U.S.-Mexico Border: Issues and Challenges Confronting the United States
and Mexico (Letter Report, 07/01/1999, GAO/NSIAD-99-190).
Members of Congress have expressed concern about the overall well-being
of the border region and what appears to be limited progress in
addressing border issues. In particular, Members have noted that the
border region has had to shoulder a disproportionate share of the cost
of U.S.-Mexican economic integration. This report (1) outlines the
nature of major border issues and (2) provides information on U.S. and
Mexican efforts underway to address them.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-99-190
TITLE: U.S.-Mexico Border: Issues and Challenges Confronting the
United States and Mexico
DATE: 07/01/1999
SUBJECT: Smuggling
Foreign governments
Illegal aliens
Intergovernmental relations
Economically depressed areas
Law enforcement
International cooperation
Economic development
Drug trafficking
International economic relations
IDENTIFIER: Mexico
INS Southwest Border Economic Development Initiative
INS New Border Vision
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United States General Accounting Office GAO Report
to Congressional Requesters July 1999 U.S.-MEXICO BORDER
Issues and Challenges Confronting the United States and Mexico
GAO/NSIAD-99-190 United States General Accounting Office
National Security and Washington, D.C. 20548
International Affairs Division B-283037
Letter July 1, 1999 Congressional Requesters Your June 24, 1998,
letter to us expressed concern about the overall well-being of the
border region and what appeared to be limited progress in
addressing border issues. You also expressed concern that the
border region has had to shoulder a disproportionate share of the
cost of U.S.-Mexican economic integration. As agreed with your
offices, this interim report (1) outlines the nature of major
border issues and (2) provides information on U.S. and Mexican
efforts underway to address them. We are continuing our in-depth
analyses of transportation and environmental infrastructure issues
affecting the border region. These studies are aimed at
identifying potential options to address these issues, within the
context of the overall border situation. Results in Brief
The United States has pursued a strategy of developing closer
relations with Mexico, in recognition that a stable, democratic,
and prosperous Mexico is fundamental to U.S. interests. The border
region, defined as the area 100 kilometers (62 miles) deep on
either side of the almost 2,000-mile long U.S.-Mexico border,1 is
the bridge that binds the two countries. Thus, the border is
critical to U.S. objectives. However, the U.S. border region has
relatively high unemployment and poverty levels and faces a number
of development challenges. And, while growing integration has
increased trade between Mexico and the United States, it has also
exacerbated some long-standing border problems. At the same time,
many U.S. efforts to interdict illicit drugs and illegal
immigration take place on the border. As a result, there is a
confluence of seemingly competing objectives at the border that
have important implications for the United States. (See app. I
for additional background on border perspectives.) The major
issues on the border include the following: * Drug enforcement:
The 2,000-mile Mexican border is one of the main battlegrounds of
the national war on drugs, as law enforcement agencies 1As defined
by the 1983 Agreement for the Protection and Improvement of the
Environment in the Border Area, known as the "La Paz Agreement."
Letter Page 1
GAO/NSIAD-99-190 U.S.-Mexico Border Issues B-283037 try to stop
the flow of illicit narcotics into America. An estimated 60
percent of the cocaine and 29 percent of the heroin sold across
America in 1998 are believed to have come through the U.S.-Mexico
border. Further, the cross-border movement of illicit drugs is
associated with a high level of violence, as well as corruption of
U.S. and Mexican officials and money laundering. Efforts to stop
the flow have put pressure on the transportation infrastructure
and contributed to congestion at the border crossings. (See app.
II.) * Illegal immigration: The border is the primary checkpoint
for illegal immigration. The U.S. Immigration and Naturalization
Service apprehended 1.5-million undocumented immigrants on the
southwest border in fiscal year 1998. Illegal immigration has
been shown to be associated with increased criminal activities and
to raise the cost of some federal, state, and local programs.
Attempting to assure that only eligible individuals enter the
United States places a burden on border infrastructure and affects
the cross-border flow of goods and services. (See app. III.) *
Cross-border transportation: The border area provides the
transportation infrastructure to facilitate trade between the
United States and Mexico, which has more than doubled since the
North American Free Trade Agreement went into effect in 1994.
Nearly 4 million trucks and 85 million passenger vehicles entered
the United States from Mexico in fiscal year 1998. Processing the
high volume of commercial and passenger traffic while at the same
time interdicting contraband and illegal immigrants has
contributed to congestion and air pollution and has placed
pressure on the infrastructure of local communities along the
border. (See app. IV.) * Environmental infrastructure and public
health: The need for environmental infrastructure2 improvement is
particularly acute on the Mexican side of the border, where many
communities are without potable water and adequate sanitation. On
the U.S. side, most border communities have environmental
infrastructure, but some facilities require repair or expansion.
Moreover, most locations are faced with a diminishing supply of
clean and safe drinking water. Environmental infrastructure
problems have contributed to public health concerns. Many diseases
occur at rates much higher in the border region than in other
areas of the United States and Mexico. Also, there is an
increased 2Environmental infrastructure refers to the
infrastructure designed to protect human health and the
environment along the U.S.-Mexico border by preventing and/or
reducing the pollution of air, water, and soil. Letter Page 2
GAO/NSIAD-99-190 U.S.-Mexico Border Issues B-283037 concern about
the growing number of multidrug-resistant tuberculosis cases in
the border region. (See app. V.) * Economic development:
Although the U.S. border region has experienced some recent
economic growth, it still has relatively high unemployment and
poverty levels. A number of initiatives are underway to address
economic development issues. Projections of high population
growth and a change in the rules governing the Mexican maquiladora
industry could potentially affect the existing economic
development challenges. 3 (See app. VI.) These problems are being
addressed by a number of Mexican and U.S. federal, state, and
local agencies that are responsible for specific aspects of each
problem. In light of the transnational nature of the problems,
various binational institutions, programs, and initiatives have
also been created, such as the Border Environment Cooperation
Commission, the High-Level Contact Group on Narcotics Control, and
the New Border Vision. While such binational mechanisms have been
able to make some improvements in certain areas, they have not
been able to close the gap between what is needed and what exists.
The limits on progress may be due in part to the differing levels
of development and dissimilar governmental structures of the two
countries. In recognition of the special economic development
needs of the U.S. border community, the President on May 25, 1999,
announced the Southwest Border Economic Development Initiative,
which is designed to coordinate federal and local economic
development efforts to raise the living standards and overall
economic profile of the border region on a sustained basis. The
total requirements and their associated costs for addressing the
border issues described above are unknown, and there remains no
single, binational plan to address border problems. As we
continue our in-depth case study analyses of transportation and
environment issues, we plan to identify potential strategies to
overcome the institutional and programmatic challenges that impede
improved conditions on the border. Agency Comments We provided
a draft of this report to officials from the following agencies
that had activities discussed in this report: the Departments of
Agriculture, 3The maquiladora program allows duty-free imports
into Mexico of materials and components from foreign suppliers.
These processed materials are assembled into finished products
that must then be reexported from Mexico unless special approval
is given to sell them in the Mexican market. Page 3
GAO/NSIAD-99-190 U.S.-Mexico Border Issues B-283037 Health and
Human Services, State, Transportation, and the Treasury; the
Environmental Protection Agency (EPA); the Immigration and
Naturalization Service (INS); the U.S. Customs Service; and the
Drug Enforcement Administration. All agencies provided material to
update key pieces of information, as well as some technical
changes that we incorporated where appropriate. Treasury and EPA
officials commented that the report did not provide sufficient
detail about some of the activities underway and accomplishments
made in addressing the border issues. We intended this report to
be a broad overview of the major border issues and what is being
done to address them, rather than a detailed examination of each
specific effort. We plan to provide greater detail in our
separate reports on the transportation and environmental
infrastructure issues. We also discussed the draft report with
officials representing Mexico's Secretariat of Foreign Relations.
Their primary concern was that the draft did not give sufficient
description of the nature of the drug-trafficking problem, noting
that U.S. demand for drugs is a factor. They said that the report
should highlight to a greater extent some of the recent
counterdrug initiatives they have undertaken. They also
emphasized the importance of the New Border Vision, as a
binational commitment to work for sustainable economic and social
development along the border. They said that this effort will
more effectively coordinate the multiple mechanisms already
existing at the federal, state, and local levels. Where
appropriate, we have added more detail in response to these
comments. Scope and To obtain information on the major issues
on the U.S.-Mexico border, we Methodology conducted an
extensive literature search and relied heavily on a number of
issued GAO reports and government studies. We also reviewed
documents and interviewed officials from the relevant federal,
state, and local agencies and private sector organizations. In
addition, we visited Mexico City, where we interviewed U.S.
embassy and Mexican government officials. We also obtained and
analyzed information from our ongoing case studies of
transportation and environmental infrastructure issues at key
sister cities along the border. This report is intended to provide
a broad overview of the major issues on the border and their
implications. Therefore, it may not include all of the programs
and initiatives that may be underway to address specific Page 4
GAO/NSIAD-99-190 U.S.-Mexico Border Issues B-283037 problems at
the border. Appendix VII contains additional information on our
scope and methodology. We are sending copies of this report to
appropriate congressional committees and to the Honorable Dan
Glickman, Secretary of Agriculture; the Honorable William M.
Daley, Secretary of Commerce; the Honorable Donna Shalala,
Secretary of Health and Human Services; the Honorable Andrew M.
Cuomo, Secretary of Housing and Urban Development; the Honorable
Madeleine Albright, Secretary of State; the Honorable Rodney
Slater, Secretary of Transportation; the Honorable Robert E.
Rubin, Secretary of the Treasury; the Honorable Thomas A.
Constantine, Administrator of the Drug Enforcement Administration;
the Honorable Carol M. Browner, Administrator of the Environmental
Protection Agency; the Honorable Doris Meissner, Commissioner of
the Immigration and Naturalization Service; and the Honorable
Raymond W. Kelly, Commissioner of the U.S. Customs Service. We
will also make copies available to other interested parties upon
request. Please contact me at (202) 512-4128 if you or your staff
have any questions concerning this report. Other GAO contacts and
staff acknowledgements are listed in appendix VIII. Benjamin F.
