[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



                  IMPROVING SECURITY AND FACILITATING
                   COMMERCE WITH MEXICO AT AMERICA'S
                            SOUTHERN BORDER

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                         THE WESTERN HEMISPHERE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 9, 2013

                               __________

                           Serial No. 113-111

                               __________

        Printed for the use of the Committee on Foreign Affairs





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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
JOE WILSON, South Carolina           GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas             ALBIO SIRES, New Jersey
TED POE, Texas                       GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona                 THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania             BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina          KAREN BASS, California
ADAM KINZINGER, Illinois             WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama                   DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas                 ALAN GRAYSON, Florida
PAUL COOK, California                JUAN VARGAS, California
GEORGE HOLDING, North Carolina       BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas            JOSEPH P. KENNEDY III, 
SCOTT PERRY, Pennsylvania                Massachusetts
STEVE STOCKMAN, Texas                AMI BERA, California
RON DeSANTIS, Florida                ALAN S. LOWENTHAL, California
TREY RADEL, Florida                  GRACE MENG, New York
DOUG COLLINS, Georgia                LOIS FRANKEL, Florida
MARK MEADOWS, North Carolina         TULSI GABBARD, Hawaii
TED S. YOHO, Florida                 JOAQUIN CASTRO, Texas
LUKE MESSER, Indiana

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director
               Jason Steinbaum, Democratic Staff Director
                                 ------                                

                 Subcommittee on the Western Hemisphere

                     MATT SALMON, Arizona, Chairman
CHRISTOPHER H. SMITH, New Jersey     ALBIO SIRES, New Jersey
ILEANA ROS-LEHTINEN, Florida         GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas             ENI F.H. FALEOMAVAEGA, American 
JEFF DUNCAN, South Carolina              Samoa
RON DeSANTIS, Florida                THEODORE E. DEUTCH, Florida
TREY RADEL, Florida                  ALAN GRAYSON, Florida

















                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Alan Bersin, Assistant Secretary, Office of 
  International Affairs and Chief Diplomatic Officer, U.S. 
  Department of Homeland Security................................     9
Mr. Eric Farnsworth, Vice President, Council of the Americas and 
  Americas Society...............................................    14
Ms. Lea Marquez Peterson, President and Chief Executive Officer, 
  Tucson Hispanic Chamber of Commerce............................    22
Mr. Glenn Hamer, President and Chief Executive Officer, Arizona 
  Chamber of Commerce and Industry...............................    27
Mr. Timothy C. Hutchens, Executive Vice President and Head, 
  Federal Lessor Advisory Group, CBRE, Inc.......................    34
Mr. Christopher Wilson, Associate, Mexico Institute, Woodrow 
  Wilson International Center for Scholars.......................    40

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Alan Bersin: Prepared statement....................    11
Mr. Eric Farnsworth: Prepared statement..........................    17
Ms. Lea Marquez Peterson: Prepared statement.....................    25
Mr. Glenn Hamer: Prepared statement..............................    30
Mr. Timothy C. Hutchens: Prepared statement......................    37
Mr. Christopher Wilson: Prepared statement.......................    42

                                APPENDIX

Hearing notice...................................................    62
Hearing minutes..................................................    63
The Honorable Matt Salmon, a Representative in Congress from the 
  State of Arizona, and chairman, Subcommittee on the Western 
  Hemisphere: Material submitted for the record..................    64

 
                  IMPROVING SECURITY AND FACILITATING
                   COMMERCE WITH MEXICO AT AMERICA'S
                            SOUTHERN BORDER

