2:30 P.M. EST
ASSISTANT SECRETARY BOHIGIAN: Well, thank all of you for coming today. I appreciate it. Mexico is an important strategic as well as trade partner of the United States and I look forward to our continuing engagement with the Calderon administration. Secretary Gutierrez, the Secretary of Commerce, attended the inauguration of the president and really underscored the relationship that we have with Mexico in so many realms, again, both political as well as economic.
Secretary Gutierrez's career, in fact, started in Mexico working for the Kellogg Company. And to -- for him to engage throughout Mexico gives him the opportunity to further increase the competitiveness of North America as well as the entire Western Hemisphere. And one of the ways that we'll be looking to do that in the weeks and months and years ahead is to work on cross-border trade issues.
Throughout the world, when you look at trade facilitation, over one-half of $1 trillion is lost because borders don't operate as efficiently as they can. And next week, I'll be taking a tour throughout the southern United States and northern Mexico to look at land border crossings in El Paso, Nogales, and San Diego, as well as kicking off the tour at the Port of Houston, where I'll be talking about what NAFTA looks like 13 years after implementation and a look ahead 13 years from now, what could it be.
Because we all want to reduce the friction in trade, because again, that's money left on the table, because the numbers are just staggering; almost $300 billion in two-way trade between the United States and Mexico. To put that in perspective, that's $1,000 per American and $4,000 for an American family of four. That's supporting jobs, that's providing U.S. consumers less expensive goods, to provide American businesses the ability to have intermediate goods to create jobs here and have helped lift thousands and millions of people out of poverty throughout Mexico as well as helped raise the standards of living here.
So we'll be looking at ways to improve how the border works in conjunction with my colleagues at the Department of Homeland Security, in particular, Customs and Border Protection. And we sat down with them earlier this week to better understand some of their priorities on trade facilitation. This will be my third visit to Mexico in my short tenure as Assistant Secretary of Commerce. Earlier in the fall, I was in Mexico City to discuss some of the priorities that we have together under the Security and Prosperity Partnership with North America, in which we engaged in discussions with both Mexico and Canada, as well as going to Laredo and Nuevo Laredo on the border to better understand the rail as well as truck crossings there.
So we look forward to talking to the Mexicans as the new administration comes into office regarding border issues and broad themes such as job creation, competitiveness, and I look forward to learning more from this trip next week in order to be able to come back to Washington and throughout the country to better understand how we can continue to build a better economic integration.
I'm not going to the border to discuss immigration. I'm not going to the border to discuss transnational flu issues. I'm not going to the border to discuss anything but the important balance that we need to strike between security and prosperity. And the import story that we have with Mexico and the United States is an important component of that prosperity. The exports that we have to Mexico is another important leg of that prosperity. And so the border issues play into that with always security coming first. So I welcome your questions on what we're trying to accomplish, what the Secretary is trying to accomplish and certainly look forward to, you know, to report back after two were in successive trips that we'll be taking. So thanks for your time today.
MODERATOR: If you guys could just say your name and affiliation, that would be great, when you ask a question, so we can know who you are.
QUESTION: The first question that came to my mind is, if you can tell us what exactly are you hoping to get from this trip? And the other thing is I wondered that did you decide to go by yourself to see firsthand how things work along the border between U.S. and Mexico? Is it because you have some knowledge about the challenge and the issues that both countries face in that region and I wonder if you can give us like a brief summary about what is the situation right now in terms of the cargo along the border region? What challenge are both countries facing? And -- I mean, and also you have been receiving any feedback from local authorities because my guess is, you know, they are better in (inaudible) a list in this issue than the federal government because you know, they see things every day.
ASSISTANT SECRETARY BOHIGIAN: That's right. Well, part of the impetus for this trip and why I'm going is because in my visit to Laredo and Neuvo Laredo, you know, I had a chance to see what an integrated economy could look like on both sides of the border. And -- but as importantly as that is to see the obstacles to that. And I come to this from a business background, having been in venture capital and entrepreneurship, prior to joining the Commerce Department and you can just see some of the simple process improvements that could help facilitate cross-border trade. One that's been highlighted -- and I'm pleased to say that the Department of Homeland Security has begun to work on this issue -- is to be able to coordinate simply the times that the border crossings are open on either side of the border. Because when one border opens at 9 o'clock and the other doesn't open until 11 o'clock in the morning you're obviously going to have bottlenecks in the system.