Nelson, Director International Relations and Trade Issues Page 5
GAO/NSIAD-99-190 U.S.-Mexico Border Issues B-283037 List of
Congressional Requesters The Honorable Henry Bonilla The Honorable
Bob Filner The Honorable Ruben E. Hinojosa The Honorable Solomon
P. Ortiz The Honorable Silvestre Reyes The Honorable Ciro D.
Rodriguez House of Representatives Page 6
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Page 7 GAO/NSIAD-
99-190 U.S.-Mexico Border Issues Contents Letter
1 Appendix I
10 The U.S.-Mexico Border in Perspective Appendix II
20 Drug Enforcement Appendix III
25 Illegal Immigration Appendix IV
29 Cross-Border Transportation Appendix V
35 Environmental Infrastructure and Public Health Appendix VI
45 Current and Emerging Challenges to Economic Development in the
Border Region Page 8 GAO/NSIAD-99-190 U.S.-Mexico Border
Issues Contents Appendix VII
49 Objectives, Scope, and Methodology Appendix VIII
51 GAO Contacts and Staff Acknowledgments Table
Table I.1: Selected Maquiladora Industry Statistics, by City,
March 1999
13 Figures Figure I.1: U.S.-Mexico Border
Region and 14 Sister Cities 11 Figure I.2:
Mexican Maquiladora Plant
14 Figure I.3: A Colonia in Douglas, Arizona
15 Figure I.4: South Bay International Wastewater Treatment Plant
18 Figure II.1: Truck X-Ray
24 Figure III.1: U.S.-Mexico Border at San Ysidro, California,
and Tijuana, Mexico
27 Figure IV. 1: Commercial Traffic in Laredo, Texas
30 Figure V. 1: Agricultural Runoff Near Where the New River
Enters the Salton Sea
37 Abbreviations BECC Border Environment Cooperation
Commission DEA Drug Enforcement Administration EPA
Environmental Protection Agency INS Immigration and
Naturalization Service NADBank North American Development Bank
NAFTA North American Free Trade Agreement Page 9
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix I The U.S.-
Mexico Border in Perspective
Appendix I The border between the United States and Mexico extends
for almost 2,000 miles, from the Gulf of Mexico in the east to the
Pacific Ocean in the west. The border region, as defined by the La
Paz Agreement of 1983,1 is 100 kilometers (62 miles) deep on
either side of the border. As can be seen in the map (fig. I.1),
there are four U.S. states and six Mexican states along the
border. In Texas, which comprises roughly half of the border, the
border is defined by the Rio Grande River. California, Arizona,
and New Mexico have land border crossings. In all, there are 45
border crossings,2 with estimates of around 278 million to 351
million persons legally crossing the border from Mexico into the
United States in fiscal year 1998.3 1The 1983 Agreement for the
Protection and Improvement of the Environment in the Border Area,
commonly referred to as the "La Paz Agreement." 2According to the
State Department. This number includes two bridges that are
currently under construction. 3These numbers are based on the
differing estimating techniques of the U.S. Customs Service and
the Immigration and Naturalization Service, respectively, and
include both vehicle and pedestrian traffic. Page 10
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix I The U.S.-
Mexico Border in Perspective Figure I.1: U.S.-Mexico Border
Region and 14 Sister Cities California
Oklahoma Arizona San Diego
New Mexico Calexico Yuma Tijuana Mexicali San
Luis Rio Colorado Sunland Columbus Park
Texas Nogales El Paso Naco
Douglas Las Baja
Ciudad Juarez Nogales Naco Agua Palomas Calif.
Prieta Norte Ojinaga Del Sonora
Rio Presidio Ciudad Acuna Eagle Pass Baja
Piedras Calif.
Chihuahua Negras Sur
Nuevo Laredo Pacific Ocean
Laredo Gulf of
Gulf of California
Coahuila De Mexico Zaragoza
Mc Allen Sinaloa
Reynosa Brownsville Matamoros Durango Nuevo Leon Zacatecas
Tamaulipas There are 14 sister or twin cities on the border,
accounting for around 92 percent of the border population. While
legally separate cities, in reality, sister cities often
constitute binational and bicultural "single" communities. Many
families in the region have members on both sides of the border.
Further, many people live on one side of the border and commute
daily to work or school on the other side. Border Population
The border region's population has changed dramatically since 1965
when Mexico initiated the Border Industrialization Program to
foster job growth in its northern region by sponsoring a
maquiladora, or export assembly, Page 11
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix I The U.S.-
Mexico Border in Perspective industry.4 As more jobs were
created, more Mexican workers moved to border cities, which
experienced significant population growth. For example, the
population of Ciudad Juarez, Mexico, grew from 650,000 in 1980 to
an estimate of over 1.1 million by 1999. Tijuana, Mexico, grew
from 428,000 in 1980 to about 989,000 in 1995. Its twin city
across the border, San Diego, went from 875,530 in 1980 to over
1.1 million by 1994. In 1997, the Environmental Protection Agency
(EPA) estimated that the population of the U.S.-Mexico border
region was greater than 10.5 million people, with about 6.2
million people in the United States and about 4.3 million in
Mexico. The population on both sides has grown far faster than
the population in either country as a whole. The population on
the U.S. side of the border is increasing at an annual rate of 2.7
percent, compared to a total U.S. growth rate of 0.95 percent.
The population on the Mexican side of the border is growing at an
annual rate of 3 percent, compared to a total Mexican population
growth rate of 1.8 percent. Current population projections
forecast a doubling of the border population over the next 20
years. The Maquiladora As of March 1999, the Mexican
government statistical agency reported a Industry total
of about 3,200 maquiladora plants throughout Mexico, with total
employment of 1,090,000. Mexico's border region had a reported
1,751 maquiladora plants with 651,580 workers, according to the
statistical agency. The border states of Chihuahua, Baja
California Norte, and Tamaulipas employed the most maquiladora
workers in Mexico, together accounting for about 61 percent of
maquiladora employment. The top locations for border maquiladoras
included the cities of Ciudad Jurez and Tijuana. In March 1999,
the number of workers employed in maquiladora plants in these two
cities reached nearly 370,400 workers, or approximately 34 percent
of total Mexican maquiladora employment.5 Table I.1 shows the
number of plants and employees in the major border cities. 4The
maquiladora program allows duty-free imports into Mexico of
materials and components from foreign suppliers. These processed
materials are assembled into finished products that must then be
reexported from Mexico unless special approval is given to sell
them in the Mexican market. 5For a detailed discussion of the
maquiladora industry in historical perspective, see Lucinda
Vargas, Business Frontiers, Issue 4 (Dallas, Tx: Federal Reserve
Bank of Dallas, El Paso Branch, 1998). Page 12
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix I The U.S.-
Mexico Border in Perspective Table I.1: Selected Maquiladora
Industry Statistics, by City, March 1999 Number of Number
of City, state
maquiladoras employees Tecate, Baja California Norte
123 11,730 Mexicali, Baja California Norte
179 50,368 Tijuana, Baja California Norte
731 153,453 Nogales, Sonora
85 33,644 Ciudad Juarez, Chihuahua
254 216,945 Piedras Negras, Coahuila
44 15,687 Ciudad Acuna, Coahuila
57 33,426 Nuevo Laredo, Tamaulipas
54 21,533 Matamoros, Tamaulipas
118 56,734 Ciudad Reynosa, Tamaulipas
106 58,060 Total
1,751 651,580 Source: Mexican National Institute for
Statistics, Geography, and Information. In 1994, the North
American Free Trade Agreement (NAFTA) established new rules that
affected the maquiladora program. For example, by 2001, Mexico
will restrict the duty preferences available to maquiladoras for
non-NAFTA-originating raw materials used in the manufacture or
assembly of finished products. In addition, changes brought about
by NAFTA and Mexican law will virtually eliminate all restrictions
on foreign investment in the manufacturing sector, making it
unnecessary to establish a maquiladora facility to assemble in
Mexico. It is too early to predict what the effects of the
changes in the maquiladora law will be for the border region.
(See app. VI for details.) Figure I.2 illustrates a maquiladora
plant in Tijuana, Mexico, near the Otay Mesa crossing. Page 13
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix I The U.S.-
Mexico Border in Perspective Figure I.2: Mexican Maquiladora
Plant Poverty on the Border Relatively high levels of poverty
exist in the border region. Many of the poorest counties in the
United States are found there, especially in Texas. There are also
low levels of educational attainment, a relatively young
population, and a high percentage of new immigrants. Using Census
data, we calculated that about 24 percent6 of the population
living in U.S. border counties in 1996 lived in poverty,7 compared
with a national poverty rate of nearly 14 percent in this same
year. In Texas alone, the population living at or below the
poverty line is 35 percent, based on 1990 Census data. Income
distribution also varies widely along the border. For example,
according to Census data, about 16 percent of residents in San
Diego County, California, were below the poverty line, as compared
to about 52 percent in Starr County, Texas, in 1996. Three of the
10 poorest counties in the United 6Poverty rate estimates are our
calculations based on Census data. The Census data has a 90-
percent confidence interval. 7The Census Bureau updates poverty
thresholds each year for use in calculating all official poverty
population figures. Thresholds are estimated by size of family
and age of members. For example, in 1996, the poverty threshold
for a single person aged 65 or older was $7,525, while that of a
family of four with two children under 18 was $15,911. Page 14
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix I The U.S.-
Mexico Border in Perspective States are located in the border
area, and the federal government has designated 21 U.S. border
communities as economically distressed.8 The poverty is more acute
in the border areas called colonias. The term "colonia" generally
refers to an unincorporated, low-income community endemic to the
U.S.-Mexico border. These communities are characterized by
substandard housing, inadequate roads and drainage, substandard or
no water and sewer facilities, and no garbage disposal services.
Although colonias are found in all four U.S. border states, they
are most common in Texas and New Mexico. EPA estimated in 1997
that the colonias' population includes over 390,000 people in
Texas and over 42,000 in New Mexico. Figure I.3 illustrates an
example of a U.S. colonia. Figure I.3: A Colonia in Douglas,
Arizona Although poor by U.S. standards, Mexico's northern border
is considered to be one of the more affluent areas of the country.
