Economists at the Federal Reserve Bank of Dallas are warning that cross-border transportation delays between the United States and Mexico could have serious repercussions on trade between the two countries.
In a paper entitled “Beating Border Barriers in U.S.-Mexico Trade,” economists Pia Orrenius and Keith Phillips and research assistant Benjamin Blackburn note that over the past 15 years, U.S. trade with Mexico has increased almost 400%. Yet neither Mexico nor the U.S. has made the adjustments necessary to handle the growing traffic, they state. Shippers primarily have to rely on short-haul trucks to shuttle cargo across the border -- trucks that haul in one direction only, clogging bridges, roads and inspection stations with empty trucks.
The authors argue that now is the time to improve the flow of trade by committing to new technologies and streamlining cooperation between government agencies on both sides of the border. They conclude that the ultimate benefits of cross-border transportation improvements will go to U.S. and Mexican consumers, as untying traffic bottlenecks will reduce the cost of transportation and thus the final cost consumers pay for goods.