Free Trade Could Worsen Clogged U.S.-Mexico Border : Transport: Traffic lines have grown slower and longer along the 2,000-mile frontier as commerce booms.

The most insurmountable barrier to free trade in North America may not be any of the conflicts that have grabbed the most attention--not industrial pollution nor farm subsidies nor even fear of lost jobs.

The real deal breaker could be the lines of traffic that creep through border towns to the exhaust-choked international crossings on the U.S.-Mexico frontier.

From San Ysidro, Calif., to Brownsville, Tex., all along the 2,000-mile border, those lines have grown longer and slower over the last five years as trade between the two countries has doubled to $65 billion a year.

And as President Bush and Mexican President Carlos Salinas de Gortari meet in San Diego on Tuesday with the free-trade agreement on their agenda, fears are surfacing that the flood of goods unleashed by the dropping of trade barriers could cause the border transportation system to break down completely.

“We are going to be standing on both sides of the river and waving to each other, because we won’t be able to cross over,” predicted Michael Landeck, director of the Institute for International Trade at Laredo State University.

Untangling the traffic jam will demand nothing less than reconciling the contradictory nature of the border itself. Part bridge, part barrier, the border links two complementary economies while marking the dividing line that keeps them distinct.

The boom in U.S.-Mexico trade brings those dual roles into high relief, creating pressure to speed up the flow of computer components and tomatoes--often on the same officials charged with stopping the flow of cocaine and guns.

“If there is an attempt to get (legal traffic) through as fast as you can . . . that is something I think traffickers will take advantage of,” said veteran Drug Enforcement Administration Agent Bobby Sheppard, who supervises the San Diego office of a multi-agency anti-narcotics team.

No wonder a Texas Department of Commerce study found concern that efforts to stop drug trafficking will be “blunted, or at least rendered selective, by political and diplomatic agendas, and a virtual trade-off between drug enforcement and free trade.”

And then there are the people. The Tijuana factory managers who live in San Diego. The tourists. The prospective illegal immigrants.

On any weekday afternoon along California’s southern border, exhaust fumes from the slow river of cars clogging the northbound lanes that approach the U.S. inspection booths mingle with fumes from southbound trucks lumbering through Mexican customs.

Nearby, the setting sun silhouettes hundreds of migrants who gather daily on the Tijuana River levee, waiting to dash north. Tourists on a pedestrian bridge that spans the freeway watch the figures dropping over fences, the pursuing Border Patrol vehicles raising clouds of dust, the spectacle of groups of illegal immigrants hiking north amid speeding traffic on the Interstate 5 freeway divider.

Already, San Diego-based Border Patrol agents sometimes catch more than 3,000 people a day, half of the illegal immigrants turned back at the U.S.-Mexico border. And while political leaders in both countries say that free trade--by boosting Mexico’s economy--will reduce illegal immigration, top U.S. immigration officials privately disagree.

The trade pact, they predict, will only intensify what they describe as a “trampoline effect” in Mexican border cities created by the expanding maquiladoras , or foreign-owned assembly plants, and growing population. Low-wage workers who migrated from the Mexican interior will decide that higher wages across the border are worth the risk of illegal entry.

Moreover, at legal entry points, growing numbers--hiding in vehicles or posing as legal crossers--will try to slip by border inspectors already overwhelmed by the flow of traffic, officials warn.

“It’s going to be a magnet to draw people up to the border area,” said T. J. Bonner, president of the National Border Patrol Council, the agents union.

Mexican border officials have their own built-in suspicions of cross-border traffic.

In barely seven years, Mexico has been transformed from one of the world’s most closed economies into one of the most open, requiring a radical shift in mentality for the customs service.

Trained to regard all merchandise as potential contraband, Mexican customs officials now are expected to distinguish between legal and illegal imports and to assume that importers are business people, not smugglers. Still, they must be vigilant against the import of high-powered weapons, so readily available in the United States but illegal in Mexico.