Compared to other areas 8An area of general economic distress is
defined, for all urban and rural communities, as any census tract
that has a poverty rate of at least 20 percent, or any designated
Federal Empowerment Zone, Supplemental Empowerment Zone, Enhanced
Enterprise Community, or Enterprise Community. Furthermore, any
additional rural or Indian reservation area may be so designated
after considering the following factors: (1) unemployment rate,
(2) degree of poverty,(3) extent of outmigration, and (4) rate of
business formation and rate of business growth. Letter Page 15
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix I The U.S.-
Mexico Border in Perspective of the country, the Mexican side of
the border has lower unemployment, higher incomes, more even
income distribution, and more services. Although better off than
much of the rest of Mexico, communities on the Mexican side of the
border also confront deficiencies in basic services. According to
a 1996 EPA study, about 12 percent of the population in major
Mexican border cities lack access to safe drinking water, and only
about 69 percent live in residences connected to sewage collection
systems. Furthermore, only 34 percent of the wastewater produced
in Mexican border cities is treated. What Are the Unique
The transnational nature of the border issues, the differing
levels of Challenges in development in the
United States and Mexico, and the dissimilar governmental
structures make border issues difficult to address. Many of
Addressing Border the major border issues are
essentially not "domestic," but transnational Issues?
issues that transcend political boundaries. For example, El Paso,
Texas, and its sister city, Ciudad Juarez, have a serious air
pollution problem. The mountains surrounding the cities create a
single air basin, causing airborne pollution to stagnate over the
area. Only by working together to mitigate the sources of the
pollution will either city enjoy clean, healthy air. The
situation is essentially the same for many other important border
issues, such as drug interdiction, immigration, congestion at
border crossings, availability and management of water, and health
concerns (such as the high levels of tuberculosis in the border
region). Addressing these complex transnational issues requires
coordination and cooperation among numerous U.S. federal, state,
and local agencies, and with their Mexican counterparts.
Transnational Nature of the The United States and Mexico
recognize the transnational nature of the Issues
major issues on the border and have worked to build a closer
bilateral relationship. To this end, they have created numerous
binational institutions to foster joint action. Among them are
the U.S.-Mexico Binational Commission, established in 1981, and
the Border Liaison Mechanism, which was created in 1993. The
Binational Commission meets annually at the Cabinet level and
works on a wide range of issues, such as drugs, immigration, and
border cooperation, that are critical to U.S.-Mexican relations
and the border region. The Border Liaison Mechanism is chaired by
the consuls-general or consuls in the sister or pair cities. It
brings together the U.S. and Mexican sides---local federal, state,
and municipal officials, as well as business and community groups-
--in order to develop joint actions to help resolve local
problems, such as Page 16
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix I The U.S.-
Mexico Border in Perspective cross-border law enforcement issues,
health concerns, and coordination of port security and operations.
The U.S. and Mexican governments have recently developed an
initiative called the New Border Vision. In May 1997, President
Clinton and President Zedillo proposed to devise a comprehensive
and long-lasting strategy to transform the border into a model of
bilateral cooperation. They agreed on the need to promote
sustainable economic and social development as well as to improve
the well-being and safety of families and communities along the
shared border. Disparity in Development A second challenge in
addressing border issues is the disparity between the Levels
United States and Mexico in terms of level of development. This,
in turn, results in differing levels of resources available to
address border problems. Many parts of Mexico's northern border
are poor by U.S. standards, yet the northern border is relatively
well off as compared to other parts of Mexico. In addition, the
Mexican government has been focused on improving its overall
economy, reducing government spending, and dealing with less-
developed regions in the south. This means that the amount of
funding that is available from Mexico for border projects is
limited. For example, the United States and Mexico agreed to
jointly finance a new wastewater treatment plant in South Bay,
California, and a plant expansion at Nogales, Arizona, to treat
waste generated on the Mexican side of the border. As a result of
limited resources and higher priorities elsewhere in the country,
Mexico contributed $17.8 million of the total cost of $321.9
million for both projects. The United States financed Mexico's
share of project costs and agreed to 10 annual installment
payments to repay the loan. Figure I.4 illustrates the new South
Bay wastewater treatment plant, just inside the border near San
Diego, which exclusively treats wastewater from Tijuana, Mexico.
Page 17 GAO/NSIAD-99-190 U.S.-
Mexico Border Issues Appendix I The U.S.-Mexico Border in
Perspective Figure I.4: South Bay International Wastewater
Treatment Plant Differences in Government Differing U.S. and
Mexican governmental structures also create a challenge Structure
to joint action. Mexico has had a centralized government
structure in which authority is generally contained in Mexico
City. Policy and resource allocation decisions that affect border
issues are typically made in Mexico City. Thus, Mexican states
and local governments in the border region generally have not had
the authority or resources to address border issues. While Mexico
is beginning to delegate more authority to state and local
officials, this shift in authority is made more difficult because
local officials can only serve one 3-year term. The resulting
turnover among officials makes building institutional expertise
and continuity difficult, and new relationships have to be
developed between U.S. and Mexican counterparts. It also means
that there are no assurances that the initiatives of one
administration will be carried out by its successor. In the United
States, the federal government shares authority and responsibility
with the states on matters such as natural resources management,
the environment, transportation, and health issues. For instance,
most highways in the United States are planned, built, and
maintained by the states. Decisions about the location of a new
highway are typically made by state and local officials. Because
of these differences Page 18
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix I The U.S.-
Mexico Border in Perspective in government responsibilities, on
certain issues, the Mexican counterparts to U.S. state and local
authorities have not had the authority to make decisions on
actions to address common border problems. The U.S. officials
have had to negotiate with Mexican federal officials, who have
many priorities in addition to the northern border. Page 19
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix II Drug
Enforcement
Appendix II The need to stop the flow of illicit narcotics from
Mexico to the United States has had major implications for the
U.S.-Mexico border area, where much of the enforcement effort
takes place. This drug enforcement mission affects the processing
of both people and cargo that cross the border. The cross-border
movement of drugs has been accompanied by other criminal
activities on both sides of the border, including the corruption
of law enforcement officials, violence, and money laundering. The
United States and Mexico consider drug trafficking to be a major
threat to their respective national security and have attempted to
address drug-trafficking issues through coordination and the
development of a binational counternarcotics strategy. Much of
the U.S. efforts are focused on providing assistance to U.S. law
enforcement organizations along the border to enhance their drug
interdiction capabilities. The principal U.S. agencies combating
the flow of drugs across the border are the U.S. Customs Service,
the Drug Enforcement Administration (DEA), the Department of
Defense, and the Immigration and Naturalization Service (INS).
What Is the Nature of At present, Mexico is the principal
transit route for most of the cocaine and the Drug Problem?
much of the heroin and foreign-produced marijuana that is consumed
in the United States. U.S. agencies estimate that about 60
percent of the almost 340 metric tons of cocaine entering the
United States in 1998 passed through Mexico and, despite Mexican
drug eradication efforts, Mexico remains a major source country
for marijuana and heroin sold in the United States. According to
DEA, almost all of the estimated 6 metric tons of heroin produced
in Mexico in 1998 will reach U.S. markets. In February 1999, the
DEA Administrator testified that a study DEA has underway
indicates that as much as 29 percent of the heroin used in the
United States is smuggled in by Mexican drug-trafficking
organizations. DEA also estimates that the majority of the
methamphetamine available in the United States is either produced
in Mexico and transported to the United States or manufactured in
the United States by Mexican drug traffickers. The drug-
trafficking problem in the United States and Mexico is associated
with corruption of law enforcement officials, violence, and money
laundering: * A major impediment to U.S. and Mexican
counternarcotics efforts is the corrupting influence that drug
trafficking activities have on law enforcement. According to one
U.S. estimate, Mexican narcotics traffickers spend billions of
dollars a year to suborn Mexican Page 20
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix II Drug
Enforcement government officials at all levels.1 Recognizing the
impact of corruption on law enforcement agencies, the president of
Mexico (1) expanded the role of the military in counternarcotics
activities and (2) introduced a screening process for personnel
working in certain law enforcement activities. However, neither
of these initiatives can be considered a panacea for the
narcotics-related problems confronting the two countries. In
fact, since these initiatives, a number of senior military and
screened personnel were found to be either involved in or
suspected of conducting drug-related activities. Drug-related
corruption of law enforcement is not limited to Mexico. Some U.S.
Immigration and Naturalization Service and U.S. Customs Service
employees on the U.S.-Mexico border have engaged in a variety of
illegal drug-related activities. Such activities have included
waving drug loads through at the border crossings, coordinating
the movement of drugs across the border, transporting drugs past
U.S. Border Patrol checkpoints, selling drugs, and disclosing drug
intelligence information to drug traffickers.2 * Violence is also
an outgrowth of the illicit drug situation that affects both sides
of the border. Organized crime groups from Mexico have relied on
violence as an essential tool of their trade. For example,
between September 1996 and February 1999, DEA recorded 141 threats
or violent incidents against U.S. law enforcement personnel, their
Mexican counterparts, public officials, or informants in Mexico or
along the border. According to DEA, much of the drug-related
violence, which has become commonplace in Mexico, has spilled over
to communities within the United States. * Money laundering is
another byproduct of drug trafficking. According to the
Department of State, Mexico continues to be the primary haven for
money laundering in Latin America. Drug cartels launder the
proceeds of crime in legitimate businesses in both the United
States and Mexico, favoring transportation and other industries
that can be used to facilitate drug, cash, and arms smuggling or
to further money-laundering activities. In May 1998, Customs
concluded Operation Casablanca, the largest and most comprehensive
drug money-laundering investigation in the history of U.S. law
enforcement. This 3-year investigation netted 1See Drug Control:
Update on U.S.-Mexican Counternarcotics Activities (GAO/T-NSIAD-
99-98, Mar. 4, 1999). 2See Drug Control: INS and Customs Can Do
More to Prevent Drug-Related Employee Corruption (GAO/GGD-99-31,
Mar. 30, 1999). Page 21
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix II Drug
Enforcement about $100 million in illicit drug proceeds and
culminated in the arrest of 168 individuals from 12 of Mexico's
largest banking institutions.3 Additionally, three Mexican banks
were indicted for participating in the money-laundering scheme.
