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Intercambio: A conversation on the cross-border economy

 July 4, 2022 at 12:55 PM PDT

S1: A conversation on the cross border economy.
S2: Nowadays , we're seeing that impact economically , really benefiting not just Tijuana , but I think all of the regions.
S1: I'm Jade Hindman. Today we're bringing you a KPBS Midday Edition special. The Cali Baja region produces an estimated economic output of more than $250 billion a year.
S3: Right now , we have probably 2 million square feet of companies that would like to start in Tijuana today. We're leasing buildings off site plans that won't even start construction until 2023.
S1: Industries from manufacturing to biotech have generated tens of thousands of jobs. But long border waits impact commuters and international shipping routes. That's ahead on Midday Edition. The economy may not be the first thing that comes to mind when you think of the border region. But the region known as Cali Baja is an economic powerhouse. It produces a gross domestic product of nearly $250 billion , according to a recent report from USD. That's more than 23 U.S. states and industries in the region , from manufacturing to biotech , generate thousands of jobs on both sides of the border. So today on Midday Edition , we're bringing you a conversation about the cross-border economy with a panel of guest who have spent a lot of time thinking about the topic. They are Paola Avila , now chief of staff for Mayor Todd Gloria. She spent 25 years specializing in public policy and government affairs. EARNEST Del Bravo , West Division president of Tacoma , which streamlines the process for foreign or U.S. manufacturing companies to operate in Mexico. Denise Garcia , chief of staff for supervisor Nora Vargas. She's also worked for several local elected leaders in international affairs. Kurt Honnold , Secretary of Economy and Innovation in Baja , California. He was also mayor of Tijuana in 2007. And Joe Smith , senior vice president of Coldwell Banker Real Estate , who has specialized in the border region for the last 25 years. And here's KPBS investigative border reporter Gustavo Solis , who moderated the conversation.
S4: So I want to start the conversation with everyone kind of being in the same headspace. Right. And earnest , I think you could help us out with this. We're talking about something that's not always fully understood , the cross-border economy. Can you because here's a quick , quick overview of the border economy , like what was it 20 years ago ? What is it now ? Where do you see it going ? You've been in it for a long time.
S2: That whole world of the cross-border economy that's been created over the past three decades really started out in the eighties , and it started with Mexico creating a program to allow really to generate employment and foreign direct investment into Mexico. That was the original purpose , and that continues to be the purpose of the program. It's been extremely successful all along the border and especially in Tijuana , which is in the top two cities along the border and in overall in Mexico total in terms of employment and foreign direct investment and exports mostly into the US. So it started in the eighties and throughout the eighties we grew as more companies realized the value of setting up operations in Tijuana especially. And then in the nineties , where it really kind of jumpstarted was with the passing of NAFTA in 1994 and , and then came to throughout the 2000. In the 2021 , China joined the WTO. And we saw a significant impact from in a lot of industries and a lot of sectors within Tijuana and manufacturing that went to Asia , not just China , but but Asia in general. And that decreased that along with recessions that that happened occasionally. And that has always have a big impact on manufacturing employment in Mexico. Then came the 20 tens and where we saw , just especially after the recession of oh eight , the Great Recession , we saw significant growth to the level where it really has not stopped in the last more than a decade. Today , we stand at over 200,000 manufacturing jobs in Tijuana , and these jobs are not what they used to be in the eighties , where it was mostly just unskilled labor doing very repetitive tasks. Nowadays , the level of manufacturing that we have in Tijuana is world class. The level of talent that we have in Tijuana is world class. And so we're we're doing we're talking now about engineering , product development , very advanced software programming and many , many other activities that 30 years ago definitely were not the case. And nowadays we're seeing that that impact economically and really benefiting not just Tijuana , but I think all of all the region.
S4: Anyone else want to add and I know , Kurt , I saw you nodding your head.
S5: Oh , he's a very , very well. And I don't know you to work for me.