                              ----------                              


                        MONDAY, DECEMBER 9, 2013

                       House of Representatives,

                Subcommittee on the Western Hemisphere,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The subcommittee met, pursuant to notice, at 10:18 a.m., at 
Tucson City Council, City Hall, 255 West Alameda Street, 
Tucson, Arizona, Hon. Matt Salmon (chairman of the 
subcommittee) presiding.
    Mr. Salmon. A quorum being present, the subcommittee will 
come to order. I am going to start by recognizing myself and 
the other members to present our opening statement, and then I 
will present the rules of the hearing and yield time to our 
witnesses.
    Good morning, and welcome to this hearing on our vital 
commercial relationship with Mexico and what we can do to 
enhance the flow of commerce while maintaining security along 
the southern border. I would like to give a warm welcome and 
personally thank Albio Sires, who is our ranking member on the 
subcommittee, for braving the scary skies right now this time 
of year with all the weather patterns across the eastern 
seaboard, and appreciate the fact that he was able to get here. 
I know he had some real difficulties, so thank you for taking 
the time.
    I would like to thank my colleagues from Arizona, Ron 
Barber, Kyrsten Sinema, and David Schweikert, for attending 
this meeting. I believe it is one of extreme importance to the 
State of Arizona, and particularly here in southern Arizona.
    The chairman of the full committee, Ed Royce, was going to 
be here, but his airplane, because of the weather across the 
country, got cancelled last night, and he sends his profound 
regrets. But he has been incredibly supportive of the 
Subcommittee on the Western Hemisphere, and I appreciate his 
trust in asking me to chair this subcommittee. I knew 
immediately when he asked me to chair this subcommittee that I 
wanted to focus on the growing trade and investment 
opportunities that exist throughout the western hemisphere. I 
pay particular attention to potential energy independence and 
security in North America. Thanks to our own energy renaissance 
and increased production in Canada, I have been pushing the 
Obama administration to finally approve the Keystone XL 
Pipeline, which promises to create jobs while making us less 
dependent on energy from areas around the world that are less 
friendly to our interests.
    Right now, Mexico is debating meaningful energy sector 
reforms, reforms that would open up their energy sector to 
private investment through a constitutional amendment. If 
passed, and most experts believe that it will, Mexico will be 
able to realize its real production potential, making North 
America--the U.S., Canada, and Mexico--truly energy self-
sufficient. Mexico is moving ahead with reforms in the 
education and telecommunications sectors as well. Reforms in 
Mexico, including judicial reforms, are significant steps the 
Government of Mexico is taking to improve its economic 
landscape.
    As you all know, the economies of the United States and 
Mexico are deeply intertwined, linked by geography, cultural 
ties, and the North American Free Trade Agreement. Since NAFTA 
took force nearly 20 years ago, the stock of bilateral foreign 
direct investment has increased six-fold. In 2012 alone, 
bilateral trade in goods and services between our two countries 
topped $\1/2\ trillion. Our economic partnership with Mexico 
has the potential to play a key role in strengthening supply 
chains and boosting exports to the rest of the world.
    Our production-sharing relationship with Mexico is 
important to understand. Indeed, 40 percent--that is right, 40 
percent--of the value of all U.S. imports of final goods from 
Mexico actually come from materials and parts produced in the 
United States. This means that approximately 40 cents out of 
every dollar U.S. consumers spend on Mexican imports actually 
goes to United States' companies and workers. This is a direct 
result of production sharing that is made possible and enhanced 
by proximity and cultural ties with our Mexican and our 
Canadian neighbors.
    The same cannot be said for goods coming from anywhere 
outside of North America. For example, U.S. imports from China 
have an average of only 4 percent U.S. contact as compared to 
the 40 percent figure I mentioned with Mexico. Exports to 
Mexico from the great State of Arizona have increased by 225.2 
percent since NAFTA took force. And Arizona is the sixth 
largest exporter of goods to Mexico among all the States in the 
Union.
    Mexico is Arizona's top trading partner with upwards of $13 
billion worth of trade crossing our shared border each year, 
and Mexican visitors spend over $7 million each day in Arizona 
translating to $2.3 billion annually for Arizona and tourism 
from Mexico. It is clear that in terms of job creation and 
economic opportunity for Arizona and the country, our 
relationship with Mexico and, of course, Canada is vital.
    The good news is that our commercial relationship with 
Mexico continues to grow. The bad news is that our ports of 
entry face significant challenges keeping up with this growth, 
resulting in wait times along the border that cost an average 
of $7.2 billion a year.
    The September 11th, 2001 attacks on our country, coupled 
with the costs of illegal immigration, particularly on the 
border States, forced the United States to reevaluate border 
management, meaning needed security improvements have often 
been made at the expense of maintaining efficiencies. I convene 
this hearing today specifically to get at what we need to do 
both in the public and private sectors to improve border 
infrastructure to better facilitate trade without letting down 
our guard on border security efforts.
    The United States is already partnering with Mexico on 
security through the Merida Initiative, a partnership that I 
support strongly. While Mexico has made important commitments 
to security along our border, the United States must continue 
pressing Mexico to step up efforts to address violence among 
the most dangerous parts of our border by increasing Mexican 
deployments able to conduct joint patrols with the U.S. Border 
Patrol. It is important that we not lose sight of the serious 
security concerns that continue to plague Mexico.
    Efforts to further secure our border can and should be 
achieved without hampering better and more efficient flows of 
commerce across our various ports of entry. Border security and 
efficient flows of commerce need to be mutually conductive 
efforts. Working to pass pro-trade policies that include--
excuse me--that improve our important economic relationship 
with Mexico and serve to benefit both our economies should be a 
major goal for all Members of Congress, regardless of their 
political party.
    Here in Arizona, we know trade, particularly with our North 
America partners, is not a partisan issue, and I am so pleased 
that my Democratic colleagues are joining me here today for 
this bipartisan hearing. I would like to make a side note. This 
is my second time serving in Congress, and I have got to tell 
you I have never seen a more cohesive, friendly, let us get 
things done kind of attitude delegation. I mean that across the 
board with our Republicans and our Democrats. I believe that we 
have a very, very good relationship. And though you are hearing 
a lot through the media that the partisan rancor on Capitol 
Hill is at an all-time high, I am pleased to say that we 
actually, from our delegation, are friends and we work well 
together.
    I am disappointed that due to the weather delays, Assistant 
Secretary Alan Bersin of the Department of Homeland Security 
could not be with us today, but I would like to ask for 
unanimous consent that one of our staff members, Mark Walker, 
would be allowed to read the entire testimony. I believe it is 
very, very valid. So without objection, so ordered.
    Secretary Bersin has been involved in the important 
negotiating agreements with his counterparts in Mexico that 
will improve security and commercial flows along our southern 
border. His testimony is an important component of this 
hearing. And in addition, Secretary Bersin will be making 
himself available to answer questions from the members at a 
date to be determined in Washington, DC.
    I am also grateful for our distinguished panel of private 
witnesses: Mr. Eric Farnsworth of the Council of the Americas, 
Ms. Lea Marquez Peterson, president and CEO of the Tucson 
Hispanic Chamber of Commerce and a rising star not just in 
Arizona, but I think here in the United States. I am pleased to 
have Mr. Glenn Hamer, president and CEO of the Arizona Chamber 
of Commerce and Industry, a dear friend and a great leader, Mr. 
Timothy Hutchens, executive vice president of the Federal 
Lessor Advisory Group, and Mr. Christopher Wilson from the 
Mexico Institute at the Woodrow Wilson Center.
    I would now like to recognize my dear friend, and 
colleague, and ranking member of the subcommittee, Mr. Sires, 
for his opening remarks.
    Mr. Sires. Well, good morning, everyone. Chairman, thank 
you very much for inviting me. I cannot think of anybody better 
to serve with in Congress than my colleague as chairman here. 
This is my second time in Arizona. I have been to the golf 
courses in Scottsdale, but they tell me that the golf courses 
down here at more beautiful. [Laughter.]
    It is beautiful here, so I am looking forward to this 
hearing.
    Good morning, and thank you to our witnesses for being here 
today. The U.S. and Mexican bilateral relationship is critical 
to the economic and public security of both nations. 
Unfortunately, it also has to be amongst the relationships most 
taken for granted and least appreciated in U.S. foreign policy. 
This is in spite of the fact that our nations share a vast 
history, common values, and a nearly 2,000-mile border. The 
U.S. is Mexico's largest trading partner and largest foreign 
investor. Mexico, in turn, is the third largest U.S. trading 
partner after Canada and China.
    In 2012, combined annual trade between our two nations was 
$494 billion, and since the North American Free Trade Agreement 
took effect in 1994, U.S. trade with Mexico has increased over 
500 percent. Additionally, Mexico-U.S. migration remains today 
the largest bi-national migration in the world. These 
statistics are significant and set the backdrop for today's 
discussion on improving security and facilitating commerce with 
our southern neighbors.
    Neither the U.S. nor Mexico lives in isolation. Clearly 
what happens on the one side of the border has political and 
economic repercussions on the other. This was clear surely 
after the global financial crisis that beset the United States 
and soon after the escalation of drug trafficking related 
violence that spread in Northern Mexico. The push and pull 
factors that dictate migration flows were turned upside down by 
local communities on both sides of the border due to negative 
economic activity. In that regard, the United States and Mexico 
have an undeniable and mutual responsibility to border security 
and facilitating the flow of goods and people in an effective 
and a humane matter. Advancing border security and trade 
facilitation are often thought to be mutually exclusive goals.
    On the one hand, border security entails risk management of 
border flows by identifying and preventing the illegal entry of 
illicit goods and unauthorized persons while enforcing policies 
that govern their exchange and transit. On the other hand, 
trade facilitation involves improving the efficiency and 
predictability of processing times at U.S. ports of entry for 
both goods and people. By their very nature then, border 
security affects efforts, creates speed bumps of ports of entry 
while trade facilitation aims to remove them, caught in the 
middle of the U.S. and Mexican economies with billions of 
dollars in lost economic output and the thousands of authorized 
persons crossing daily alongside countless unauthorized persons 
attempting to do the same.
    I would be interested to hear how U.S. consulates and 
border patrol, associated Homeland Security, and U.S. Agencies 
Division are aiming to address the tension that exists between 
border enforcement and trade facilitation. The tension between 
border security and trade facilitation does not only affect the 
flow of goods and services and those persons authorized to 
cross freely between our respective borders. A byproduct of 
this tension is a series of adverse unintended consequences 
resulting in border area crime, civil rights abuses, and loss 
of life.
    A more profound and distressing toll is taken by the 
thousands of unauthorized persons who by no fault of their own 
are compelled to leave their home and endeavor a life-
threatening journey involving extortion and sexual assaults, 
over treacherous terrains in hopes of entering the United 
States. Although an effective deterrent, increasing force and 
monitoring would also compel many would-be unauthorized persons 
into the United States utilizing smuggling networks to resort 
to riskier means to enter the United States.
    While many of these migrants come from regions other than 
Mexico, like Central America, approximately half of the 
unauthorized immigrants in the United States are from Mexico. 
Most of these migrants endeavor this journey in the hope of a 
better life. Nevertheless, the possibility exists that persons 
wishing to inflict harm on the United States' public can also 
enter through these means. Additionally, for those unauthorized 
persons that are captured, detained, and eventually 
repatriated, we must ensure that the enforcement of our laws is 
done in a humane manner, respectful of our Constitution and 
their civil rights. Deportees are at risk of becoming repeat 
offenders and victims of border crime syndicates. We shall seek 
balance between national enforcement and repatriation that 
lessens this likelihood.
    The current paradigm between our nations is all too real, 
while also being broken down by the communities that straddle 
our 2,000-mile border, and our brave men and women assigned to 
protect it. As potential legislation affecting the nearly 
11,000 million undocumented immigrants remains stalled in 
Congress, policymakers in our Nation's capital must be equally 
mindful and aim to break down this divide.
    I look forward to hearing from our panelists. Thank you 
very much. And I would also like to welcome my colleagues, 
which I should have done at the beginning, but I am grateful 
they are here with me. Thank you very much.
    Mr. Salmon. Thank you. I would like to recognize the 
gentleman from Tucson, Mr. Barber.
    Mr. Barber. Well, thank you, Mr. Chairman, and thank you, 
Ranking Member, for having this hearing and inviting myself and 
my colleagues from the Arizona delegation.
    As a member of the Homeland Security Committee and ranking 
member on the Oversight Committee, I am very concerned about 
the issue that you have brought to the table today. And I 
really look forward to the opportunity to hear from the 
witnesses.
    But here is my take on it. We must expedite the legal flow 
of commercial traffic into our country. When you have to wait 
2\1/2\ hours at our ports of entry here in southern Arizona, 
you are not going to be coming as often as you might. Thirty 
percent of the revenue that is taken in at the major malls in 
Pima County, 30 percent of that revenue comes from visitors who 
come from Mexico. When they wait 2\1/2\ hours, they are not 
going to come through this port of entry. They are going to 
find another place to come.
    We must also pay attention clearly, Mr. Chairman, to border 
security. I live in Tucson, but I represent a district that has 
13 percent of the Mexico-Arizona border. We have done a lot of 
work to improve border security, but we have not completed the 
job. When the people I represent who live outside of the ports 
of entry, rural Pima County or rural Cochise County, I should 
say, from Douglas to the New Mexico State line, and in between 
the ports of entry going west, they live each day in fear of 
the cartels. We have to protect people living in those homes 
and on those ranches, but we also have to be smart about how we 
do it.
    To me it is about border security coupled with economic 
security. The commercial traffic that comes into our State if 
we do a better job of staffing the ports of entry will be 
incredible growth potential for our State and for the country. 
I have spoken to people down in Nogales and Douglas about the 
delays and what it means to them. The Fresh Produce 
Association, Bruce Bracker, I believe is here today 
representing that community and has, I think, a lot of great 
insights about what needs to be done to staff up the ports of 
entry.
    While we have appropriately increased the number of border 
patrol agents we have in the southwest border, we have done 
very little, Mr. Chairman, to increase the number of customs 
agents that staff the ports of entry. We are getting ready to 
open the Mariposa extension of the Nogales port of entry, a 
tremendous new asset to increasing commercial traffic. We need 
to be ready for the increased commercial traffic that is going 
to come from Mexico when the port at Guaymas is deepened and 
will rival Los Angeles as a major place where imports and 
exports come and go. If Arizona is not ready, we will lose a 
tremendous amount of economic benefit from that deepening of 
the port.
    But even now before that is available, we have problems at 
the ports of entry both in Douglas and in Nogales. Douglas, for 
example, a port of entry that was built in 1932 without any 
measurable improvements since that time, needs to be upgraded. 
We need more agents. We need a better infrastructure.
    Nogales, certainly a much more modern port. The DeConcini 
port of entry and the Mariposa port of entry are going to be, 
when they are completed--Mariposa--tremendous avenues for legal 
commercial traffic. And unless we staff them properly, we will 
never get the job done. When we look at the potential economic 
development and benefit to Arizona and to the Nation at large, 
those ports of entry have to be properly staffed.
    But going back for a moment to the issue of border 
security, we cannot have one without the other. I am very proud 
to say that the Homeland Security Committee passed a bill 
called the Border Security Results Act, a bill that I co-
sponsored. And that bill was passed unanimously, Mr. Chairman, 
by every member of that committee, Democrat and Republican 
alike. That is the kind of bipartisanship we need in the 
Congress more, and we are getting it, as you have mentioned, in 
ways that do not meet the headline test. They do not get 
publicized because it is not great news when people get along, 
and cooperate, and get things done.
    But that Border Security Results Act could be a path toward 
improving ports of entry staffing and to securing the border in 
a smart way, which requires that stakeholders who live and work 
on the border, border patrol agents, law enforcement officials 
are consulted by the Department of Homeland Security before 
they develop a strategic plan to implement a better and 
improved border security plan. So we have great potential, and 
I hope that all members of the House of Representatives will 
soon have an opportunity to vote on that bill and to move 
forward with that important development of our border security 
and economic security opportunities.
    It is really a privilege to be with you today. Thank you, 
Mr. Chairman and Ranking Member, for inviting myself and our 
colleagues from Arizona to join you, and we look forward to 
hearing from the witnesses. I yield back.
    Mr. Salmon. Thank you, Mr. Barber. The chair recognizes the 
gentlewoman from CD 9, Ms. Sinema.
    Ms. Sinema. Thank you so much, Mr. Chairman, and thanks for 
inviting me to join you all here today. It is great to be back 
in my hometown of Tucson, Arizona. And I really feel honored 
and privileged to be with all of you here today to talk about 
an issue that is important not just to our Nation, but, in 
particular, important to Arizona and southern Arizona.
    While Canada and China are the two largest trading partners 
at the national level for the United States, Mexico is 
Arizona's largest export market and our top trading partner. In 
2012, the year for which we have the most recent statistics, 
Arizona exported nearly $6.3 billion in goods and services to 
Mexico, and, of course, this number totals over 30 percent of 
all of Arizona's exports. So the importance of having a smooth 
and efficient relationship with our largest trading partner 
cannot be over emphasized here in Arizona.
    I am proud to say that Congressman Salmon and I are working 
together with a host of business organizations in Arizona to 
increase Arizona's export industry to all nations, but 
particularly to our largest trading partner and our closest 
neighbor, Mexico. However, I think we all can recognize that 
many hurdles prevent the efficient and effective movement of 
goods and services from Arizona to Mexico, and equally 
importantly from Mexico into Arizona. For instance, the 
unpredictable and lengthy wait times at Arizona's ports of 
entry from Mexico have forced many of our produce companies to 
divert their import traffic to southern Texas. No offense to 
them, but we would like that traffic right here in Arizona.
    Congress must take action to ensure that the U.S. Customs 
and Border Protection Agency can operate all ports of entry in 
our country smoothly and efficiently to allow for the free and 
efficient flow of commerce back and forth across our border. 
Equally, Congress must also take action and pay attention to 
immigration in a fashion that ensures border security, and that 
adjusts our visa system to meet the demands of the U.S. labor 
market rather than continuing to rely on an antiquated and 
outdated visa quota system that fails to meet the needs of 
American businesses and employers. Nowhere is that felt more 
acutely than here in Arizona.
    So, Mr. Chairman, thank you again for inviting me to join 
this field hearing today, and I believe if this panel were 
granted the authority to come up with the solutions and address 
them with Congress and the Senate, I think we would be able to 
solve this problem. So if there is a way for the Speaker to 
allow this group to make the decision, I think we would be able 
to solve this problem and get our State and our country back on 
a strong economic footing to increase trade, to protect our 
borders, and to grow our economic engine in America. Thank you, 
Mr. Chair.
    Mr. Salmon. Thank you. The chair now recognizes the 
gentleman from Fountain Hills, Mr. Schweikert.
    Mr. Schweikert. Scottsdale.
    Mr. Salmon. Scottsdale.
    Mr. Schweikert. Thank you, Mr. Chairman. And I will not 
argue with you about the golf courses, but----
    Mr. Sires. That is what they said.
    Mr. Schweikert. You know, just next time you come to 
Scottsdale, call me, we will work something out for you.
    Mr. Sires. You got it.
    Mr. Schweikert. And, Mr. Salmon, to members and everyone 
here, one of the things our office has been specializing in is 
the other side of bilateral trade and regional trade, and that 
is also the externalities of transaction costs, whether it be 
regulatory, whether it be financial. And much of this, we have 
a great interest in what is happening not only directly south 
of the border, but in the entire region with modernization of 
banking systems, but also the promises that were woven within 
NAFTA 20 years ago of being able to have, you know, fair, open 
contracts, whether it be within telecommunication, within the 
next generation of the banking systems, and the transactional 
costs that that will bring.
    What is unique for all of us in this is we have an amazing 
opportunity just before us. Some of this is because of what is 
happening from the energy sectors in our country and also south 
of the border to actually have an entire region that actually 
has an amazing energy future and with that, the ability to 
become a key manufacturing hub for the entire world. But with 
that, we also have to overlay the honest discussions of 
security and what it means to our populations on both sides of 
the border.
    And I hope actually as we hear the different witnesses come 
up and speak we have a discussion that is more than just-in-
time products, perishables, backing up, but also the 
discussions of what is the next generation solutions. Is it a, 
you know, subscription express type lane mechanisms to move 
those just-in-time perishable products, and if so, what should 
those partnerships end up looking like? And with that, Mr. 
Chairman, I yield back.
    Mr. Salmon. Thank you, Mr. Schweikert.
    Pursuant to Committee Rule 7, the members of the 
subcommittee will be permitted to submit written statements to 
be included in the official hearing record.
    Without objection, the hearing record will remain open for 
7 days to allow statements, question, and extraneous materials 
for the record, subject to the length and limitation of the 
rules.
    As I mentioned earlier, Secretary Bersin was waylaid due 
some of our airline traffic problems. And without further ado, 
I am going to ask Mr. Walker to go ahead and read his 
testimony. And as I mentioned, before, he will make himself 
available when we get back to Washington to answer questions 
that we might have. Mr. Walker?
    Mr. Walker. Mr. Chairman, let the record reflect that I am 
Mark Walker, staff director for the Western Hemisphere 
Subcommittee on the House Foreign Affairs Committee. And I have 
been asked today to read the statement as provided for the 
record of Alan D. Bersin, Assistant Secretary for the Office of 
International Affairs and Chief Diplomatic Officer of the U.S. 
Department of Homeland Security.

