Stereotypical media images of the U.S./Mexico border typically show barren open areas, dilapidated housing, vigilantes trying to catch people illegally crossing into the U.S., or fenced stretches watched by U.S. Border Patrol agents. They rarely show images of two modern border cities, San Diego and Tijuana, the heart of the Cali-Baja Region (California/Baja California).
What do the recent executive orders issued by U.S. President Donald Trump mean to these two cities? How will building a border wall, increasing enforcement at the border and deporting more undocumented individuals impact the region?
The North American Research Partnership (NARP) is a nonprofit think-tank that researches how the United States, Mexico and Canada can better position themselves for success in the 21st century.
“In general, the vibrant, dynamic and closely intertwined economies of Southern California and Northern Baja California are not affected directly by the executive orders,” said NARP’s portfolio manager, D. Rick Van Schoik. “But the fear and uncertainty about what is next is unsettling to any business expansion efforts. In other words, the economy of both has stalled as jobs on one side so depend upon expansion on the other side.”
With a combined population of more than 6 million people evenly distributed on both sides of the border, San Diego and Tijuana have developed together over the decades, supporting each other economically and culturally. Both have growing economies, fine restaurants, quality cultural amenities and sandy beaches on the Pacific Ocean. Both are located at the furthest point from their national capitals, mostly out of the minds of national leaders, often looking more toward each other than to Mexico City or Washington, D.C.
Two mayors vow to continue cross-border collaboration
San Diego Mayor Kevin Faulconer believes his city’s proximity to the border is one of its greatest strengths, which he addressed in his Jan. 12 State of the City speech.
“When some people look at the U.S.-Mexico border, they see division. But here in San Diego we view it much differently,” he said.
“Rather than allowing the border to divide us, we’re building bridges that connect us. We share so much in common. A cross-border culture. A cross-border economy. And a cross-border spirit of cooperation that has my complete and unwavering support!”
Recently elected Tijuana Mayor Juan Manuel Gastelum shares Faulconer’s view. “When jobs are created in Tijuana, jobs are created in San Diego and vice versa,” he said at a joint press conference with Mayor Faulconer on Feb. 6. “We have made a lot of progress over the years, but we know there is more work to do. We want to keep the momentum going, and to do that we must keep the relationship strong in light of some of the things that have been said outside of our cities.”
Paola Ávila, the vice president for international business affairs at the San Diego Regional Chamber of Commerce, agrees. “Our region is a national model for cross-border commerce. Home to the busiest land port of entry, our Cali-Baja region has a thriving $230 billion economy thanks to trade agreements like NAFTA, a talented workforce, and strong binational cooperation.
“San Diego and Baja are powerful partners in business with intertwined economies that are strengthened by a commitment to collaboration. At the Chamber, we stand by the belief that we aren’t just trading with Mexico, but we are producing together.”
50 million people legally cross into the U.S. at San Diego each year
According to data compiled by the U.S. Bureau of Transportation Statistics, more than 50 million people legally crossed into San Diego in 2015, the last full year tallied. An equal number crossed in the other direction. These crossers work, shop, visit family, conduct business or just enjoy the amenities of the other country.
Some small business owners with the San Diego Main Street Alliance are concerned about the executive orders and their effect on foot traffic. The Alliance is a chapter of a national network of small business coalitions working to build a new voice for small businesses on important public policy issues, and the group is speaking out against the executive orders.
Francisco Garcia, the owner of Modern Architecture Services in San Diego, has been in business for a decade. “I see the contributions of fellow immigrants, documented and undocumented, on our local communities,” he said. “Advancing policy that locks them out of our economy will be a disaster for our country.”
Another alliance member, Osvaldo Blackaller, owner of Cueva Bar in the city’s Parkcrest neighborhood, says his business depends upon both economic and cultural ties that President Trump’s executive orders may sever. “My restaurant’s success has been possible through the merging of cultures, the blending of foods and a team from all over the world,” he said. “I cook to bring people together.”
