Okay. Mr. Hamer, maybe you could address that. 

And then, Mr. Hamer, I had an additional question on that. Does 

the CBP have adequate personnel to manage trade flows at ports 

of entry on the U.S.-Mexico border? And how would increasing CBP 

officer deployments affect port hours of operation, border wait 

times, trade enforcement, and import safety? 

Mr. HAMER. Mr. Chairman, both are great questions, and I believe one of the things that has really come out of this hearing is 

that there is a real staffing issue. You know, we have some really 

good things happening on the infrastructure side, but an infrastructure that is not adequately staffed is still going to create 

major problems. And it really seems that, you know, one of the 

48

major things that could come out of this hearing is the need to 

make sure that we have more resources on the Customs side. 

If we are able to get these new facilities or these modernized facilities properly staffed, we are going to see a decrease in wait 

time, and that will increase our competitiveness, particularly in Arizona. I believe one of the witnesses or earlier today it was discussed that we are having some issues with Texas now. And I 

know not everyone on the dais is from Arizona, but from the Arizona perspective, we want to make sure that we can have the maximum amount of international trade go through our borders. And 

probably the most concrete thing I could say is if we are able to 

get some additional resources into Customs, you could almost take 

it to the bank that we are going to see smoother trade between our 

two nations. 

Mr. SALMON. One of my big frustrations is that a lot of times in 

government we are penny wise and a pound foolish, and we ought 

to be putting more and more resources into those areas that are 

profit centers, and this definitely is a profit center. This is an opportunity to increase commerce, and increase jobs, and increase 

revenues, and it seems like kind of a no-brainer. 

Mr. HAMER. And, Mr. Chairman, if I may say, you know, during 

your first round in Congress, I would argue that few, if any, members had more of an impact in really increasing our commercial opportunities with Asian countries. I mean, you take a look at a lot 

of the work that you did for normal trade relations and increasing 

our trading relationships with other Asian countries, and you look 

at the increase in wealth and opportunities in that part of the 

world. I think the more we do on the infrastructure in our neck of 

the woods, the more prosperous our State will be. 

Mr. SALMON. Mr. Hutchens, I am running out of time. But, you 

know, I think the entire panel has pretty much shared with us 

today that the existing infrastructure and personnel are inadequate 

to meet the demands of our current commerce or desired commerce 

levels with Mexico. You have come up with some good ideas for accomplishing things with limited government resources. Could you 

maybe share what port infrastructure investments should be 

viewed as top priorities? 

Mr. HUTCHENS. Obviously the project that we have identified as 

the top priority right now is Calexico, and part of the reason we 

have identified Calexico as opposed to, you know, certain Arizona 

LPOEs that require massive infrastructure as well, is because the 

GSA has already funded the design for the redevelopment of 

Calexico. This project was recognized as a mission critical project 

5 years ago. Twenty-eight million dollars has been since spent on 

the design, but the budget process for the improvements themselves has not proceeded, you know, very far along. So those plans 

will get old, they will get stale if you do not move forward on them. 

So that is why that is the project that we have identified as probably the most mission critical and most doable. 

I would like to offer one other comment, if I may, about staffing, 

and that the approach that I have talked about can also have a 

very positive impact on staffing at the border stations for two reasons. One, if the air conditioning system breaks at an LPOE, instead of having to take money out of the budget that might otherVerDate 0ct 09 2002 13:07 Mar 11, 2014 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 F:\WORK\_WH\120913\86001 SHIRL
49

wise have gone to Customs agents, the landlord is going to fix it. 

It is in the budget. It is in the rent. You know what it is. In addition, you are not having to divert personnel and personnel time to 

the administrative burden of keeping the facilities clean, of keeping 

the lights on, of these improvements. And that will also free up resources at the CBP level to focus on the core mission. 

Mr. SALMON. And ultimately, since I am hearing more from the 

panel that infrastructure is a big issue, but staffing maybe even is 

a bigger issue right now, I would be really interested, and time will 

not permit an answer, but I would love to maybe continue a dialogue on how—I am going to use the wrong term—but public-private partnerships maybe with staffing, too, not just infrastructure, 

could be addressed by this Congress. 

Mr. HUTCHENS. Certainly. 

Mr. SALMON. Mr. Sires, I would recognize you. 

Mr. SIRES. Thank you, Mr. Chairman. I am just curious. I assume that a lot of the merchandise accounts through these ports 

come in containers, trucks? How much emphasis is placed on security on the point of departure before it gets to the border as point 

of entry? Is there a lot of emphasis in negotiations? Because one 

of the things, I represent the Port of Newark and the Port of Elizabeth, and after 9/11 obviously, we get a lot of merchandise. Eighty 

percent of the merchandise that comes through those ports is consumed in the region, and only 20 percent goes to the rest of the 

country. 

And one of the questions was, how do we secure these containers? And they have come up with a pretty good system of point 

of departure, you know, those companies that do business. But, you 

know, I was just wondering here in Arizona how much emphasis 

is placed on point of departure as point of entry in terms of security? 

Mr. WILSON. If you do not mind, Ranking Member Sires, I can 

answer that question to a certain extent. The program C–TPAT, 

Partnership Against Customs Terrorism, is exactly that. It is a program where companies join——

Mr. SALMON. Mr. Wilson, could you bring the mic just a bit closer? Thanks. 

Mr. WILSON. Yes, absolutely. It is a program that—there we go. 