S6: And I would just add , you know , the I think it's a well-kept secret similar to San Diego's diversity of of its economy. We're known in San Diego as a tourism mecca. Right. And that's where Sunshine City. But there's so much more to San Diego than that. And similarly , our cross-border region , it's much more than just manufacturing , even advanced manufacturing. How that has shifted. I mean , we have an incredible culinary scene , craft brewer brewing arts and culture and and theater. That's just been exploded and different types of jobs. Also the I think are our other panelists will speak to this , but the increase of residential development , you know , in another sporting industry. So it's just I think it's very diversified and people don't understand how much there is , really.
S4: And I think it's a really exciting time. Now , I've heard I think , Vanessa , you've mentioned it , Joe , we've talked about this. It's kind of like the boom times and the economy right now in some respects , which must be kind of nice to be where you're at right now to to see it , to be where we're all at , to see it.
S6: And I'll chime in really quick. And what's really exciting , too , is that we're actually talking about it. A lot of times we talk amongst each other because we're the ones that are the border people , right ? I say the border groupies because a lot of us have worked in this and very many different jobs and capacities. But we're actually talking about it. So thank you to KPBS and to you and to Southwestern College for hosting us. But we're actually having a dialogue. And like you said , you don't want to just talk about the violence and the negative aspects. We want to talk about what the benefit and how we actually support each other. And it's not only manufacturing , it's not only tourism , whether it's medical tourism or culinary experiences. It's actually about the relationships and the relationships across the border and how we build that are all different capacities. So yeah , absolutely very exciting to have worked in this for this long and to actually see us be able to talk about it and share it with the entire region and the nation.
S4: Well , I love like I said earlier , I love the fact that we have a good mix of folks who work in and out of government. And I'm curious to hear from different members of the board yourself of the panel. Sorry. Like in your view , like what role does local government play in helping and also in hurting the cross-border economy ? Joe , we haven't heard from you. I don't know if you want to jump in.
S3: Just my perspective is a little bit different because I'm on the we're on the ground and I don't want to pop anybody's balloon there , but there isn't a lot that local government can or can't do to change what goes on in multinational boardrooms today. But what they what does affect them and where local governments do directly affect them is infrastructure. Right now , we can't get more buildings in Tijuana. There's not 185 million square feet of space in Tijuana , 35 million square feet and Mexicali , 6 million into Katy. And during the first quarter , not one company moved out , not one. There are zero vacant industrial buildings in Tijuana today. And you go , Well , why ? Well , the reason why is getting approval for zoning is crazy hard. We're leasing buildings off site plans that won't even start construction until 2023. So the reality is that where local governments can help is providing the infrastructure necessary. The platform for manufacturers to be able to hook into the sewer , hook into the water and get electrical capacity.
S4: Just so I understand you having companies interested in buildings that won't be starting to be built until a couple of years from now.
S3: It'll year over year. Wow. Oh , the pipeline right now in Tijuana , the desire is huge. Fortunately , we have guys like Kurt now who comes from the private sector. He is extremely successful in the private sector. He understands what's needed. So hopefully with the new administrations and in Tijuana and Mexicali , we'll see a turnaround in terms of investing in infrastructure.
S5: In California , the state owns the water , let's say. So what we do is we are looking in areas in California where we know we is electricity and also we know is water. So what we are doing now is directing the the new investments or new buildings to build there , because we know the structure is there is what we are doing already. And we talking to the CFE in order to make sure that when the building is done they have to the they have the , the power. And yes the reason we have these problems is because in 7 million and a half people live in California and 2.2 million workers are related to the Taliban , both sides of the border. So this closure is being very beneficial for many people. Not only that , because of the cost of living in San Diego , a lot of people use. Moving to California in Tijuana , for example , because it's less cost to to live there. So we have now another problem. They say that we have to build condominiums and houses for for people that wants to live in a bar because it is less cost of them. And then in San Diego.
S4: Doesn't that just put more stress ? Sorry. I'm sorry. Sorry to interrupt , but.
S5: And being innovative is looking ways to make the crossing faster because these people , they want to live in in California , they want to keep working in San Diego. So we need to find ways more innovative to cross the border easier and faster. We understand that we need to comply with the with the security in the border. We understand that. But if we find innovative ways to cross the border will make it easier for people to cross border easier. And there's a lot of families only because. But you say it. Not only people who go and do business or tourism is families in boats on the border that they are related and they cross to visit each other. So we need to to make a better way to cross not two , 3 hours. That's that's not good. Perfect.
