San Diego – Tijuana: A regional economy of the future

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Many experts have been speculating for a while about the development of the Mexican economy. This is being reflected in a growing trend showing the numerous positive benefits of establishing operations in Mexico.

Many companies are taking advantages of the shorter supply chains for manufacturing goods in Mexico rather than outsourcing to the Far East. It has been reported that Mexico has signed over forty trade agreements. This approach has been further strengthened by the links being established between San Diego and Tijuana. A number of experts are comparing the feel and experience of these links with the special economic zones seen in the 1990’s such as between Hong Kong and Shenzhen.

In fact many companies are treating their satellite offices established in Mexico as just another regional office despite it being in another country. Some even speculate about the possibility of putting in a joint bid for San Diego and Tijuana to host the 2024 Summer Olympic Games. This spirit of cooperation is radically different from years gone by, where San Diego experienced a great many problems with illegal immigrants crossing the border from Mexico.

There has been great change and now many San Diego residents see the potential for economic growth rather than a border threat. In fact, many influential decision makers are actively trying to bolster the Tijuana economy and bring about embracing cooperation. They are encouraging an attitude of communication and openness rather than viewing a security risk. Many feel that increased border security will be accompanied by a great economic cost.

Delays at high security border crossings can often take in excess of three hours which creates huge trade problems. Some supporters of building a regional economy believe that investment should be focused on more agents and crossing lanes rather than more fences. This would allow people to cross more quickly and increased technology could allow inspections in seconds rather than minutes. Recent research actually estimated that delays at the border could actually cost in excess of $2 billion each year for the region.

At the Regional Studies Department at San Diego State University, they believe that the national stigma about border control issues remains and while delays at border crossings may make some United States residents feel more secure, it is costing time and resources. They believe that it would better to improve the functions of the border and improve the inefficiencies which are penalizing businesses and the economy.

San Diego Major Filner has made the focal point of his administration the cross border relations and is mentioning Mexico whenever the opportunity presents itself. He has appointed a binational director of affairs and while the Olympic cross border bid has been rejected by the committee, he remains optimistic.

With Mexico receiving the second largest volume of exports from the U.S, it is clear that changes to infrastructure and border control will soon become a priority for the administration. Plans to expand the border crossing west have been approved; the federal money has yet to be appropriated. The Mexican side has already been renovated but the American side plans appear to have stalled. It is clear that these plans need action to push forward development and create the regional economy of the future.

Both cities are working in a bi-national project to accelerate growth of the region: A cross-border bridge from Tijuana Airport to San Diego border. For now, the Mexican side of this project is led by GAP (Grupo Aeroportuario del Pacífico), which manages Airports of Mexican Pacific from Guadalajara to Tijuana. It has been reported that Tijuana airport is working in an expansion that will be part of that international bridge.

Cities and counties are taking a more active role on seeking investments and domestic growth for their citizens. Regional integration is becoming a serious option to several cities for moving along from world recession. Globalization and technology have made easier such integration. Cross-border transactions, inter-state commerce and shared infrastructure still have to follow the law of the place and would require proper contracts and legal documentation, though.

Topics:  Bob Filner, Cross-Border, Economic Development, Mexico

Published In: International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Alberto Esenaro, Alberto Esenaro | Attorney Advertising

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