The NAFTA Dilemma: A New North American Dynamic. Border Trade Advisory Committee Meeting Texas Department of Transportation October 23, 2018
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1 The NAFTA Dilemma: A New North American Dynamic Border Trade Advisory Committee Meeting Texas Department of Transportation October 23,
2 RECENT POLITICAL HISTORY OF INTERNATIONAL TRADE POLICY Reciprocal Trade Agreement Act Trade Expansion Act Tokyo Round Trade Agreements Act Mexico joins GATT Canada/US Free Trade Agreement North America Free Trade Agreement (NAFTA) China joins WTO and Doha Round begins Tariff Act (Smoot- Hawley Act) U.S countries found the General Agreement on Tariffs and Trade (GATT) Trade Act Fast Track Authority Trade and Tariff Act Omnibus Trade and Competitiveness Act Uruguay Round (ISDS) World Trade Organization (WTO) replaces GATT New NAFTA talks begin 2
3 PRIVATE SECTOR OBJECTIVES Keep NAFTA a tri-lateral trade agreement Strengthen and modernize the three-country region to successfully compete with Europe and Asia Do no harm Act quickly Amend the agreement Engage the private sector 3
4 MODERNIZATION OF OF NAFTA Energy U.S. Customs and commercial port efficiencies Telecommunications E-Commerce Environmental Human Capital Promote small & medium-size business opportunities Infrastructure Trade Logistics 4
5 POLITICAL CLIMATE THEN AND NOW 1993 Three presidents support the creation of a North American Trade Bloc to compete with growing competition from Europe and Asia 2018 U.S. Congress is polarized. Reaching agreement will be extremely difficult U.S. Congressional Votes: House of Representatives: (218 majority) Yes: R-132; D-102 No: R-43; D-156 Leader are not in agreement Senate: (61 majority) Yes: R-34; D-27 No: R-12: D-26 5
6 TOP NEGOTIATORS Source: Bloomberg, Getty Images, 6
7 NAFTA 2.0 Trade negotiations between the U.S., Canada and Mexico successfully concluded on September 30, The outcome represents an updated trade agreement that is intended as an acknowledgement of the evolution of global trade over the past 20 years. In the U.S., it is called USMCA or the United States- Mexico-Canada Agreement. In Mexico, it is called T-MEC or Tratado México Estados Unidos Canadá. 7
8 Key Issue Description Under NAFTA Under USMCA Automotive parts Percentage of contents 62.5% 75% contents needed to qualify for zero tariffs Automotive labor Workers wages No requirement 30% by workers making $16+ an hour, rising to 40% in 2023 Intellectual property Dispute resolution Canadian dairy market access Sunset clause Currency manipulation IP protection provided to member countries Process to challenge another country s tariffs Restricted access to Canada s dairy market Requirement to periodically review and renew agreement Require liberal exchange rate policy Source: Wells Fargo Investment, Bloomberg, White House WHAT HAS CHANGED? Provided broad protections Existing Chapter 19 ruled by panel from each country Complex system of quotas No requirement No requirement Tougher protection for patents and trademarks, updated for today s economy Will remain Mostly remains in place with U.S. farmers gaining market share Terminates in 16 years if not actively renewed at meetings every 6 years Commitment to maintain market-based exchange rates and refrain from 8 devaluations
9 NEXT STEPS In the US, Congressional approval will probably come in February or March of 2019 A private sector coalition is necessary to effectively promote approval This includes: U.S. Chamber of Commerce, Texas Association of Business, Texas Mexico Trade Coalition, etc. Trade Coalitions: Business Roundtable/National Foreign Trade Council/National Association of Manufacturers Think Tanks: Wilson Center, Baker Institute, Peterson Institute, Cato Institute, etc. 9
10 10
11 LOBBYING AND PROMOTION 11
12 LOBBYING AND PROMOTION 12
13 U.S./MEXICO CEO DIALOGUE 13
14 MEXICO CEO MEETING WITH TEXAS GOVERNOR ABBOTT 14
15 TEXAS MEXICO TRADE COALITION 15
16 You cannot remain a spectator. If you do not get involved, those who do will determine your future. Dennis E. Nixon, Chairman International Bancshares Corporation 16
17 17
18 TEXAS MEXICO BORDER TRANSPORTATION MASTER PLAN UPDATE Border Trade Advisory Committee October 23, 2018 Texas-Mexico Border Transportation Master Plan Update October 23, 2018