Andy Carey, the executive director of the U.S. Mexico Border Philanthropy Partnership, says the region is already seeing diminished retail sales and business opportunities.
“People’s time is worth gold when considering the effort involved in traveling to the other side. If you are going to lose too much time, you will reevaluate the need to take the trip,” he explained. “We are already seeing boycotts from Mexico to shop and dine in the U.S. Unfortunately, the boycotts are misplaced and hurt the dialogue more than help it.”
Carey’s bi-national nonprofit is a network of organizations that builds prosperity through leadership, collaboration and philanthropy in the U.S.-Mexico Border region.
“We are inextricably linked by a common desire to improve the quality of life for our people and local communities,” he said. “We share significant human and natural resources, and are much stronger as a region when we cooperate and collaborate with one another.”
David Mayagoitia is the chair of the Tijuana Economic Development Corp. An executive whose personal and business lives straddle the border, he takes a measured view of the executive orders and does not see any impacts yet, although he says U.S. Customs and Border Protection (CBP) has begun to inspect cars leaving the U.S., causing longer waiting times into Mexico.
Mayagoitia believes the orders might impact daily crossing times for executives if there are increased inspections and more questioning by CBP officers, but he doesn’t think it will impact the companies wishing to locate in the region. “This is a minor counterbalance to the economic benefit to companies wishing to relocate to this region by a long shot,” he said.
Will retail sales on both sides of the border suffer? “I suspect some,” Mayagoitia said. “It’s hard to quantify as there are no formal numbers available.”
He told us the impact will mostly center around crossing times. “As they increase, Mexicans who shop in the San Diego region will tend to not come across, so daily impulse shopping will be reduced; likewise in the other direction,” he explained. “Also, [the number of] people who reside in Tijuana and work in San Diego or those who live in San Diego and work in Tijuana will reduce crossing as times increase. This will diminish shopping on both sides by each group.”
Companies want to know what’s next
Flavio Olivieri is an economic development professional specializing in the U.S.-Mexico border region. He says stricter security measures will have minimal impact on companies establishing manufacturing in Baja, although there might be more delays in merchandise crossing the border — reducing productivity and competitiveness.
“The more immediate impact is the fear of what’s next,” he explained. “Companies have frozen their expansion plans or canceled all together. The uncertainty of what will happen with NAFTA and the costs of Mexican imports into the U.S. has already had a direct impact on investment and creation of jobs.”
Olivieri is also concerned about the impacts of mass deportations. “They might have a social impact in the border cities, but they will impact more directly the U.S. economy, as those people are productive right now, and when they get displaced, it takes them a long time to become productive again. Their families will not have the income to continue spending in the U.S.”
Carey from Border Philanthropy Partnership says the security measures are less worrisome than the truth and realities of the U.S.-Mexico relationship.
“The dialogue has been diminished to sound bites communicating myths and false perceptions about the binational border,” Carey said. “The rhetoric includes falsehoods about large numbers of undocumented people crossing the border without approval. In San Diego-Tijuana, this is not the case.”
“We already have a double- and triple-fence barrier and significant wait times to move people and goods back and forth across the border. These wait times impede people’s ability to get to work, spend time with family, and enjoy daily and routine activities such as shopping, dining, attending religious services and engaging in tourist activities. All of this speaks to the quality-of-life issues that companies look for when setting up their operations.
“All companies want their employees’ and their families to have a high quality of life. We have that today in the binational region, but increased enforcement, increased barriers and border wait times will actually do more to diminish our quality of life rather than enhance it.”
Carey says we need an informed national conversation about the realities of the U.S.-Mexico relationship. Olivieri adds that it’s all about complementary capabilities, infrastructure and resources — and finding the most cost-effective way of producing something, distributing it and consuming it.
“The productivity gains and competitiveness are in continuous tension because of the binational relationship, the federal governments, and too many rules, regulations and standards,” he told us. “This on top of the language and cultural barriers and historical mistrust is a great inhibitor to unleashing our true binational potential.”