At the same time, manufacturers with factories on one side of the border that depend on components made on the other--the essence of the “win-win-win” relationship that free-trade proponents advocate--are insisting on a more steady flow of goods through those same channels.

“We ship merchandise from San Luis Potosi (Mexico) to Louisville through Laredo,” said J. Douglas Youngblood, transportation manager for GE Appliances. “Total transit time can take four to 14 days. A 10-day range is not acceptable. It precludes proper inventory management.”

When General Electric’s Kentucky warehouse starts getting low on Mexican-made gas ranges, Youngblood picks up the phone and begins searching for them. At least twice a month, he finds the stoves sitting in railroad cars in this border city.

Typically, there is a problem with the paperwork. And at this busy crossing, U.S. Customs Service agents are too overwhelmed by routine matters to deal with problems. The stoves have been shunted off onto a siding until someone can spare the time to find out what went wrong.

“When that happens, the merchandise sits there for eternity,” Youngblood said. “It’s disheartening, especially if it is product that we need desperately. There is very little we can do in Louisville, Kentucky, to speed up that process.”

Like Youngblood, transportation managers from Pocatello, Ida., to Ecatepec, Mexico, are in a daily battle to move goods between the two countries.

Even without free trade, the problem would be more acute. A growing number of companies, including GE, are implementing corporate-wide policies that call for reducing inventory levels to reduce costs and increase competitiveness. Under such “just-in-time” inventory systems, for which Japanese firms are famous, reliable transit times become critical.

“Transportation is going to have to be like a conveyor belt,” Youngblood said.

Balancing the conflicting needs to quickly move legal merchandise and people while halting their illegal counterparts will require a drastic change in the way goods currently travel between the United States and its third-largest trading partner.

In both countries today, most merchandise is loaded onto trucks that haul it to the border, drop it off and bounce home empty. Another truck takes the merchandise across the border, waiting in line for hours to be inspected. The merchandise is then delivered to a third truck, which probably drove to the border empty. That truck takes the load to its destination.

A third of the southbound trucks and a quarter of those headed north--a total of about 1,500 a day--pass through a single border crossing at Laredo. Similarly, the two San Diego County ports of entry at San Ysidro and Otay Mesa handle a quarter of all the cross-border passenger and foot traffic--67 million people each year.

Those hot spots are the most extreme examples of the way that the entry points have become funnels, slowing the flow of merchandise and people between the two countries.

And the situation promises to get worse.

In the next decade, the number of trucks crossing the border will triple to 6 million, according to a study by the Kingsley Group, a consulting firm that specializes in transportation.

“Trade has doubled, but nobody has done anything about infrastructure,” Landeck, the trade institute director, said. “We do not have sufficient roads, and the roads we have were not built for that purpose. So trucks are stuck waiting 12 to 14 hours to cross bridges.”

Human infrastructure--the customs, immigration and agriculture inspectors at legal crossings and the agents charged with preventing illegal entry--is equally strained.

“The agents right now are beyond the point of burnout,” said Bonner, the union president. “They are dealing with such masses of people in San Diego, the never-ending flow. How much more can the system take?”

The resounding answer--from factory managers, merchants with perishable goods, overworked customs inspectors and truck drivers fed up with waiting in endless lines--is that the system as it exists cannot take any more. For a free-trade agreement to work, they say, the border transportation system must undergo fundamental change.

It is not enough, according to those familiar with border issues, to simply hire more inspectors.

The Immigration and Naturalization Service increased staffing at the border nearly 20% last year, but that was playing catch-up: The workload had doubled from 1986 to 1990, with only a 1% boost in manpower.

As for customs, Maria Reba, the chief U.S. Customs Service representative to the free-trade negotiations, said: “We will never have all the facilities we need; we will never have all the staff we need.”

Multimillion-dollar plans to refurbish railroads, expand airports and modernize marine transport are barely a beginning toward meeting the two nations’ needs. Laying track through mountains and building container docks could take years.

