Billions of Dollars at Stake as Mexican, U.S. Governors Meet

With the North American Free Trade Agreement now in effect, the annual meeting of U.S. and Mexican border state governors will begin in Phoenix today with a strong undercurrent of competition, unlike the neighborly atmosphere of past gatherings.

The Border Governors Conference begins as member states on both sides of the Rio Grande are competing for billions of dollars in funds to finance a host of proposed NAFTA--related transportation and environmental projects. Those projects--to be funded by the U.S. government and the World Bank--translate into jobs and economic benefits that politicians everywhere are eager to go after.

Although the governors of California, Arizona, New Mexico and Texas and their six Mexican counterparts are accentuating their fraternity, their staff members admit that the leaders intend to size up the competition for projects, which range from a sewage treatment plant in San Diego to telecommunications links in Nogales to interstate highway funds in Laredo.

“The battle will be who gets the money and who has the best proposals,” said Rudy Fernandez, director of California-Mexico affairs in the state’s Trade and Commerce Agency.

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California may already be at a competitive disadvantage, at least in generating cooperation from Mexican governors. That’s because Gov. Pete Wilson’s use of illegal immigration as a political issue has offended many Mexicans as well as Mexican Americans, observers said. Wilson is scheduled to attend the conference.

To fully maximize NAFTA-related business, the states must build the infrastructure--roads, bridges, sewers, environmental controls, border checkpoints and communications links--to make themselves attractive to business. And to do that, they need help from Uncle Sam.

A big chunk of the federal aid targeted by the states was created by NAFTA itself. To get the trade bill past environmental interests in Congress, the U.S and Mexican governments agreed to fund billions of dollars’ worth of environmental projects through a new North American Development Bank, or NADBank, headquartered in San Antonio.

Making the decisions on which environmental projects to fund will be the new Border Environmental Cooperation Commission based in El Paso, also created by a side deal to NAFTA, which will be responsible for evaluating and prioritizing environmental project proposals.

Although Texas got most of the NAFTA bureaucracy and some jobs when it snared the headquarters of NADBank, BECC and three other NAFTA-related agencies, the project dollars are still very much up for grabs.

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California’s activity on NAFTA planning issues has fallen short of other states’ efforts, said Charles E. Nathanson, executive director of San Diego Dialogue, a regional public policy think tank at UC San Diego that studies border issues. Nathanson said Wilson has shown a lack of leadership.

“Wilson is at a disadvantage, image-wise, because of his strong stand against illegal immigration. But while other governors are using the force of their personalities to energize cross-border exchanges--thinking that it will have big payoffs down the road--Gov. Wilson is not,” Nathanson said.

Bill George, a state Trade and Commerce Agency assistant secretary, disagreed, noting that Wilson has established an “aggressive export finance program” and a new office for California-Mexican affairs.

“We have a good record and certainly believe that California is positioned as well as anyone to take advantage not only of NAFTA, but other trade agreements as trade is liberalized throughout the world,” George said.

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While in a competitive posture, the governors still must cooperate in some areas to take full advantage of NAFTA. For example, they and their staffs exchange ideas on how to accommodate the huge increase in border vehicle traffic that NAFTA is expected to generate. Texas and Arizona, for example, may use a recent increase in federal funds to build “trade corridors,” or interstate highway extensions to facilitate traffic north from their borders.