S4: Perfect. Hold that thought. I want to go back to some of those dates. But you wanted to add something ? Yeah.
S6: I you know , part of the interesting point I think to make is , as was mentioned and the pandemic actually spurred growth in Tijuana , you saw a growth in maquiladoras and business growth more moving there. And the reason for that , one of the reasons , I think , is because we saw the supply chain completely disrupted with the pandemic and near shoring was already starting to happen. The pandemic has helped to accelerate that and you had to find innovative ways to get a product to the consumer. And and companies saw that opportunity in Tijuana because then you it it really cut down and circumvented a lot of that issue. But also , just to respond to your question about local government , I think there's a lot that local government can do and that we are doing where the the my my boss , the mayors , the mayor of the largest border city and the US-Mexico border , and his position to advocate for the cross-border economy and the region is tremendous because we're very far away from D.C. where decisions are being made at the federal level that impact the region. Likewise for Tijuana. Very far away from Mexico City , it's capital for two cities that are that are like geographically separated from the decision makers. You need to rely on local government to advocate for you and push policies that help support the growth , smart growth of the region. And that's why my my boss is vice chair of the Border Policy Committee , U.S. Conference of Mayors. He goes to Washington , D.C. , very often to advocate for the region and has positioned himself in that regard because he believes that's in this region. That's what we have to do. We have to do that. And I know same goes for the supervisor and Curt at that level for the for his involvement in the in the state of above had to advocate similarly to Mexico City. Yeah. As you said , my boss is the vice chair of the County Board of Supervisors. And for the first time in the county's history , you do have a binational woman sitting on the board. So , again , going back to elevating the discussion. Right. And building those relationships , the county board , now her as the vice chair , has relationships with the governor. They call each other with the mayor of Tijuana. And also building on that right , talking about what we did in the pandemic , we were able to bring vaccines to students in Baja in Tijuana. That wouldn't happen without the actual relationships that we had , without the Mexican consulate and the relationship that we have here in San Diego and with the drive and the leadership of local leaders , elected officials here in San Diego. So there's definitely a lot there's economic development , there's business , there's manufacturing. But again , bringing in the ties and how does government work on that ? It's because you have to have the leadership , the drive and the desire and know how both governments work as well. And so not only were we able to do that , we were able to also vaccinate maquiladora workers at the port of entry and again at the federal property that we were able to bring UCSD to come vaccinate maquiladora workers in Otay Mesa to be able to grow the vaccines. And again , that was local , even though working with federal government , it was local leadership. So I think that's really important to make sure that we see.
S1: I'm Jade Heineman. KPBS border reporter Gustavo Celis is joined in this discussion by Paola Avila , chief of staff for Mayor. Todd. Gloria. Ernest Bravo West Division President of Tacoma. Denise Garcia , Chief of Staff for Supervisor. Nora Vargas. Kurt Honnold , Secretary of Economy and Innovation for Baja California. And Joe Smith , senior vice president of Coldwell Banker Real Estate. In this part of the discussion , panelist Joe Smith discusses why so many businesses are flocking to Tijuana and why major infrastructure issues are stifling further growth.
S3: When we are with the multinationals , the guys from not only U.S. but Europe , Asia and many of them have operations here and are expanding those. And the typical expansion is from an existing operation that isn't typically from a new one. And after you tour them , you spend the day with them and you're drinking beers with them. They explain , you know , the the official stuff goes away and they explain why they're here. And it isn't just near shoring. It isn't just having their goods on a boat for two or three weeks crossing and then another two weeks at Long Beach. What it is , is following the last election , you know , following about two years ago , boardrooms started to worry about mainland China doing something that they would consider stupid regarding Taiwan. This is before Russia , Ukraine and the debt , their board rooms. There are worries that if they don't reduce their China China footprint , they could be stuck in the same situation as a lot of companies right now who are boycotting Russia. And then the other segment that Ernesto mentioned is , I'm not in politics , but when you talk to people that are new moving in , many of them are from California. And California , rightly or wrongly , is perceived as non business friendly. And when you compare wage rates of the two countries and California having that , I don't call it a persona. Rightly or wrongly , that's where we see most of the new entrants , but the most of the people are. And then in terms of Carly Baja , Kurt brought it up. It's extremely important. For years , Carly Baja didn't mean a lot of expansion on this side. Companies would go on the other side and money flow. People flowed , but not so much industrial expansion right now because there's no space in Tijuana what companies are doing. They're expanding their footprint in their existing building and moving the warehousing portion , which is raw materials and finished goods to this side. So right now , we're working with about 750,000 square feet of users who are looking in the Otay Mesa side for their raw materials and their finished goods , which typically they have held on the Mexico side. So Curt's right. I mean , Carly Baja , but Carly Baja is growing more now than it has in the past. It's you can see it on the ground.