Also places that I hope to be able to look at improving the environment is some of the electronic processing of documents. Certainly in a 21st century information environment, there are better ways than some of the old systems that we've had to being able to know what's in the cargo that's coming to the border before it gets to the border. And so to see some of the rail crossings, to see some of the road crossings and to see the Port of Houston, will allow us to really help develop best practices to bring back to Washington to understand how we can balance security, but not just bring it back to Washington. I've been impressed by work that they've done in some of these border areas to study the economic impact of the border and the jobs that it's creating. And the quality of life that it's increasing.
And in the areas where they've been able to study it, to be able to measure something is the first step at managing it. And their ability to work across the border with -- and we've talked to mayors, we've talked to regional authorities, we've talked to states -- and the best partnerships have led to the best results. So to be able to bring people together when we're in Nogales, we'll be meeting with two mayors, one from either side of the border. Certainly as we travel our regional authorities are interested in this. I hope to be able to bring people together on this trip and then share best practices.
I also expect to be able to develop a more comprehensive survey than has ever been done before of the border and what trade facilitation means. When I mentioned earlier that about $600 billion is left on the table every year because of trade facilitation, that's a global number, I'd like to be able to develop a construct where people understand what a minute at the border crossings costs American consumers and in American jobs because for something to be stuck at the border throughout the United States and throughout the world, for every day that a company is a stuck at the border adds about .08 percent, almost 1 percent of the cost of that item, all right.
So, understanding how that affects things at the Mexican border when we're talking generally about things being stuck or slowed down for hours, rather than days. But when things are stuck at the border, it's adding costs that are just lost to the system. I'd like to be able to know about construct for that, so that people know how to develop resources appropriately. So when we talk about adding two more hours to the border, it's going to cost a number of dollars, how much that's going to add to the economy by doing that.
QUESTION: May I? I think -- I mean, I wonder if you are talking about, I mean, well, I will say -- well, I will ask who do you think that doesn't have this picture about the necessity to have a more fluid practice of goods across the border? And I'm asking this because I spent almost 20 years living along the border. I know firsthand some of the issues that the region has been facing not only in terms of the fluid of goods, but also the flow of people. And most of the time, it seems that the one who doesn't know or doesn't take in consideration what are you talking about is the federal -- or the agencies of the federal government, not local authorities. It seems to have a mold in fluid relationships when, you know, they have an issue to resolve. So I wonder if -- I mean, you are looking just to improve the communication between the panel of commerce and other agencies which are involved with issues along the border, like especially Homeland Security Department. I mean, what exactly is going to help you, you know, all this information that you get in the United States?
ASSISTANT SECRETARY BOHIGIAN: Well, I think it's an important ability that we have from a commerce point of view convened businesses with the local government leaders as well as on each one of these cities and states will be able to put together the people who can raise these issues as well as coming back as a voice within the Administration with a strengthened hand to be able to discuss again the prosperity that we're able to create by helping* these issues. The Department of Commerce sees itself very much as the voice of American business, the voice that's trying to help create jobs. And you're exactly right that, nobody in the abstract is against border efficiency. I mean, everyone would love to see 100 percent of good things, be able to move through there immediately and 100 percent of bad things be stopped at the border. But it's that balance that you need to strike with security. And so I'd like to be able to come back and talk to people as I have already with -- at the Department of Homeland Security and others about what my findings are because they've got a world to cover and maybe there's some creative solutions that we can come to together after I've had a chance to look at the border.
QUESTION: Excuse me. Jose Carreno with Universal in Mexico City. I think I'll get to the same point but from a different track.
ASSISTANT SECRETARY BOHIGIAN: Okay.
QUESTION: To what degree the field for security or the lack of security has become a hurdle for the flow of goods in the border, the U.S.-Mexico border? To what degree the feeling from some on the American side that the recent security in the Mexican side of the border has become a problem? To what degree that feeling is also somewhat at the need of some agencies to show off more than to act?
ASSISTANT SECRETARY BOHIGIAN: Okay.
QUESTION: To what -- and how much would you deal with customs in this trip?
ASSISTANT SECRETARY BOHIGIAN: Yeah. Well, we'll be working hand in glove with customs. They'll be the ones who are walking me through their facilities. We'll also be going to the maquilas on the other side to understand what the challenges are. We're putting together people from, again, governments and businesses on both sides of the border as well as looking at the infrastructure. And I truly believe that it's an issue that there are common sense solutions to it, as I've outlined earlier and moving to a more electronic environment, to be able to move some of the inspections and security away from where some of the bottlenecks are. Clearly, when you look at the border, too often you see back to back trucks lined up.
