Business leaders worry Abbott’s new border policy will hit Texas in the pocketbook7 min read
El PASO — In business parlance, time is money. And business leaders and trade experts are on edge over the likelihood that Texas Gov. Gregg Abbott’s directive this week to step up commercial vehicle safety inspections on the border is going to take a lot of time and cost a lot of money.
Already along the border — including here in El Paso, which shares four international crossings with Mexico — commercial truck lines were unusually slow Friday, with wait times averaging three hours or more. Although federal officials are in charge of the border crossings, the Texas Department of Public Security does perform some inspections there.
“It’s going to be chaos,” said Norma Jean Payne, president of the Transportation Club of DFW, an organization whose members represent more than 50 North Texas trucking, supply and logistics companies. “We’ve had so many problems in our supply chain over the last year and a half, two years — I don’t think anything that’s going to delay or cause any more problems is a wise decision right now. There’s got to be a better way to handle this.”
On Wednesday, Abbott said his plan to increase the number of state inspections is in response to the Biden administration’s decision to end the pandemic-era Title 42 health order allowing for the rapid expulsion of migrants who cross the border. During the increased safety inspections, state workers could in theory discover more of the thousands of migrants who are crossing the border every day, many hoping to seek asylum in the U.S.
But wary business leaders, trade experts and border politicians, including conservatives who support the Republican governor, note that federal officials already routinely inspect commercial vehicles as they cross the border. Additional inspections along highways by Texas officials could add hours to commercial trips.
“I think there are good intentions in Governor Abbott’s measures and my respects to him, but we have to make sure this is a process that doesn’t affect the supply chain,” said Ernesto Gaytán Jr., chairman of the Texas Trucking Association.
Gaytán explained that each loaded truck that passes from Mexico to the U.S. already goes through four security filters in Texas: one by Customs and Border Protection; one by the Federal Motor Carrier Safety Administration and the Texas Department of Transportation; another by DPS; and one more about 30 miles past the border at checkpoints manned by the CBP and the Border Patrol.
Checks at these security points already add at least four hours drivers spend delivering cargo to its destination. Delays will increase the costs of transporting merchandise, he said, both for the time lost and the fuel used, and in the end these will end up being absorbed by Texas consumers.
“We would oppose any state-level action that results in an inspection process that duplicates the inspections already performed by U.S. Customs and Border Protection,” said Britton Mullen, president of the national Border Trade Alliance, in a statement released from their Washington, D.C. headquarters.
“While border states like Texas have an important role to play in ensuring truck safety and code compliance, the state should be working in collaboration with CBP, not engaging in a new inspection scheme that will slow the movement of freight, which will only exacerbate the country’s supply chain crisis and put even more upward pressure on consumer prices.
There’s a lot at stake, even for consumers.
Mexico is Texas’ No. 1 trading partner. Texas and Mexico share a 1,254-mile border that’s connected by more than 27 international crossing points. The two economies are in many ways integrated into one. In 2021, there was more than $661 billion in trade between the U.S. and Mexico, according to U.S. Census data.
Texas is the state through which most of the freight from Mexico to the U.S. passes.
Data from the Federal Bureau of Transportation indicate that 70% of the trucks with cargo that enter the U.S. do so through Texas.
“Time is money and long lines will make Texas less competitive as a state and the United States less competitive as a country,” said Raymond Robertson, director of the Mosbacher Institute at the Bush School of Government and Public Service at Texas A&M University.
In 2021, more than 3 million truckloads of cargo entered through Texas. Of those, almost 2 million came through Laredo alone worth about $243 billion. Interstate 35 connects with primary Mexican trade routes there, running northeast to San Antonio and then north through Dallas-Fort Worth to points beyond.
More inspections and longer lines “would hurt us economically,” said Laredo Mayor Pete Saenz, a conservative. “Longer lines means less trade. Supply chains are impacted as well as goods and services. Time is money. Border delays mean consumers are waiting and that can impact inflation too.”