Thank you. It is a program in which companies that join agree to 

secure their entire supply chain starting at the point of departure. 

It means that they install things like cameras, seals on their containers, other mechanisms by which they can ensure that the containers are not tampered with in the course of transport to the 

physical border. And these have been successful because they allow 

then Customs and Border Protection at the ports of entry to spend 

less time inspecting these containers because they have a higher 

level of confidence that they do not contain illicit goods. 

Now, the problem is that that those programs are not used 

enough. We still need to get a higher percentage of the total containers crossing the U.S.-Mexico border involved in C–TPAT and 

the fast lanes that they can then use to cross the border. Some very 

interesting new efforts are being piloted right now in terms of Customs pre-clearance, which takes this process really one step further. It allows there to be U.S. officials, U.S. CBP officers in Mexico 

50

actually, you know, verifying the safety and security of these containers as they are being processed so that we can spend even less 

time inspecting them as they cross the border. So it is a program 

that is very important, both of these programs, and there are ways 

to improve security and efficiency at the exact same time. 

Mr. SIRES. Mr. Hutchens, I was very curious about your program 

of build, design, and operate. Are you talking about operating actually these border entries? 

Mr. HUTCHENS. No, we are talking about operating the, you 

know, physical facility. The Customs function would be left to CBP 

agents. In other words, the guy you hand your passport to or who 

inspects the truck would continue to be a U.S. Government DHS 

employee. The person is making sure that the lights are on, that 

the grass is cut, as I said, the HVAC systems are working. And 

quite frankly, a lot of the maintenance would be in the roads, that 

the roads are well paved. It would be the private developer who 

takes over the operation of the facility, but the government operation would stay in government hands. 

Mr. SIRES. They would get part of the tolls? Is that how that 

works? 

Mr. HUTCHENS. The tolls would be used to defray the costs of the 

upfront improvements. You know, for instance, again, at Calexico, 

we are talking about doubling the size of the east port of entry, 

adding 3 new truck lanes, adding 6 new passenger lanes. The tolls 

would go toward helping fund the cost of those improvements. 

And this is not a completely unique technique. It has been employed by the Department of Energy. I just mentioned it since we 

are in Arizona. And the Department of the Army specifically, the 

Army was interested in working with Arizona in keeping General 

Motors’ warm weather test track here in Arizona. And we did a 

project at Yuma Proving Ground where the Army leased the land 

to General Motors. General Motors built a shared new test track 

which is now used by the Army and General Motors for vehicle 

testing. It is a very similar type process. 

Mr. SIRES. Yeah, I am familiar with this build and design operation because we built a light rail. It is more used and more effective with transportation because the concern I would have is the 

security part of it. 

Mr. HUTCHENS. Right, and that is why——

Mr. SIRES. That is why, you know, the operations part of it is 

handled by the government. 

Mr. HUTCHENS. Correct. Correct. Very much like the Chicago 

Skyway, but, yes, transportation works very well, and this is functionally a transportation project. But the government function 

would remain with the government. 

Mr. SIRES. You know, I always read about the tension on the border. Tell me the impact this tension has had in the last few years 

on the economy of this region. 

Mr. FARNSWORTH. Mr. Ranking Member, I assume you mean the 

tension between security and economic growth. 

Mr. SIRES. Yes. Yes. And after 9/11, everybody is very concerned 

about terrorism. 

Mr. FARNSWORTH. Yes, well, and appropriately so. I do not know 

that anybody has actually quantified the amount of foregone ecoVerDate 0ct 09 2002 13:07 Mar 11, 2014 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 F:\WORK\_WH\120913\86001 SHIRL
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nomic exchange, but I think we hear anecdotally all the time of 

companies that find it easier to get product in from China or product in from other places than simply from our closest neighbor, 

Mexico, and even Canada, too. 

You hear a lot of discussion about the so-called thickening of the 

border, which means the border itself has become more complicated 

to get across. And as global production patterns have changed, this 

becomes important because if you are bringing in a product from 

China, you bring it into the United States once. If you are producing in North America, that same product might cross the border 

three, four, five, sometimes even six or seven times. So each time 

it has to cross the border, that adds cost, delays, everything else. 

And I agree with some of the things that have been said in terms 

of C–TPAT and pre-clearance, and I think that is an important 

part of the solution. But there are some even more fundamental 

issues here. Just basic forms that have to be filled out, I mean, 

they are different on both sides. And they have to be filled out each 

time the product goes back and forth. I mean, this is just a tyranny 

of small differences. And what we need, we just need to think bigger about the relationship and the way to understand that patterns 

of global trade have changed. It is not the way we did things 20 

years ago. 

North America itself is a production platform, but you also have 

a couple of things that are coming online here in the next year. 

Two thousand fourteen is going to be a huge year, perhaps 2015 

when they actually open the Panama Canal. You are already seeing ports in the United States dredging deeper, preparing for the 

patterns of change that are coming through the Panama Canal. 

Vice President Biden was just there with mayors from various port 

cities in the United States. That is going to change patterns of 

trade. It is going to make it easier to get product into ports like 

New Jersey, and Florida, and Virginia, et cetera. That could impact 

here. 

But you also have the whole idea of energy liberalization in Mexico, too, and we have talked a little bit about it, but I want to be 

very clear. If that passes in Mexico in the way that it could, that 

is going to open up a huge opportunity in Mexico, not just in the 

energy sector, but in every sector where energy is an input, and 

that is everyone. And to the extent you have the cost of energy decrease in Mexico, which was most likely what would happen, what 

you are going to see is a manufacturing renaissance in Mexico in 

the same way it is occurring in the United States and Canada. 