What Efforts Are The United States and Mexico have
attempted to address drug-trafficking Underway to Counter issues
by (1) coordinating their efforts, particularly through periodic
meetings of senior government officials and (2) developing a
binational the Drug Threat? counternarcotics
strategy. The United States has also increased its
counternarcotics assistance to Mexico, and U.S. law enforcement
organizations have received additional support along the southwest
border in order to enhance drug interdiction capabilities. The
United States and Mexico have established a number of formal and
informal mechanisms to increase cooperation and coordination
between the two countries on law enforcement and narcotics-related
issues. The two principal formal coordinating forums are the
U.S.-Mexico High-Level Contact Group on Narcotics Control and the
senior Law Enforcement Plenary. The contact group, led by the U.S.
Director of the Office of National Drug Control Policy and the
Mexican Foreign Secretary and the Attorney General, met twice in
1998. An ad hoc meeting between the Mexican and the U.S.
Attorneys General occurred in July 1998 and resulted in the
creation of a process for enhanced consultations and cooperation
in sensitive cross-border operations. Additionally, Mexico
created the Bilateral Task Force, a special unit within the
Mexican Attorney General's office responsible for investigating
and dismantling the most significant drug-trafficking
organizations along the U.S.-Mexican border. The United States and
Mexico have also developed the Binational Drug Strategy, released
in February 1998, which contained 16 general objectives. Among
them were the goals of reducing the production and distribution of
illegal drugs in both countries, increasing the security of the
border, and focusing law enforcement efforts against criminal
organizations. Since the issuance of the binational strategy, a
number of joint working groups, made up of U.S. and Mexican
officials, have been formed. One result of these meetings was the
development of joint performance measures and 3See Drug Control:
Update on U.S.-Mexican Counternarcotics Efforts (GAO/T-NSIAD-99-
86, Feb. 24, 1999). Page 22
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix II Drug
Enforcement milestones for assessing progress toward achieving the
objectives of the binational counternarcotics strategy. At the
border crossings, the U.S. Customs Service is the primary agency,
assisted by INS Inspections, responsible for stopping the flow of
illegal drugs through U.S. ports of entry. In addition to
conducting routine inspections to search passengers, cargo, and
conveyances4 for illegal drugs, Customs' drug interdiction program
includes investigations and other activities unique to specific
ports. In conducting its drug interdiction role, Customs' major
challenge is to effectively carry out its interdiction and trade
enforcement missions while at the same time facilitating the flow
of persons and cargo across the border. In fiscal year 1998,
Customs seized 31,769 pounds of cocaine, 830,891 pounds of
marijuana, and 407 pounds of heroin along the U.S.-Mexico border.
To help deal with the drug problem at the border, Customs is
installing various state-of-the-art X-ray systems to inspect cargo
and vehicles and is evaluating other forms of new technology in
high-risk areas. Many of these efforts are being supported by the
Department of Defense and involve support of and coordination with
other law enforcement agencies. Figure II.1 illustrates a truck
exiting the truck X-ray at the Pharr, Texas crossing. 4Conveyances
include cars, buses, trucks, aircraft, and vessels. Page 23
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix II Drug
Enforcement Figure II.1: Truck X-Ray The Border Patrol is the
principal agency within INS responsible for detecting and
apprehending drug smugglers along the border between the ports of
entry. According to the Office of National Drug Control Policy,
the Border Patrol seized 22,675 pounds of cocaine and more than
871,000 pounds of marijuana during fiscal year 1998. The INS also
reports that it was responsible for the arrest of more than 8,600
persons for narcotics-related violations along the southwest
border during this period. Page 24
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix III Illegal
Immigration
Append Iix II Each year, hundreds of thousands of illegal aliens
enter the United States across the U.S.-Mexico border. As a
result, Congress has mandated increased efforts to facilitate
border processing of legal entries and prevent or deter illegal
crossings. Jobs in the United States have been the major draw for
Mexican migrants. What Is the Nature and Mexican citizens and
others who want to be admitted to the United States Extent of
Increasing must present documents to INS inspectors
at ports of entry along the border. Of the 915,900 persons who
were granted legal permanent resident Immigration on the
status in fiscal year 1996, 163,572, or 15 percent, were from
Mexico-an Border? increase of about 82
percent from fiscal year 1995. In addition, an unknown number of
Mexicans, likely to exceed 1 million, come and work in the United
States for short periods of time and then return home, according
to a Brookings Institution study.1 INS has the dual role of
facilitating legal entry into the United States and stopping
illegal entry. Last year, for example, an average of 960,000
entries were processed daily along the border. In 1996, INS
estimated that the Mexican undocumented entrant population had
grown by an average of 150,000 annually since 1988 and that 2.7
million undocumented entrants had established residence in the
United States. In fiscal year 1998, INS made 1.5 million
apprehensions on the southwest border. What Is Being Done to INS'
Inspections and the U.S. Border Patrol, also part of INS, are the
two Address Border components chiefly
responsible for deterring illegal entry along the southwest
border. In attempting to inhibit unlawful entrants, the Attorney
Immigration Issues? General announced a five-part
strategy in 1994 to strengthen enforcement of the nation's
immigration laws, including enhancing border monitoring. The
primary focus of enforcement efforts shifted from apprehending
illegal aliens in the United States to deterring their entry.
Moreover, Congress increased the U.S. Border Patrol's budget from
$362 million in fiscal year 1993 to $727 million in 1997. As a
result, existing resources have been reallocated along the border,
and border control personnel have been increased. For example,
the number of Border Patrol agents on the border rose from 3,389
to 7,357 between fiscal year 1993 and 1998. This growth 1The
Brookings Institution, Immigration in U.S.-Mexican Relations: A
Report of the U.S.-Mexican Relations Forum (Washington, D.C.: Jan.
1998). Page 25
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix III Illegal
Immigration was due largely to the 1996 Illegal Immigration Reform
and Immigrant Responsibility Act's requirement that the U.S.
Border Patrol hire 1,000 agents annually through 2001. However, a
study commissioned by the Office of National Drug Control Policy
estimated that the U.S. Border Patrol would need over 16,000
agents to deter unauthorized crossings along the southwest
border.2 This number is more than twice the 7,357 agents working
the border as of September 1998. We recently reported that INS is
unlikely to meet the 1,000-agent annual hiring quota mandated by
Congress, and the executive branch has not requested additional
positions in its fiscal year 2000 budget.3 Figure III.1
illustrates U.S. Border Patrol agents monitoring the double wall
dividing San Ysidro and Tijuana to deter illegal crossings, among
other things. 2F. Bean, R. Capps, and C. W. Haynes, An Estimate of
the Number of Border Patrol Personnel Necessary to Control the
Southwest Border (Austin, TX: Center for U.S.-Mexico Border and
Migration Research, University of Texas, July 1998). We have not
reviewed the methodology used to arrive at this figure. 3In March
1999, the INS Commissioner testified that nearly 48 percent of the
Border Patrol agents had less than 3 years of experience, and law
enforcement experts had indicated that it is risky to allow an
agency's overall ratio of inexperienced officers to exceed 30
percent. Also, according to an INS official, INS lacks adequate
facilities to support the increased numbers of agents along the
southwest border. Therefore, according to INS, maintaining
staffing at the fiscal year 1999 level will give INS time to
develop more experienced agents and allow INS to allocate the
funds it needs to improve facilities. Illegal Immigration: Status
of Southwest Border Strategy Implementation (GAO/GGD-99-44, May
19,1999). Page 26
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix III Illegal
Immigration Figure III.1: U.S.-Mexico Border at San Ysidro,
California, and Tijuana, Mexico One method the United States is
using to enhance and expedite enforcement efforts at border
crossings is increasing the use of biometric technology, whereby
biometric identifiers, such as photos and fingerprints, can be
digitally scanned and read by a computer. INS has developed
IDENT, an automated system that catalogues apprehended illegal
aliens' fingerprints, which can help identify the number of aliens
apprehended while attempting to reenter the country. The State
Department is also currently phasing in another identification
system to speed processing Page 27
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix III Illegal
Immigration times for legal entry of Mexicans who frequently cross
the border into the United States. The border crossing cards that
had previously been used are now being replaced with laser visas,
new high-tech biometric cards that include photos and
fingerprints. One area of current concern in U.S. border
enforcement efforts is a U.S. Congress-mandated4 automated
entry/exit control system at land and seaport points of entry that
will collect arrival and departure data on every non-U.S. citizen
crossing the border. Critics of the mandate, fearing huge
bottlenecks at the border, want a system that balances law
enforcement and trade facilitation. The system was to be
established by September 30, 1998, on both the Mexican and
Canadian borders. However, Congress has extended the deadline to
March 31, 2001. While the United States and Mexico are willing to
work together on some border issues, there are some differences in
emphases: the United States wants to reduce the level of
unauthorized migration, while Mexico wants to protect its
citizens. The United States' present policy is to immediately
deport illegal immigrants who are apprehended, unless they might
have a legitimate claim to asylum or have committed a crime.
Mexico's focus emphasizes actions the United States should take,
particularly better protection of the human rights of migrants and
avoidance of abrupt changes to immigration policy. In particular,
the Mexican government is concerned that the 1996 Illegal
Immigration Reform Act will (1) result in a concerted effort to
identify and deport undocumented workers and some documented
workers and (2) make it more difficult for Mexican nationals
living illegally in the United States to acquire legal status. In
another effort to deal with border entry issues, the U.S. and
Mexican governments established a Border Safety Initiative in June
1998 to prevent injuries, deaths, and violence along the border.
With increased enforcement at border entry points, aliens have
shifted their crossing patterns to more dangerous river and desert
crossings. This initiative warns potential illegal aliens through
various media of the dangers in crossing the border at particular
routes and targets search and rescue operations in hazardous
areas. At a February 1999 meeting in Merida, Mexico, the United
States and Mexico agreed to a memorandum of understanding on
combating border violence. 4Section 110 of the Illegal Immigration
Reform and Immigrant Responsibility Act of 1996 (P.L.104-208,
Div.C). Page 28
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix IV Cross-
Border Transportation
Appendix IV As commercial and private vehicle traffic associated
with growing economic integration has increased, it has put stress
on the local infrastructure. Long lines at some crossings impede
local traffic movement, contribute to air pollution, and can raise
business costs if merchandise and parts are delayed. Traffic
congestion is caused in part by inadequate infrastructure at some
crossings, resource management issues, as well as how the ports of
entry are managed. Another major factor affecting congestion is
the need to facilitate commerce and the movement of people across
the border while at the same time protecting the nation against
illegal immigration and contraband goods. What Is the Nature and
The growing volume of trade between the United States and Mexico
has Extent of the placed pressure on the local
transportation infrastructure of border communities. Total trade
between the United States and Mexico has Cross-Border
increased from $75.8 billion in 1992 to $157.3 billion in 1997,
and that year Transportation just under 10
percent of total U.S. imports entered the country from Problem?
