New Mexico Wants to Facilitate More Trade as Texas Gets Tougher on the Border

New Mexico’s appeal has increased as congestion gets worse in El Paso and Juarez amid the nearshoring boom. As manufacturers leave Asia and build nearer their final market, often the US, the border zone has started to attract electric-vehicle suppliers

An aerial view of the Union Pacific intermodal Terminal in Santa Teresa, New Mexico on Tuesday, August 9, 2022.
By Shelly Hagan and Maya Averbuch
August 29, 2022 | 10:49 AM

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Bloomberg — Twenty-five miles west of El Paso, in an unincorporated slice of the Chihuahuan desert where shipping containers outnumber humans, New Mexico is working to turn a quiet border crossing into an international port that rivals anything Texas has to offer.

It is, by all measures, a wildly ambitious plan. The dusty little outpost, located just outside of the town of Santa Teresa, sees one-fifth of the truck traffic that moves through El Paso’s crossing; the surrounding area has less than one-10th the warehouse space of its rival; and there’s hardly any housing in the area for the would-be port workers to live in.

Proponents of the plan are undaunted. They say the area’s lack of congestion, nearby freight-train lines and cheaper property taxes all are working in their favor just as a nearshoring boom fuels a jump in cross-border trade.

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And there’s another crucial factor, too: Texas Governor Greg Abbott’s move to boost cargo-truck inspections in April -- part of an election-year crackdown on undocumented immigration -- caused massive shipping delays that left millions of dollars worth of Mexican food exports to rot. Officials in Mexico City were incensed. They quickly determined they needed to lessen their dependence on Texas and speed up efforts to help foster the development of the New Mexico port.

Perhaps in the end, the whole initiative falls flat. It is, after all, a long shot. But crazier, and less economically viable, projects have been born out of political tiffs before. And this one is pretty intense. Mexican President Andres Manuel Lopez Obrador has blasted Abbott as “dishonest” and “sensationalist” for the comments he’s made about immigrants and his use of the National Guard to patrol the border.

The truck inspections, Lopez Obrador said, were merely a political stunt to win votes. A few days after they began, his economy minister, Tatiana Clouthier, said the Mexican government would redirect a train route so that it runs through New Mexico instead of Texas.

“We have to strengthen points of entrance and exit so that all our eggs are not in one basket,” Clouthier said in an interview this month. “That’s part of the vision that we have in the short, medium, and long term, so that it does not happen again.”

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But if this is the start of an economic rivalry between Texas and New Mexico, it seems a bit one-sided. While New Mexican officials have been traveling regularly to Mexico City and the state of Chihuahua to promote Santa Teresa, Texans express little concern about losing out on business at the state’s 13 commercial crossings with Mexico.

It’s reflective of the broader relationship between the states. While New Mexicans are notably outspoken in their only-slightly-tongue-in-cheek disdain for arrogant Texans, residents of the Lone Star State often seem like they can hardly be bothered to give New Mexico much thought at all.

George Chasteen thinks it would behoove Texas to pay more attention. As vice president of Mesilla Valley Transportation, which provides freight and logistics services in the area, he has a front-row seat to New Mexico’s efforts to win that business.

“Santa Teresa has carved out a niche of specialized freight” such as blades for wind turbines that would be too big to bring over the Rio Grande in El Paso, Chasteen said. “It’s less populated. There’s more room.”

Juan Carrillo, assistant port director at the Santa Teresa Port of Entry, walks near an inspection area for commercial cargo in Santa Teresa, New Mexico on Wednesday, August 10, 2022.dfd

New Mexico’s appeal has increased as congestion gets worse in El Paso and Juarez amid the nearshoring boom. As manufacturers leave Asia and build nearer their final market, often the US, the border zone has started to attract electric-vehicle suppliers. Mexico is also looking to lure chip factories to the country.

“Santa Teresa is a sweet spot,” said Alan Russell, owner of TECMA, an El Paso-based firm that helps US and foreign companies set up factories in Mexico and also includes a trucking division. “It has been much easier to use in the last few years since Texas bridges have been choked up.”

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Alan Russel, chairman and CEO of TECMA, poses for a portrait next to his helicopter at the Dona Ana County International Jetport in Santa Teresa, New Mexico on Tuesday, August 9, 2022.dfd

In one niche of global trade, New Mexico is already a big-time player: Santa Teresa is home to the largest cattle crossing on the southern border. And truck crossings have recently picked up to some 660 a day this year on average, about double the rate from 2019.

Santa Teresa, with a population of about 5,000, has just 4.7 million square feet of warehouse and manufacturing space, versus almost 52 million square feet in El Paso. But industrial developments in both Santa Teresa and the town across the border -- San Jeronimo -- have been growing. Combined, there’s about 2.1 million square feet of buildings under construction, according to Jerry Pacheco, who heads the Border Industrial Association.

On the Mexican side, Foxconn Technology Co. has a plant that builds computers for Dell Technologies Inc. and is building a 1.2-million-square-foot expansion, according to Pacheco. Mount Franklin Foods, which makes gummy bears and other sweets, is building an additional 280,000 square feet.

Jerry Pacheco, president of the the Border Industrial Association, poses for a portrait in his office in Santa Teresa, New Mexico on Wednesday, August 10, 2022.dfd

Over the longer term, the plan is for Santa Teresa to add more warehouses nearby so that shippers don’t need to bring their goods back to logistics hubs in El Paso. The port is an extra 15-mile drive for trucks on the Mexican side coming from Juarez, and then an additional 20 miles on the US side for those going to warehouses in El Paso.

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City officials in Juarez plan to create a quicker route to the New Mexico crossing that would bypass crumbling roads and outdoor markets that slow traffic. New Mexico officials will construct a highway connector that would cut travel time to the Texas border to six minutes from 24.

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Cattle enter the United States from Mexico at the Santa Teresa International Export/Import Livestock Crossing in Santa Teresa, New Mexico on Tuesday, August 9, 2022. The location is the busiest on the U.S.-Mexico border, crossing more head than anywhere else.dfd

That could also make working in Santa Teresa a little easier. Most of the 6,000 employees at the town’s four industrial parks drive in from homes in El Paso or Las Cruces, New Mexico, because there’s not much residential housing available nearby. The town’s most prominent retailers are a Dollar General and a Family Dollar. The best dining option is the Chester’s Chicken counter housed within a sprawling gasoline station.

Customs and Border Protection Port Director Tony Hall poses for a portrait at the Santa Teresa Port of Entry in Santa Teresa, New Mexico on Wednesday, August 10, 2022.dfd

Abbott’s office defended the governor’s truck inspections, saying they were necessary to combat illegal immigration fueled by President Joe Biden’s border policies, and pointed out that the delays abated after Abbott signed accords with four Mexican border-state governors to begin enhanced security enforcement measures.

“It’s time for President Biden to do his job and secure our border, and it’s time for President Lopez Obrador to work with Texas and the U.S. to stop this flow of illegal immigration,” Renae Eze, Abbott’s spokeswoman, said in an email.

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Her statement didn’t address New Mexico at all.

An aerial view of a Foxconn factory in San Jeronimo, Chihuahua state, Mexico, as seen from Santa Teresa, New Mexico on Tuesday, August 9, 2022.dfd

For now, Santa Teresa remains a relatively sleepy crossing. On a recent weekday morning, only a handful of passenger vehicles and 18-wheelers were lined up at the checkpoint.

“We want to keep trade growing,” Clouthier said. “By diversifying, we can make sure there are mechanisms so that things go better.”

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