 STATEMENT OF THE HONORABLE ALAN BERSIN, ASSISTANT SECRETARY, 
 OFFICE OF INTERNATIONAL AFFAIRS AND CHIEF DIPLOMATIC OFFICER, 
              U.S. DEPARTMENT OF HOMELAND SECURITY

    [As read by Mr. Walker.]
    Chairman Salmon, Ranking Member Sires, and distinguished 
members of the subcommittee, on behalf of the Department of 
Homeland Security, Acting Secretary Rand Beers, I want to thank 
you for your continued support and the opportunity to testify 
today about trade facilitation in the border region.
    In the last 5 years, the United States and Mexico have 
revolutionized their security and trade relationship, achieving 
unprecedented levels of cooperation and success. This 
transformation has been largely built on a new understanding of 
borders, a new bi-national approach to border management, and 
direct sustained bilateral engagement at the most senior levels 
of government. Now, historical levels of cooperation are on 
display across the spectrum of both countries' governments, and 
the U.S.-Mexican border is safer, more secure, and more 
efficient than it has ever been.
    The core of DHS interests lies in improving joint border 
management, which includes everything from investigations to 
disaster response, admissibility determinations to joint 
operations, and appropriate information sharing to the 
repatriating of Mexican nationals. The majority of the DHS 
programmatic efforts with Mexico are focused on expediting the 
legitimate flow of goods and people and interdicting and 
preventing the illicit trafficking of people, weapons, drugs, 
and currency. DHS continues to have a robust and mutually 
beneficial relationship with our counterparts in the Government 
of Mexico based on the doctrines of co-responsibility of our 
shared border and co-management of migration issues.
    The United States and Mexico share a historical unique 
relationship of migration, trade, and cultural exchange. The 
1,969-mile border between the United States and Mexico is the 
most frequently crossed border in the world. Trade between the 
United States and Mexico continues to grow, totaling nearly 
$500 billion in goods during 2012 alone, making Mexico the 
United States' third largest trading partner and second-largest 
export market. Mexico also has the largest number of airports--
36--of any nation in the world providing last point of 
departure service to the United States.
    Conventional wisdom on the U.S.-Mexico border has told us 
for many years that trade and security are mutually exclusive, 
that an increase in one must lead to a decrease in the other. 
We have learned that this is a false dichotomy when managing 
the border. First, it fails to address the everyday experiences 
of people who live along the U.S.-Mexico frontier. Second, it 
ignores the growing importance to the prosperity of both 
nations of our bi-national trade. Third, it poses a false 
anachronistic choice between security and trade that results in 
grossly inefficient border management.
    We are now devising innovative solutions to address the 
difficulties we face head on and liberate us from the 
conceptual straitjackets of security versus trade or national 
versus local. Commerce and public safety can be mutually 
reinforcing from the standpoint of both Federal requirements 
and local interests. The fact that trade and security can 
enhance one another does not mean that they automatically will. 
We must regularly use smarter security practices and 
technologies on our border that allow us to process with 
maximum efficiency goods and travelers that we know are safe 
and legitimate, and focus our energies on people and shipments 
that could potentially pose a threat to our safety and our 
prosperity.
    The concerted reshaping of the U.S.-Mexico bilateral 
relationship begun in earnest through the Merida Initiative was 
deepened and memorialized in the 21st Century Border Management 
Declaration. Spurred by this declaration, we have begun to move 
decisively. Trusted partner programs for people in commerce, 
such as SENTRI and Global Entry/Viajeros Confiables, FAST and 
C-TPAT/Nuevo Esquema de Empresas Certificadas, or NEEC, must be 
expanded dramatically and utilized more systematically. These 
programs allow us to move quickly to process cargo and 
previously vetted travelers, which in turn allows a focus of 
time and energy on goods and people about which less is known. 
Local communities and businesses must partner with Federal 
authorities to expand the number of trusted travelers and 
cargoes so that we can expedite their movement at scale and 
focus regulatory attention in a targeted fashion.
    In 2013, C-TPAT and NEEC finalized the details of a joint 
work plan that will guide the work required toward achieving 
mutual recognition, or MR, in 2014. MR will benefit both 
Mexico's and U.S.' trade community and governments by 
increasing resource efficiency, transparency, and decreasing 
duplication of efforts while still bolstering security across 
both borders.
    Federal authorities working with local communities must 
continue to support initiatives that are tailored for specific 
ports of entry and that reengineer processes to make more 
efficient use of existing infrastructure. Local efforts are 
customized to reflect the needs and circumstances of the local 
community as well as the resources available to it. The 
important point is that they result from a process of co-
creation by and between the U.S. and Mexican public and private 
sectors.
    Our policy making and politics must take account of the 
international and domestic interests affected by border issues 
and the nature of border issues. Today the communities both at 
the border and in the interior most deeply touched by border 
policies developed in Washington and Mexico City often have 
little role in developing and implementing those policies. Not 
only does this fact lead them unrepresented on matters that 
ultimately affect them, it robs the policy making process of 
much needed local expertise and experience as well as political 
support. To generally secure our border and encourage trade, we 
must enlist the interests, insight, and imagination of local 
communities on both sides of the borders.
    [The prepared statement of Mr. Bersin follows:]


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    Mr. Salmon. Thank you, Mr. Walker. I will excuse you, and I 
would like to seat the second panel. Before I introduce the 
panel, I want to inform the members that two of our witnesses 
may have to leave early because of prior commitments.
    I would like to begin introducing the panel starting with 
Mr. Farnsworth. Mr. Farnsworth is the vice president of the 
Council of the Americas and Americas Society. He is a foreign 
policy professional with experience in public, private, and 
non-profit sectors.
    Ms. Marquez Peterson is the president and CEO of the Tucson 
Hispanic Chamber of Commerce and is an advocate of the southern 
Arizona business community. She received a B.A. in marketing 
and entrepreneurship from the University of Arizona, and an 
M.B.A. from Pepperdine University. I understand the University 
of Arizona is going to get a great ranking today, or has that 
already come out? [Laughter.]
    Number one, right? All right. That is what I am hearing. 
All right. Next is Mr. Hamer. He is the president and CEO of 
the Arizona Chamber of Commerce and Industry. He is overseeing 
the organization's development in one of the most respected 
pro-business public policy entities in the State. Mr. Hamer is 
a graduate of Cornell University School of Industrial and Labor 
Relations and Arizona State University College of Law.
    Mr. Hutchens is a CBRE executive vice president and the 
head of Federal Lessor Advisory Group. He received his B.S. in 
economics from Johns Hopkins University and his J.D. from the 
University of Chicago Law School.
    Mr. Wilson is an associate at the Mexico Institute of the 
Woodrow Wilson International Center for Scholars. He oversees 
regional economic integration in U.S., Mexico, and border 
affairs. Mr. Wilson holds an M.A. in international affairs from 
American University.
    Let us begin. Mr. Farnsworth, you are recognized.

 STATEMENT OF MR. ERIC FARNSWORTH, VICE PRESIDENT, COUNCIL OF 
               THE AMERICAS AND AMERICAS SOCIETY

    Mr. Farnsworth. Well, thank you very much, Mr. Chairman, 
and good morning to you and to the members of the subcommittee. 
And I really would like to thank you for the opportunity to 
testify today both because the issues are so important and also 
because it gets me out of Washington during winter and brings 
me here to Tucson. I really appreciate that. And as you know, 
this hearing today continues the outstanding efforts both of 
the full committee and also the subcommittee to address the 
most important issues that are facing us in the western 
hemisphere.
    And I really wanted also congratulate all of you for the 
outstanding introductory comments that were made. I thought 
they really captured the issues quite well, and I wanted simply 
to reflect that.
    The Council of the Americas has a long history of 
engagement on the U.S.-Mexico relationship, and we firmly 
believe that Mexico is critically important to the core 
prosperity and security of the United States. As the location 
of this field hearing suggests, the relationship is not limited 
to Washington and Mexico City. Intense interaction takes place 
at all levels of government and in the business community and 
civil society.
    Nonetheless, the depth of the bilateral agenda represents a 
fairly recent development. In trade alone, annual bilateral 
exchange has gone from less than $100 billion per year prior to 
NAFTA to today more than $1 billion in goods and services every 
single day. Mexico is now our second largest export market and, 
has been mentioned, our third largest trading partner.
    For 23 States, including Arizona, as well as many non-
border States, Mexico is the first or second export 
destination. Beyond these tangible commercial benefits, NAFTA 
institutionalized the bilateral relationship within a broader 
North American context and, in our estimation, helped anchor 
Mexico to a path of economic reform, development, and 
democracy.
    This reality, as has been discussed a little bit already, 
has unfortunately been overshadowed by the security issues 
which people in the border communities and elsewhere know so 
well. But as the Council has highlighted through our border and 
competitiveness initiative, within North America, we do not 
merely trade products anymore, we now design and make them 
together. Joint production and supply chains have developed so 
that from a commercial perspective at least, national borders 
no longer define production. North America itself is the 
production platform.
    Businesses are generally optimistic about Mexico's 
trajectory, and we are increasingly observing companies leaving 
China and other Asian sites setting up plants in Mexico as they 
seek to develop their own manufacturing base and cut high 
transport costs, reducing delivery times to the United States. 
This is hugely important because as has been mentioned, 
according to the National Bureau of Economic Research, every 
dollar of U.S. imports from Mexico includes 40 percent of U.S. 
content, while imports from China to the United States include 
barely 4 percent of U.S. content.
    Foreign direct investment is also pouring into higher-end 
manufacturing in central Mexico and elsewhere, making clear 
that the country is no longer a low-cost labor player. In fact, 
from 2009 to 2012, foreign direct investment from the United 
States increased over 50 percent into Mexico. Yes, labor costs 
are lower than in the United States, but the production is also 
cutting edge. Who in Washington knows, for example, that Mexico 
has a successful and growing aerospace industry, or that the 
number and quality of Mexican engineers producing for the 
global market is highly competitive?
    Broadly, what we are seeing is design work done in the 
United States and Canada followed by high end manufacturing in 
Mexico and final production and path-to-market in the United 
States as Mexico moves up the value-added chain. Without the 
ability to do work in Mexico, overall production would be 
uncompetitive, and dependent U.S. jobs would evaporate. This 
turns the old NAFTA as job killer argument squarely on its 
head.
    To paraphrase the old television program, our strategic 
opportunity, if we choose to accept it, is to capitalize on 
this increasingly unified economic space and Mexico's emerging 
economic dynamism. But to do so, we need to think bigger and 
bolder about the bilateral relationship. A joint 
competitiveness agenda should prioritize making business easier 
at our common border as clearly this hearing is designed to do. 
Important security gains have been made during the last decade, 
but trade facilitation has received insufficient attention, in 
my view, even as cross-border supply chains have steadily 
integrated. As a result, long and unpredictable crossing times 
have produced bottlenecks and relatively few ports of entry 
have seen major upgrades. Recent discussions in Washington on 
border security sometimes overlook the urgent need to direct 
investments toward infrastructure improvements.
    As Mexico's Ambassador to the United States, Eduardo Medina 
Mora, has said recently, ``We have a 21st-century trade model, 
operating on a 20th-century policy format, with a 19th-century 
infrastructure.'' The financing of needed investments could 
overcome budgetary constraints through the use of innovative 
mechanisms like public-private partnerships--Mr. Sires, I know 
you have had some direct experience with that in New Jersey in 
the housing sector, for example; very successful--mixed capital 
investment vehicles for project finance, and allocation of 
capital to multilateral development banks like the North 
American Development Bank. Infrastructure improvements must 
also be accompanied by staffing increases. We have heard a 
little bit of that already today. Although staffing for the 
U.S. Border Patrol has grown in recent years, the number of 
Customs and Border Protection officers has remained largely 
unchanged.
    More broadly, among other things like regulatory 
harmonization and simplification, governments should strengthen 
multilateral trade cooperation beyond just border issues. 
Mexican and Canadian entry into the Trans-Pacific Partnership 
negotiations was a critical step. Now we should also consider 
negotiating, together with Mexico and Canada, the Free Trade 
Agreement with Europe. Similarly, future economic association 
among the NAFTA and Pacific Alliance nations would be timely 
and, in our view, appropriate.
    Of course, Mexico must continue along the reform path in 
order to build its own competitiveness, including in the energy 
sector. And we saw some of the potentially dramatic changes 
that have been proposed just over this recent weekend. 
Meanwhile, unaddressed security issues affect the economic 
agenda because perceptions of insecurity in Mexico impact the 
willingness of entrepreneurs to bet on Mexico. At the same 
time, failure by the United States to address the demand for 
illegal drugs or the supply of weapons contributes to Mexico's 
security difficulties.
    Nonetheless, as NAFTA turns 20 on January 1st, the United 
States is positioned to write the next chapter of global 
competitiveness. To do so, we have to begin to view North 
America as a more unified production platform and the U.S. 
border with Mexico as a line that unites, rather than divides, 
our two great nations.
    Mr. Chairman, I look forward to your questions.
    [The prepared statement of Mr. Farnsworth follows:]


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    Mr. Salmon. Thank you very much.
    Ms. Marquez Peterson, you are recognized.

