Building a Competitive U.S.-Mexico Border

Thank you, Duncan. It is a pleasure to be here and to welcome you all to the Ronald Reagan Building, home of CBP’s Headquarters.

My first international trip as Commissioner was to Mexico City in April 2014. That underscores the importance I place on our work with Mexico – and the significance of our ongoing partnerships.

These relationships are vital to our dual mission of border security and facilitation of legitimate trade and travel, and depend on information sharing; joint investment in border infrastructure; and security collaboration.

Mexico and the United States are deeply connected – in trade, culture, and commitment to democratic principles. This also extends to our economic interests. More than $530 billion in trade flows between the two countries each year, and Mexico is Latin America’s second largest economy.

This is why consistency and harmonization at our borders are so critical, and have been the driving force behind our efforts to modernize and transform how we do business. 

The most important element of CBP’s trade vision is having a consistent “One U.S. Government” approach to our country’s imports and exports. Nearly 50 U.S. federal agencies touch our trade processes in various ways, requiring hundreds of paper forms.

And that is why CBP continues to develop and implement the Automated Commercial Environment, ACE, as the foundation for the U.S. Single Window. 

As most of you know, this push to automate our trade processes, removing paper from the import/export process, is a massive transformation. We are making the process more efficient, less costly, and more predictable for importers and exporters.

When the process is fully implemented, there will be one common set of harmonized data elements used by the entire U.S. government for any import or export transaction—reducing redundancy, lowering cost, and increasing predictability for importers, exporters, and the government.

While we drive toward President Obama’s December 2016 goal for this effort, we are working with international partners who are developing their own Single Windows. Mexico is on the forefront, having already deployed viable, active Single Window, which has saved the country money, time, and resources.

Mexico’s Single Window has saved more than 191.2 billion pesos, or $12.4 billion USD, and it has eliminated paper amounting to the equivalent of 27,000 trees each year. It also eliminates the need to send documents from the 49 Mexico Customs sites to Customs headquarters, which represented an annual expenditure of about 7 million pesos.

CBP’s Single Window team and Mexican Customs have worked closely to harmonize data set standards used by both countries. As the U.S. Single Window is fully implemented, we continue to identify ways to connect these programs internationally, further amplifying the benefits across the global supply chain.

Last October, I had the honor of signing a Mutual Recognition Arrangement (MRA) with Chief Aristóteles Núñez Sánchez of Mexico’s Servicio de Administracion Tributaria, or SAT. This Agreement formalizes compatibility between our Customs-Trade Partnership Against Terrorism (C-TPAT) program and Mexico’s New Scheme of Certified Companies NEEC.

What this means is that whenever possible, each Customs Administration will extend benefits to the partners and members of the other’s supply chain security and trusted trader program. 

And this MRA has already yielded important outcomes. Both programs have already exchanged information and participated in several trade events, including the first CBP-hosted AEO workshop, attended by customs officials from 25 countries.

Most importantly, they already have designed a strategy to recognize validations conducted by either program.  For example: NEEC will be conducting 60 validations this year of companies in Mexico that are both C-TPAT and NEEC members. 

And C-TPAT will recognize the outcome of those validations, while also conducting validations on behalf of NEEC. They will also conduct a number of joint validations. This is what mutual recognition is all about – more efficiency and less redundancy for our trusted partners. 

Another great example of collaboration providing real benefit is in the Cargo Pre-Inspection Pilots. These are being implemented at three locations, each lasting 180 days.

First, there’s the pilot at Laredo International Airport in Laredo, Texas. Starting in late August, it will involve pre-inspection of air cargo from the automotive, electronics, and aerospace industries destined to eight Mexican airports.

Then there is Mesa de Otay, Baja California, Mexico – just across from the Otay Mesa POE in California, scheduled for mid-September. Finally, there is FOXCONN, Chihuahua, Mexico, near Santa Teresa, New Mexico, projected for mid-2016. U.S. officials working side-by-side with Mexican officials will have the potential to significantly reduce congestion and wait times, along with storage and other operating costs for business. 

With $1.45 billion a day in two-way trade and nearly one million people legally crossing between the United States and Mexico each day, healthy infrastructure on our common border is vital.  Aging facilities and limited resources at our land ports of entry cause long, costly wait times for people and goods. 

Through bilateral discussions, including the 21st Century Border Management Initiative and the High Level Economic Dialogue, the U.S. and Mexico have made significant headway. 

For example, in 2014, the U.S. completed construction on the Nogales-Mariposa Port-of-Entry, which now includes eight primary commercial inspections lanes, up from four. This will significantly improve the port’s capacity for processing of more than half of the U.S. winter produce.

Another example: CBP and Mexican Customs are in the final stages of fully replacing the existing, temporary, and outdated inspection facility at Fabens-Caseta, Texas, which does not currently process commercial traffic.

Then there is the new Tornillo-Guadalupe land port of entry. When that is completed, it will not only create additional commercial processing capacity in the busy greater El Paso border region, but it will also become the largest port by area in the U.S., with capacity to accommodate growing demand.

Finally, CBP and Mexican Customs are closely collaborating with the project sponsors on the proposed Otay Mesa East port, which will be two miles east of the existing Otay Mesa port. If implemented, this highly innovative, toll-based land port would provide an alternative crossing option for commercial and non-commercial traffic, which could help ease the congestion at the existing crossings between California and Baja California. 

CBP is also using its Reimbursable Services and Donations Acceptance Authority, granted by Congress, to enter into five year partnerships with private sector and government entities to support additional services.

Currently, CBP has 20 Reimbursable Services Agreements, increasing staffing at 19 ports of entry in eight of our field offices – including two on the Southwest Border.

First, the City of El Paso agreement extends peak vehicle and pedestrian traffic hours at their Ysleta and Paso Del Norte bridges. Second, the South Texas Assets Consortium increases capacity at several crossings, including Hidalgo, Brownsville, and Laredo.

In addition, Congress authorized CBP and the General Services Administration to accept donations from private sector or government entities at CBP or GSA-owned properties.

This authority – under Section 559 of the Consolidated Appropriations Act of 2014 – lets us accept certain resources to expand operations at new or existing ports of entry.

CBP received seven proposals during the first open period in FY2015, and six of the seven are for ports on the Southwest Border. We expect to announce initial selections by the end of this summer.

In closing, let me emphasize that no single company, customs service, or law enforcement agency sees the complete picture of every facet of the supply chain.

That’s why it’s imperative that we coordinate with our international partners and trade stakeholders to ensure that the supply chain stays secure and efficient.

We continue to work with Mexico on developing new initiatives, especially in light of the high-level economic dialogue that took place at the North American Leaders Summit in Toluca, Mexico in February 2014 and the U.S.-Mexico CEO Dialogue in Monterrey in December.

Thank you for the opportunity to share CBP’s perspective on these important issues, and I look forward to taking a few questions.