Mexico. Approximately 75 percent of U.S.-Mexico trade (measured
by weight) crosses the southwest border by truck. According to
the U.S. Customs Service, in fiscal year 1998 approximately 3.9
million trucks entered the United States from Mexico, a 30-percent
increase from fiscal year 1996. At some ports of entry, such as
Laredo, Texas, and Otay Mesa, California, as many as 2,500
commercial vehicles a day enter the United States. Commercial and
passenger traffic volume can also be seasonal. For example,
Nogales, Arizona, handles a high volume of fresh vegetables during
the winter months. Cross-border passenger traffic generally
increases around major holidays, particularly Christmas and
Easter. The number of passenger vehicles entering the United
States from Mexico also rose 12 percent during the 1996-98 period,
from 76 million to 85.4 million. Currently, there are 45 ports of
entry along the U.S.Mexico border, according to the State
Department;1 however, the number is not static. A new port of
entry recently opened in Brownsville, Texas, and new bridges are
scheduled to open in Eagle Pass this year and Laredo, Texas, next
year. The value of imports that crossed the U.S. border from
Mexico in 1997 was $75.5 billion-Customs statistics show that
South Texas district ports of entry processed $38.8 billion, the
West Texas district handled $14.7 billion, the Arizona district
processed $8.5 billion, and Southern California handled 1This
includes two bridges currently under construction. Page 29
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix IV Cross-
Border Transportation $13.5 billion.2 These numbers illustrate
the burden placed on the transportation infrastructure of the
different communities along the border. Figure IV.1 illustrates
trucks waiting for paperwork in the U.S. import lot in Laredo; the
trucks on the bridge are heading into Mexico. Figure IV. 1:
Commercial Traffic in Laredo, Texas Traffic associated with
southwest border ports of entry has led to congestion of both
commercial and passenger vehicles at some crossings, particularly
older crossings that were built in downtown areas. This traffic
has taxed the local and regional transportation infrastructure,
and the resulting lines of traffic, which can run up to several
miles during peak periods, are associated with air pollution
caused by idling vehicles. Federal and local officials have also
expressed concerns about how congestion affects safety around the
ports of entry. Congestion can also have a negative impact on
businesses that operate on a just-in-time schedule and rely on
regular cross-border shipments of parts, supplies, and finished
products. Custom brokers and local trucking companies also have
an effect on the flow of traffic because their work is part of the
process of moving goods across the border. Custom brokers process
paperwork for 2The U.S. Customs Management Centers on the
southwest border are South Texas, West Texas, Arizona, and
Southern California. Page 30
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix IV Cross-
Border Transportation exporting and importing goods; and trucking
companies ship goods across the border. Processing the high volume
of commercial and passenger traffic while interdicting illegal
contraband and immigrants and ensuring commercial vehicle safety
presents a challenge for the multiple agencies working on the
border. Customs and INS are the main, frontline agencies at the
ports of entry that have contact with the public. Customs is the
lead agency that processes commercial traffic, and its inspectors
are responsible for searching vehicles for illegal drugs, illegal
imported goods, and illegal immigrants. INS primarily focuses on
processing pedestrians and passenger vehicles while also looking
for contraband and immigration violations. Other agencies that
may be at the ports of entry, depending on the goods imported, are
the federal and/or state departments of transportation, the Food
and Drug Administration, the Agricultural Plant and Health
Inspection Service of the Agriculture Department, and the U.S.
Fish and Wildlife Service. Customs subjects commercial vehicles
entering the United States to a mandatory primary inspection.
Inspectors check shipping documentation, track the truck's and
driver's recent crossing history, and review vehicle and driver
permits. At some ports of entry, Customs staff, assisted by
National Guard staff, examine vehicles using canines, tools, and
scopes. Trucks may then be selected for additional secondary
examinations, such as full truck X-rays. There are also other
inspections that may take place, such as a hazardous materials
check or inspections by the Departments of Transportation and
Agriculture, or the Food and Drug Administration. The result is
that inspection facilities can be crowded during peak periods as
trucks are off-loaded and inspected, or drivers wait for paperwork
to be approved. At some ports of entry, Customs officials said
that insufficient staffing also impedes the crossing process and
leads to backups because not all available primary entry lanes can
be opened to let trucks into the inspection compound. A recent
binational study published by the Joint Working Committee
quantified costs associated with trade-related traffic between the
United States and Mexico. The study estimated that wear on the
U.S. border state highway systems was $113 million in 1995, while
wear on U.S. nonborder highway systems was estimated at $62
million. Page 31 GAO/NSIAD-99-190
U.S.-Mexico Border Issues Appendix IV Cross-Border Transportation
What Is Being Done to The U.S. and Mexican governments have
several binational mechanisms to Address the
coordinate port of entry activities. These mechanisms take place
at the national, state, and local levels. The primary binational
mechanism at the Cross-Border Traffic national level is
the U.S.Mexico Binational Group on Bridges and Border Problem?
Crossings. This group works out agreements for existing and
potential bridges and border crossings and is coordinated by the
U.S. State Department and its Mexican counterpart. The Joint
Working Committee is another group that works on transportation
planning at the local and national levels, with representatives
from U.S. and Mexican states and federal governments. The Border
Governors' Conference, which represents the four U.S. and six
Mexican border states, focuses on addressing issues and
opportunities of the border region, and promoting initiatives to
improve the region's quality of life. The Western Governors'
Association works on issues that affect the four U.S. border
states, such as border congestion and air pollution, among other
issues. At the local level, the Border Liaison Mechanism is
coordinated by U.S. and Mexican consulates, and we have learned of
informal U.S. and Mexican counterpart port of entry committees.
Perspectives differ on cross-border traffic problems. Mexican and
U.S. federal and state government officials have told us they
believe existing ports of entry should be used to their full
capacity throughout the day before new ones are built. However,
in both the United States and Mexico there is local interest in
building new ports. In Texas, for example, toll revenues from
bridges that cross the Rio Grande River provide a key source of
revenue for local communities, counties, and private owners. The
potential for receiving crossing revenue has, according to some
observers, led to interest in building new crossings. According
to local officials, rural areas and small cities have fewer
resources to cope with the effects of cross-border traffic flow
problems but may derive economic benefits from a port of entry.
Within the federal agencies at ports of entry, there are programs
to improve interdiction efforts as well as port of entry
management and operations. A recent undertaking is the Border
Coordination Initiative, which is designed to increase cooperative
interdiction efforts between Customs and INS. Some ports of entry
also have instituted Port Quality Improvement Committees that
bring together all agencies responsible for facilities and
operations. In addition, some ports of entry have tried extending
hours and opening more lanes to improve the flow of traffic as
staffing and operating budgets have permitted. Page 32
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix IV Cross-
Border Transportation Federal and local funding have been
earmarked for various border infrastructure projects. Congress
established the Southwest Border Stations Capital Improvements
program in 1988 and appropriated $361 million for it, nearly all
of which has been spent. Recently, the Transportation Equity Act
for the 21st Century (TEA-21) authorized funding for border
infrastructure projects as well as for high priority corridors,
which may include border projects, totaling $140 million for each
of fiscal years 1999 through 2003.3 In Texas, a position was
created for an assistant executive director for border trade
transportation, along with a new border transportation initiative.
While many groups have reported on these problems and potential
ways to solve them, and mechanisms are in place to serve as tools
for coordinating operations along the U.S.-Mexico border, problems
that have existed at the border crossings continue. In 1991 and
1997, we reported that private sector groups and federal, state,
and local government officials were concerned about the adequacy
of inspection facilities to accommodate increased commercial
traffic expected with NAFTA, as well as with the adequacy of
border-related road and highway infrastructure.4 In 1994, the
Border Infrastructure and Facilitation Task Force made short- and
long-term recommendations for changes to bring about operational,
infrastructure, institutional, and regulatory/legislative
improvements. In addition, the binational Joint Working Committee
issued its report in 1998, covering a wide range of border
infrastructure issues and including an inventory of capacity
estimates for ports of entry and analysis of the economic impacts
of U.S.-Mexico trade on border communities. The Border Trade
Alliance, a public-private coalition of individuals conducting
business across U.S. borders, has also compiled a Southwest Border
Port Capital Improvements Report for Fiscal Year 2000 that
identifies potential port of entry capital improvements. Finally,
the Western Governors' Association recently released a study on
border congestion. The study's potential solutions to border
congestion problems include better monitoring and staffing of
vehicle inspection lanes at border crossings, adding additional
inspection lanes where deficient, establishing average maximum
queue times as an official goal, establishing a unified port of
entry management system to coordinate efficient and rule-compliant
3P.L. 105-178, secs. 1101, 1118-19. 4See U.S.-Mexico Trade:
Survey of U.S. Border Infrastructure Needs (GAO/NSIAD-92-56, Nov.
27, 1991) and Commercial Trucking: Safety Concerns About Mexican
Trucks Remain Even as Inspection Activity Increases (GAO/RCED-97-
68, Apr. 9, 1997). Page 33
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix IV Cross-
Border Transportation movement of goods and people across the
border, and encouraging users to cross the border at off-peak
times. Page 34 GAO/NSIAD-99-190
U.S.-Mexico Border Issues Appendix V Environmental Infrastructure
and Public Health
Appendix V Environmental problems and their impact on public
health have been a long-standing concern in the border region.
The United States and Mexico have not been able to keep pace with
the growing environmental infrastructure1 needs associated with
the expansion of the border region's economy and population.