  STATEMENT OF MS. LEA MARQUEZ PETERSON, PRESIDENT AND CHIEF 
     EXECUTIVE OFFICER, TUCSON HISPANIC CHAMBER OF COMMERCE

    Ms. Marquez Peterson. Thank you, Mr. Chairman, Ranking 
Member, and members of the subcommittee. Thank you again for 
your invitation to testify today. I am grateful for the 
committee's interest in the small business experience along the 
Arizona-Sonora Border.
    In my role as the president and CEO of the Tucson Hispanic 
Chamber of Commerce, I represent over 1,000 member businesses 
in which 70 percent have less than 25 employees, which is 
reflective of the businesses in Arizona. Our chamber works with 
businesses in Arizona on reaching the fast-growing Hispanic 
market and assisting businesses in Arizona and Mexico 
interested in international trade.
    We have built a reputation in our geographic region for 
being a resource for businesses interested in exploring 
international trade in Mexico, and work closely with referral 
partners from Arizona businesses such as the U.S. Department of 
Commerce and the U.S. Small Business Administration. In 
addition, we assist Mexican businesses who are interested in 
investing or expanding into Arizona.
    The border States in the U.S. and Mexico have a population 
of 14 million people. I believe that there are many best 
practices that we can learn from different States and regions. 
The more information we can share between business 
organizations, like chambers of commerce, the better we can 
collaborate, learn of resources, and advocate for changes in 
our respective State administrative codes. Ultimately, this 
will lead to a positive impact on our economy.
    The United States and Mexico are critical economic 
partners, as we have heard this morning. In May 2013, President 
Obama and President Pena Nieto announced the formation of the 
High Level Economic Dialogue. We share not only a 2,000-mile 
border, but a dynamic commercial relationship that generates 
more than $500 billion in trade in goods and services and 
supports millions of jobs in both countries. The global 
competitiveness of both of our countries requires continued and 
deepened economic integration, commercial exchange, and policy 
alignment.
    At a local level, our chamber has focused on building 
relationships cross-border between these businesses. Our member 
businesses are from diverse industries, and approximately 65 
percent are Hispanic owned or managed firms. The key to the 
economic recovery of our Nation and bolstering economic 
development within our border States is the support of 
entrepreneurship and the promotion of the value of our 
bilingual workforce. A key to the continued economic recovery 
of our Nation is that support of entrepreneurship.
    Arizona, like many of our border States, has a fast-growing 
Hispanic population, and experts expect that by 2035 the 
majority of the State's population will be Hispanic. These 
dynamic attributes are an asset to our Nation, and the Hispanic 
market represents $50 billion in purchasing power in our State 
alone.
    The Tucson Hispanic Chamber hosts trade mission trips 2 to 
3 times a year to Sonora, Mexico. On our most recent trip in 
September, we had 21 attendees who represented our local 
businesses, our university, our community college, and our 
county. During the trip, we toured the manufacturing facilities 
of the Offshore Group, an Arizona business operating in 
Guaymas. We also toured the Port of Guaymas and discussed the 
impact on the Arizona economy, met with the Mayor of Guaymas, 
and signed an economic development agreement with the chamber 
of commerce in Guaymas. This 2-day trip provided our attendees 
with key contacts and the ability to follow up to develop 
resources within their respective industries. Our chamber is 
currently planning our next trade mission trip to Cananea, 
Sonora to study the expanding mining industry and explore 
opportunities. Mining continues to be a key industry for 
Arizona. We plan to invite Arizona suppliers who specialize in 
the mining industry, logistics businesses, and other service-
related companies, to join us.
    Over the last 4 years, our chamber has developed a regional 
business presence in Mexico. Four years ago, our Arizona 
businesses were subject to the boycott as a result of Arizona's 
SB 1070 law. We worked closely with our fellow chambers of 
commerce in Sonora to advocate for the 65,000 Hispanic-owned 
businesses and our greater business community in Arizona during 
the time of the boycott. We focused on the economic 
interdependence of our Southern Arizona-Sonora region and the 
importance of a Federal response to immigration reform.
    Mexico is the main destination for exports in Arizona, 
California, and Texas. Additional business incentives, the 
removal of impediments, and identification of resources and 
tools are necessary to build export opportunities for our 
business community. Cooperation in transportation and freight 
systems between the U.S and Mexico is important. Several 
programs have been valuable in assisting retailers on both 
sides of the border, such as FAST and SENTRI, to name a few. 
Easing transportation challenges for consumers and businesses 
can assist our Arizona businesses in building cross-border 
relationships. The extension of the proposed I-11 corridor from 
Las Vegas to Phoenix through Tucson and Nogales will provide a 
more efficient method for goods to travel from Latin America 
throughout the United States.
    The U.S. Government estimates that each additional billion 
dollars in new exports supports more than 6,000 new jobs. 
Exports to Mexico increased $18 billion in 2012 alone, thus 
potentially helping create over 107,000 new U.S. jobs. Almost 6 
million U.S. jobs rely on trade with Mexico, according to the 
U.S. Chamber of Commerce. In Arizona, businesses export more $6 
billion worth of goods to Mexico, and over 111,000 jobs in 
Arizona rely on trade.
    In closing, I would like to address specific needs of small 
businesses in our border States related to trade with Mexico. 
At the Tucson Hispanic Chamber, we have learned that making the 
business decision to export can have a transformational effect 
on sales and growth, but exporting can seem complicated, 
especially for smaller firms. We heard about a lot of 
challenges, which include difficulty accessing financing, 
trouble finding skilled workers, lack of information about 
foreign markets, and the high cost of establishing a physical 
presence in foreign countries.
    The Mexican Government is paying close attention and is a 
ready partner in collaborating with business organizations, 
such as the Tucson Hispanic Chamber. As part of President 
Enrique Pena Nieto's economic policy, on January 11, 2013, his 
decree created the National Institute of the Entrepreneur. The 
INADEM goal, which is that organization, is to implement, 
execute, and coordinate the national policy on supporting 
entrepreneurs, as well as micro, small and medium enterprises, 
bolstering their innovation and competitiveness in order to 
increase their contribution to economic development and social 
welfare. Furthermore, it seeks to provide help toward the 
development of policies which foster entrepreneurial culture 
and productivity. According to the OECD, small- and medium-
sized businesses in Mexico represent the vast majority of 
businesses. They account for 41 percent of GDP and generate 64 
percent of total employment.
    Mr. Chairman, coordination between the U.S and Mexico on 
the effort to bolster micro and small business activity in 
international trade would greatly enhance the economic recovery 
of our region and ultimately our Nation. Small business is such 
a vital part of both countries, especially along our mutual 
border States. I ask that the committee make efforts to 
understand the financial impact of an improved small business 
trade environment to our country.
    Thank you. I look forward to answering any questions.
    [The prepared statement of Ms. Marquez Peterson follows:]


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    Mr. Salmon. Thank you, Ms. Marquez Peterson.
    The chair recognizes Mr. Hamer.

  STATEMENT OF MR. GLENN HAMER, PRESIDENT AND CHIEF EXECUTIVE 
       OFFICER, ARIZONA CHAMBER OF COMMERCE AND INDUSTRY

    Mr. Hamer. Thank you, Chairman Salmon and members of the 
committee. Thank you for putting on the on button. Technical 
expertise is not my area of expertise.
    Chairman Salmon, members of the committee, thank you for 
holding this very important hearing today. There are a few 
things that we can do to better improve the economy of Arizona 
and the United States than to look for ways to increase our 
positive trading relationship with Arizona's largest trading 
partner, Mexico. And how appropriate it is that we are now just 
less than a month away from the 20th anniversary of the 
implementation of the NAFTA to be discussing best practices and 
ways we can further facilitate this relationship. And we will 
talk a little bit about some of the things Congressman Kolbe 
has done, but I want to also commend Chairman Salmon for his 
sponsorship of the Outer Continental Shelf Trans-Boundary 
Hydrocarbon Agreement Authority Act. You want to talk about 
something that is timely. As the President of Mexico is, I 
believe, this week, there should be progress on his legislation 
to open up energy markets in Mexico. Getting this legislation 
through the U.S. Congress is vitally important not just for the 
success and the improvement of our economy, but also for 
Mexico's. I will talk a little bit about that later, but I 
wanted to, from the outset, applaud Congressman Salmon for his 
leadership on that issue.
    We have now 20 years of positive experience under our 
collective belts with U.S., Mexico, and Canada. And it is 
exciting that we are now all part of the Trans-Pacific 
Partnership trade talks, an agreement poised to link the 
markets of Asia and the Americas, accounting for about 800 
million people and a combined GDP of $27.5 trillion. The 
importance of trade with Mexico is not lost on the Arizona 
Chamber of Commerce and Industry or with the larger business 
community. We recognize the 6 million U.S. jobs that depend on 
trade with Mexico and the $12 billion in trade between Mexico 
and Arizona in 2012 alone. It was mentioned earlier today that 
one-third of our exports in Arizona occur with Mexico--one-
third. That is a very significant number.
    To that end, the chamber in 2012 formed a Trade and Tourism 
Committee, which serves as our one-stop public policy shop for 
trade and international travel promotion. Our chamber has 
advocated for improved transportation links between our State 
and Sonora, increased international flights from Mexico, and 
better resources and infrastructure to process the trade 
flowing between our two countries. And I believe that has been 
a theme that we have heard here many times earlier today about 
the need to do more so we can better process the trade between 
our two countries. And we would also like to see additional 
educational exchanges.
    In 2013 alone, I have had the distinct pleasure of 
traveling to Mexico City with our Arizona Speaker of the House, 
Andy Tobin, as part of a bipartisan delegation of lawmakers and 
business leaders to visit with members of Mexico's Congress. We 
were treated very warmly. Over the past several years, I have 
also had the great privilege to travel to Mexico City and to 
Guadalajara with a number of our excellent mayors, including 
the mayor of Tucson, as well as Mayor Stanton, who I had the 
privilege to be on a trade mission to Guadalajara a few months 
ago, where we were part of a new non-stop flight between 
Guadalajara and Phoenix. And by the way, every new flight 
between Mexico and Phoenix represents hundreds of thousands of 
dollars of new economic activity for our entire State.
    One thing that is sort of interesting is that the increased 
trading opportunities and the desire for Arizona to deeper 
relationships with Mexico is really part of our culture. Our 
professional sports teams also have recognized the importance 
of the Mexican market and the positive role sports can play in 
forging new relationships. I could tell you from my experience 
on the Guadalajara trade mission that having the Diamondbacks' 
World Series hero, Luis Gonzalez, as part of your delegation 
makes an incredibly positive impression. Our NFL Arizona 
Cardinals have played a regular season game in Mexico City, and 
have a huge broadcast presence in Mexico where their games are 
broadcast to 18 cities throughout the country, including Mexico 
City and Guadalajara. Yesterday our friends in Mexico were able 
to hear the very good news of Carson Palmer and company slicing 
and dicing the St. Louis Rams. The NBA's Phoenix Suns have not 
only participated in trade missions to Mexico, but they are 
also the first NBA team to conduct their own youth basketball 
clinics in that country.
    And I mentioned my former Southern Arizona Congressman, Jim 
Kolbe, fought right from the start for NAFTA. It is not 
hyperbole to say I am not sure if that agreement would be in 
effect today if not for his work. Congressman Kolbe was also 
critical in the expansion of the border travel zone, which 
governs how far Mexican nationals in possession of a valid 
border crossing card may travel before requiring additional 
documentation. Because of his work in 1999, Mexicans crossing 
the border into Arizona may travel as far north as Tucson, 
where they can enjoy world-class resorts and shopping 
destinations.
    Along most of the U.S.-Mexico border, Mexican visitors may 
travel only 25 miles north before requiring an additional form. 
Earlier this year, the Department of Homeland Security expanded 
the border zone in New Mexico where business leaders there 
cited Arizona's positive experience as a case study for 
increased travel access. The Maricopa Association of 
Governments, MAG, the Council of Governments for the greater 
Phoenix area, is now leading an effort for the entire State of 
Arizona to be considered part of the border travel zone as a 
means to further grow the tourism opportunities between Arizona 
and Mexico.
    Arizona, as you all know, is also home to the Arizona 
Mexico Commission. The AMC, chaired by Governor Jan Brewer--and 
the president, Larry Lucero, is here today--has since 1959 
sought to promote a better relationship between Arizona and 
Sonora through twice yearly plenary sessions and cultural and 
educational exchanges.
    In just the last few years, Arizona has dramatically 
stepped up its efforts to promote our State's outstanding 
business environment to the rest of the world. Mexico figures 
prominently in that strategy. Arizona in 2010 formed the 
Arizona Commerce Authority, which right now is being 
extraordinarily well run by Sandra Watson. This is a public-
private entity to lead the State's job attraction efforts, and 
we have put a lot of effort in the State to make Arizona the 
most competitive place when it comes to export-oriented 
industries. The push is on to open additional trade offices in 
Mexico. There has been a lot of discussion about doing some 
things in Mexico City on the State level as well as through 
several cities.
    I will close by saying, again, we need to do everything we 
possibly can to enhance this relationship. There is a lot that 
we need to do in terms of improving the number of customs 
agents. We have made a lot of great moves in terms of 
modernizing Nogales, but we need to make sure that it is 
properly staffed. We have heard about the backups.
    You have the power to change that. We need to do more 
things along the lines of what Chairman Salmon is doing in 
terms of increasing our ability to take advantage of the energy 
revolution, which could truly make North America energy 
independent.
    Thank you for the opportunity to testify this morning. 
Thank you, Chairman Salmon, for your leadership.
    [The prepared statement of Mr. Hamer follows:]


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    Mr. Salmon. Thank you, Mr. Hamer.
    Mr. Hutchens, you are recognized.