“A lot is being expended to improve transportation, but it is not going to be enough,” said Philip Weaver, vice president, agricultural commodities, for Ft. Worth-based Burlington Northern Railroad. “What is required is a completely new approach.”

That new approach will require change by border law enforcement, freight companies and the corporations that move merchandise across the border.

All those groups worry that free-trade negotiators for the United States, Mexico and Canada--which also would be part of a North American free-trade zone--are not adequately addressing the question of what the new approach should be or how to pay for it. U.S. immigration officials, as well as immigrant rights advocates and some political parties in Mexico, are particularly disillusioned by the failure to discuss illegal immigration as part of the free-trade talks.

About the only relief promised by the talks themselves involves negotiations over transportation services and the possibility that customs paperwork will be standardized.

Beyond those steps, though, solutions to border transportation problems will rely on unilateral efforts by each country, private initiative and a bilateral commission that has been struggling with the issues since long before the free-trade talks began.

Mexico has approved a plan that would, in a sense, move the border--allowing sealed containers to pass straight through the frontier for inspection at customs posts in interior cities.

But that proposal requires massive private investment, such as the $180-million joint venture whose partners, including San Francisco-based Southern Pacific Lines, are building a network of private, inland rail ports. The first--in Torreon, Mexico, in Coahuila state, about 480 miles southeast of El Paso--opens this month.

Indeed, getting around the border is the emphasis of most private plans.

Burlington Northern and the Monterrey-based industrial conglomerate Protexa last year began the first scheduled barge and rail transportation system through the Gulf of Mexico to link Canada, the United States and Mexico.

“We will need multiple modes and routes to bypass the traditionally congested points,” Weaver, of Burlington Northern, said. “The bridge to the other side does not have enough room for everyone to cross it.”

Meanwhile, corporations that do a lot of cross-border business are finding ways to work more efficiently.

General Motors--Mexico’s top private exporter and a major importer as well--has taken the lead, virtually eliminating empty trailers and cutting border crossing times.

“The key element is working together,” said Rafael Laguna, GM’s materials, transportation and logistics director.

GM was among the first companies to use computer links with U.S. and Mexican customs to expedite cross-border traffic. The company has a lawyer waiting at the border to resolve any problems that might hold up merchandise. Trucks switch tractors at the border--but never trailers, saving loading time. Because trucks still cross through Laredo, they can sit up to six hours at the border. But by routing 90% of rail traffic through a smaller, less-congested crossing up the river at Eagle Pass, GM has cut rail crossing time to an hour--just long enough to change crews.

As important, when a truck or rail car pulls into a GM plant in Mexico, another load is sitting on the dock, waiting to be hauled back to the United States.

Laguna said he has taken a hard line with carriers against one-way trips. “My exports are 30% of my imports,” he said. So normally, 70% of GM’s northbound traffic would be empty trucks and rail cars that had brought merchandise to Mexican factories.

But they aren’t empty.

“I don’t pay for empties,” said Laguna. Using GM’s supplier network and other business contacts, he helps carriers market the empty space.

Few companies have the kinds of contacts and clout that back up GM’s bargaining with carriers. But many manufacturers have similar needs. And the prospect of free trade is forcing carriers and government agencies to address them.

“An integrated North American market cannot meet its full potential,” said Weaver, “if it continues to be served by a fragmented transportation system.”

Darling reported from Laredo, and Rotella reported from San Diego.

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Busy Crossing Points

At the most active ports of entry along the 2,000-mile U.S.-Mexico border, backups and delays are growing longer for commercial truckers as trade between the two countries increases. Overall, 1.56 million truckloads of goods crossed the border in 1991. The map below shows the five busiest ports of entry and the volume of loaded truck traffic in 1991.

1) EL PASO

Southbound: 255,784

Northbound: 213,154

2) LAREDO

Southbound: 260,960

Northbound: 169,039

3) SAN DIEGO

Southbound: 181,533

Northbound: 156,494

4) BROWNSVILLE

Southbound: 133,780

Northbound: 57,575

5) NOGALES

Southbound: 50,000

Northbound: 110,900