That is going to put monumental pressure on the border because 

you are going to have all that product trying to get into the other 

countries of North America in a way that the border is already 

over-burdened. 

So what is going to happen when that increases dramatically? 

Now, Mexico is trying to develop relations with China right now. 

They are trying to develop relations with Europe and other countries in South America so that the United States is not their only 

market—over 80 percent of their product comes to the United 

States—but that they diversify. 

Having said that, if that energy reform occurs, it is going to be, 

in our view, very important for the people of Mexico, very imporVerDate 0ct 09 2002 13:07 Mar 11, 2014 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 F:\WORK\_WH\120913\86001 SHIRL
52

tant in terms of energy integration, et cetera, but you are also 

going to put increased pressure on that border. So that, plus the 

Panama Canal, plus the changing patterns of trade means that, 

you know, if we are still dealing with the border in the way of each 

border crossing. You know, it takes 20 years or whatever to get upgrades, and we are talking about staffing, and we are talking about 

forms that do not match. The private sector is just going to say, 

well, we are going to go somewhere else, and that is what we are 

seeing. And that is not just here in Arizona. That is across the border. That is Texas. That is California. That is everywhere else. 

So there is some urgency here, and the idea of getting the private 

sector engaged in the financing side I think is very, very important. 

The appropriations process in Washington takes a long time. We 

know the budget realities in terms of Washington. There are some 

big issues here, but I think working together we can work to get 

through them. 

Mr. SIRES. Thank you. Thank you very much, Chairman. 

Mr. SALMON. Thank you. Mr. Barber? 

Mr. BARBER. Again, I want to thank the chairman and the ranking member for bringing us some really outstanding witnesses. I 

have a few questions, if I could start with Mr. Farnsworth. We 

have had several hearings in the Oversight Committee and the full 

committee of the Homeland Security Committee of the House. And 

We have focused a lot on what I believe, and I think many members believe, is the lack of accountability and transparency in the 

operation of the Department of Homeland Security. In all fairness, 

22 legacy agencies, trying to pull them together into a common 

mission, not an easy task. 

But when I look at some of the money that I believe, quite frankly, has been wasted, two examples. In Ajo, Arizona, the Homeland 

Security Department built homes at the average cost of $600,000 

in a community where the average cost of homes is under 

$100,000. We had a hearing recently where we were looking at information technology improvements, $24 million on a project that 

was stopped because it was not going anywhere. 

So my question, Mr. Farnsworth is, given these constraints that 

we have in these tight budget times, how would you, if you were 

able to, direct the Department of Homeland Security to focus on 

priorities? Where would you take that money that should not have 

been spent wastefully and put it to make the most use in terms of 

economic development and improvements in what we want to have 

happen as you all have discussed here today? 

Mr. FARNSWORTH. Well, thank you for the question, and I wish 

Assistant Secretary Bersin were here so that he could answer directly on behalf of——

Mr. BARBER. So do I. [Laughter.] 

Mr. FARNSWORTH. So I certainly will not attempt to speak for 

him or for the U.S. Government. But I do think there are some important realities here in terms of where could additional funds be 

spent. My personal view is that border infrastructure is a clear 

winner here because you get to the point, and we have talked a lot 

about it. All the witnesses have talked about simply the ease of 

getting across the border. Now, that could be in terms of bridges. 

It could be in terms of enhanced facilities. 

53

Each local community is going to have their own priorities, and 

I think that is a critically important aspect of this. We have to get 

the local communities involved. In fact, in some ways, the local 

communities need to lead the effort so that they are creating a 

sense of place not just for the communities on this side of the border, but certainly on the Mexican side of the border as well, so that 

you have a much more integrated approach. I think that is critically important. 

I do think that this is where, frankly, it is important to bring in 

the conversation of private sector funding because these are 

projects that are really, really expensive. And I think with new and 

innovative financing models, I think that is going to be a critically 

important aspect of the entire effort. 

I mentioned in my oral testimony the North American Development Bank, the NAD Bank. I think they are doing some very interesting things. I think to the extent they could get private sector 

money into their budget process and use that in terms of border 

infrastructure and development, I think that could be a positive 

step. I am not sure that people have talked about that in any specific way. But again, there are vehicles there. We just have to be 

creative and find them. 

Mr. BARBER. Thank you for that. And let me just turn to both 

Lea and Glenn for this question. Sitting on the Small Business 

Committee, one of the most frustrating things that I have heard 

over and over again from small businesses is a lack of access to 

capital. Recently I met with some businesses in southern Arizona. 

One woman who owned a business, a very successful business, for 

20 years, was trying to expand her business along the same track, 

but in a different area of the country. She went to every bank she 

could think of in Arizona that she had done business with. Could 

not get a line of credit or a loan. She ended up going to Portugal 

to get the line of credit that she needed. I mean, that is outrageous. 

We cannot have that happen. 

So from your experience, first of all, access to capital I think is 

an issue. What are some of the ways in which you think we can 

overcome this important problem, because we know that small 

businesses are 70 percent of our economy? If we get them moving, 

the economy gets moving. So what would you say about access to 

capital? 

