Bulletin
May 18, 2022
As we approach summer in Southern California
and Northern Baja California, we are finally leaving COVID behind and entering
a new phase in the binational relationship that will call for a renewed
enthusiasm and hard work in a border dynamic that is only accelerating and will
bring new and sometimes unexpected circumstances.
In the last 6 months it has become clear that
the Tijuana-San Diego border is the epicenter of the new phase of the
U.S.-Mexico relationship, what with frequent visits by the U.S. Ambassador to
Mexico Ken Salazar focusing on environmental and mobility projects, and key
officials from the Mexican Foreign Ministry, the Infrastructure, Communications
and Transportation Ministry and the Mexican federal water authority (CONAGUA)
diligently following up on major water, port and road projects. Visits from EPA
Administrator Michael Regan and President Andrés
Manuel López Obrador have
added positive pressure.
Security, migration and public health will be
top agenda items. Mobility, aligning economic development policy, green policy
at our ports, nearshoring, allyshoring, and value creation in manufacturing
will be our greatest opportunities. Will
we be up to the task?
*****
California Senator
Ben Hueso’s enviable connection to and understanding of the CA-Baja
California relationship makes him perhaps the most important legislator on
border matters. With a used tire bill
(SB 1181, https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB1181)
and a “Border Bottle Resolution” in
the works, the Senator presses on with the thorny issue of the tens of
thousands of used tires that end up in Tijuana, Tecate and Mexicali, are used
for a short period and are discarded in landfills and canyons. Many of these
tires end up in California estuaries and beaches. Better unsafe used tire
tracking and making it a crime to sell unsafe tires will bring attention to
this environmental hazard. The bottle
resolution would increase the amount of alcohol allowed duty-free --
potentially 4 liters instead of 1-- into California by paying duties online or
over the phone rather than in secondary inspection at the land ports of entry.
*****
The Burnham Center for
Community Advancement (BCCA) and the Discovery Institute are “think
and do tanks” that are guiding lights for our region. The Smart Border Coalition’s co-chair Steve
Williams introduced the BCCA’s Tad Parzen and me to Steve Buri, Executive
Director of the Institute. The latter is a 30-year old organization that
focuses on technology policy, trade, transportation and tourism in the Seattle-Vancouver
region, and it advances a culture of purpose, innovation and creativity in a
context of limited government. The BCCA
has gotten behind some high profile projects such as the World Design
Capital, the Balboa Park Initiative (governance and fiscal
incongruity issues), housing affordability, workforce development and
rebuilding the community fabric.
*****
The Tijuana EDC
is leading the way for the recasting of binational industry. Carlos
Jaramillo of Via Capital has been an uncommon leader who clearly sees the
need for Tijuana and San Diego to view themselves as one region to attract
capital but more importantly, to be more competitive globally. He realizes that
though Baja California will be in the assembly manufacturing arena for years to
come, the move toward a knowledge based economy is a must. Upskilling and
reskilling of labor and adding much more value to existing legacy industries
such as medical devices and audiovisual equipment must be top of mind.
Jaramillo states that “we can no longer think of industrial
clusters; we must think of all-encompassing concepts such as “life sciences” instead of “medical devices” and
“mobility” in lieu of “automotive industry.” Though these seem mere word
choices, they signal a quantum leap in the way we perceive opportunities, going
from a narrow view to a much larger, strategic concept of what’s next.
*****
The MTS and Baja Rail relationships needs an
overhaul. One of the effects of the pandemic was to worsen their relationship.
Baja Rail did not pay rent in 2020 and 2021, ostensibly because supply chains
were affected and the import economy suffered as a result. MTS canceled the
lease contract with the company back in late July of 2020 and Baja Rail
launched a dispute resolution procedure. Mediation started in early December of
2020 but MTS announced the end of mediation meetings in June of 2021.
It is imperative that the MTS board focus on a plan to
make the Desert Line feasible. MTS’s
responsibility with tax payers is to have mobility systems work, not to only to
collect rent. A step in the right direction is to perform a feasibility study. Caltrans has been able to obtain
resources to fund that study. Once we have it, it will be much easier to find a
willing and able investment bank and company to take on the “Impossible”
railroad challenge, and in my mind, one of the great logistics opportunities in
this early part of our century. I
believe that Baja Rail will have a role to play in the short term, but the jury
is still out on its role for the long term.