In Laredo you see a train that is forced to stop in the middle of the bridge change crews in the middle from the Mexican side to the American side. And certainly as we build trust within the local communities as well as between the new presidential administration in Mexico and our customs, you're able to increase the efficiency of the border just through these sorts of discussions. So we'll be working with customs down there, as we work with customs here. We'll be working with the Mexican administration as we've done in the past in Mexico City. And we'll be looking at ways that together we can make a difference. And I'll highlight an issue or a similar exercise that we underwent with our Canadian counterparts at the Detroit-Windsor crossing. The Detroit-Windsor crossing is one of the busiest land border crossings in the world. And because of efforts with our colleagues at the Department of Homeland Security, we've been able to decrease border crossing times by 50 percent -- by 50 percent. So if we can get some of those process points worked out and work with the Mexicans in a similarly constructive way, I'll be pleased to be able to come back to you in the year ahead and say this is what that translates into jobs and dollars.
QUESTION: Excuse me. Just as far as details, what is the average for the crossing of merchandise between Mexico and the U.S. and the border is two hours, four hours, six hours? What is -- what -- how much are you hoping to eventually reduce from that?
ASSISTANT SECRETARY BOHIGIAN: That's the problem, see no one knows. When I come back, when I talk about studying the border, the Federal Reserve out of Texas, El Paso and Dallas has done some preliminary work. The chambers of commerce along the border have done some preliminary work. The World Bank has done some preliminary work on a state-by-state basis in Mexico. But no one has pulled together what an average might be to put it in a logical construct as I was trying to develop earlier that if things take -- in an ideal world, if things took an hour to get across the border and right now, it's coming across in two hours, again, that's not the real math. But saving that hour could create 40,000 jobs and $40 million in tax revenue, whatever those numbers might be. No one's had a chance to do that across the border.
And that's the kind of information that helps us at the local level, at the state level, and at the federal level to make the case for why people should allocate more resources, whether that's border crossings or changing to electronic systems or more infrastructure, whatever the case might be. That data's not out there now. And even at the local level, it's not out there. In Laredo and Nuevo Laredo, when I was down there again earlier this year, I encouraged them to work up some data like that. But it's not there.
QUESTION: But I wonder, I mean, you know the central -- I mean, why is the real problem so far, because you talk about infrastructure. You go, for example, to Laredo, Nuevo Laredo, which is, I think, the busiest land port between U.S. and Mexico, at least in terms of commercial cargo. You're going to find that they have four bridges and one specifically just for cargo, two of the bridges in downtown for processed people and (inaudible).
Nevertheless, I mean, you go to -- try to cross from Nuevo Laredo to Laredo on a Wednesday before noon, you're going to have to wait at least one hour and -- I mean, the problem is not a lack of space or maybe lack of personal -- I mean, I haven't -- I remember wanting stuff that when -- you know, we had to wait almost 30 minutes to cross border -- to cross to the American side and we'll have -- we only have like, six vehicles, I have of -- and the thing is, some members of the customs service, you know, they go sometimes to draw the line when they're trying to conduct inspections.
And it strikes me because most of the time, you find people from local communities who cross, in other words, maybe two or three times. So, you know, there's people who know the area -- you know, they are not strangers. Nevertheless, you know, the same group -- people -- one, they (inaudible) another. So I mean, what would you say that is the biggest problem that you face at this point? The lack of understanding of the -- among -- for those agencies, the lack of communication between both sides or what is exactly the problem? Are any -- in order to expedite the flows of goods across the --
ASSISTANT SECRETARY BOHIGIAN: Well, I think in many cases, it's communications and let me talk to communications broadly. It's communications regarding why this is important. It's communications regarding the electronic format in which our computers are communicating back and forth. It's communications that -- between the businesses and the government as to what your business priorities are that need to be fixed. So I think that's -- again, I don't believe that many of these fixes are difficult. It's making people aware of some of the short-term priorities that are going to have a real effect without too many resources.
Obviously, there are things that will require resources when they're talking about infrastructure or additional bridges, but there are certain things that, just through communications, both interpersonal and government to government, will allow things to move more quickly.
QUESTION: (Inaudible.) A basic question, I wonder if you could tell us the dates of treatment, where you want to be where.
ASSISTANT SECRETARY BOHIGIAN: Sure.