STATEMENT OF MR. TIMOTHY C. HUTCHENS, EXECUTIVE VICE PRESIDENT 
      AND HEAD, FEDERAL LESSOR ADVISORY GROUP, CBRE, INC.

    Mr. Hutchens. Thank you, Mr. Chairman. I would also like to 
thank the ranking member when he returns and the rest of the 
committee for the opportunity to appear before you today.
    In his invitation to appear today, Chairman Royce indicated 
that the purpose of the hearing was to examine the U.S.-Mexico 
trade relationship, including existing trade mechanisms, and 
the projects that are being considered, and what can be done to 
streamline commerce with Mexico. A critical element for a 
strong cross-border trade with Mexico is sufficiently-sized, 
well-equipped, and adequately-manned land ports of entry that 
promote the efficient movement of people as well as goods 
across the border by taking advantage of the latest 
technologies. This applies to all modes of cross-border 
traffic, including pedestrians, automobiles, trucks, and rails, 
as each of these will benefit cross-border trade if they are 
handled efficiently and effectively.
    As the volume of commerce with Mexico has increased over 
the past 15 years, the capacity and technology of our LPOEs has 
not kept pace with this increasing demand. This is seen most 
often, as we have heard several times today, in long lines and 
extended wait times that are now common at many of our 
southwestern border LPOEs, especially for truck traffic. 
Further, while these long lines evidence the need for border 
station improvements. What they do not show is the loss of 
trade as shippers and manufacturers either scale back 
operations or direct trade and commerce elsewhere. Addressing 
this deficiency on both sides of the border is critical if we 
are to continue to enhance and encourage increased trade with 
Mexico.
    This is not to say that we have completely ignored the need 
for improvements to our LPOEs on the southwestern border during 
the last decade. In recent years, in fact, primarily as a 
result of the Stimulus Act, we have invested over $950 million 
in improvements to our border facilities around the country, 
not just on the southwestern border, and added significant new 
technologies. The primary expenditure of these funds on the 
southwestern border has been on the completion of phase one of 
the redevelopment of the San Ysidro LPOE and the significant 
corollary improvements at Otay Mesa.
    And this investment is paying off in the increased flow of 
goods in both directions across the border in the San Diego 
area to the tune of almost $1.2 billion a day in cross-border 
trade in that region. What is needed now is a similar 
investment in other key southwestern border stations in 
California and here in Arizona as well as in Texas and New 
Mexico that are important to U.S.-Mexico trade. Given the need 
for this investment and the scarcity of Federal dollars to 
address this need, I believe the government must actively 
consider, where appropriate, engaging with the private sector 
to seek alternative development services and funding for the 
redevelopment of these border stations.
    There was a reference to public-private partnerships. What 
I am discussing are not public-private partnerships because 
that is a bad word at OMB. We refer to these as public-private 
collaborative efforts to stay within the bounds of their rules. 
But in these types of transactions, which are an alternative to 
the Federal design bid build approach to standard construction, 
the government would enter into a ground lease of an aging 
asset with a private development team who in turn commits to 
using its own financial resources and technical expertise to 
replace or significantly renovate the facility in question in 
full compliance with government requirements.
    The government would in turn lease the redevelopment 
improvements for a lease term not to exceed 20 years pursuant 
to a lease which itself is approved by the relevant 
congressional oversight committees. This approach will reduce, 
if not eliminate, the need for current appropriations dollars 
and can offer many key additional benefits besides just the 
improvements. These include insulating the Federal Government 
from cost increases that are so common in Federal construction 
projects since they are fixed priced projects; an ongoing 
obligation on the part of the private sector to actually 
maintain these facilities for the full term of the lease; 
freeing up the U.S. CBP personnel to focus on their core 
mission of border operations and border security; significantly 
shortening the development timeline for these projects by as 
much as 3 to 5 years over Federal appropriation; enhancing 
border security from the resulting physical, locational, and 
technological improvements that these projects will entail; and 
significant environmental benefits, primarily from reduced 
vehicle emissions at the border stations as wait times are 
reduced.
    The funding for these projects would ultimately come from 
two sources, the lease payments that would be due from the 
Federal Government in future years and, in most instances, by 
the implementation of a tolling operation at the affected 
border station. Tolling appropriately shifts a portion of the 
costs of the--excuse me. Tolling appropriately shifts a portion 
of the costs to the key beneficiaries of the new and improved 
border stations, the users. Modern technology--and this is 
important--affords the ability to implement fully automated 
tolling regimes at our border stations which will not impact or 
add any further burden on the CBP as they operate these border 
stations.
    Questions have been raised about whether this approach 
would constitute an evasion of the congressional budget 
process, and I would answer that it does not. It is far from 
it. Far from being an evasion, current law permits the ground 
lease of these facilities, and before any CBP occupancy lease 
can be signed, it must approved by various House and Senate 
committees to ensure compliance with oversight and budget 
priorities established by Congress.
    As I noted, this approach would be particularly effective 
for larger projects, such as the critical need that CBP and GSA 
have identified for the LPOEs at Calexico, California, which is 
also a project supported by the local stakeholders, by the 
Mexican Government, and by California Governor Jerry Brown. The 
Calexico downtown port of entry is located too close to the 
border, and its aging facilities have limited space, resulting 
in difficulties in both trade and security, yet this facility 
handles over 4 million vehicles and 5 million pedestrians a 
year. Calexico East, while relatively new--it was built in 
1997--is currently handling almost 8,000 cars and 1,000 trucks 
a day, approximately double its original intended capacity.
    My written statement includes more information about 
Calexico, but I believe this project could serve as a model for 
similar projects, including needed projects here in Arizona. In 
the case of Calexico, it is also important to note that the 
Mexican Government has already earmarked funds for the 
corollary improvements which need to occur on the other side of 
the border to make the border station improvements function and 
work as intended.
    On a final note, it has been argued by some that current 
budget guidelines do not allow this type of an occupancy lease 
that I am proposing because these assets are special purpose 
assets of the government. I would counter this by noting that 
the intent of this budget guideline and the requirements that 
assets leased have a private sector market is to prevent the 
government from leasing goods and services--goods and 
materials--excuse me--that can only serve a governmental 
purpose.
    A good example of this is war materials, and, in fact, this 
restriction was introduced specifically to prevent the leasing 
of warships--excuse me--of airplanes and warships during the 
Vietnam era. In the case of LPOEs, we are essentially talking 
about buildings and roads, items that are in use in the private 
sector throughout the Nation. Of course, the government use 
here, as it is whenever the government leases an asset, is for 
governmental use, but the key is that the assets are not 
unique.
    I believe the approach I have discussed could have both 
immediate long-lasting benefits for enhancing trade as well as 
increased border security, and I would encourage the committee 
to consider it further.
    [The prepared statement of Mr. Hutchens follows:]


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    Mr. Salmon. Thank you, Mr. Hutchens.
    Mr. Wilson, you are recognized.

    STATEMENT OF MR. CHRISTOPHER WILSON, ASSOCIATE, MEXICO 
  INSTITUTE, WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS

    Mr. Wilson. Chairman Salmon, Ranking Member Sires, members 
of the subcommittee, thank you for this opportunity to join 
such a distinguished panel of experts to address the important 
issue of U.S.-Mexico trade and border management. In my 
testimony I will focus on the development of a multifaceted 
approach to border management that promotes security, trade and 
competitiveness and a high quality of life for those living in 
the border region. I will present a summary of my full written 
testimony, which I have submitted to the subcommittee for 
inclusion in the record.
    Over the last 20 years, there have been two clear turning 
points in border management, and a third one may well be 
underway. First was the implementation of the North American 
Free Trade Agreement in 1994, which lowered barriers to trade 
and investment and caused tremendous growth in cross-border 
flows. This trend of quickly rising legitimate cross-border 
traffic during the first years of the post-NAFTA era ended in 
2001. Whereas between 1993 and 2000, bilateral trade grew at an 
average annual rate of 17 percent, between 2000 and 2008 trade 
growth cooled to just 5 percent per year.
    Security improvements at the border ports of entry 
following the terrorist attacks of 2001 were real and 
significant, but they came with a cost to businesses and border 
communities: The long and unpredictable wait times to cross the 
border. The unique nature of U.S.-Mexico trade causes 
congestion at the border to have a magnified impact on regional 
manufacturers. The key is that the United States and Mexico do 
not simply buy and sell finished products; they build them 
together.
    The manufacturing sectors of our two countries have become 
deeply integrated and, as a result, materials and parts often 
flow back and forth across the border multiple times as goods 
are manufactured. This means that any cost associated with 
crossing the border--paying a trucker to wait in line, using a 
customs broker, et cetera--is often paid multiple times during 
the production process. These costs, which amount to a border 
tax, eat away at the competitiveness of these goods and provide 
an inadvertent boost to the relative competitiveness of 
manufacturers outside our North America region.
    Thankfully, the story does not end with the slow growth of 
the early and mid-2000s. After falling sharply during the Great 
Recession, U.S. exports to Mexico have rebounded, growing at an 
average annual rate of 19 percent per year, which is faster 
than the growth in U.S. exports to China. Much of the recent 
growth is due to changes in the global economy: Currency 
values, quickly rising wages in China, high shipping costs, et 
cetera. But also in recent years, border management has become 
somewhat more efficient. Much remains to be done in this 
respect.
    In my judgment, the framework for border management 
currently in place is strong. Building on the Smart Border 
Agreement of 2002, President Obama and then President Calderon 
launched the 21st Century Border initiative in 2010, which was 
reaffirmed by President Obama and President Pena Nieto in May 
2013. The concept of a 21st century border asserts that not 
only can security and efficiency at the border coexist, but 
that a robust, multifaceted border management strategy can 
simultaneously improve security, efficiency, environmental 
sustainability, and the quality of life of residents living in 
the border region. It is within this framework then that there 
exists the opportunity to realize the full potential of the 
U.S.-Mexico partnership for a secure and competitive border.
    While significant progress has been made toward this goal, 
I will outline a few important remaining challenges that the 
subcommittee may wish to consider. Additional issues are 
included in the written testimony.
    Most cross-border infrastructure was built in the years 
before NAFTA fundamentally altered the nature of the U.S.-
Mexico economic relationship, increasing the volume of traffic 
and magnifying the importance of connectedness between our two 
countries. Investments are needed to update and expand port of 
entry infrastructure.
    On staffing, infrastructure can only be utilized if the 
ports of entry are adequately staffed. While the size of the 
Border Patrol has increased five-fold since the early 1990s, 
the number of Customs and Border Protection officers working at 
the ports of entry has not experienced similar growth.
    Trusted traveler programs--trusted traveler programs, which 
Global Entry, SENTRI, FAST, C-TPAT, and the Mexican NEEC 
Program are of critical importance. They offer expedited 
passage across the border to those individuals and companies 
that have voluntarily undergone extensive background checks and 
committed to high security standards. By facilitating the flow 
of designated low risk travelers, border officials increase 
overall throughput while freeing up staff resources to focus 
attention on individuals and shipments that present a higher or 
unknown level of risk. Global Entry and SENTRI are growing 
quickly, but C-TPAT and especially FAST, which are the 
commercially-oriented programs, are facing challenges in 
increasing their levels of enrollment and use. Increasing the 
portion of commercial traffic in these programs may be among 
the most cost-effective way to reduce congestion and boost 
U.S.-Mexico trade.
    Finally, cooperation with Mexico. Last, but extremely 
importantly, border crossings are, by definition, bi-national 
projects, but border management benefits enormously from 
coordinated and cooperative efforts. Efforts are needed to 
ensure that dedicated trusted traveler lanes extend as far back 
into Mexico as needed so the benefits of limiting border 
congestion can be maximized. Intelligence sharing for 
strengthened border security has improved significantly over 
the past several years, but additional progress is possible 
there.
    In an ideal world, U.S. and Mexican officers would work 
side by side to run streamlined ports of entry together. To 
move toward this ultimate goal while continually achieving more 
concrete short-term progress, ongoing bilateral consultation, 
confidence building, and capacity building efforts are all 
needed.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Wilson follows:]