S6: There is the Otay Mesa east that is right now in in the stage of development. Right. And it's going to help trucks cross the border quicker , relieve San Ysidro from all the congestion and also help the businesses that Joe just talked about that are growing , have their manufacturing their plants in E Soto Mesa and then their sister company in in Tijuana. So definitely advocating for that , making sure that we're visible and making sure that we talk to the companies and that we are there on the ground talking to them about what they need. E So time says County , so making sure that we're reaching out and saying , how can we help support you ? I think definitely that's one way for a couple of ways our government can help. I agree with Denise. My former role was in the private sector. I worked for large business organization and we heard from companies. Part of their decision making is whether to expand or relocate is how much support is there from government for the business community. And so the more we advocate and our vocal and are there as proponents , they will then feel more confident in investing like , okay , this border region is one that is of interest because of the high level of collaboration. And I see they're signing a muse and they're very prominent. And and vocalized and he said and utilizing our chambers when I was in a large business organization and I was in government at the city level. We would take delegations to our nation's capitals on both sides. Right. Making sure we were talking not only to local officials , but also to federal officials about the importance and the need to be a business friendly country on both sides.
S5: So I want to say something , because sometimes it sounds like we have a we have a big problem and we don't have the infrastructure. Yes , it's a good problem to have. It's better not to have a problem. But we are working on having the electricity and working with the water. So California will have no problems in the future by 2024. They ought to it's going to be open by 2024. We're going to have enough electricity to it will continue to grow , but it's going to be to plans being built , as he told me now in one solar in finance. So that is going to help us a lot. I want to say something in the world , like you say , changing and and what and what we're doing in the in the government , that that's what they are government policies that see what's going on in the world and what's why is growing so much. One is nurturing the other one is what he saying China and they want to multiply global children's nurturing is that and the other one and that we are focusing he said technology technology is the future and and we are working with all the biotech companies and also everything related with medicine. I don't saying we're producing medicines and everything's related to medicine devices and everything to bring that to to where it is San Diego is probably is not if not number one is the number two in the United States in biotech. And so we are working with them in order to bring biotech to where we are working with. I don't know , maybe you knew about it only in San Diego and they grow in 34% live and 18 Embarcadero rain every year. And so it's a lot of people that are going out. So we need to have these kids. They the schools I'm sorry. They need to teach them what we need. When I went to meet this biotechnology , the software engineer , and instead of having now big plans , we're looking at buildings going up because these people that are wants to nuke the new companies , they need technical and engineers. So we that's what we are focusing now. And those are the things that we want to bring to Tijuana. So we need to work out the future , let's say what is what is coming. And that's what we're doing now in Baja. So and that's gullible because if we don't do it together and then it's not going to work , that formula is really working. And because Denise and Paola , we we right now have bosses in the politics. Mike I have the governor , major and the supervisor , but we've been working with Carly back up for many years. So there it starts on the line. And because our line is that we understand what we need to do and we are the soldiers who are making things happen and our bosses understand what we need to do. So I just wanted to say that I we we have problems. Yes. But it's nothing that is going to stop our growth because you are perfect.
S4: I want to shift the conversation a little bit to like how people can just be more active in the cross border economy. Right. There are some barriers we haven't talked about , like cultural language barriers. And Joe , I'm kind of curious to hear from you just because I've I'm assuming you may have stood out when you were in T.J. and starting out week in there.