QUESTION: And also, if I may, I don't -- I mean, you mentioned that you have decreased, you know, the delay timing in that crossing in Canada and why do you have the data for that -- you know, for the border with Canada and you don't have it for Mexico?
ASSISTANT SECRETARY BOHIGIAN: Well, some border crossings have undergone study, whether that's through the Chamber of Commerce or another entity that might have looked at it, so -- you know, because I'm hoping that system-wide data is something that we hope to be able to do, but hasn't been done in the past.
On Monday, I leave for Houston where I'll be giving remarks at the Greater Houston Partnership regarding, again, NAFTA and the Administration's vision for where NAFTA can be. Part of what our work has been in that area is the Security and Prosperity Partnership, where we're working on issues such as movement of goods, such as intellectual property rights that don't require legislation, but give us the ability to make our economies even more competitive in the world economy. So I'll be talking about that Monday in Houston.
I leave for El Paso and will spend Tuesday in El Paso. I'll be talking to transportation and logistics officials. I'll be touring the Bridge of America, seeing some maquiladoras as well as meeting with their association; leaving then for Tucson that evening, spending Wednesday in Tucson, similar itinerary with business leaders and understanding the CANAMEX and CyberPort operations; visit the port authority there as well, see the local truck crossing.
Then we'll leave for San Diego, where I'll spend Thursday again, similarly, talking to the San Diego Chamber of Commerce, tour the Otay Mesa both on the U.S. and the Mexican side. I'll see the truck crossing there, and visit some maquilas on the Tijuana side.
When you look at some of the maquila employment, it's pretty amazing to see the border state employment and -- you know, obviously, when the U.S. economy flows, it has negative impact on the maquila employment, but there's just so much that you can do in the border states when you look at just the maquila economy.
About 45 percent, I think, of our imports in the United States come from the maquilas, to be able to understand better how those systems operate, to better understand how some of our manufacturers here are able to create jobs in the United States, because they're able to leverage an international supply chain, to better understand how we're able to compete against global competitors throughout the world that, because of our integrated supply chain between Mexico and the United States, because we need to develop a platform between Canada, Mexico, the United States, and the entire Western Hemisphere that's -- while protecting security first, is efficient and allows goods and services and knowledge to move across the borders so that we can be even more competitive and prosperous in the 21st century.
QUESTION: (Inaudible) the Assistant Secretary for Compliance (inaudible)?
ASSISTANT SECRETARY BOHIGIAN: Assistant Secretary for Market Access and Compliance. Our objectives in Market Access and Compliance are to ensure that countries are living up to their commitments under trade agreements and are providing access, whether or not we have a trade agreement, to American firms and American workers on a level playing field.
QUESTION: Maybe you have the right person. My next question on another topic _ on Nicaragua. As you may know, yesterday, Ortega decided to (inaudible) the ALBA. The ALBA is, I don't know how to (inaudible) trade agreement with Bolivia and trade agreement with -- and Venezuela and Cuba. So Nicaragua is joining these two countries right now. And I'd like to know if you can -- your opinion, any programs are going to try to listen (inaudible), these kind of countries and having a free trade agreement with the United States at the same time?
ASSISTANT SECRETARY BOHIGIAN: Well, I want to focus on remarks today, simply on the trip I'm going to take and the Secretary's continuing engagement with Mexico. So maybe at a later time, we'll be able to discuss some of those issues. I'd like to stay focused on the importance that we place on our relationship with the Calderon administration and all the democratically elected nations in the Western Hemisphere to be able to move forward in a way that helps to promote peace and prosperity throughout the region.
QUESTION: A quick question. Do you foresee that -- speaking of a trade agreement, the trade agreement with Central America will have an impact on the border of -- you know, increased cargo and so forth? Or do you expect more of (inaudible) coming from, you know, through vote or -- I mean, is there any impact that you foresee on that?
ASSISTANT SECRETARY BOHIGIAN: Well, I mean, our -- the balance between security and prosperity to all of our borders matters with all of our trading partners. And certainly, we've seen an uptick in trade with our CAFTA trading partners and part of that is because of the ability to integrate supply chains as we're doing with Mexico. The focus is -- of this trip, as I said, is going to be on deepening our relationship with the Calderon administration and working on border issues.
The Secretary is committed to not just working out at the border, as I mentioned earlier, on some of these trade issues and market access issues, but really trying to work with the Calderon administration to ensure that their priorities of job creation and their aggressive 2030 plan were able to be partners in helping to have Mexico and Mexicans achieve their goals.