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    Mr. Salmon. Thank you. It is now time for the members of 
the subcommittee to be able to ask questions. Before I ask the 
first question, I would like to introduce this letter from the 
Fresh Produce Association of the Americas regarding our ports 
of entry and some of the concerns that they have, without 
objection.
    I am going to start out by yielding myself 5 minutes for 
questions, and I would like to start out with you, Ms. Marquez 
Peterson. How has the emphasis on border security affected the 
competitiveness and productivity of industries located along 
the U.S.-Mexico border and throughout the United States, in 
your estimation?
    Ms. Marquez Peterson. Mr. Chairman, certainly the 
conversation about border security is very complex, and a lot 
of the businesses that we work with are primarily small 
businesses that are interested in trade cross-border. Where we 
have seen the challenges occur is really the wait times and 
impediments of regulation when people are considering doing 
cross-border trade.
    I do not believe that particular border security details 
have perhaps impacted them as much as the lack of resources in 
the Customs officers, which increases their wait time at the 
border, and certainly impacted our retailers in southern 
Arizona, manufacturers, and entities, like the Fresh Produce 
Association.
    Mr. Salmon. To what extent do you think the U.S. Government 
has included the views or ideas of U.S. manufacturers and 
importers in the design of its border security efforts or ports 
of entry improvements?
    Ms. Marquez Peterson. So, Mr. Chairman, that is a very 
interesting question. I think at the State level, which is 
primarily where I operate, there is an Arizona Manufacturing 
Council, which Glenn is very familiar with. I think more 
conversation could be occurring. The conversation, such as the 
tour that we recently hosted to the Offshore Group where they 
are an Arizona entity allowing and helping American businesses 
who want to manufacture in Mexico. I believe more dialogue 
could occur at that point. There are some great resources that 
I think they could be giving you day-to-day experiences.
    Mr. Salmon. Have manufacturing industries presented 
proposals on how trade facilitation could be enhanced? And, if 
so, what are the proposals?
    Ms. Marquez Peterson. So, Mr. Chairman, I am not aware of 
proposals specifically for the manufacturing industry in the 
State of Arizona, but perhaps Glenn Hamer can speak to that a 
little bit more.
    Mr. Salmon. Okay. Mr. Hamer, maybe you could address that. 
And then, Mr. Hamer, I had an additional question on that. Does 
the CBP have adequate personnel to manage trade flows at ports 
of entry on the U.S.-Mexico border? And how would increasing 
CBP officer deployments affect port hours of operation, border 
wait times, trade enforcement, and import safety?
    Mr. Hamer. Mr. Chairman, both are great questions, and I 
believe one of the things that has really come out of this 
hearing is that there is a real staffing issue. You know, we 
have some really good things happening on the infrastructure 
side, but an infrastructure that is not adequately staffed is 
still going to create major problems. And it really seems that, 
you know, one of the major things that could come out of this 
hearing is the need to make sure that we have more resources on 
the Customs side.
    If we are able to get these new facilities or these 
modernized facilities properly staffed, we are going to see a 
decrease in wait time, and that will increase our 
competitiveness, particularly in Arizona. I believe one of the 
witnesses or earlier today it was discussed that we are having 
some issues with Texas now. And I know not everyone on the dais 
is from Arizona, but from the Arizona perspective, we want to 
make sure that we can have the maximum amount of international 
trade go through our borders. And probably the most concrete 
thing I could say is if we are able to get some additional 
resources into Customs, you could almost take it to the bank 
that we are going to see smoother trade between our two 
nations.
    Mr. Salmon. One of my big frustrations is that a lot of 
times in government we are penny wise and a pound foolish, and 
we ought to be putting more and more resources into those areas 
that are profit centers, and this definitely is a profit 
center. This is an opportunity to increase commerce, and 
increase jobs, and increase revenues, and it seems like kind of 
a no-brainer.
    Mr. Hamer. And, Mr. Chairman, if I may say, you know, 
during your first round in Congress, I would argue that few, if 
any, members had more of an impact in really increasing our 
commercial opportunities with Asian countries. I mean, you take 
a look at a lot of the work that you did for normal trade 
relations and increasing our trading relationships with other 
Asian countries, and you look at the increase in wealth and 
opportunities in that part of the world. I think the more we do 
on the infrastructure in our neck of the woods, the more 
prosperous our State will be.
    Mr. Salmon. Mr. Hutchens, I am running out of time. But, 
you know, I think the entire panel has pretty much shared with 
us today that the existing infrastructure and personnel are 
inadequate to meet the demands of our current commerce or 
desired commerce levels with Mexico. You have come up with some 
good ideas for accomplishing things with limited government 
resources. Could you maybe share what port infrastructure 
investments should be viewed as top priorities?
    Mr. Hutchens. Obviously the project that we have identified 
as the top priority right now is Calexico, and part of the 
reason we have identified Calexico as opposed to, you know, 
certain Arizona LPOEs that require massive infrastructure as 
well, is because the GSA has already funded the design for the 
redevelopment of Calexico. This project was recognized as a 
mission critical project 5 years ago. Twenty-eight million 
dollars has been since spent on the design, but the budget 
process for the improvements themselves has not proceeded, you 
know, very far along. So those plans will get old, they will 
get stale if you do not move forward on them. So that is why 
that is the project that we have identified as probably the 
most mission critical and most doable.
    I would like to offer one other comment, if I may, about 
staffing, and that the approach that I have talked about can 
also have a very positive impact on staffing at the border 
stations for two reasons. One, if the air conditioning system 
breaks at an LPOE, instead of having to take money out of the 
budget that might otherwise have gone to Customs agents, the 
landlord is going to fix it. It is in the budget. It is in the 
rent. You know what it is. In addition, you are not having to 
divert personnel and personnel time to the administrative 
burden of keeping the facilities clean, of keeping the lights 
on, of these improvements. And that will also free up resources 
at the CBP level to focus on the core mission.
    Mr. Salmon. And ultimately, since I am hearing more from 
the panel that infrastructure is a big issue, but staffing 
maybe even is a bigger issue right now, I would be really 
interested, and time will not permit an answer, but I would 
love to maybe continue a dialogue on how--I am going to use the 
wrong term--but public-private partnerships maybe with 
staffing, too, not just infrastructure, could be addressed by 
this Congress.
    Mr. Hutchens. Certainly.
    Mr. Salmon. Mr. Sires, I would recognize you.
    Mr. Sires. Thank you, Mr. Chairman. I am just curious. I 
assume that a lot of the merchandise accounts through these 
ports come in containers, trucks? How much emphasis is placed 
on security on the point of departure before it gets to the 
border as point of entry? Is there a lot of emphasis in 
negotiations? Because one of the things, I represent the Port 
of Newark and the Port of Elizabeth, and after 9/11 obviously, 
we get a lot of merchandise. Eighty percent of the merchandise 
that comes through those ports is consumed in the region, and 
only 20 percent goes to the rest of the country.
    And one of the questions was, how do we secure these 
containers? And they have come up with a pretty good system of 
point of departure, you know, those companies that do business. 
But, you know, I was just wondering here in Arizona how much 
emphasis is placed on point of departure as point of entry in 
terms of security?
    Mr. Wilson. If you do not mind, Ranking Member Sires, I can 
answer that question to a certain extent. The program C-TPAT, 
Partnership Against Customs Terrorism, is exactly that. It is a 
program where companies join----
    Mr. Salmon. Mr. Wilson, could you bring the mic just a bit 
closer? Thanks.
    Mr. Wilson. Yes, absolutely. It is a program that--there we 
go. Thank you. It is a program in which companies that join 
agree to secure their entire supply chain starting at the point 
of departure. It means that they install things like cameras, 
seals on their containers, other mechanisms by which they can 
ensure that the containers are not tampered with in the course 
of transport to the physical border. And these have been 
successful because they allow then Customs and Border 
Protection at the ports of entry to spend less time inspecting 
these containers because they have a higher level of confidence 
that they do not contain illicit goods.
    Now, the problem is that that those programs are not used 
enough. We still need to get a higher percentage of the total 
containers crossing the U.S.-Mexico border involved in C-TPAT 
and the fast lanes that they can then use to cross the border. 
Some very interesting new efforts are being piloted right now 
in terms of Customs pre-clearance, which takes this process 
really one step further. It allows there to be U.S. officials, 
U.S. CBP officers in Mexico actually, you know, verifying the 
safety and security of these containers as they are being 
processed so that we can spend even less time inspecting them 
as they cross the border. So it is a program that is very 
important, both of these programs, and there are ways to 
improve security and efficiency at the exact same time.
    Mr. Sires. Mr. Hutchens, I was very curious about your 
program of build, design, and operate. Are you talking about 
operating actually these border entries?
    Mr. Hutchens. No, we are talking about operating the, you 
know, physical facility. The Customs function would be left to 
CBP agents. In other words, the guy you hand your passport to 
or who inspects the truck would continue to be a U.S. 
Government DHS employee. The person is making sure that the 
lights are on, that the grass is cut, as I said, the HVAC 
systems are working. And quite frankly, a lot of the 
maintenance would be in the roads, that the roads are well 
paved. It would be the private developer who takes over the 
operation of the facility, but the government operation would 
stay in government hands.
    Mr. Sires. They would get part of the tolls? Is that how 
that works?
    Mr. Hutchens. The tolls would be used to defray the costs 
of the upfront improvements. You know, for instance, again, at 
Calexico, we are talking about doubling the size of the east 
port of entry, adding 3 new truck lanes, adding 6 new passenger 
lanes. The tolls would go toward helping fund the cost of those 
improvements.
    And this is not a completely unique technique. It has been 
employed by the Department of Energy. I just mentioned it since 
we are in Arizona. And the Department of the Army specifically, 
the Army was interested in working with Arizona in keeping 
General Motors' warm weather test track here in Arizona. And we 
did a project at Yuma Proving Ground where the Army leased the 
land to General Motors. General Motors built a shared new test 
track which is now used by the Army and General Motors for 
vehicle testing. It is a very similar type process.
    Mr. Sires. Yeah, I am familiar with this build and design 
operation because we built a light rail. It is more used and 
more effective with transportation because the concern I would 
have is the security part of it.
    Mr. Hutchens. Right, and that is why----
    Mr. Sires. That is why, you know, the operations part of it 
is handled by the government.
    Mr. Hutchens. Correct. Correct. Very much like the Chicago 
Skyway, but, yes, transportation works very well, and this is 
functionally a transportation project. But the government 
function would remain with the government.
    Mr. Sires. You know, I always read about the tension on the 
border. Tell me the impact this tension has had in the last few 
years on the economy of this region.
    Mr. Farnsworth. Mr. Ranking Member, I assume you mean the 
tension between security and economic growth.
    Mr. Sires. Yes. Yes. And after 9/11, everybody is very 
concerned about terrorism.
    Mr. Farnsworth. Yes, well, and appropriately so. I do not 
know that anybody has actually quantified the amount of 
foregone economic exchange, but I think we hear anecdotally all 
the time of companies that find it easier to get product in 
from China or product in from other places than simply from our 
closest neighbor, Mexico, and even Canada, too.
    You hear a lot of discussion about the so-called thickening 
of the border, which means the border itself has become more 
complicated to get across. And as global production patterns 
have changed, this becomes important because if you are 
bringing in a product from China, you bring it into the United 
States once. If you are producing in North America, that same 
product might cross the border three, four, five, sometimes 
even six or seven times. So each time it has to cross the 
border, that adds cost, delays, everything else.
    And I agree with some of the things that have been said in 
terms of C-TPAT and pre-clearance, and I think that is an 
important part of the solution. But there are some even more 
fundamental issues here. Just basic forms that have to be 
filled out, I mean, they are different on both sides. And they 
have to be filled out each time the product goes back and 
forth. I mean, this is just a tyranny of small differences. And 
what we need, we just need to think bigger about the 
relationship and the way to understand that patterns of global 
trade have changed. It is not the way we did things 20 years 
ago.
    North America itself is a production platform, but you also 
have a couple of things that are coming online here in the next 
year. Two thousand fourteen is going to be a huge year, perhaps 
2015 when they actually open the Panama Canal. You are already 
seeing ports in the United States dredging deeper, preparing 
for the patterns of change that are coming through the Panama 