While most incorporated border communities on the U.S. side have
an environmental infrastructure, in places it is in need of
repairs, upgrading, and/or expansion. The need for an
environmental infrastructure is far greater on the Mexican side of
the border, where many communities lack a clean and safe drinking
water supply and proper sanitation facilities. Inadequate
infrastructure on either side, however, creates health concerns on
both sides of the border. Unsanitary living conditions are a
leading cause of gastrointestinal and other diseases that are
prevalent on the border. Moreover, there is a serious shortage of
water in some locations. Many communities lack the resources and
human capital to deal with these problems. What Is the Nature and
Communities on both sides of the border face environmental
problems Extent of the associated with water and
wastewater treatment, solid and hazardous waste disposal, and air
pollution. During the 1993 debates over NAFTA, it Environmental
was estimated that as much as $8 billion would be needed to meet
the Infrastructure and border region's environmental
infrastructure needs during the next 10-year Public Health
period. Problem? Water and Wastewater A diminishing
supply of clean and safe drinking water supply and Treatment
inadequate water distribution systems, as well as untreated
wastewater, pose serious health risks for communities on both
sides of the border. In Mexican border cities, about 12 percent of
the population does not have access to drinking water, according
to Mexico's National Water Commission. In addition, while 69
percent of the population live in residences connected to sewage
collection systems, some of which are very old and have exceeded
their useful life, the wastewater treatment plants in Mexican
border cities treat only 34 percent of wastewater in the
aggregate. In some areas, raw or insufficiently treated
wastewater 1Environmental infrastructure refers to the
infrastructure designed to protect human health and the
environment along the U.S.-Mexico border by preventing and/or
reducing the pollution of air, water, and soil. Page 35
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix V
Environmental Infrastructure and Public Health eventually flows
into surface and drinking water sources that are shared by both
countries. Sewage disposal has been a particularly severe problem
at Ciudad Juarez and Matamoros, cities with combined populations
of well over 1 million residents, where no wastewater treatment
capability currently exists. However, Ciudad Juarez is currently
building wastewater treatment facilities. On the U.S. side of the
border, the vast majority of U.S. municipalities have EPA-
approved, publicly owned wastewater treatment plants. In some
communities, however, water and wastewater systems are at or near
capacity and will need to be upgraded or expanded in the future.
The colonias, however, face significant environmental
infrastructure problems. These colonias, located mainly in Texas
and New Mexico, typically have substandard housing and inadequate
roads and lack access to clean drinking water and wastewater
disposal systems. These problems are particularly severe in
Texas, which has an estimated 1,200 colonias. Agricultural runoff
and irrigation return flows are a source of pollution in some U.S.
border communities. The New River, which flows through Mexicali,
Baja California, and the Imperial Valley of California before
emptying into the Salton Sea, is one of the most polluted rivers
in the United States. The pollution is caused in large part by
runoff from farms in the Imperial Valley. Figure V.1 illustrates
an irrigation canal polluted from agricultural runoff. Page 36
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix V
Environmental Infrastructure and Public Health Figure V. 1:
Agricultural Runoff Near Where the New River Enters the Salton Sea
Population and industrial growth also threaten the water supplies
in arid regions along the border. For example, San Diego/Tijuana,
according to some studies, will face serious drinking water
shortages early in the next century. Authorities from the two
cities hope to meet future needs with transfers of Colorado River
water from agricultural areas in California's Imperial Valley and
Mexico's Mexicali Valley. They are tentatively discussing the
joint construction of an aqueduct for this purpose. In El
Paso/Ciudad Juarez, the anticipated water shortages are related to
the inadequate source of water. El Paso and Ciudad Juarez depend
on the same aquifers for water, and these aquifers are rapidly
being depleted. A binational study of the depletion of the
aquifer is now underway, with a view toward taking corrective
action. Solid and Hazardous Waste Many communities in the border
region, particularly in Mexico, lack the Disposal
infrastructure for collecting and properly disposing of solid
waste. Mexican border cities often have waste management
institutions that are beset with administrative deficiencies and
lack adequate legal authority to regulate and collect user fees
for services. These institutions often have too few reliable
trucks to collect all the garbage. As a result, only 86 percent
of household waste is collected, and only 53 percent of what is
collected is deposited in sanitary landfills. In some Mexican
communities, Page 37
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix V
Environmental Infrastructure and Public Health waste is
incinerated in the open, impairing visibility and diminishing air
quality. In Nogales, Sonora, the burning of manure in the
stockyards has posed a serious health risk to residents on both
sides of the border. In the U.S. border region, solid waste
disposal problems are mainly restricted to the colonias, where
solid waste collection is often inconsistent and inadequate.
While officials of some U.S. border communities recognize the
significance of the problem, they are concerned that extending
solid waste collection to colonias may strain the capacities of
current landfills. Hazardous waste disposal is a growing problem
in the border region. In Mexico, maquiladora plants generate the
most hazardous waste in the border region. The Mexican government
has required that this waste be returned for proper disposal to
the country of origin of the raw materials, which is usually the
United States. However, there are concerns about the proper
disposal of hazardous waste generated by Mexican businesses.
Mexico currently has only one hazardous waste disposal facility.
The Mexican Secretariat for Environment, Natural Resources and
Fisheries has identified several hazardous waste disposal problems
in Baja California, including a lack of treatment, neutralization,
or incineration systems for hazardous and toxic waste. The
Secretariat has made the development of a hazardous waste
infrastructure throughout Mexico a priority. Air Pollution Air
quality is also a major concern in the border region because many
residents of border cities are exposed to health-threatening
levels of air pollution from a variety of sources. According to a
1996 Border XXI report,2 13 border cities exceeded or are expected
to exceed at least one of the ambient air quality standards set by
their respective federal governments. Rapid urbanization and
industrialization are responsible for most of the air pollution
problems in the border region. The citizens of El Paso, Texas,
nearby Sunland Park, New Mexico, and Ciudad Juarez have long been
exposed to high levels of air pollution. According to a local
binational task force for improving air quality,3 the sources of
this pollution are emissions from the increasing vehicular traffic
in the area, dust from unpaved roads and the surrounding desert,
open burning, fireplaces and 2See p. 43 for a description of
Border XXI. 3The Paso del Norte Air Quality Task Force was
established in 1993 as Appendix I to the 1983 La Paz Agreement,
with a mission to implement projects and promote policies to
improve air quality in the area. Page 38
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix V
Environmental Infrastructure and Public Health wood-burning
stoves, and industrial activity. The region's arid climate and
high elevation also contribute to the problem. In addition, the
cities occupy a mountain pass known as the Paso del Norte, which
is surrounded by mountains on three sides, forming a natural
amphitheater that traps the pollution. Obstacles Communities
Initiating and sustaining needed environmental infrastructure
projects have Face in Addressing long been problems for
Mexican border communities as they face financial, Environmental
Needs administrative, and institutional obstacles. Local
communities on the Mexican side of the border are dependent on a
revenue-sharing system from the federal and state governments to
finance infrastructure projects. However, the revenue available to
most communities is uncertain because it is dependent on
allocations made annually by legislative decree. Communities can
turn to Mexico's National Bank of Public Works and Services as a
source of credit for environmental infrastructure projects;
however, the interest rates are too high for most communities.
Municipalities do not have the option of raising capital outside
of Mexico's domestic market, as the Mexican Constitution prohibits
states and municipalities from incurring financial obligations in
foreign currencies and/or with foreign creditors. This status is
changing; for example, the Mexican Ministry of Finance assisted
the North American Development Bank (NADBank) in establishing a
nonbank financial subsidiary through which the NADBank is able to
lend directly to municipalities in dollars.4 Mexican border
communities' strong dependence on the federal government has also
limited their ability to gain the experience necessary to plan,
develop, and manage public works projects. Further, when the
local administration changes every 3 years, personnel in key
management positions are removed and the institutional capacity
that is developed is lost as well. As part of a federal effort to
decentralize governmental decision-making, communities are now
expected to assume more responsibility for planning and providing
public services to their residents. On the U.S. side, colonias
also face financial and institutional obstacles to environmental
infrastructure development. Since colonias are unincorporated
settlements, they lack the basic financial and institutional
mechanisms available to U.S. cities. Therefore, they do not have
the tax bases and credit sources needed to borrow money. Further,
jurisdictional 4NADBank is discussed on p. 41. Page 39
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix V
Environmental Infrastructure and Public Health disputes about
service areas among cities, counties, and rural water districts
have left the colonias without basic services. Linkage Between the
Contamination of air, water, and soil by solid waste, raw sewage,
and Environment and Public untreated wastewater, which
facilitates the growth of parasites, bacteria, Health
and other pollutants, is suspected to be a key factor contributing
to the presence of certain diseases in border populations. These
include respiratory diseases, elevated blood lead levels in
children, cancer, hepatitis A, and infectious gastrointestinal
diseases. An outbreak of a disease on one side of the border poses
a potential threat to both countries because of the daily flow of
people back and forth between the United States and Mexico. The
high level of poverty in the border region is also a likely factor
in the high level of diseases found in the region. According to
the Interhemispheric Resource Center,5 about one-third of the U.S.
tuberculosis cases reported for the first 10 weeks of 1998 were
from the four U.S. border states. During that same period,
Mexico's border states, representing about one-sixth of Mexico's
population, accounted for about 61 percent of the country's new
tuberculosis cases. Health officials of both countries have been
particularly concerned about the increased number of multi-drug-
resistant tuberculosis cases in the border region. Further,
according to Texas officials, neural tube birth defects, which
affect the brain and spinal column, occur more frequently in the
Texas border region than in the rest of the United States.
Examples of these birth defects include anencephaly, or babies
born with partial or missing brains; and spina bifida, a severe
deformation of the spinal cord. Also, between 1994 and 1997,
cases of hepatitis A, a gastrointestinal virus borne by
contaminated food and water, occurred on the U.S. side of the
border at rates from 2 to 5 times the national average. In
addition, on the Mexican side of the border, communities have been
confronted with a disproportionately high level of intestinal
infectious diseases which are extremely rare in the United States.
