MEXICO’S NORTHERN ECONOMIC CORRIDOR
November, 2014
US Trade with Mexico
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013$0
$100
$200
$300
$400
$500
$600
$700
Canada China Mexico Japan
$ b
illio
ns
In 2013, 48 cents of every $1 of US-Mexico trade crossed at a Texas border POE by truck
3Footer Text
2008 2009 2010 2011 2012 2013$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
Total U.S.-Mexico Trade TX truck crossings
Tra
de
Val
ue
($ m
illio
ns)
Nu
mb
er o
f cr
ossi
ngs
Mazatlán-Matamoros Highway
Mazatlán-Matamoros Highway
Mazatlán-Durango section:
• 140 miles long• 115 bridges• 61 tunnels
Mexico’s six-year national infrastructure plan: $316 billion
Mazatlán-Durango Highway: $2.2 billion
Predictions: Travel Times
New, reduced travel times
Improved access to Midwest and East Coastmarkets
Durango, MX Torreón, MX
Monterrey, MX
Pharr, TX Nogales, MX
Mazatlán, MX to:
2:30 hours 4:35 hours 7:40 hours 10:10 hours 16:00 hours
Travel Distances
Destination of Mexican Truck and Rail Imports
US Region
US POE West South Midwest Northeast
Nogales, AZ 41% 7% 48% 4%
Brownsville, TX 4% 68% 22% 6%
Hidalgo, TX 7% 66% 23% 3%
Laredo, TX 12% 44% 38% 6%
Predictions: Economic and Trade Effects
Increased traffic to the Lower Rio Grande Valley, especially for produce
– 62% growth of produce truckloads in Texas predicted by 2020
– Lower Rio Grande Valley is predicted to receive 59% of these new truckloads
– Shortage of agricultural inspectors at the border will be a challenge
Potential for increased economic development in regions surroundinghighway
Traffic Estimates
Baluarte Bridge– 2,000 vehicles per day
Mazatlán to Durango portion– 3,000 vehicles per day (1st year)– 6,500 vehicles per day – Eventually will handle 4 times as many vehicles as it did
before Shift from Nogales to Hidalgo
– 24,000-48,000 trucks
Surrounding Mexican States
Sinaloa– Top agricultural producer in Mexico– Performs well on socioeconomic and human development indicators– High crime rate compared to other Mexican states
Durango– State economy is agriculture based, but Durango is not a significant
producer on a national level– High poverty rate and low human development indicators– High crime rate compared to other Mexican states
Zacatecas– Is in the top ten of agriculture producing states in Mexico, but exports
less than most states– Has one of the highest poverty rates and lowest earnings per capita in
Mexico– Higher than average perception of insecurity, crime rate is similar to
national average
Surrounding Mexican States
Crime is an issue All the following
states had higher than average murder rates, and lower than average perceptions of highway safety:– Chihuahua– Coahuila– Durango– Nuevo Leon– Sinaloa– Tamaulipas– Zacatecas
Surrounding Infrastructure
Port of Mazatlán– Cannot accommodate Panamax
Ships– Handles only 2% of Mexican
Pacific cargo– Dredging is planned, but there
have been difficulties andLázaro Cardenas is still expected to be the major port on the Mexican Pacific coast
Rail infrastructure from Mazatlán to Matamoros is deficient
Tolls
Five axel truck from Mazatlán to Durango: $US 110 (140 miles) Nine axel truck from Mazatlán to Matamoros: $US
300 (720 miles)
Preparations in Arizona
• Arizona‒ $220 million
improvement for Nogales POE lane expansion
‒ Investment in trade corridors, especially highways
Preparations in Texas
Texas– Increase of traditional and cold storage facilities in the Valley
• Four projects for cold storage in Reynosa• Additional cold storage being built in McAllen• Conversion of dry storage to cold storage in Pharr• Produce companies shifting offices to McAllen• Texas International Produce Association (TIPA) has seen 80% increase in
membership
– Marketing to attract more traffic to the Valley, especially refrigerated goods
– Potential purchase of an Electron Beam Sterilization machine to extend produce shelf life
Conclusion
Mazatlán-Matamoros is an engineering feat Unclear whether surrounding Mexican states will
increase production or exports Crime, safety, and high tolls are issues in Mexico Produce imports from Mexico are increasing in
Arizona and Texas, and both states seek to be competitive
QUESTIONS?