19 Overview: TX-MX Border Transportation Master Plan (BTMP) The BMP is a binational comprehensive approach to coordinate planning, programming, and implementation of projects at border crossings support facilities serving the border crossings Transportation system Key components Multimodal Transportation System Ports of Entry and Support Facilities Policies, Programs, and Projects Short, Medium, and Long-term investments Texas-Mexico Border Transportation Master Plan Update October 23, 2018
20 TX-MX Border Transportation Master Plan Update Task 1: Project Management Plan Task 2: Stakeholder Plan Task 3: Goals and Objectives Texas-Mexico Border Transportation Master Plan Update October 23, 2018
21 Project Management Plan Overview Project Management Plan Project schedule Project Team Online Workspace and management dashboard Communications and Correspondence Plan Quality Assurance/Quality Control Plan Texas-Mexico Border Transportation Master Plan Update October 23, 2018
22 Stakeholder Engagement Plan Overview Stakeholder Engagement Plan Education and Outreach Materials Stakeholder Database Quarterly Engagement Summaries Webpage contents for project website Status updates on outreach efforts and project updates For BTAC, binational study committees, and TFAC and other meetings as requested Project fact sheets Other documents and supporting materials as requested Texas-Mexico Border Transportation Master Plan Update October 23, 2018
23 Goals & Objectives Overview Develop overall goals and objectives of the TX-MX BTMP Serve as a measure to gauge success Facilitate discussion and generate consensus with binational stakeholders Develop framework for analysis to prioritize projects Texas-Mexico Border Transportation Master Plan Update October 23, 2018
24 Bi-National Stakeholder Engagement TxDOT has participated in Bi-National Public and Private Sector Engagement Texas Municipal League Eagle Ford Consortium, Inc. Attended the U.S. Mexico Joint Working Committee Meeting Proposed meeting to discuss BTMP scope of work Developed the TX-MX Border Transportation Master Plan One Pager Spanish translation of all documents Texas-Mexico Border Transportation Master Plan Update October 23, 2018
25 Next Steps Continue discussions with HDR on development of: Project Management Plan Stakeholder Engagement Plan Goals & Objectives Discuss schedule, meeting dates and locations to introduce BTMP concept Provide BTAC documents for initial review and walk through Request public and private stakeholder data sources Request inventory of transportation assets at corridor level Texas-Mexico Border Transportation Master Plan Update October 23, 2018
26 Contact Information Timoteo Tim Juarez, Jr. TXDOT TX-MX BTMP Project Manager / International Trade & Border Coordinator Tim.Juarez@txdot.gov (512) Alejandro Solis, PH.D HDR TX-MX BTMP Project Manager / Principal Economist & Business Class Lead, Economics & Finance Alejandro.Solis@hdrinc.com (202) Texas-Mexico Border Transportation Master Plan Update October 23, 2018
27 TEXAS-MEXICO BORDER STRATEGIC TRANSPORTATION BLUEPRINT & U.S. MEXICO JOINT WORKING COMMITTEE (JWC) Border Trade Advisory Committee Austin, Texas October 23, 2018 Border Transportation Advisory Committee October 23, 2018
28 Texas Border Strategic Transportation Blueprint Recommendation #1: Establish a Texas- Mexico Trade Transportation Task Force Recommendation #2: Develop a Texas Trade Lanes Program Recommendation #3: Develop a Public Awareness & Education Program Recommendation #4: Implement Technology & Innovative Border Strategies Recommendation #5: Foster Public Sector Involvement Border Transportation Advisory Committee October 23, 2018
29 Texas Border Strategic Transportation Blueprint Recommendations (April 18, 2018): Develop a comprehensive and unified vision for the Texas border among members of the border community Identify binational public and private stakeholders for participation in Blueprint efforts Identify existing funding programs and established processes Develop documents for support of the Public Awareness and Education Program Identify existing case studies and develop alternative efforts to Implement Technology & Innovative Border Strategies Identify strategies to include private sector in developing recommendations Border Transportation Advisory Committee October 23, 2018