Ms. MA ́ RQUEZ PETERSON. Absolutely. Thank you, Congressman 

Barber. That is absolutely the number one issue we hear from 

small businesses is the access to capital. I wish I had a solution 

to pitch to you today, but we continue to have this layer. I know 

there are activities and actions being taken by the U.S. Government that is not flowing down. It is not hitting our small business 

community. It is even harder to grow a business and get access to 

capital to grow and expand here in the United States. But when 

you take that the next step and look to exporting, it is even more 

challenging. 

Our chamber hosted a meeting just yesterday, in fact, with ExIm Bank so that we could understand what it took to utilize the 

services there, to find perhaps more delegate banks in the State of 

Arizona who could assist businesses who need credit insurance or 

need to do term loans to do exporting. We are out there searching 

54

for those opportunities, but that is number one the biggest issue 

that small businesses face. 

Mr. BARBER. Mr. Hamer? 

Mr. HAMER. Congressman, I am not sure I have much to add. I 

mean, we have been, the Arizona Chamber, strong supporters just 

in the context of trade of the Export-Import Bank. But I believe 

Lea’s comments were right on the mark, and I am sorry to hear 

about the situation with the company that had to go to Portugal. 

Mr. BARBER. Pretty absurd, is it not, that we would go there. Mr. 

Hutchens, I would like to ask you a question about this. And I am 

going to say the word that must not be spoken, ‘‘public-private 

partnership.’’ I think it works. [Laughter.] 

We like it. And, you know, the port of entry at Douglas, which 

is on the border of the city. Right across from Douglas, Agua 

Prieta, has about 240,000, Douglas maybe 40,000. The economic 

improvement that could be made in Douglas and all of Cochise 

County and all the way up Arizona are immeasurable if that port 

were upgraded. It was built in 1932 without any improvements 

pretty much since that time. We have been working with the 

mayor and council down there to try to encourage and support public-private partnerships in improving that port of entry. 

Can you speak to what barriers we in Congress need to address 

to help move that forward? I am really practical when it comes to 

these things. I want to see what we can do as Members of Congress 

to be pragmatic and then move the agenda, and not just to talk 

about it. So what things can we and should we be doing about 

that? 

Mr. HUTCHENS. There are a couple of barriers that are the primary things that you have to be concerned with. The number one 

barrier to these kinds of projects are a set of budget scoring rules 

that OMB adopted in response to a congressional resolution in 

1990 called Budget Resolution 90–02. And the primary focus of 

Budget Resolution 90–02 was the U.S. Government can borrow 

money cheaper than the private sector, so if we want to build a 

capital asset, the Federal Government should pay for it up front 

and not lease it. 

You know, that was a fine budget resolution when two things 

were happening. One, the country had enough money to build these 

kinds of projects, and, two, there was a fairly big interest rate differential between what the Federal Government could borrow 

money at and what the private sector could borrow money at. And 

over the past 25 years, both of those things have changed dramatically. Obviously the budget priorities of the United States, there 

are things we have to fund, and a lot of these infrastructure 

projects, which are long-term capital projects and could benefit 

from private sector expertise, could be funded through this leaselease back mechanism. But again, we have to deal with what are 

called the A–11 scoring rules, which have a six-part test, and it 

seems like if we do not get hung up on one of them——

I mean, one of the great things about the project I am talking 

about is the tolling gets us under the primary problem of this, 

which is it cannot exceed 90 percent of the value. Well, if the tolls 

are paying for 40 percent of the project, I do not have a 90-percent 

problem. What I am hearing from OMB is they are concerned 

55

about the unique government nature of the project. And as I say, 

as I addressed in my testimony, I do not believe this is what those 

rules were intended to address. So getting some relief from that, 

getting OMB to look at their rules in a more 21st century realistic 

way would be very helpful. GSA needs to be encouraged to pursue 

these projects. They have, in effect, not pursued them because of 

the worry of whether they were going to get approved by OMB, and 

so those are the two things that really need to happen. 

Mr. BARBER. It sounds like a bureaucratic two-step to me. I am 

familiar with that in State government, and I am seeing it in abundance in the Federal Government. We just need to cut through all 

that nonsense and get to the decisions. 

I just have one follow-up question, if I may, Mr. Chairman, and 

that is, have you seen or been able to study effectively what the 

impact of tolls have on travel, on tourism, on commercial travel? 

Does it have a negative effect? Does it suppress that desire to come 

through that port of entry? 

Mr. HUTCHENS. What we have seen is that it actually does not 

have a negative effect. The fact is that people are willing to pay 

not to have to wait 21⁄2 hours in line. The primary tolling focus will 

be on the commercial traffic, and believe me, a truck sitting in line 

costs $125 an hour to sit there. If they can pay $25 to go across 

the border in 15 minutes as opposed to spending 21⁄2 hours in line, 

for them it is pure economics. 

As we design these tolling schemes, the primary emphasis will 

be on the commercial traffic, then there will be emphasis on faster 

lanes on the auto, and as little as possible on the pedestrian side 

because that is where it has the most impact. But we have found 

that for convenience, people are much willing to pay the convenience actually when you implement these, and southern California 

is where they have been implemented the most. Traffic actually increases, not decreases. 

Mr. BARBER. Thank you, Mr. Chairman. I yield back. 

Mr. SALMON. Thanks, Mr. Barber. I think this recurring theme 

that we all seem kind of excited about, the whole idea of publicprivate partnerships, it sounds like a big part of the impediment 

is just maybe we need some legislative language, some clarity from 

the Congress to the administration to jump start this thing. I think 

that is kind of what I am hearing. 

