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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