30 Rec1 - Establish a TX-MX Trade Transportation Task Force Goals: to serve as a forum that would handle bi-lateral communication, coordination, and collaboration between Texas and Mexico on cross-border trade transportation including planning, programming, and implementation; and economic development Objectives: Promote and improve bilateral cooperation, integration, and partnerships to address cross-border trade and transportation infrastructure issues. Facilitate the communication among agencies responsible for border transportation planning and implementation within U.S. and Mexican federal, state, local, and regional agencies. Facilitate bilateral data collection, sharing, and analysis to identify cross-border trade transportation needs and investment strategies. Border Transportation Advisory Committee October 23, 2018
31 Rec1 - Establish a TX-MX Trade Transportation Task Force Identification of Task Force Members: Proposed Members from Texas - Texas Secretary of State Office - TxDOT ADM - TxDOT Freight and International Trade - Economic Development Division, Texas Governor s Office - A representatives from each Texas border region (El Paso, Laredo, Pharr) Proposed Members from Mexico - Secretary of Communication and Transportation (SCT) - Secretary of Foreign Affairs (SRE) - Tax Administration (SAT) - Representatives from Chihuahua, Coahuila, Nuevo Leon and Tamaulipas Potential Ex Officio Members - US Customs & Border Protection - US and Mexico Consuls - US Department of Transportation - US State Department - Texas-Mexico Trade Coalition (TAB) - Railroads (UP, KCS, BNSF) Border Transportation Advisory Committee October 23, 2018
32 Rec1 - Establish a TX-MX Trade Transportation Task Force Revise Timeline: December 2018 Inauguration of Mexican President Jan Feb, 2019 Appointments of Mexican Secretaries and lower level positions Feb - March Notification of Task Force Members April 2019 Initial Meeting (Austin) Meetings would alternate between TX and MX Border Transportation Advisory Committee October 23, 2018
33 Rec1 - Establish a TX-MX Trade Transportation Task Force Action Items Concurrence on Task Force proposed membership Continue to follow appointments of Mexican Secretaries and lower level positions Provide membership list by agency and name Develop notification to Task Force members outlining intent, purpose and goals Establish meting calendar with dates and locations Border Transportation Advisory Committee October 23, 2018
34 Rec2 - Develop a TX-MX Trade Lanes Program Discuss development of a proposed Trade Lanes Program The following items have been discussed: Review of TXDOT Clear Lanes Program Review of Coordinated Border Infrastructure (CBI) and Rider 11B Programs Identify TxDOT District projects and needs Develop of a Trade Lanes Program Border Transportation Advisory Committee October 23, 2018
35 Rec2 - Develop a TX-MX Trade Lanes Program Action Items Continue with project identification list Identify needed funding Discuss project criteria and evaluation Discuss next steps in development of a Trade Lanes Program Create white paper for BTAC consideration Develop the Border Trade Activities Report Develop the International Trade Corridors Report Border Transportation Advisory Committee October 23, 2018
36 Rec3 - Develop a Public Awareness & Education Program Discuss the status and development of identified deliverables within the Public Awareness Program Deliverables: International Trade Video Border Transportation Master Plan - One Pager Fact Sheet POE El Paso, Del Rio, Eagle Pass, Hidalgo Pharr, Brownsville Public Outreach Texas Municipal League & Eagle Ford Consortium, Inc. 91 Bi-National Public and Private Stakeholder Engagements Border Transportation Advisory Committee October 23, 2018
37 Rec3 - Develop a Public Awareness & Education Program Action Items Continue development of Fact Sheets Remaining Port of Entry(s) Custom Districts 1 for each of the El Paso and Laredo custom district Commodities 1 fact sheet for the top three export and import commodities at each border crossing (39 face sheets) Transportation Mode one fact sheet by mode (truck, rail, air, maritime, and pipeline) Border Related Topics 5 fact sheets on various items Border Transportation Advisory Committee October 23, 2018