Mr. Hutchens, if you could maybe guide us to how that would 

be——

Mr. HUTCHENS. I would be happy to send you some follow-up materials that I have prepared. 

Mr. SALMON. That would be great. That would be great. Ms. 

Sinema. 

Ms. SINEMA. Thank you, Mr. Chair. And my question, sir, is directed to Ms. Ma ́ rquez Peterson and Mr. Hamer. Thanks so much 

for being here today, both of you. In particular, I wanted to just 

get your feedback about how Arizona businesses find their own 

interaction with the trusted trade programs that do exist with imports into the United States from Mexico. And if you can, talk 

about what some of the concerns or benefits your members feel 

about cargo pre-clearance programs. 

56

I know that there has been some excitement about cargo preclearance programs, but also some concerns around security and 

cost-effectiveness. So if you have feedback from businesses in 

southern Arizona and central and northern Arizona, that would be 

really helpful. Thanks. 

Mr. HAMER. Do you want to go first? 

Ms. MA ́ RQUEZ PETERSON. Okay. Thank you, Congresswoman 

Sinema. Primarily, a lot of our interaction has been with Arizona 

businesses who are at a point in their business life cycle, I guess 

I would call it, where they are prepared to do exporting. They are 

looking for relationships cross-border, specifically in Mexico, which 

is where our chamber assists. A key partner has been the U.S. Department of Commerce and commercial services. We refer quite a 

bit to Eric Nielsen, who I believe is here in the audience, the businesses that are qualified and able and have that infrastructure and 

that financial stability to look for contacts cross-border. Oftentimes, 

the biggest challenge we hear from them is certainly looking for the 

vendors, suppliers, the connections, building those relationships. 

Working in Mexico is a much longer sales cycle. It is creating 

that relationship, and it could be throughout a year or multiple 

years before an actual transaction occurs. Our Chamber of Commerce is focused particularly on working with Mexican chambers of 

commerce so that we are business to business, B2B, and we are establishing those relationships and focusing and stressing the economic interdependence of our two States in the case of Sonora and 

Arizona that kind of outlives a lot of the politics that are happening, whether it is in our State or in our Nation. And that seems 

to be handled well through the business community. 

So I think that is probably the most important resource we have 

got is with the U.S. Department of Commerce, and we are exploring other opportunities at this time. 

Ms. SINEMA. Thanks. 

Mr. HAMER. Thank you, Congresswoman, and I want to—I did it 

in my opening remarks—thank the other members of the Arizona 

delegation for being here today. It says a lot. Congressman Barber, 

I know this is your neck of the woods, but you have really worked 

very hard on these issues, and Congressman Sinema and Congressman Schweikert, for you to travel from the Phoenix area today says 

a lot. And I would second Lea’s comments about the good work of 

Eric Nielsen and the U.S. Department of Commerce, that we have 

found them to be very helpful for a number of our members. 

In terms of the pre-clearance, there is very, very strong support 

from our members to do more of that type of activity. Of course, 

we are all concerned about security, but we believe that there are 

ways that we can do it so that we would not jeopardize security, 

but could dramatically increase the efficiency of our commercial 

interactions. 

Ms. SINEMA. All right. Thank you. And, Mr. Chair, not a question, but just a follow up to Mr. Hutchens’ last statement. I think 

it would be really helpful to get information from you and your 

team about what we as Members of Congress could do to clarify 

public-private partnerships. While it may not be a great word for 

you, it is very popular in Arizona, and it has helped us to create 

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grams in the country. So we are very proud of public-private partnerships, and we would love to, I think, work together to find opportunities to streamline Federal Government rules and regulations so that we can continue that work in Arizona and help other 

parts of the country do what we do well. Thanks. 

Mr. HUTCHENS. I will make sure I coordinate with the staff so 

that I can get that material to you. 

Ms. SINEMA. Thank you. 

Mr. SALMON. I think the appetite is pretty voracious up here for 

something like that. I recognize Mr. Schweikert. 

Mr. SCHWEIKERT. Thank you, Mr. Chairman. Just for the fun of 

it, Mr. Wilson, what do you think of Mr. Hutchens’ sort of—I do 

not like to call it a ‘‘toll,’’ but sort of participatory costs for those 

who want to save time whether they have perishables or just-intime inventory. 

Mr. WILSON. I know the concept is a bit controversial, and there 

are proponents, and there are people who are detractors. I look at 

the example of Texas where many of the bridges across the Rio 

Grande are actually owned by the cities, and they generally do use 

tolls on those bridges as a way to pay for that infrastructure. And 

that has been a very successful model, so it is actually a model not 

in the context of public-private partnerships, but in public-public 

partnerships, has been used on the border between the U.S. and 

Mexico for a long time with a lot of success. But it is obviously important to make sure that we do not implement tolls in a way that 

does limit traffic, that does limit the ability of members of family 

to visit one another. 

Mr. SCHWEIKERT. Well, but conceptually it does just the opposite. 

For truck traffic it creates a, hey, here is the value of a couple of 

hours of produce sitting in the back of my truck, and pulls that 

traffic away. Does that provide, you know, other capacity in other 

spots? I mean, that is at least the underlying economic theory. 

Mr. WILSON. That is absolutely how it tends to work. 

Mr. SCHWEIKERT. Mr. Hutchens, how do you feel about Mr. Wilson talking about some of the express programs? What is it? It is 

FAST and some——

Mr. WILSON. C–TPAT. 