*****
The Ensenada to
San Diego ferry could become a reality. The Baja
California Government has made mobility across our ports one of its
cornerstones. The State has been quietly creating momentum for a 2 hour 15
minute journey on a ship designed for both passengers and vehicles. The Port of Ensenada just finished an
operations study and the State has embarked on a detailed feasibility study
with a private infrastructure firm. The Port
of San Diego has also expressed interest in taking a serious look at the
project. Key authorities have met several times.
Instead of taking 3-4 hours to go from Ensenada to San
Diego (1.5 hours on the highway and another 2.5 to enter Tijuana and get in
line at the San Ysidro Port of Entry), travelers would get on a ferry, not
stress about driving, and enjoy the scenery for a little over 2 hours, arriving
at San Diego’s downtown.
*****
The San Ysidro
Port of Entry has shifted its work from Ukrainian refugees to the most vulnerable migrants. Ukrainians are processing their move to the
United States through a program that allows them to come directly to the United
States from Warsaw and other European capitals. The Pedestrian West crossing close to Plaza Las Américas is
now being used to welcome the most vulnerable asylum seekers including members
of the LBTQ+ community. Customs and Border Protection was able to get a “loan”
of close to 100 agents from the Los Angeles area to staff the port. What we
still don’t know is how the agency will process many more migrants once Title
42 is lifted potentially next week.
*****
The World Design Capital designation is in the midst of a CEO search. The team that put together the bid in 2021 and
led the burgeoning organization until lately is transitioning to a team that
needs a captain, someone quite versatile who really “gets” the binational world
and who understands how to manage people both in San Diego and Tijuana.
We will see familiar faces on the new management team such as Michèle Morris, Design Forward
Alliance President and also Associate Director of UCSD’s Design Lab.
*****
Ecollanti is an idea and business case that can fill a large tire
disposal vacuum for Baja California tires. There are at least 786,000 tires that are
legally imported to Baja California mainly from California every year, not to
mention the tens of thousands of unsafe used tires that clandestinely make
their way to cities like Tijuana. There currently is no effective policy or
infrastructure in place in the state to manage a festering problem that grows
every year.
The startup proposes to handle tires accumulated in multiple lots in the
state, create tire reception centers for a more orderly collection process and
build plants to transform tire rubber into useful and exportable day-to-day
products such as playground floors.
*****
The State of Baja
California Economy and Innovation Secretariat has been setting the stage
for an angel investment network that will in time support the local
entrepreneurial ecosystem. Creating an angel network is no easy task when our
investment culture is one that focuses on owning tangible things like land,
cattle and industrial parks where returns are much more predictable. Successful family businesses in their second
or third generation in cities like Tijuana and Mexicali have the capital to
start investing in startups, and can handle higher levels of risk.
Rudy
Andrade, Undersecretary for Economy and Innovation,
understands that it will take some hand holding from Silicon Valley accelerators and venture capitalists to convince
Baja California investors to pioneer angel funds which will be behind great
companies and hopefully, the first Baja unicorn in a few years! Manos
Accelerator visited Tijuana and Mexicali last week (https://manosaccelerator.com/)
and spoke about their evolution. They are the first Hispanic Accelerator in
Silicon Valley and have ties to many Mexican entrepreneurs and investors. Their
CEO, Sylvia Flores, is a
Mexican-American entrepreneur and leader who is opening many doors in Mexico.
*****
The 3rd CaliBaja
Symposium and Workshop led by Professor Olivia Graeve of UCSD’s CaliBaja Center for Resilient Materials and
Systems (http://graeve@ucsd.edu)
will count on the Smart Border Coalition’s support and sponsorship for an
event that will bring together international leaders in science and technology
to provide a vision of what future developments lie ahead and to continue
building bridges of collaboration.
Please register at https://forms.gle/izM7LS3d8uyYCWmV7.
Plenary and invited speakers include Chancellor
Pradeep K. Khosla of UCSD, Imperial Beach Councilmember Paloma Aguirre,
Professor Dora Luz Flores from UABC
(Universidad Autónoma de Baja California), and Chancellor
Fernando León García, from CETYS Universidad.