38 Rec4 - Implement Technology & Innovative Border Strategies Goals: identify technology topics for review and development of white papers White Paper #1 - Develop Texas Border Crossing Technology and Innovative Border Process Inventory White Paper #2 - Unified Cargo Processing for Rail White Paper #3 - Texas-Mexico Border Shipment Tracking Technologies White Paper #4 Texas s Pipeline System Action Items Continue development of the four white papers Border Transportation Advisory Committee October 23, 2018
39 Rec5 Foster Private Sector Involvement Discuss how to develop an active dialogue between the public and private sectors The following items were discussed: Proposed listening session(s) Identification of invited participants Timeline and schedule of roundtables Additional efforts for consideration Action Items Continue development of Rec 3 deliverables Continue with stakeholders list Completion of action items of Rec1 Border Transportation Advisory Committee October 23, 2018
40 Texas Border Strategic Transportation Blueprint Recommendation #1: Establish a Texas- Mexico Trade Transportation Task Force On Hold Recommendation #2: Develop a Texas Trade Lanes Program Ongoing Recommendation #3: Develop a Public Awareness & Education Program Ongoing Recommendation #4: Implement Technology & Innovative Border Strategies Analysis Being Conducted Recommendation #5: Foster Public Sector Involvement On Hold Border Transportation Advisory Committee October 23, 2018
41 TX-MX Border Strategic Transportation Blueprint: Next Steps At BTAC s concurrence, Rec 2, 3, and 4 committees will continue to meet Committees 1 and 5 develop a refined schedule that takes into account the identified Mexican counterparts Committees review, prioritization, and implementation of committee efforts Committees move forward with implementation of committee priorities as identified above Border Transportation Advisory Committee October 23, 2018
42 U.S. - MX Joint Working Committee Summary of the U.S.-Mexico Joint Working Committee on Transportation Planning September 5-6, 2018 San Diego, California Border Transportation Advisory Committee October 23, 2018
43 U.S. - MX Joint Working Committee Binational group whose primary focus is to cooperate on land transportation planning and facilitate efficient, safe, and economical cross-border transportation movements. Comprised of transportation professionals from: Federal Highway Administration (FHWA) Mexican Secretariat of Communications and Transportation (SCT) U.S. Department of State (DOS) Mexican Secretariat of Foreign Relations (SRE) Four U.S. border State departments of transportation (DOTs), Six Mexican border States General Services Administration (GSA) U.S. Customs and Border Protection (CBP) of the Department of Homeland Security and their counterparts in Mexico. Border Transportation Advisory Committee October 23, 2018
44 U.S. - MX Joint Working Committee Two Key Components: FHWA Ways in which transportation infrastructure unites the United States and Mexico and builds a strong relationship between the two nations. U.S. DOT s Strategic Plan for FY : identified connections between the work done by the JWC and the goals of Safety, Infrastructure, Innovation, and Accountability outlined in the Strategic Plan. BUILD (Better Utilizing Investments to Leverage Development) applications are currently under review by the U.S. DOT and will be awarded in the coming months. Continued focus on megaregions - Binational group whose primary focus is to cooperate on land transportation planning and facilitate efficient, safe, and economical cross-border transportation movements. Secretaria de Comunicaciones y Transportes (SCT) Discussed the pending change of administration that will occur in Mexico Reflected on the progress that has been made in the past few years, including completed projects, increased collaboration, and technological advances. Encouraged participants to provide feedback and suggestions to the committee to continue advancing the JWC and binational relationships. Comprised of transportation professionals Border Transportation Advisory Committee October 23, 2018