Canal. Vice President Biden was just there with mayors from 
various port cities in the United States. That is going to 
change patterns of trade. It is going to make it easier to get 
product into ports like New Jersey, and Florida, and Virginia, 
et cetera. That could impact here.
    But you also have the whole idea of energy liberalization 
in Mexico, too, and we have talked a little bit about it, but I 
want to be very clear. If that passes in Mexico in the way that 
it could, that is going to open up a huge opportunity in 
Mexico, not just in the energy sector, but in every sector 
where energy is an input, and that is everyone. And to the 
extent you have the cost of energy decrease in Mexico, which 
was most likely what would happen, what you are going to see is 
a manufacturing renaissance in Mexico in the same way it is 
occurring in the United States and Canada. That is going to put 
monumental pressure on the border because you are going to have 
all that product trying to get into the other countries of 
North America in a way that the border is already over-
burdened.
    So what is going to happen when that increases 
dramatically? Now, Mexico is trying to develop relations with 
China right now. They are trying to develop relations with 
Europe and other countries in South America so that the United 
States is not their only market--over 80 percent of their 
product comes to the United States--but that they diversify.
    Having said that, if that energy reform occurs, it is going 
to be, in our view, very important for the people of Mexico, 
very important in terms of energy integration, et cetera, but 
you are also going to put increased pressure on that border. So 
that, plus the Panama Canal, plus the changing patterns of 
trade means that, you know, if we are still dealing with the 
border in the way of each border crossing. You know, it takes 
20 years or whatever to get upgrades, and we are talking about 
staffing, and we are talking about forms that do not match. The 
private sector is just going to say, well, we are going to go 
somewhere else, and that is what we are seeing. And that is not 
just here in Arizona. That is across the border. That is Texas. 
That is California. That is everywhere else.
    So there is some urgency here, and the idea of getting the 
private sector engaged in the financing side I think is very, 
very important. The appropriations process in Washington takes 
a long time. We know the budget realities in terms of 
Washington. There are some big issues here, but I think working 
together we can work to get through them.
    Mr. Sires. Thank you. Thank you very much, Chairman.
    Mr. Salmon. Thank you. Mr. Barber?
    Mr. Barber. Again, I want to thank the chairman and the 
ranking member for bringing us some really outstanding 
witnesses. I have a few questions, if I could start with Mr. 
Farnsworth. We have had several hearings in the Oversight 
Committee and the full committee of the Homeland Security 
Committee of the House. And We have focused a lot on what I 
believe, and I think many members believe, is the lack of 
accountability and transparency in the operation of the 
Department of Homeland Security. In all fairness, 22 legacy 
agencies, trying to pull them together into a common mission, 
not an easy task.
    But when I look at some of the money that I believe, quite 
frankly, has been wasted, two examples. In Ajo, Arizona, the 
Homeland Security Department built homes at the average cost of 
$600,000 in a community where the average cost of homes is 
under $100,000. We had a hearing recently where we were looking 
at information technology improvements, $24 million on a 
project that was stopped because it was not going anywhere.
    So my question, Mr. Farnsworth is, given these constraints 
that we have in these tight budget times, how would you, if you 
were able to, direct the Department of Homeland Security to 
focus on priorities? Where would you take that money that 
should not have been spent wastefully and put it to make the 
most use in terms of economic development and improvements in 
what we want to have happen as you all have discussed here 
today?
    Mr. Farnsworth. Well, thank you for the question, and I 
wish Assistant Secretary Bersin were here so that he could 
answer directly on behalf of----
    Mr. Barber. So do I. [Laughter.]
    Mr. Farnsworth. So I certainly will not attempt to speak 
for him or for the U.S. Government. But I do think there are 
some important realities here in terms of where could 
additional funds be spent. My personal view is that border 
infrastructure is a clear winner here because you get to the 
point, and we have talked a lot about it. All the witnesses 
have talked about simply the ease of getting across the border. 
Now, that could be in terms of bridges. It could be in terms of 
enhanced facilities.
    Each local community is going to have their own priorities, 
and I think that is a critically important aspect of this. We 
have to get the local communities involved. In fact, in some 
ways, the local communities need to lead the effort so that 
they are creating a sense of place not just for the communities 
on this side of the border, but certainly on the Mexican side 
of the border as well, so that you have a much more integrated 
approach. I think that is critically important.
    I do think that this is where, frankly, it is important to 
bring in the conversation of private sector funding because 
these are projects that are really, really expensive. And I 
think with new and innovative financing models, I think that is 
going to be a critically important aspect of the entire effort.
    I mentioned in my oral testimony the North American 
Development Bank, the NAD Bank. I think they are doing some 
very interesting things. I think to the extent they could get 
private sector money into their budget process and use that in 
terms of border infrastructure and development, I think that 
could be a positive step. I am not sure that people have talked 
about that in any specific way. But again, there are vehicles 
there. We just have to be creative and find them.
    Mr. Barber. Thank you for that. And let me just turn to 
both Lea and Glenn for this question. Sitting on the Small 
Business Committee, one of the most frustrating things that I 
have heard over and over again from small businesses is a lack 
of access to capital. Recently I met with some businesses in 
southern Arizona. One woman who owned a business, a very 
successful business, for 20 years, was trying to expand her 
business along the same track, but in a different area of the 
country. She went to every bank she could think of in Arizona 
that she had done business with. Could not get a line of credit 
or a loan. She ended up going to Portugal to get the line of 
credit that she needed. I mean, that is outrageous. We cannot 
have that happen.
    So from your experience, first of all, access to capital I 
think is an issue. What are some of the ways in which you think 
we can overcome this important problem, because we know that 
small businesses are 70 percent of our economy? If we get them 
moving, the economy gets moving. So what would you say about 
access to capital?
    Ms. Marquez Peterson. Absolutely. Thank you, Congressman 
Barber. That is absolutely the number one issue we hear from 
small businesses is the access to capital. I wish I had a 
solution to pitch to you today, but we continue to have this 
layer. I know there are activities and actions being taken by 
the U.S. Government that is not flowing down. It is not hitting 
our small business community. It is even harder to grow a 
business and get access to capital to grow and expand here in 
the United States. But when you take that the next step and 
look to exporting, it is even more challenging.
    Our chamber hosted a meeting just yesterday, in fact, with 
Ex-Im Bank so that we could understand what it took to utilize 
the services there, to find perhaps more delegate banks in the 
State of Arizona who could assist businesses who need credit 
insurance or need to do term loans to do exporting. We are out 
there searching for those opportunities, but that is number one 
the biggest issue that small businesses face.
    Mr. Barber. Mr. Hamer?
    Mr. Hamer. Congressman, I am not sure I have much to add. I 
mean, we have been, the Arizona Chamber, strong supporters just 
in the context of trade of the Export-Import Bank. But I 
believe Lea's comments were right on the mark, and I am sorry 
to hear about the situation with the company that had to go to 
Portugal.
    Mr. Barber. Pretty absurd, is it not, that we would go 
there. Mr. Hutchens, I would like to ask you a question about 
this. And I am going to say the word that must not be spoken, 
``public-private partnership.'' I think it works. [Laughter.]
    We like it. And, you know, the port of entry at Douglas, 
which is on the border of the city. Right across from Douglas, 
Agua Prieta, has about 240,000, Douglas maybe 40,000. The 
economic improvement that could be made in Douglas and all of 
Cochise County and all the way up Arizona are immeasurable if 
that port were upgraded. It was built in 1932 without any 
improvements pretty much since that time. We have been working 
with the mayor and council down there to try to encourage and 
support public-private partnerships in improving that port of 
entry.
    Can you speak to what barriers we in Congress need to 
address to help move that forward? I am really practical when 
it comes to these things. I want to see what we can do as 
Members of Congress to be pragmatic and then move the agenda, 
and not just to talk about it. So what things can we and should 
we be doing about that?
    Mr. Hutchens. There are a couple of barriers that are the 
primary things that you have to be concerned with. The number 
one barrier to these kinds of projects are a set of budget 
scoring rules that OMB adopted in response to a congressional 
resolution in 1990 called Budget Resolution 90-02. And the 
primary focus of Budget Resolution 90-02 was the U.S. 
Government can borrow money cheaper than the private sector, so 
if we want to build a capital asset, the Federal Government 
should pay for it up front and not lease it.
    You know, that was a fine budget resolution when two things 
were happening. One, the country had enough money to build 
these kinds of projects, and, two, there was a fairly big 
interest rate differential between what the Federal Government 
could borrow money at and what the private sector could borrow 
money at. And over the past 25 years, both of those things have 
changed dramatically. Obviously the budget priorities of the 
United States, there are things we have to fund, and a lot of 
these infrastructure projects, which are long-term capital 
projects and could benefit from private sector expertise, could 
be funded through this lease-lease back mechanism. But again, 
we have to deal with what are called the A-11 scoring rules, 
which have a six-part test, and it seems like if we do not get 
hung up on one of them----
    I mean, one of the great things about the project I am 
talking about is the tolling gets us under the primary problem 
of this, which is it cannot exceed 90 percent of the value. 
Well, if the tolls are paying for 40 percent of the project, I 
do not have a 90-percent problem. What I am hearing from OMB is 
they are concerned about the unique government nature of the 
project. And as I say, as I addressed in my testimony, I do not 
believe this is what those rules were intended to address. So 
getting some relief from that, getting OMB to look at their 
rules in a more 21st century realistic way would be very 
helpful. GSA needs to be encouraged to pursue these projects. 
They have, in effect, not pursued them because of the worry of 
whether they were going to get approved by OMB, and so those 
are the two things that really need to happen.
    Mr. Barber. It sounds like a bureaucratic two-step to me. I 
am familiar with that in State government, and I am seeing it 
in abundance in the Federal Government. We just need to cut 
through all that nonsense and get to the decisions.
    I just have one follow-up question, if I may, Mr. Chairman, 
and that is, have you seen or been able to study effectively 
what the impact of tolls have on travel, on tourism, on 
commercial travel? Does it have a negative effect? Does it 
suppress that desire to come through that port of entry?
    Mr. Hutchens. What we have seen is that it actually does 
not have a negative effect. The fact is that people are willing 
to pay not to have to wait 2\1/2\ hours in line. The primary 
tolling focus will be on the commercial traffic, and believe 
me, a truck sitting in line costs $125 an hour to sit there. If 
they can pay $25 to go across the border in 15 minutes as 
opposed to spending 2\1/2\ hours in line, for them it is pure 
economics.
    As we design these tolling schemes, the primary emphasis 
will be on the commercial traffic, then there will be emphasis 
on faster lanes on the auto, and as little as possible on the 
pedestrian side because that is where it has the most impact. 
But we have found that for convenience, people are much willing 
to pay the convenience actually when you implement these, and 
southern California is where they have been implemented the 
most. Traffic actually increases, not decreases.
    Mr. Barber. Thank you, Mr. Chairman. I yield back.
    Mr. Salmon. Thanks, Mr. Barber. I think this recurring 
theme that we all seem kind of excited about, the whole idea of 
public-private partnerships, it sounds like a big part of the 
impediment is just maybe we need some legislative language, 
some clarity from the Congress to the administration to jump 
start this thing. I think that is kind of what I am hearing.
    Mr. Hutchens, if you could maybe guide us to how that would 
be----
    Mr. Hutchens. I would be happy to send you some follow-up 
materials that I have prepared.
    Mr. Salmon. That would be great. That would be great. Ms. 
Sinema.
    Ms. Sinema. Thank you, Mr. Chair. And my question, sir, is 
directed to Ms. Marquez Peterson and Mr. Hamer. Thanks so much 
for being here today, both of you. In particular, I wanted to 
just get your feedback about how Arizona businesses find their 
own interaction with the trusted trade programs that do exist 
with imports into the United States from Mexico. And if you 
can, talk about what some of the concerns or benefits your 
members feel about cargo pre-clearance programs.
    I know that there has been some excitement about cargo pre-
clearance programs, but also some concerns around security and 
cost-effectiveness. So if you have feedback from businesses in 
southern Arizona and central and northern Arizona, that would 
be really helpful. Thanks.