5The Interhemispheric Resource Center is a nonprofit organization
in New Mexico that was founded in 1979. This information on
tuberculosis was reported in the May 1998 issue of its monthly
bulletin, titled Borderlines. Letter Page 40
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix V
Environmental Infrastructure and Public Health Many people who
live on the U.S. side of the border also lack access to affordable
healthcare. This situation contributes to the lower rates of
immunizations of children on the U.S. side of the border. The
rate for measles is 50 cases per 100,000, versus a U.S. national
average of 11 per 100,000. The rate for mumps has been documented
as high as 41 per 100,000, versus a U.S. national average of 2 per
100,000. The U.S. side of the border also has a shortage of
healthcare providers. In 1998, 27 of Texas' 43 border counties
were designated as Health Professional Shortage Areas for primary
medical care.6 What Is Being Done to The United States and Mexico
have created institutions to deal with Address
environment and health issues. The oldest of these key
institutions is the International Boundary and Water Commission,
created in 1889, which is Environmental and
responsible for maintaining the boundary between the United States
and Public Health Mexico and managing issues
involving the waters of the Rio Grande and 7 Problems?
Colorado rivers. The Commission's responsibilities also include
designing, constructing, operating, and maintaining certain
wastewater treatment facilities along the border. In recent
years, the Commission has participated in the development or
expansion of three treatment plants, one serving Tijuana, Baja
California; one serving Nogales, Arizona, and Nogales, Sonora; and
one serving Nuevo Laredo, Tamaulipas. Concern about the
environmental impact of increased industrial production and
transportation led to a NAFTA environmental side agreement. This
agreement established two binational organizations--the Border
Environment Cooperation Commission (BECC) and NADBank--to promote
the planning and financing of environmental infrastructure
projects in the border region. These organizations were created
to help border communities develop and finance environmental
infrastructure projects that will address hazardous human health
and environmental conditions. 6The U.S. Department of Health and
Human Services defines an area with fewer than one primary care
provider for every 3,500 residents as a federal Health
Professional Shortage Area if physicians are not within a
reasonable distance. The designations may apply to primary
medical care, dental services, or mental health services. 7This
organization was known as the "International Boundary Commission"
until it was reconstituted as the International Boundary and Water
Commission on February 3, 1944. Page 41
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix V
Environmental Infrastructure and Public Health BECC's primary
purpose is to certify that project proposals meet criteria for
technical and financial feasibility and sustainability. In
establishing the scope of projects to be considered, the board of
directors limited the types of projects to water, wastewater, and
solid waste based on guidance in BECC's charter. BECC emphasizes
the importance of sustainability because, in the past, projects
have been built in poor border communities with grants and other
assistance but then could not be properly maintained due to the
communities' limited financial resources. BECC also provides
technical assistance to border communities with project
development activities, including devising plans, creating project
designs, and performing environmental assessments. As of May
1999, BECC had approved over $11 million in technical assistance
grants to border communities. BECC also works to ensure public
support for projects. The Border Utility Management Institute, a
new program of NADBank, is directed at addressing the problem of
the municipalities' limited experience in undertaking public works
projects by providing funding for the development of the financial
and administrative capacities of utility managers and their
staffs. NADBank is also directing its technical assistance grant
monies to address the problem of turnover in local administration
management, with over 90 Institutional Development Program
projects in the region. Projects certified by BECC qualify to be
considered for financial assistance through NADBank and/or other
funding sources. NADBank's primary role is to facilitate
financing for the development, execution, and operation of
environmental infrastructure projects that have been certified by
BECC. The United States and Mexico have agreed to provide $225
million each to capitalize NADBank, which can be used to make
loans and loan guarantees to border communities for border
infrastructure projects. NADBank also administers EPA's funds
through its Border Environment Infrastructure Fund, which provides
grant money for water and wastewater environmental infrastructure
projects. The EPA grant funds may be used for projects on the
Mexican side, within 62 miles of the border, if there is a
transboundary impact of the infrastructure deficiency. As of June
1999, BECC had certified 27 projects. NADBank has been involved
in providing construction funding for 14 of these projects.
NADBank's participation has been mainly in the form of loans and
Border Environment Infrastructure Fund grants. According to
NADBank, it has provided loans to 7 projects, for a total of $11.1
million, while providing a total of $119.3 million in Border
Environment Infrastructure Fund Page 42
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix V
Environmental Infrastructure and Public Health construction
grants. For example, NADBank provided a $4.6 million loan and
$11.1 million in a Border Environment Infrastructure Fund
construction grant for a $31.2 million wastewater treatment plant
in Ciudad Juarez, Chihuahua. The loan for this project accounts
for 41 percent of the total NADBank funds used for loans. These
amounts represent a small percentage of the billions needed to
meet the border area's environmental infrastructure needs. Border
environmental infrastructure development involves many federal,
state, and local agencies. EPA has played a central role as a
source of grant funds for environmental infrastructure projects on
both sides of the border. Other federal agencies, including the
Department of Housing and Urban Development and the Department of
Agriculture, provide grants for environmental projects in poor and
rural areas such as colonias. Border State governments also
provide loans and grants for environmental infrastructure
development through state revolving funds and tax-exempt municipal
bonds for environmental infrastructure financing.8 Coordination
efforts between the United States and Mexico under the La Paz
Agreement have involved EPA and the Mexican Secretariat for
Environment, Natural Resources and Fisheries. In 1992, the two
governments issued the Integrated Environmental Plan for the
Mexican Border Area, which linked long-term economic growth and
environmental protection. The United States and Mexico
subsequently developed an expanded planning and coordination
mechanism known as Border XXI. Border XXI is intended to be a
comprehensive program designed to achieve a clean environment,
protect public health and natural resources, and encourage
sustainable development. It emphasizes three strategies: (1)
public participation in project development; (2) decentralized
environmental management and building the capacity of local and
state institutions to deal with environmental problems; and (3)
interagency cooperation to maximize available resources, avoid
duplicative efforts on the part of government and other
organizations, and reduce the burden that coordination with
multiple entities places on border communities. The U.S.-Mexico
Binational Commission also has a Working Group on the Environment
and Natural Resources. 8State revolving funds were established by
the Water Quality Act of 1987 as a primary source of financing for
wastewater treatment facilities and related purposes at the state
level. They provide states with federal seed money in the form of
grants to capitalize their revolving funds. The states use their
revolving funds to make loans at or below market interest rates to
local governments, and, as loans are repaid, the funds are
replenished. Page 43
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix V
Environmental Infrastructure and Public Health Border public
health issues are being addressed by a number of organizations.
For example, the U.S.Mexico Binational Commission's Health Working
Group provides an annual forum for reviewing progress on priority
health issues. The Pan American Health Organization, an arm of
the World Health Organization, convenes and oversees the
U.S.Mexico Border Health Association, which was created in 1943.
The Association is a mechanism for health professionals along the
border to foster communication on both sides of the border,
identify local health needs, and recommend ways to meet those
needs. In addition, Congress authorized the establishment of the
U.S.-Mexico Border Health Commission in 1994 (P.L. 103-400). The
Commission's goals are to (1) institutionalize a domestic focus on
border health and (2) create a venue for binational discussion to
address public health issues and problems that affect U.S.-Mexico
border populations. Congress appropriated $800,000 in fiscal year
1998 to assist in the creation of the U.S. Section of the Border
Health Commission. The 13 U.S. Commissioners have been selected,
but 8 remain to be appointed by the President.9 Efforts are
underway to explore the potential for Mexico's eventual
participation, with the goal of making the Commission a binational
forum. Another binational effort is the Ten Against TB
[tuberculosis] Campaign, led by the 10 border state health
officers in the U.S. and Mexico. It is addressing the problem of
tuberculosis on the border, working with federal and
nongovernmental partners. The Ten Against TB Campaign has
developed a four-part strategy to improve surveillance and
epidemiology, laboratory analysis, health promotion, and case
management. In addition, at a meeting on February 15, 1999, in
Merida, Mexico, Presidents Clinton and Zedillo signed a Memorandum
of Understanding on Cooperation in Prevention and Control of
Tuberculosis, recognizing that the reemergence of tuberculosis is
a major threat to global health. Finally, the U.S.-Mexico
Binational Surveillance Project has been implemented to develop a
more comprehensive binational surveillance system for public
health problems. Funded by the National Center for Infectious
Diseases and the Centers for Disease Control and Prevention, the
project targets three partner city units: San Diego-Tijuana, El
Paso/Las Cruces-Ciudad Juarez, and McAllen-Reynosa. 9Five of the
commissioners are mandated by statute: the Secretary of Health
and Human Services as chair, plus the four border states' Border
Health Officers. Page 44
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix VI Current
and Emerging Challenges to Economic Development in the Border
Region Appendix VI In addition to the existing problems of
relatively high unemployment and poverty on the U.S. side of the
border, large projected population growth, internal migration
within Mexico, and a change in the rules governing the Mexican
maquiladora industry could potentially affect economic development
challenges already existing on the border. Efforts to address job
dislocations due to NAFTA trade shifts and to alleviate the high
level of poverty in the border region are already underway,
including regional economic development initiatives. To what
extent they address border development is not yet clear. In
addition, the changes in the maquiladora industry rules in 2001
could potentially change business incentives to locate in the
border region. Initiatives to Address Although the United
States as a whole has made great economic progress Unemployment
and in the past few years, some communities in the
border region have not shared in this prosperity. For example,
unemployment in the U.S. border Economic region
between November 1997 and November 1998 was 7.4 percent,
Development compared with 4.8 percent for the
United States as a whole. Approximately 24 percent of the
population living in U.S. border counties lived in poverty in
1996,1 and only about 61 percent of the population 25 years and
over held a high school diploma.2 Moreover, the population of the
U.S.-Mexico border region, which in 1997 was 10.5 million, is
expected to double in the next 20 years. The U.S. government is
addressing worker and job dislocations in the border through
programs such as the NAFTA Transitional Adjustment Assistance
Program and the U.S. Community Adjustment and Investment Program
administered by NADBank. The NAFTA Transitional Adjustment
Assistance program was designed to assist workers in companies
affected by U.S. imports from Mexico or Canada or by shifts in
U.S. production to either of those countries. The program
provides cash payments, job training, or allowances for job search
and relocation expenses. Another program designed to deal with the
job dislocation effects from NAFTA trade is the U.S. Community
Adjustment and Investment Program. This program helps stimulate
financing by providing loans, loan guarantee fees, and grants to
create or retain private sector jobs in communities 1Poverty rate
estimates are our calculations based on Census data. The Census
data has a 90-percent confidence interval. 2As reported by the
Southwest Border Region Partnership, January 20, 1999. Page 45
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix VI Current
and Emerging Challenges to Economic Development in the Border
Region evidencing significant job losses due to changes in trade
patterns with Canada or Mexico after the passage of NAFTA.