The event will also highlight the start of this summer’s Enlace Summer Research Program designed
to create project teams of U.S. and Mexico high school students in an assigned
research laboratory.
*****
The Commission of
the Californias is getting a shot in the arm from a couple of relevant
actors in the CaliBaja region. The Center for U.S.-Mexican Studies led by
Rafael Fernández
de Castro (https://usmex.ucsd.edu/)
and the Institute of the Americas led by
Richard Kiy (https://iamericas.org/es/) have become important allies to the
State Governments of California, Baja California Sur and Baja California. For
the Commission to be effective, a
practical mechanism must be put in place, and this is
where the aforementioned institutes have a large role to play. They will also
be producing white papers and research in topics such as energy, water and
nearshoring that will be useful for the working groups.
******
The San Diego /
Baja California trip to Washington, D.C. coordinated by the San Diego Regional Chamber of Commerce in
late March was long overdue. It was a pleasure being with a group of border
enthusiasts who speak their mind. There were over a dozen meetings, but I will
highlight the ones I felt were most helpful to the binational community.
First was the meeting with new Customs and Border Protection Commissioner Chris Magnus. He is in
charge of a 60,000 strong force in all U.S. borders. Our very own former San
Diego Field Office Director, Pete Flores, is an Executive Assistant
Commissioner and was at Magnus’s side. He admits to a staffing challenge
and stated that though in theory the ports are staffed at 95%, the reality is
that only 75% of the officers are actually on the ground in the San Diego
sector. He is interested in technology, human resource development, resilience
and the agency’s image. He believes in port innovation, extending the border line beyond the ports. He
mentioned the creation of “sterile corridors” through collaboration with border
communities and the use of the CBPOne
app. Non-intrusive inspection technology is coming soon to our border, meaning
that CBP could inspect up to 100% of all travelers in an effective way.
The State Department meetings touched on the Bipartisan Infrastructure
Bill as a once-in-a-generation
opportunity. Part of it will be used for bridge construction, traffic and
development densification in multimodal transportation. There will be $17B for
maritime ports and $20B for airports. However, there is some uncertainty as to
the volume of resources coming to the land ports.
There is great interest
in deepening the High Level Economic
Dialogue and the High Level Security
Dialogue between the U.S. and Mexico. New challenges are human rights
(human trafficking and use of illicit financial networks), public health and security.
Supply chain resiliency and building a sustainable and
equitable future for North America are also getting attention.
Mexican Ambassador to the United States, Esteban
Moctezuma stated that he has
already spoken with Mayor Todd Gloria
on 3 occasions and thinks highly of him. The Mexico-California relationship is
critical. The Mexican and Mexican-American community is the backbone of the
California economy. The border is more than CBP; it is supply chains, it is
strategic industries, world class manufacturing hubs and nearshoring.
He
added that there are opportunities
such as the Otay Mesa East Port of Entry
and the High Level Economic Dialogue that
must be seized for the benefit of our binational community.
*****
The “La Frontera”
Docuseries which is to be produced in San Diego, Mexicali and Tijuana this
fall is still looking for funders. The effort to produce at least one hour of
the wildly popular show that will showcase our region’s culinary prowess, will
also change the border narrative by describing our region’s ability to bring
the people of Tijuana and San Diego closer together in shared success and
prosperity.
Regional up-and-coming professionals such as Bosco Luján and
Karlo Terán are
marshalling young and successful CEOs of industrial and service companies on
both sides of the border as well as governments to donate resources to help
absorb 2/3 of the production cost. PBS will add the remaining 1/3. Several
Smart Border Coalition board members will also be important contributors to the
effort. Please let me know if you are able to donate.
*****
Sempra Infrastructure (https://semprainfrastructure.com/)
connected with several binational organizations in an unprecedented effort to
improve the results of its philanthropy. The company is a juggernaut in terms
of the energy infrastructure it has in both Mexico and the United States. It is
the quintessential North American company. It owns 11 of the 23 liquefied
natural gas pipelines connecting our two countries. Their largest investments
and philanthropy in Mexico are in Baja California.