Mr. SCHWEIKERT [continuing]. C–TPAT are being under-utilized. 

And what are we doing wrong? Are we not marketing them? Are 

we not educating? You know, so why are some of our partners on 

the other side of the border not embracing these more so? 

Mr. HUTCHENS. I think that, you know, you are getting a bit out 

of my area of expertise, but I do think that a lot of those programs 

were really designed with sea ports of entry in mind. A lot of the 

containers, a lot of the cargo stuff, I know a lot of the work they 

have done at Oakridge National Laboratory in terms of being able 

to see inside vehicles are geared toward containers and not necessarily 18-wheeled trucks going up and down the road. 

Mr. SCHWEIKERT. Yes. And that is one of the uniquenesses of 

what we do. But to that, Mr. Farnsworth, sort of the same question. Why not more adoption? 

Mr. FARNSWORTH. Well, I think there is an education issue in 

some ways, just the idea that this could be a real solution. You 

know, the truth of the matter is we have to look at all of the proVerDate 0ct 09 2002 13:07 Mar 11, 2014 Jkt 000000 PO 00000 Frm 00061 Fmt 6633 Sfmt 6633 F:\WORK\_WH\120913\86001 SHIRL
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grams that are out there. It has to be an all-of-the-above type solution, whether it is C–TPAT, whether it is fast lanes. I think that 

is exactly right. 

But I come back to there are other things that need to be looked 

at, too. I mean, just basic forms need to be standardized, and you 

should not need to have the same process back and forth every 

time you cross the border. I mean, this should be something that 

we can figure out together with our Mexican partners in this. So 

I think an all-of-the-above approach could work pretty well. 

Mr. SCHWEIKERT. In that same line, I know there was a discussion last year about even doing an electronic form where you pull 

it up, you hit the button, you send it in, instead of the, you know, 

carbonless paper walking up to the staff and having to fill it out 

and look for your mistakes. From your position, when you look at 

the discussion of trying to do a mix of structure, is the problem 

physical structures at the border or is it staffing? 

Mr. FARNSWORTH. I think it is both, and I think it varies depending on each border crossing. And I think this is why it is so vitally 

important to engage the local communities because what works in 

San Diego and Tijuana may not work in Laredo and Nuevo Laredo. 

And what might work in Arizona might not work elsewhere because the issues are different. I think if you look across the border, 

and I have participated in meetings across the border from San 

Diego literally to Laredo, there are different issues. And sometimes 

it really is a staff problem. 

Mr. SCHWEIKERT. But to that point, let us say, you know, I came 

to you tomorrow and said, hey, we found magic money. You have 

unlimited staff. Are you maximizing the use of your ports? Remember there have been the discussions of should we go to 24 hours 

in certain lanes. Has this been properly modeled? 

Mr. FARNSWORTH. I think that the answer would be that if you 

just found a magic pot of money to be utilized right now, you are 

going to have existing infrastructure. So the best use of that money 

would be in terms of personnel and finding ways to increase staffing time, increase agents, and increase the throughput in terms of 

existing infrastructure. 

Mr. SCHWEIKERT. So today staff and personnel would consume 

more of my capital than structure? 

Mr. FARNSWORTH. Well, if you had that pot of money and you 

just had to spend it in this fiscal year, yes. 

Mr. SCHWEIKERT. Mr. Hutchens, in that sort of discussion, as you 

start to model ways to pay for it, because, you know, as we start 

to move into the demographic crisis that, look, everyone understands what is happening. Resources are already very, very tough. 

Is there a way of using that sort of express pass mechanic, tolling 

mechanic to also provide hours of access as much as new physical 

facilities? 

Mr. HUTCHENS. You know, much like the concern over tolling 

and is tolling going——

Mr. SCHWEIKERT. I beg of you to pull the mic a little closer. 

Mr. HUTCHENS. Sorry. Much like the discussion with tolling, you 

know, there is a question of if you increase staffing and you say 

we have got these three lanes, and they are open 24 hours a day. 

But do people really want to cross the border between 2 o’clock and 

59

4 o’clock a.m. because that is when the time is available. I think 

that it is a balance between staffing and facilities. If you are going 

to create these opportunities for trade, you know, you want people 

coming across the border to go to the shopping centers, as we were 

talking about, when the shopping centers are open, not in the middle of the night. So I think staffing is very important. 

And for CBP, it is one of their concerns as we talk to them about 

increasing the number of lanes. They are worried about where they 

are going to get the staff from. So we have got to focus on both. 

Mr. SCHWEIKERT. If today our staffs wanted to say where is the 

best data sets, you know, where is my data set to say here is where 

I am at capacity. Is it capacity because of my hours of service, because of my physical location? Is it I have enough lanes, but the 

lanes to it are restrictive on either side of the border? Where do 

I go to get the best quality research to understand what we should 

be doing? And I see Mr. Wilson sort of standing up in his chair. 

[Laughter.] 

Mr. WILSON. It is because there is a fundamental problem in that 

respect, and the fundamental problem there is that we do not have 

clear data on the wait times that are currently in place at each of 

our border crossings. There is not a consistent methodology being 

applied to measure the length that cars and individuals are waiting 

to cross the border. There is some work that is being done on that 

to use RFID chips to improve that data set. But it is critical that 

we improve that data set so that we can make rational decisions 

about investment at the border. 

