Arizona needs to step up its efforts to strengthen ties with Mexico in order to expand economic development.
Politics aside, Arizona and Mexico need each other economically. The border between two countries “connects us and should be viewed as a bi-national region,” concludes the 108th Arizona Town Hall.
The group of Arizona government officials, economic development experts, social service representatives and business owners spent four intensive April days in Tucson coming up with ways to strengthen that connection.
Many issues were discussed: immigration, infrastructure, customs, trade, tourism and cultural understanding. We at Commercial Real Estate Group of Tucson are primarily interested in economic development, which ran through all of these topics. The final report of the town hall directly addresses what’s at stake: “For Arizona, our economic relationship with Mexico will help shape our state’s future.”
Current Economic Landscape
We know this relationship already affects our economy. Tucson, only 64 miles (103 kilometers) north of the Nogales point of entry, is a major commercial entry point along the 300 miles of international border between Arizona and Sonora.
Activity in Mexico, Arizona’s biggest trading partner, already creates and supports many Tucson-area businesses.
Here are three examples.
Faribault Foods in Minnesota recently merged with La Costeña, a Mexico-based food packager. Before the merger, La Costeña opened its first U.S. facility, the Arizona Canning Co., in Tucson.
Caterpillar Inc. is moving its surface mining and technology division to Tucson in part to be close to its facilities and suppliers in Mexico.
Sargent Aerospace & Defense uses its Tucson-area office for design, engineering and program management, tapping into the highly skilled U.S. workforce, while maintaining the economic benefits of its Mexico manufacturing plant.
Goods flowing from Mexico, including products from border maquiladoras, are dependent on support businesses in Tucson such as legal, trucking, warehousing, accounting, commercial real estate and other professional services.
The Port of Tucson serves as a crucial link in this Southwest trade hub. The intermodal rail facility, which recently has undergone an expansion, provides boxcar access, team track facilities and public warehousing.
Once the deep-water port in Guaymas, Sonora is completed, Arizona will be positioned to become the major U.S. connection to imports and exports from around the world.
Race for Trade
But, according to the Town Hall report, we need to act quickly to fix the problems that could leave us behind as California, Texas and even New Mexico grab the economic potential caused by the port and Mexico’s economic growth.
“Arizona finds itself in a race with other border states to build bigger, better infrastructure and capture an increased share of trade from Mexico…,” the report says.
And the needs are many. Here are just a few detailed in the report that relate to economic development.
- Infrastructure alone requires 11 points of development, from expanding and improving ports of entry to constructing major highways and freight rail to improve moving goods.
- Address public policy and government regulations, such as passport and guest worker processes, that reduce the effectiveness of cross-border trade and commerce.
- Improve relations with Mexico that have been strained by Arizona legislation and national political discourse focused on immigration.
- Integrate technology innovation and development to create a truly regional powerhouse in tech-based industries, including aerospace, mining, manufacturing, biotech, education, eco-science, medical, agriculture and energy.
Tucson plays a strong role in moving these efforts forward. The Tucson Hispanic Chamber of Commerce fosters cross-border business partnerships and helps local companies navigate international trade.
Tucson Mayor Jonathan Rothschild has made trade with Mexico a priority of his administration. He’s visited and led trade missions to several Mexican states and Mexico City. He’s opened trade offices. His efforts earned him the Ohtli Award, the Mexican government’s highest award to non-citizens.
Sun Corridor Inc., originally an economic development organization focused on the Tucson metropolitan area, has expanded its effort across four Arizona counties and 72 municipalities in Sonora.
Southern Arizona and northern Mexico has had strong, enduring ties, first as the mutual frontier of New Spain, then as the northern state of Mexico and now as a bi-national area of culture and commerce.
Moving that relationship forward by creating an Arizona-Mexico super-region will make Arizona attractive to businesses looking to tap into the growing economy and wealth of Mexico.
“With a trend in rising land, water and energy costs in other U.S. economic zones, the Arizona-Mexico region can become more attractive for employers and direct investments, providing a haven for new businesses,” the town hall report says.
Commercial Real Estate Group of Tucson specializes in representing tenants and corporate users across the United States, Latin America, Europe and Asia as a member of ITRA. For more information call +1-520-299-3400.