The company’s Senior Vice
President for Public and Corporate Affairs, Abraham Zamora, invited us to
Sempra headquarters in downtown San Diego to discuss company investments so far
and what the future holds. Importantly, he wanted to listen to what our
non-profits had to say about the current binational environment and how we see
the Sempra supporting our efforts in the coming years.
*****
The environmental wheels are
turning in Calexico and the imperial Valley with the Rio Nuevo Project.
I was pleased to see and hear California Assemblymember Eduardo García kick off our April meeting to describe the $28
million investment that will put a trash screen where the Rio Nuevo enters
the United States, divert the river’s flows underground, establish a pumping
station to send dirty water to a water treatment facility nearby and return the
cleaner water to the normal river flow. Mayor Moreno of Calexico, County
Supervisor Jesús Escobar and Baja California legislator Daylín
García were also on hand.
*****
The One Border Alliance
(OBA) is getting ready to do important work for the border. We are a group
of economic development groups and chambers of commerce from both sides of the
border who believe it is in speaking with one voice that we will be able to do
more to advance border needs and transform the traveler crossing experience.
OBA features 4 key themes: making
border crossings faster and more efficient, infrastructure needs and new
investments, public health, and security in the crossing experience. Advocacy
and performance evaluation are transversal concepts we will use to
catalyze and measure results. Our working groups will be based on the 4 themes.
If you are interested in joining any one of these please let me know.
*****
Our Stakeholders Working
Committee Meeting on May 12th featured Melissa Floca of
the University of San Diego speaking about her work as one of the key
researchers for “The CaliBaja Regional
Economy: Production, Employment, Trade and Investment.” The study also
features the work of economist Alan Gin and
Professor David Shirk. We also had Evan Reade, Lt. Governor Kounalakis’ Advisor for International
Relations and Trade, on the Commission
of the Californias relaunch. Rita
Fernández, Global Affairs
Director for the City of San Diego
spoke to the group about the recently signed San Diego – Tijuana MOU that casts
a light on migration, border wait times, and environmental issues as new areas
of collaboration and information exchange.
The Tijuana EDC was also a
presenter, with President Carlos
Jaramillo delivering some great insights into the new way that the Baja
California business community and State Government are viewing their joint
planning and work towards a new wave of economic development focused on a
knowledge based binational economy.
Key business associations on
both sides of the border, including the Smart Border Coalition, will be signing
an MOU in June for a new “Binational
Business Coalition.” The binational agenda
will now officially be included in the business agenda. In addition, the Baja Private Enterprise Development Policy
will be in alignment with the State of
Baja’s Economic Development Policy (both are 5 year plans), and will
officially declare border crossings as “inhibitors” to economic
development. This is a big deal, as it
thrusts our land ports in the center of private enterprise and government focus
and evaluation.
*****
The new CBX and international traveler processing facility at the Tijuana Airport is a sight to behold. I
had a chance to get a tour of the space and witness the the ribbon cutting
ceremony on May 9th. One
friend told me that “it would give the San Diego Airport a run for its money”,
but I do not see it this way. The only way to understand the facility is that
it will put our region on the world map like few things have done in the last
50 years.
With an area 83% of the
entire Tijuana Airport, the new wing adds a much more pleasant and welcoming
area for all CBX passengers, with over 40 airline counters, at least 12 lanes
for Mexican immigration, large and clear flight information screens, and
state-of-the-art
portable bag checking lines.
It also offers a sterile processing facility for international travelers who
will fly into Tijuana and continue to the United States without going through
Mexican customs and immigration. In the near future I see examples of what this
means: a Tijuana to Salt Lake City flight or a Singapore flight to San Diego by
way of Tijuana.
Congratulations to Grupo Aeroportuario del Pacífico
for this $100 million dollar investment!
*****
Our next online Stakeholders
Working Committee meeting will convene on July 7th from 9:00a.m. to
11:00a.m. in Tijuana. This will be in-person only. Please register at https://www.smartbordercoalition.com/meetings/stakeholders-working-committee-meeting-23.
Sincerely,
Gustavo De La Fuente
Executive Director
gdelafuente@smartbordercoalition.com / (619) 814-1386