QUESTION: For me, I think this is going to be the final question and forgive me, if it sounds like I'm pressing you.
ASSISTANT SECRETARY BOHIGIAN: No, please.
QUESTION: But the thing is, I mean, you talk about the -- how you were able to reduce the crossing time along the border between Windsor and Detroit. And the thing that strikes me is, I mean, how can you expect to improve the crossing of goods between the -- goods between the -- Mexico and U.S. when what we have seen -- or at least seen in 2001 is an increase on security measures along the border. And as a result, I just give you that personal example, you know, and if you can put this situation not only in Laredo, but also maybe in (inaudible) or El Paso.
ASSISTANT SECRETARY BOHIGIAN: Right.
QUESTION: So, I mean, how can you think that you can balance this approach of security and also trying to have a more fluid trade between both countries when so far, the emphasis that we have seen along the border is security, security, security plus security? I mean, I remember a speech by Secretary Gutierrez when -- maybe it was the last time that he met with his Mexican counterpart and also had the Secretary of Commerce from Canada.
ASSISTANT SECRETARY BOHIGIAN: Right.
QUESTION: And he stressed, you know, the necessity to have a better relationship in terms of the -- the flows of trade. But we asked him the same question and he didn't have the officers assigned. So I mean, I don't know -- I mean, what areas do you see that you can have -- do something in order to really have a beneficial impact in this area?
ASSISTANT SECRETARY BOHIGIAN: Yeah. Well, the balance between security and prosperity is exactly why Secretary Chertoff from the Department of Homeland Secretary and Secretary Gutierrez formed the two legs of the Security and Prosperity Partnership. But if you wanted to have 100 percent secure border, you'd have 100 percent closed border, all right? Just as if you wanted to have 100 percent secure house, you wouldn't have any doors or any windows, but that's not practical from an economic standpoint or from a political standpoint, so what you need to do is balance that. To be able to balance security and prosperity calls for looking at tolerance for risk and risk management techniques.
We need to ensure that illegal drugs aren't coming through the border. We need to ensure that the pandemic flu isn't crossing the border. We need to ensure that the only people who are coming across the border are permitted to cross the border. But we equally need to ensure for our economic prosperity that we're able to allow goods and services to cross the border.
So how do you do that? You do that through -- the Department of Homeland Security has done, which is to understand better which containers and which trucks and which trains and which parts of those they need to look at. Sometimes that's 100 percent. You do that through better technology, the ability to have the gamma rays looking at the trains as they go through, allow the trains to continue to move rather than poking it and prodding it and opening up every container that comes through.
You do that through enhanced analytical software that allows you to understand where shipments are coming from and where shipments are going. You do that through partnership programs with trusted shippers. You do that through reducing the number of documents that people are required to fill out, but still getting the information that you need. You do that through staffing up the border so that you're maintaining security, while at the same time improving the process flow through the border.
So I think each one of those are specifics and I think as I come back from the border, we'll be able to look at a comprehensive plan to say, "Do this step; we believe would cost this much money and save this much money. We believe if you do this step, would reduce wait times by this many minutes. And by reducing wait times, increases our competitiveness and increases the number of jobs we have."
So I think those are all specific steps, but to give you the granular dollars and cents and job figures is something I hope to be able to do in the coming months after I return.
QUESTION: So do you expect that there will be a plan with some of those steps that you just mentioned to be implemented when you -- after you come back and you --
ASSISTANT SECRETARY BOHIGIAN: It will take time. It will take time, but the promise of the Security and Prosperity Partnership is to balance security and prosperity and we need to continue to look at the balance as we develop better risk mitigation techniques and new technology will have to move goods more quickly. And the more communications we have allow us to better understand where the dollar marks are, but developing a plan in 2007 is something that I hope to be able to produce.
MODERATOR: Okay. We have time for one more question.
QUESTION: You don't have any idea how much the -- you know, your -- the U.S. Government could invest in improving the -- I mean, taking some of these steps or -- I mean, do you have any idea, any sort of budget or some sort of a sense of --
ASSISTANT SECRETARY BOHIGIAN: Today, we're not prepared to talk about any of the budget figures. But we'll be going down to the border to understand what some of the bottlenecks are. And again, some of these solutions won't require a tremendous amount of new monetary or other resources. Some of these solutions require better communication between local authorities, customs brokers, state authorities and federal authorities.
Thank you.