Mr. SCHWEIKERT. And my understanding is it is ultimately much 

more complicated than that. In discussions I have had with some 

of Mr. Hamer’s members, it is not only wait times, it is wait times 

of which hours in the day, what types of products, seasonality of 

certain products, and how that ends up causing the skewing effects. And then, god forbid, it be on either side of a holiday. 

Mr. WILSON. And that is why we need data to be able to analyze 

each of those variables that you brought into the mix there. 

Mr. SCHWEIKERT. All right. Thank you all. Mr. Chairman, just 

two quick comments, and this is to my buddies at the other end 

of the table. Sometimes when you see us sort of cringe a little bit 

when we use the term ‘‘public-private partnership,’’ it is not the 

working with private sectors, vice versa. It is who ultimately carries the risk portion of the transaction, because so many times in 

the past, you know, as government took the risk and handed sort 

of the profit-making side to the public, there needs to be an honest 

risk sharing instead of socializing risk and privatizing the profit 

side. 

And your discussion, this one, you and I have had multiple 

times. We passed the JOBS Act a couple of years ago that was 

going to have crowdfunding, and, you know, the Reg As, and all the 

other things that were going to provide access to capital. And it has 

disappeared in the bureaucracy, particularly at the SEC, which 

breaks my heart because that was designed particularly for our 

types of business. And Congressman Barber has heard me rattle on 

about this in the small business community and committee because 

it was designed for our types of businesses here in Arizona. And 

if we could ever get some rational rule sets out of the SEC, I think 

60

actually we have a great future. So, Mr. Chairman, with that, I 

yield back. 

Mr. SALMON. Thank you. All the questions have concluded, and 

this has been an outstanding panel. I cannot tell you how much I 

appreciate you taking the time. Thank you for braving the weather, 

those of you that came in, and good luck getting back tonight. 

[Laughter.] 

A few of us are on the red eye tonight, and we are kind of biting 

our nails to see how that goes. But I want to thank you. 

More than anything, I wanted this hearing to symbolize something far greater, and that is that Arizona, in particular, is extremely interested in improving our relationship with Mexico; that 

in the past we have had what I would like to call water under the 

bridge. It is a new dawn, and you have got a team of people up 

here, both sides of the aisle, that want to do everything that we 

can to try to improve those relationships not just with trade, but 

in every aspect of that bilateral relationship. We would like to explore the opportunity, I think, for some economic trade zones and 

what other opportunities can put us in the most positive light as 

we possibly can. 

I think Mr. Farnsworth was talking about some of the changing 

demographics of global trade. With China losing some of its manufacturing swagger, Mexico is going to be up at the forefront. We 

would like to be partnering shoulder to shoulder. And on the energy forefront, those reforms portend to provide economic opportunities not just in the energy sector, but across the table. And we 

would like to be there to work with them to get that done. 

So that having been said, thank you so much. And this subcommittee hearing is adjourned. 

[Whereupon, at 12:11 p.m., the subcommittee was adjourned.] 

(61)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

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86001n.eps

SUBCOMIVIITT[[ H[ARING NOTIC[ 

COMMITT[[ ON FOR[IGN AFFAIRS 

US HOUSE OF REPRESENTATNES 

WASHINGTON, DC 20515-6128 

Subcommittee on the 'Vestern Hemisphere 

Matt Salmon (R-AZ), Chairman 

December 5, 2013 

TO: MEMBERS OF THE COMMITTEE ON FOREIGN AFFAIRS 

YOli (lfe respecl[lI11~ requested 10 attend till open FIELD hearing of the Subcommittee on the Weslem Hemisphere, to be held al 

the Tucson City Council (City Hall. 255 West Alameda Street, Tucson. Ari/.Olla. 857(1) and mailable live o1l1he Commil1ee \\ebsile al 

l!11U:j~\Dnl. ~Q1};ig].l »'fr11.i.ThJ'!Ql!5_C~J0l: 

DAT~: 

TIME: 

SUBJECT: 

WITN~SSES: 

Monda), December 9, 2011 

10:00 a.m. 

Improving Security and Facilitating Commerce ,dill Mexico at America's Southern Border 

The Honorable Alan Bersin 

Assistant Secretary 

Office ofInternational Affairs and Chief Diplomatic Officer 

U.S. Department of Homehlnd Security 

Mr. Eric Famsworth 

Vice President 

Council of the Americas and Americas Society 

J\.1r. Glenn Hamer 

President and Chief Executiye Officer 

Ari/.oll(] Chamber of Comnlerce and Indllstl) 

Ms. Lea M,jrqne7 Peterson 

President and Chief E'l.ecutive Officer 

Tucson Hispclllic Chambcr of Commcrce 

Me. Timothy C. Hutchens 

Executive Vice President and Head 

Federal Lessor Ad\ isory Group 

CBRE. ItIC. 