45 U.S. - MX Joint Working Committee Regional Border Master Plans Texas-Mexico Border Master Plan Presented on the Texas-Mexico Border Transportation Master Plan Scope of Work was distributed to attendees Spanish translated scope of work document was committed to be distributed to FHWA and SCT (completed) Key points: bi-national port of entry support facility for each POE connectivity to the multimodal transportation network system trade and economic development Proposed Texas - Mexico meeting with existing and transitional federal administration to discuss the development of the TX-MX BTMP Border Transportation Advisory Committee October 23, 2018
46 U.S. - MX Joint Working Committee Development of Subcommittees: Innovations / Technology Laredo - Nuevo Laredo Work Group Underutilized Border Crossings Cross Border Data Sharing Study TXDOT and many Texas Representatives will be participants on each committee Next U.S. Mexico JWC meeting is scheduled for April 10-11, 2019 in Mexico Border Transportation Advisory Committee October 23, 2018
47 Contact Information Timoteo Tim Juarez, Jr. International Trade & Border Coordinator (512) Caroline Mays, AICP Director, Freight and International Trade Border Transportation Advisory Committee October 23, 2018
48 INFRASTRUCTURE IN THE COAHUILA TEXAS BORDER
49 INFRATRUCTURE IN THE COAHUILA TEXAS FRONTIER LAGUNA NORTE CORRIDOR INTEGRATION OF COAHUILA ITH THE ROAD NETWORK OF THE STATE OF TEXAS Acuña Zaragoza Morelos Sacramento C Ciénegas P Negras Sabinas S Pedro CONNECTIVITY OF COAHUILA WITH THE CENTRAL Torreón Saltillo REGION OF THE UNITED STATES THROUGH THE MAZATLÁN PACIFIC OCEAN (ASIA) MANZANILLO MEXICO CITY. SALTILLO, PIEDRAS NEGRAS AND LAGUNA NORTE ROAD AXIS
50 INFRATRUCTURE IN THE COAHUILA - TEXAS FRONTIER LAGUNA NORTE CORRIDOR WITH THE FIRM INTENTION OF MODERNIZING THE LAGUNA NORTE CORRIDOR, BRINGING REGIÓN LAGUNA CLOSER TOTGETHER TO THE BORDER PORTS OF COAHUILA, IN RECENT YEARS 1,600 MILLION MXN WERE INVESTED IN THE MODERNIZATION OF THIS ROAD AXIS. IN THIS ADMINISTRATION, THIS PROJECT WILL BE CONTINUED WITH THE CONSTRUCTION OF 5 CARRIAGEWAYS THAT WILL ALLOW RAISING THE RANGE OF OPERATION OF THIS ROAD CORRIDOR, REDUCING TRAVEL TIME AND IMPROVING ROAD SAFETY. 30 ACUÑA PIEDRAS NEGRAS CARRIAGEWAYS 48 km CARRIAGEWAYS INVESTMENT 920 m mxn Región Laguna of Coahuila and Durango
51 INFRATRUCTURE IN THE COAHUILA - TEXAS FRONTIER 57 AND 29 FEDERAL ROADS WITH THE INTENTION OF IMPROVING THE TIMING OF CARGO TRANSPORTATION FROM THE CENTER OF MEXICO, AS WELL AS PROVIDING BETTER CONDITIONS TO TRANSFER THE PRODUCTS AND GOODS GENERATES BY THE LOCAL INDUSTRY, IS THAT IT IS INTENDED TO MANAGE THE ACUÑA 29 PIEDRAS NEGRAS CONSTRUCTION OF THREE CARRIAGEWAYS IN THESE TO IMPORTANT ROAD AXES, SUBSTANTIAL FOR THE SATE S ROAD MOVILITY. CARRIAGEWAYS 57 INVESTMENT 2,680 mdp CARRIAGEWAYS 67.7 km CARRETERA 57 SALTILLO
52 INFRATRUCTURE IN THE COAHUILA - TEXAS FRONTIER MODERNIZATION OF THE ACUÑA BONDED WAREHOUSE WORK IN PROGRESS BY THE FEDERAL GOVERNMENT, IT IS EXPECTED TO BE CONCLUDED BY THE END OF THIS YEAR
53 INFRATRUCTURE IN THE COAHUILA - TEXAS FRONTIER INTERNATIONAL ACUÑA-DEL RIO II BRIDGE THERE IS AN AGREEMENT SIGNED BY THE CITY OF DEL RIO, THE VAL VERDE COUNTY, CIUDAD ACUÑA AND THE GOVERNMENT OF COAHUILA, REGARDING THE CROSSING SITE PROPOSED FOR THE CONSTRUCTION OF THE INTERNATIONAL BRIDGE. CURRENTLY, THE GOVERNMENT OF COAHUILA HAS CONDUCTED A STUDY OF THE SECOND STAGE OF THE MANAGEMENT PROCESS Selection of the crossing site. THAT WILL ALLOW TO REGISTER THIS PROJECT IN THE BINATIONAL AGENDA.
54 INFRATRUCTURE IN THE COAHUILA - TEXAS FRONTIER INERNATIONAL PIEDRAS NEGRAS III BRIDGE Connectivity Piedras Negras and Eagle Pass are connected through 2 international bridges. The main road on both sides of the border is the 57 road axis. THE FEDERAL GOVERNMENT, THROUGH THE S.C.T. CONDUCTS THE STUDY Analysis of the Crossing System of the Piedras Negras-Eagle Pass region, HAVING CONCLUDED THIS, AND DEPENDING ON THE RESULT, THE STATE GOVERNMENT WILL PROPEL THE ACTIONS FOR ITS FUTURE CONSTRUCTION
55 INFRASTRUCTURE IN THE COAHUILA TEXAS FRONTIER
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