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Cross-Border Production Across San Diego-Baja Region Tops $6B, Report Finds

Cars wait to enter the United States from Tijuana through the San Ysidro Port...

Credit: Gregory Bull / Associated Press

Above: Cars wait to enter the United States from Tijuana through the San Ysidro Port of Entry, Dec. 3, 2014.

A new report found San Diego and Imperial counties don’t just trade with Baja California. Companies in both countries manufacture products together, a collaboration that’s worth about $6.2 billion a year.

The report released Thursday by World Trade Center San Diego aims to emphasize the regional impact of the North American Free Trade Agreement as the Trump Administration works to renegotiate the trinational deal that the president calls unfair to the U.S.

World Trade Center San Diego Executive Director Nikia Clarke said the data on cross-border production distinguishes trade in the U.S.-Mexico region from other areas.

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Trade And Competitiveness In North America

Trade And  Competitiveness  In North America

A 2018 report from the World Trade Center San Diego about trade and cross-border production between San Diego and Imperial counties and Baja California.

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“If you look at the relationships between U.S. and China, that is buying and selling things back and forth to each other. Here in North America, we co-produce things together…” Clarke said.

Those products include medical devices, audio/video equipment, semiconductors and auto parts, according to the report. It also found that intermediate inputs, or items that cross the border multiple times to become a final product, account for 50 percent of U.S.-Mexico trade.

The study was underwritten by Samsung, but Clarke said the company covered printing costs. The research was independent, she said, and conducted by the UC San Diego Center on U.S.-Mexican Studies.

The center’s assistant director, Melissa Floca said the findings include details that will help officials better understand what’s at stake when discussing free trade.

“The numbers that we have off the shelf don’t give us this kind of information, which means that cities, not just our city, but cities across North America don’t know what their interests are, and I think that’s why the voices of metropolitan areas are largely missing from the current discussions on the renegotiation of NAFTA,” Floca said.

El Colegio de la Frontera Norte also contributed to the report, which notes 566,000 jobs in California are dependent on trade with Mexico and the state's exports to the country are worth nearly $27 billion.

Photo by Katie Schoolov

An image of the World Trade Center San Diego report, "Trade and Competitiveness in North America," July 12, 2018.

San Diego Mayor Kevin Faulconer has often touted the regional benefits of NAFTA. His stance and that of another GOP official in a border state, Texas Gov. Greg Abbott, run counter to President Trump, also a Republican. The president says NAFTA is unfair to the U.S. and at one point threatened to pull out of the decades-old deal.

Talks to renegotiate the deal began in August 2017. United States Trade Representative Robert Lighthizer said in his opening remarks that NAFTA had benefited many Americans, including farmers and ranchers, but failed others.

"We cannot ignore the huge trade deficits, the lost manufacturing jobs, the businesses that have closed or moved because of incentives — intended or not — in the current agreement." Lighthizer said.

He also said more than 700,000 U.S. jobs were lost "due to changing trade flows resulting from NAFTA," but experts have said that figure is difficult to identify.

After several rounds of discussions but no new deal, the Trump Administration in May of this year announced it was imposing tariffs on Mexico and Canada. Both countries followed up with duties of their own.

This week, Bloomberg News reported that NAFTA negotiations may not resume later this month as previously expected due to the busy schedules of officials working on the deal. Additionally, Mexico’s newly elected president may not transition into his new role until after the votes are officially certified in September, a possible further delay, the news site noted.

U.S. Secretary of State Mike Pompeo is travelling to Mexico City on Friday for a meeting with the country’s current and newly elected presidents. Some have speculated this could be a positive sign for future conversations on the trade deal.

However, Trump recently told Fox News that he may not consider signing a new deal until after midterm elections in November.

Video by Katie Schoolov

A report produced by World Trade Center San Diego and underwritten by Samsung finds components of goods cross the border multiple times before they're turned into a final product.

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