    Mr. Hamer. Do you want to go first?
    Ms. Marquez Peterson. Okay. Thank you, Congresswoman 
Sinema. Primarily, a lot of our interaction has been with 
Arizona businesses who are at a point in their business life 
cycle, I guess I would call it, where they are prepared to do 
exporting. They are looking for relationships cross-border, 
specifically in Mexico, which is where our chamber assists. A 
key partner has been the U.S. Department of Commerce and 
commercial services. We refer quite a bit to Eric Nielsen, who 
I believe is here in the audience, the businesses that are 
qualified and able and have that infrastructure and that 
financial stability to look for contacts cross-border. 
Oftentimes, the biggest challenge we hear from them is 
certainly looking for the vendors, suppliers, the connections, 
building those relationships.
    Working in Mexico is a much longer sales cycle. It is 
creating that relationship, and it could be throughout a year 
or multiple years before an actual transaction occurs. Our 
Chamber of Commerce is focused particularly on working with 
Mexican chambers of commerce so that we are business to 
business, B2B, and we are establishing those relationships and 
focusing and stressing the economic interdependence of our two 
States in the case of Sonora and Arizona that kind of outlives 
a lot of the politics that are happening, whether it is in our 
State or in our Nation. And that seems to be handled well 
through the business community.
    So I think that is probably the most important resource we 
have got is with the U.S. Department of Commerce, and we are 
exploring other opportunities at this time.
    Ms. Sinema. Thanks.
    Mr. Hamer. Thank you, Congresswoman, and I want to--I did 
it in my opening remarks--thank the other members of the 
Arizona delegation for being here today. It says a lot. 
Congressman Barber, I know this is your neck of the woods, but 
you have really worked very hard on these issues, and 
Congressman Sinema and Congressman Schweikert, for you to 
travel from the Phoenix area today says a lot. And I would 
second Lea's comments about the good work of Eric Nielsen and 
the U.S. Department of Commerce, that we have found them to be 
very helpful for a number of our members.
    In terms of the pre-clearance, there is very, very strong 
support from our members to do more of that type of activity. 
Of course, we are all concerned about security, but we believe 
that there are ways that we can do it so that we would not 
jeopardize security, but could dramatically increase the 
efficiency of our commercial interactions.
    Ms. Sinema. All right. Thank you. And, Mr. Chair, not a 
question, but just a follow up to Mr. Hutchens' last statement. 
I think it would be really helpful to get information from you 
and your team about what we as Members of Congress could do to 
clarify public-private partnerships. While it may not be a 
great word for you, it is very popular in Arizona, and it has 
helped us to create and implement some of the most cost-
efficient and effective programs in the country. So we are very 
proud of public-private partnerships, and we would love to, I 
think, work together to find opportunities to streamline 
Federal Government rules and regulations so that we can 
continue that work in Arizona and help other parts of the 
country do what we do well. Thanks.
    Mr. Hutchens. I will make sure I coordinate with the staff 
so that I can get that material to you.
    Ms. Sinema. Thank you.
    Mr. Salmon. I think the appetite is pretty voracious up 
here for something like that. I recognize Mr. Schweikert.
    Mr. Schweikert. Thank you, Mr. Chairman. Just for the fun 
of it, Mr. Wilson, what do you think of Mr. Hutchens' sort of--
I do not like to call it a ``toll,'' but sort of participatory 
costs for those who want to save time whether they have 
perishables or just-in-time inventory.
    Mr. Wilson. I know the concept is a bit controversial, and 
there are proponents, and there are people who are detractors. 
I look at the example of Texas where many of the bridges across 
the Rio Grande are actually owned by the cities, and they 
generally do use tolls on those bridges as a way to pay for 
that infrastructure. And that has been a very successful model, 
so it is actually a model not in the context of public-private 
partnerships, but in public-public partnerships, has been used 
on the border between the U.S. and Mexico for a long time with 
a lot of success. But it is obviously important to make sure 
that we do not implement tolls in a way that does limit 
traffic, that does limit the ability of members of family to 
visit one another.
    Mr. Schweikert. Well, but conceptually it does just the 
opposite. For truck traffic it creates a, hey, here is the 
value of a couple of hours of produce sitting in the back of my 
truck, and pulls that traffic away. Does that provide, you 
know, other capacity in other spots? I mean, that is at least 
the underlying economic theory.
    Mr. Wilson. That is absolutely how it tends to work.
    Mr. Schweikert. Mr. Hutchens, how do you feel about Mr. 
Wilson talking about some of the express programs? What is it? 
It is FAST and some----
    Mr. Wilson. C-TPAT.
    Mr. Schweikert [continuing]. C-TPAT are being under-
utilized. And what are we doing wrong? Are we not marketing 
them? Are we not educating? You know, so why are some of our 
partners on the other side of the border not embracing these 
more so?
    Mr. Hutchens. I think that, you know, you are getting a bit 
out of my area of expertise, but I do think that a lot of those 
programs were really designed with sea ports of entry in mind. 
A lot of the containers, a lot of the cargo stuff, I know a lot 
of the work they have done at Oakridge National Laboratory in 
terms of being able to see inside vehicles are geared toward 
containers and not necessarily 18-wheeled trucks going up and 
down the road.
    Mr. Schweikert. Yes. And that is one of the uniquenesses of 
what we do. But to that, Mr. Farnsworth, sort of the same 
question. Why not more adoption?
    Mr. Farnsworth. Well, I think there is an education issue 
in some ways, just the idea that this could be a real solution. 
You know, the truth of the matter is we have to look at all of 
the programs that are out there. It has to be an all-of-the-
above type solution, whether it is C-TPAT, whether it is fast 
lanes. I think that is exactly right.
    But I come back to there are other things that need to be 
looked at, too. I mean, just basic forms need to be 
standardized, and you should not need to have the same process 
back and forth every time you cross the border. I mean, this 
should be something that we can figure out together with our 
Mexican partners in this. So I think an all-of-the-above 
approach could work pretty well.
    Mr. Schweikert. In that same line, I know there was a 
discussion last year about even doing an electronic form where 
you pull it up, you hit the button, you send it in, instead of 
the, you know, carbonless paper walking up to the staff and 
having to fill it out and look for your mistakes. From your 
position, when you look at the discussion of trying to do a mix 
of structure, is the problem physical structures at the border 
or is it staffing?
    Mr. Farnsworth. I think it is both, and I think it varies 
depending on each border crossing. And I think this is why it 
is so vitally important to engage the local communities because 
what works in San Diego and Tijuana may not work in Laredo and 
Nuevo Laredo. And what might work in Arizona might not work 
elsewhere because the issues are different. I think if you look 
across the border, and I have participated in meetings across 
the border from San Diego literally to Laredo, there are 
different issues. And sometimes it really is a staff problem.
    Mr. Schweikert. But to that point, let us say, you know, I 
came to you tomorrow and said, hey, we found magic money. You 
have unlimited staff. Are you maximizing the use of your ports? 
Remember there have been the discussions of should we go to 24 
hours in certain lanes. Has this been properly modeled?
    Mr. Farnsworth. I think that the answer would be that if 
you just found a magic pot of money to be utilized right now, 
you are going to have existing infrastructure. So the best use 
of that money would be in terms of personnel and finding ways 
to increase staffing time, increase agents, and increase the 
throughput in terms of existing infrastructure.
    Mr. Schweikert. So today staff and personnel would consume 
more of my capital than structure?
    Mr. Farnsworth. Well, if you had that pot of money and you 
just had to spend it in this fiscal year, yes.
    Mr. Schweikert. Mr. Hutchens, in that sort of discussion, 
as you start to model ways to pay for it, because, you know, as 
we start to move into the demographic crisis that, look, 
everyone understands what is happening. Resources are already 
very, very tough. Is there a way of using that sort of express 
pass mechanic, tolling mechanic to also provide hours of access 
as much as new physical facilities?
    Mr. Hutchens. You know, much like the concern over tolling 
and is tolling going----
    Mr. Schweikert. I beg of you to pull the mic a little 
closer.
    Mr. Hutchens. Sorry. Much like the discussion with tolling, 
you know, there is a question of if you increase staffing and 
you say we have got these three lanes, and they are open 24 
hours a day. But do people really want to cross the border 
between 2 o'clock and 4 o'clock a.m. because that is when the 
time is available. I think that it is a balance between 
staffing and facilities. If you are going to create these 
opportunities for trade, you know, you want people coming 
across the border to go to the shopping centers, as we were 
talking about, when the shopping centers are open, not in the 
middle of the night. So I think staffing is very important.
    And for CBP, it is one of their concerns as we talk to them 
about increasing the number of lanes. They are worried about 
where they are going to get the staff from. So we have got to 
focus on both.
    Mr. Schweikert. If today our staffs wanted to say where is 
the best data sets, you know, where is my data set to say here 
is where I am at capacity. Is it capacity because of my hours 
of service, because of my physical location? Is it I have 
enough lanes, but the lanes to it are restrictive on either 
side of the border? Where do I go to get the best quality 
research to understand what we should be doing? And I see Mr. 
Wilson sort of standing up in his chair. [Laughter.]
    Mr. Wilson. It is because there is a fundamental problem in 
that respect, and the fundamental problem there is that we do 
not have clear data on the wait times that are currently in 
place at each of our border crossings. There is not a 
consistent methodology being applied to measure the length that 
cars and individuals are waiting to cross the border. There is 
some work that is being done on that to use RFID chips to 
improve that data set. But it is critical that we improve that 
data set so that we can make rational decisions about 
investment at the border.
    Mr. Schweikert. And my understanding is it is ultimately 
much more complicated than that. In discussions I have had with 
some of Mr. Hamer's members, it is not only wait times, it is 
wait times of which hours in the day, what types of products, 
seasonality of certain products, and how that ends up causing 
the skewing effects. And then, god forbid, it be on either side 
of a holiday.
    Mr. Wilson. And that is why we need data to be able to 
analyze each of those variables that you brought into the mix 
there.
    Mr. Schweikert. All right. Thank you all. Mr. Chairman, 
just two quick comments, and this is to my buddies at the other 
end of the table. Sometimes when you see us sort of cringe a 
little bit when we use the term ``public-private partnership,'' 
it is not the working with private sectors, vice versa. It is 
who ultimately carries the risk portion of the transaction, 
because so many times in the past, you know, as government took 
the risk and handed sort of the profit-making side to the 
public, there needs to be an honest risk sharing instead of 
socializing risk and privatizing the profit side.
    And your discussion, this one, you and I have had multiple 
times. We passed the JOBS Act a couple of years ago that was 
going to have crowdfunding, and, you know, the Reg As, and all 
the other things that were going to provide access to capital. 
And it has disappeared in the bureaucracy, particularly at the 
SEC, which breaks my heart because that was designed 
particularly for our types of business. And Congressman Barber 
has heard me rattle on about this in the small business 
community and committee because it was designed for our types 
of businesses here in Arizona. And if we could ever get some 
rational rule sets out of the SEC, I think actually we have a 
great future. So, Mr. Chairman, with that, I yield back.
    Mr. Salmon. Thank you. All the questions have concluded, 
and this has been an outstanding panel. I cannot tell you how 
much I appreciate you taking the time. Thank you for braving 
the weather, those of you that came in, and good luck getting 
back tonight. [Laughter.]
    A few of us are on the red eye tonight, and we are kind of 
biting our nails to see how that goes. But I want to thank you.
    More than anything, I wanted this hearing to symbolize 
something far greater, and that is that Arizona, in particular, 
is extremely interested in improving our relationship with 
Mexico; that in the past we have had what I would like to call 
water under the bridge. It is a new dawn, and you have got a 
team of people up here, both sides of the aisle, that want to 
do everything that we can to try to improve those relationships 
not just with trade, but in every aspect of that bilateral 
relationship. We would like to explore the opportunity, I 
think, for some economic trade zones and what other 
opportunities can put us in the most positive light as we 
possibly can.
    I think Mr. Farnsworth was talking about some of the 
changing demographics of global trade. With China losing some 
of its manufacturing swagger, Mexico is going to be up at the 
forefront. We would like to be partnering shoulder to shoulder. 
And on the energy forefront, those reforms portend to provide 
economic opportunities not just in the energy sector, but 
across the table. And we would like to be there to work with 
them to get that done.
    So that having been said, thank you so much. And this 
subcommittee hearing is adjourned.
    [Whereupon, at 12:11 p.m., the subcommittee was adjourned.]
                                     

                                     

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