Me. Christopher Wilson 

Associate 

Mexico Institute 

Woodrow Wilson Intemational Center for Scholars 

B" Direction of the Chairman 
63

f


86001m.eps

COMMITTEE ON FOREIGN AFFAIRS 

MINL:TES OF SUBCOI\'lJI,UTTEE ON ______ ....:::''':.e::.ll:.·,.,:::·'''~rn 11,;:"'="'('''''='":.:''' ____ _ 

1>2),, __ -'.flo"f"()!!.n",ua",,t:..' _ 0"10, __ --'[,.2'-''/0912013 

Electronically R<enrded (toped) 0 

Stenographic Record 0 

"Improvi1lg Secllri(v awl Facilitating Commerce with 1J-1l!.:r:ico at America's SOllthern Bm'tlerrf 

SlIIlCOMiIUfl'U; M~;;\omERS PRESENT, 

Oulirmal1 Mati Salm"" llnd Ranking Me","", Albia Sires, 

an 

Rep. Davit! Scbweikert*, Rep.Rotl Barhey*,. (Uui Rep. Kyr .... tel1 Sin('ma1~ 

HEARING WITNESSES: S.me Its meetlng nolice allached? Yes 0 Nu 0 

({f "no ", pleas!? lis! billow and include tltle, agency, deparlmeiU. or orgam::alhm.j 

HEARING 

Chuirmal'l Sa/mort - Letter from fresh Prodllce AsslJdatiou (llthe Americas fa the UOfwJ'ahle Jlat/ Salma'U. 

TI"lE SCHEIH'I .. EO TO RECONVENE ___ _ 

(II' 

TlMIl AIJJOURl'; 1m ~~::ilJ.!~ 
64

MATERIAL SUBMITTED FOR THE RECORD BY THE HONORABLE MATT SALMON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA, AND CHAIRMAN, SUBCOMMITTEE ON THE WESTERN HEMISPHERE


86001g-1.eps
65


86001g-2.eps

Unfortunately, the Mariposa Port of Entry in Nogales, Ariz., already has the worst wait times for 

commercial crossings among all Southwest ports of entry surveyed by the aforementioned CREATE 

report (see attached table). With the expansion of the port, we estimate that Nogales will need 250-500 

full time ot1icers in order to effectively and et1iciently process goods and people 

Now, as the House of Representatives considers a variety of immigration-related legislation, we urge 

you to work with Congress to promote legislation that brings a balanced approach to staffing of border 

personnel 

Securing the border means allocating resources effectively between the ports, and within the ports 

Congress must approach the border holistically. 

The Fresh Produce Association of the Americas believes now may be the best opportunity to truly 

address security concerns at the nation's land ports of entry. 

At this time the state of Arizona needs all of its Congressmen to join together in a bi-partisan effort to 

ensure proper statling. Your leadership on this issue is more important now than ever. 

Best regards, 

Lance Jungmeyer 

President 

Fresh Produce Association of the Americas 

cc: The Honorable Janice K. Brewer, Governor 

The Honorable John McCain, US Senate 

The Honorable Jeff Flake, US Senate 

The Honorable Ron Barber, US House of Representatives 

The Honorable Ed Pastor, US House of Representatives 

The Honorable Raul Grijalva, US House of Representatives 

The Honorable Matt Salmon, US House of Representatives 

The Honorable Kyrsten Sinema, US House of Representatives 

The Honorable Trent Franks, US House of Representatives 

The Honorable David Schweikert, US House of Representatives 

The Honorable Ann Kirkpatrick, US House of Representatives 

\nnv.freshfrom111e'i:ico.com info(i1:'freshfrommexico.com 

PO Box 848 Nogab, ,\7. 85648 Phone (520) 287-2707 Fax (520) 287-2948 
Æ


86001h.eps

Time 'Period 

lane Tvpe 

+1 Optimal St.ffing 

co Calexko/East 

'islet. 

" Bridge of the 

A.mericas 

o 

Columbia Solidarity 

World Trade Bridge 

es Maripo,a 

o- lewistoll Bridge 

ra 

Peace Bridge 

Mesa OtayM""a 

 Pacific. Highway 

it 

WindsorTunnei 

Ambassador Bridge 

Economic Imp.act of Changes in Wait Time at POEs 

fABLE ·Z·8, WA!TTIMf AND COMMERCIAL VEHICLE TRIPS AT LAND BORDER CROSSINGS 

FY 2012 

CV (Regul.r' 

Average Averace Std, T<>tal 

Averag'e- Chan;ein number wS1ttime Stc!, Dev, De-v,. number of Total 

wart time Total Wait Time of lanes. per of hourly of WI number of 1>.' Tripsin During 3 open for vehicle. WTv_lues hQurly observati ons WI vehicle in Most Smost in 8 most lo,S mo.t WI jarS 

fY2012 FYZ012 Con;gested congested congested congested values conge:sted oDs.ervations in FY2012 

[minute·t H.ours hours in iii hours in a hours forfY hours jn FY 

dav day l()ll lUll 

25.3 320,482 -7()% V, 275 18.18 17.62 4168 4278 

10.1 360,470 -73% 35 11.9 10.46 9.47 2482 4646 14.6 2g0,nO -58% 4.1 14.9 14.72 14.25 239] 3423 

7.4 215,701 -95% 2.9 7.S 6.78 6.27 1539 2653 

23.8 1,356,418 -'>9% 6.9 24';0\ 20.49 19.63 2701 5108 

29.4 644,925 ·55% 2.9 37.5 33.90 31.48 2769 3797 

L,3 309,365 -71% 2.6 5.4 9.66 6.11 3140 8504 

5.3 625,651 -47% 4.7 H 17.82 11.31 4949 11754 

30.4 298,730 -38% 8.0 32.0 21.21 19.64 2844 4637 

11.0 343,396 -83% 2.3 16.0 13.14 10.34 2934 &637 

3.5 39,056 ·10()% 1.0 4,2 351 3.47 2738 8400 

4.6 1,425,757 -'>1% 7.2 8.9 4.61 4.5S 7928 8427 

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