Authorizing legislation and a fiscal year 1999 appropriation
provide up to $32.5 million to fund the program. There is a
similar program in Mexico. While the Community Adjustment and
Investment Program is not directed at the border alone, program
officials report that all U.S. NADBank border counties are now
eligible for the program (a total of 43 eligible border counties).
As of May 1999, the Community Adjustment and Investment Program,
including its agency program with the Small Business
Administration, had facilitated 88 loans or guarantees for border
communities, totaling $20.1 million. In addition, the program
had approved one direct loan in El Paso, Texas, amounting to $1
million. The program's pilot grant project was located in Dona
Ana, New Mexico, and granted $600,000 to the New Mexico Border
Authority to aid in the reemployment of displaced workers in the
region. The U.S. Department of Housing and Urban Development and
the U.S. Department of Agriculture also have efforts underway to
deal with border poverty: the Empowerment Zone and the Enterprise
Community program. This program provides tax and regulatory relief
to attract businesses to distressed urban and rural communities.
Several border communities in all four states have been designated
Empowerment Zones or Enterprise Communities. For example, the
Arizona Border Region Enterprise Community developed a plan that
addressed economic, environmental, and education/training
improvements for its community.3 In Texas, the Rio Grande Valley
Empowerment Zone reports that it has already achieved several
objectives, including business development activities such as
providing loans, a high-skills training program serving over 866
individuals, and eight waste/wastewater projects.4 Organizations
such as the Border Trade Alliance, and the Texas Comptroller, have
called for a unified approach to solving the region's problems.
Specifically, the Border Trade Alliance supports the Southwest
3The Arizona Border Region Enterprise Community includes the
counties of Cochise, Yuma, and Santa Cruz. 4The Rio Grande Valley
Empowerment Zone includes the counties of Cameron, Hidalgo, Starr,
and Willacy. In a review of the progress of six Empowerment
Zones, including the Rio Grande Valley Empowerment Zone, we
reported that the Rio Grande Valley Empowerment Zone had initiated
action on all 10 of the economic development activities planned.
See Community Development: Progress on Economic Development
Activities Varies Among the Empowerment Zones (GAO/RCED-99-29,
Nov. 25, 1998). For more information on other border region rural
and urban Empowerment Zones and Enterprise Communities, see the
Departments of Agriculture and Housing and Urban Development
websites, respectively, at http://www.ezec.gov and
http://www.hud.gov/cpd/ezec/ezeclist.html. Page 46
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix VI Current
and Emerging Challenges to Economic Development in the Border
Region Border Region Partnership, a grassroots organization
proposing to resolve regional problems through economic and
community development strategies. The recommended objectives of
the Partnership are to (1) develop a strategic plan, including
benchmarks, that addresses the five major development issues:
infrastructure, economic development, education, health, and the
environment; (2) create a community development bank and community
development fund for revolving loans and grants for business and
infrastructure; (3) increase job creation and retention
opportunities; (4) provide technical assistance, capacity
building, and leadership training to communities; (5) actively
seek partnerships and investment; and (6) become sustainable
within 5 years. On May 25, 1999, the White House announced the
launching of the Southwest Border Economic Development Initiative,
which includes the formation of an Interagency Task Force on the
Economic Development of the Southwest Border. The mission and
goal of the Task Force reflect the need to coordinate the federal
and local economic development efforts to raise the living
standards and overall economic profile of the southwest border
region on a sustained basis. The Interagency Task Force will
include members from numerous relevant federal agencies, such as
the Departments of the Treasury, Agriculture, State, Labor, and
Housing and Urban Development. It will seek to mobilize a more
integrated, rapid response by federal agencies to community
economic development strategies by (1) analyzing existing programs
and policies of member agencies; (2) consulting and coordinating
activities with state and local authorities, community leaders,
Members of Congress, and other stakeholders; (3) developing short-
and long-term options for promoting sustainable economic
development; and (4) integrating executive branch initiatives and
programs into concrete, effective actions. According to the
announcement, the first step in implementing these efforts will be
to establish demonstration projects in pilot communities. Pending
Changes in The Maquiladora Decree that governs the maquiladora
program was Maquiladora Rules revised by the Mexican
government to accommodate new rules established by NAFTA in 1994.
The maquiladora rule changes, which will be fully implemented by
2001, may affect business incentives to locate in the border
region. NAFTA provides for the gradual elimination of
restrictions limiting maquiladora production sales into the
domestic Mexican market Page 47
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix VI Current
and Emerging Challenges to Economic Development in the Border
Region by 2001.5 NAFTA also provides for the phased elimination
of U.S. import duties on maquiladora products, provided those
products meet the NAFTA rules of origin. In the year 2001, Mexico
will restrict the duty preferences available to maquiladoras for
raw materials originating outside NAFTA countries used in the
manufacture or assembly of finished products.6 Changes brought
about by NAFTA and Mexican law, which together eliminate virtually
all restrictions on foreign investment in the manufacturing
sector, will make it unnecessary to establish a maquiladora
facility to assemble goods in Mexico. 7 Observers of the border
economy, such as the Federal Reserve Bank of Dallas, the Texas
Comptroller's Office, and the U.S. Department of Commerce, agree
that several scenarios involving the maquiladora industry are
possible as a result of the changes brought about by NAFTA. These
changes range from a virtual elimination of the maquiladora
program to modifications to business practices. For example,
expected elimination of duty preferences for non-NAFTA suppliers
to the maquiladora industry could make U.S. and Canadian suppliers
more competitive with the existing non-NAFTA suppliers, possibly
leading to a shift in trade. In anticipation of Mexico's policy
change on duty relief, maquiladora producers have encouraged non-
NAFTA suppliers, such as Asian suppliers, to relocate to North
America in order to guarantee that duty-free treatment would
remain unchanged. However, it is too early to predict what the
effects of the changes in the maquiladora law will be for the
border region. 5Provided that certain Mexican customs and other
requirements are met. For example, products sold into the Mexican
domestic market must also satisfy nontariff requirements, such as
Mexican official standards, and must be of the same quality as the
finished products produced for export. 6Currently, maquiladora
companies may obtain duty-preferences on inputs obtained from any
supplier country. After 2001, maquiladora companies will only be
able to receive duty-preferences on inputs from NAFTA countries.
7Although maquiladoras will no longer exist under NAFTA as a
separate sector, production-sharing will likely continue due to
Mexico's comparative advantage in low-wage labor. Page 48
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix VII
Objectives, Scope, and Methodology
Appendix VII Concerned about the U.S.-Mexico border area's ability
to deal with a variety of issues associated with the increased
economic integration with Mexico and the ability of the area to
access federal funding, members of the House Congressional Border
Caucus asked us to undertake a broad review of border issues. As
agreed with the requesters' offices, the objective of this interim
report is to present an overview of major border issues.
Specifically, we identified (1) the nature of major issues faced
at the border, and (2) the U.S. and Mexican efforts underway to
address them. To obtain information on the nature of major issues
faced at the border, and the U.S. and Mexican efforts underway to
address them, we conducted an extensive literature search and
reviewed a variety of government studies and documents, including
State Department information on U.S.-Mexico relations. Based on
this preliminary review, we selected the following five major
issues as a focus for this work: (1) drug enforcement, (2) illegal
immigration, (3) cross-border transportation, (4) environmental
infrastructure and public health, and (5) economic development.
To establish the nature of the issues and the efforts being made
to address them, we relied heavily on the results of related past
GAO studies that addressed specific U.S. programs and activities.
We also interviewed agency officials and/or reviewed documents
from the Departments of State, Agriculture, Commerce, Defense,
Health and Human Services, and Housing and Urban Development; and
Drug Enforcement Administration, INS, and the Office of National
Drug Control Policy, as well as numerous state and local agencies
and private sector organizations. The information on foreign laws
in this report does not reflect our independent legal analysis,
but is based on interviews and secondary sources. Our ongoing
detailed evaluation of the transportation and environmental
infrastructure issues also included interviews with officials and
review of documents from the Departments of Agriculture, State,
and Transportation; EPA; INS; U.S. Customs Service; Food and Drug
Administration; General Services Administration; and state, local,
and private sector officials. We also attended various
conferences on border environment and transportation
infrastructure issues and visited Mexico City, where we
interviewed U.S. embassy and key Mexican government officials,
including officials in Mexico's Secretariat for Foreign Relations.
In addition, we obtained and analyzed data on activities at major
border crossings and environmental infrastructure projects during
case studies at key sister cities along the border, including San
Diego-Tijuana, El Paso-Ciudad Juarez, Laredo-Nuevo Laredo,
Nogales-Nogales, Brownsville-Matamoros, Calexico-Mexicali, and
Douglas-Agua Prieta. At these locations, we met Page 49
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix VII
Objectives, Scope, and Methodology with U.S. and Mexican federal,
state, and local governmental officials; a variety of officials
representing the private sector and nongovernmental organizations;
and representatives from various U.S.-Mexico coordinating
mechanisms. The meetings with U.S. and Mexican consuls general
and consuls at the key sister cities provided excellent
perspective on the wide range of border issues. As we continue
our in-depth case study analyses of transportation and environment
issues, we plan to identify potential strategies to overcome the
institutional and programmatic challenges that impede improved
conditions on the border. We performed our review from February
through June 1999 in accordance with generally accepted government
auditing standards. Page 50
GAO/NSIAD-99-190 U.S.-Mexico Border Issues Appendix VIII GAO
Contacts and Staff Acknowledgments
Appendix VIII GAO Contacts Elliott C. Smith, (214)
777-5700 John Hutton, (202) 512-7773 Acknowledgments In
addition to those listed above, Patricia Cazares-Chao, Allen
Fleener, Phillip Herr, Jeff Kans, J. Lee Kaukas, Leyla Kazaz, Ed
Laughlin, Patricia Martin, Rona Mendelsohn, Miguel Salas, Patricia
Sari-Spear, Larry Thomas, and Linda Kay Willard made key
contributions to this report. (711409) Letter Page 51
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