“You have to weigh border security vs. the economy and that’s a governor’s question,” Saenz said. He added that the governor did not consult with him, but said, “I’m sure the governor is weighing these issues.”
Many business leaders seemed reluctant to openly criticize Abbott’s plan, and emphasized that they favor border security while being concerned about the stepped up inspections.
“We welcome order on the border,” said Cecilia Levine Ochoa, owner and president of MFI International, a textile company that is an industry leader among Mexico’s maquiladoras, the border factory industry that fuels economies in Texas and Mexico.
She explained that “unorderly migration interrupts the flow of trade. So I welcome working with as many authorities as possible to make sure there is order on the border.”
But business leaders worry that slowdowns at the border will only exacerbate other threats to trade. Violence and organized crime are already huge problems in Mexican border states.
Levin has said one of the first steps to expanding trade relations with Mexico and increasing safety is for politicians to stop using the border as a hot-button issue to make political points.
But that’s exactly what some believe Abbott is trying to do.
Tony Payán, director of the Center for the United States and Mexico at Rice University’s Baker Institute for Public Policy, considered recent measures announced by Abbott to be nothing more than an “electoral circus.”
“This is nothing more than the governor talking down to his political base in this election year,” Payán said. “Randomly checking trucks to see where migrants are going hidden in cargo transport is impossible; it’s like looking for a needle in a haystack, but this is part of the political circus that migration has become.”
Already, Abbott has promised to help build a border wall and orchestrated the expenditure of billions of dollars on security issues such as having the Texas National Guard and state troopers posted along the border.
Tom Fullerton, professor at the University of Texas at El Paso’s Department of Economics and Finance, called Abbott’s announcement of stepped up inspections a “bombastic political stunt,” warning that long lines and more searches on the border would only keep Mexican customers away, especially as Holy Week gets underway and Mexicans head to the U.S. to shop.
“A large number of formerly loyal customers from Mexico became accustomed to not visiting Texas during the pandemic travel restrictions on non-essential traffic,” Fullerton said. “A portion of those customers started returning to Texas once the restrictions were lifted last November. Longer lines in support of shipping Latin American asylum seekers out-of-state is going to further dissuade international clients from returning to Texas establishments that welcome them.”
In Laredo, Gerald “Gerry” Schwebel, executive vice president at IBC Bank, and longtime conservative, expressed frustration over federal immigration policies that can’t cope with mass migration. He thinks Abbott is not helping the problem.
“Why can’t we figure it out? Immigration is a federal responsibility and this should not impede or impact the legitimate flow of commerce and people into our country,” he said. “Why do you put this on us as border communities? I have a problem with anything that impedes the flow of legitimate goods and people along the border.”
There is potential for more business between Texas and Mexico, say economic development leaders and business executives who are pushing for “reshoring” or the return of companies that left for Asia back to North America, including Mexico and the border.
“We have an unprecedented opportunity because of COVID to near shore, smart shore, re-shore so much here, and it’s the US Mexico border that makes us an attractive place for bringing manufacturing back,” said Emma Schwartz, president of the Medical Center of the America Foundation in El Paso, a nonprofit organization. “Anything that causes problems for the free flow of commerce back and forth will absolutely stymie all of the work that we’re trying to do to grow manufacturing and the supply chain in the U.S. and along the border with Mexico.”
Further along the U.S.-Mexico border, New Mexico business leaders see an opening.
“We can’t help but look at this as an opportunity for New Mexico,” said Jerry Pacheco, president of the Industrial Border Association in Santa Teresa, N.M. “I just don’t understand why Texas is shooting itself in the foot.”
On Monday, Abbott will deliver remarks at the Texas Border Sheriffs Coalition spring meeting. He’s scheduled to discuss the state’s ongoing border security efforts and how the state is helping local law enforcement.
Mexico-border correspondent Alfredo Corchado reported from El Paso. Al Dia staff writer Imelda García reported from Dallas.