S6: Yeah , well.
S4: Well , tell us.
S3: Like you , I'm an absolute gringo and I wear that with pride. And I think one of the things I was introduced to Mexico when I was in high school , you know , it's STS , you know , because there was big contingency of guys there from Tijuana. And then when I got out of the Air Force , my first job was selling Pampers in South County , and my biggest accounts were Dorian's and T and the South Korean. So I was introduced and then the Japanese adopted me for doing deals and they sent me to Tijuana. The big thing is that the typical gringo , you know , because we're proud to be just regular guys , is is not to be like a typical guy from the U.S. that knows everything , that's pushy , that goes in and tells people how they have to do business. That we understand that we're a guest in Mexico and we're fortunate guests , but we have to adapt to the Mexican way of doing business , which is not the same. The concepts are different the more that you can be involved on a daily basis. Like , my son is fluent in Spanish and he was raised more from Mexico. And us. He grew up around all Mexican kids. So it's very important that we not get focused just on the business side of it , that we'd be on the social side. And it's important for us to understand that we're guests , understand the culture , understand how business is done , and open your mind and open your eyes. And it there is , if you act correctly. There is nobody that won't welcome you in business in Mexico. It's just a different way. But you have to understand , you can't go down and tell them how they should be running their operation , you know ? But at the same time , we can be honest and exchange ideas , but. I've been adopted , you know , by so many close Mexican friends. I have many more Mexican friends than us friends. And it's not purposeful. It's just how we live. And , you know , our background and the start was saying it just , you know , the the guys from there , we hung with them and you get , you get I think you went to st and I think you might have gone there my son. Yeah. So it's , I mean it all the great people. Roger Hedgecock in Baltimore , Chris Hall great. But long story short is we need to open our minds , open our eyes and open our hearts to the , you know , to to our friends. And we're guests in their country.
S1: You're listening to a KPBS Midday Edition special on the Kelly Baja Economy. I'm Jade Hindman. In this part of the discussion , panelist Kurt Honnold talks about the persistent issue of long wait times at the border and some of the more innovative solutions being proposed to combat the issue.
S5: It is a problem. And then he's found it myself.
S4: We bring you to our next.
S5: But in some way we've been together in this trying to make both governments understand we are so far from Washington and Mexico City that they need to put attention to the border. And we understand , again , security. But the people in blue uniform , they need more people to work because they cannot open all the gates. They cannot open the gate because there have now some in the front checking that the people are have the documents , because it's a lot of Russians trying to cross the border without documents and they have to take care of them before , you know , in the United States. And they say , no , no , no. If you're not , you don't have legal documents , you have to get back. So that the reason the lines are right now longer , all they do is going to solve the problem. Then he say , but we need to find ways , different ways to make it easier for people to cross the border. I think nobody believe or knew how big this spread was. We thought there was going to be good , but not as good as here is. And what it tell us is a lot of people crossing the border and both sides , both sides , you know , going south or in north and also tiny little in or tight. And the reason is because these carioca , these are not only business , but also these people that go for tourism , both sides of the border and families. 32% of the people are economic active. People in Tijuana live in Tijuana and work in San Diego , 32%. So that's a lot of people that needs to cross the border every day to work. Some of them make 2 hours or 3 hours daily and going back because they finish work in three or four or five , that's when they lines are going. Going south are long , too. So imagine losing 5 hours. That's that's not good. That's not human. So if we not understand that , it's going to be no more border border crossings for the Tijuana , they say only Tijuana. And then we need to find ways more innovative in order to cross. One of them is the severe trolley. So when we say , see , the trolley is a bridge , the same a bridge that for people that wants to use the trolley to to cross the border and what to work. So those people will make the people that using the trolley will make the line. So we reduce people from the sanitary line. The other one is the the bike migrant the major that Gloria he's already very close to finish with Zantac. The the they see Gloria and also in our side and the same company that rents bicycle in the United States is the same company is going to train the bicycle in de Juana so you can ride a bicycle in Tijuana , crossed over to work , leave it and then rent it again to get back so it will be easier to assault to cross. And that's so you make exercise. And the other one is the the the ferries. And we want to start we didn't send Eva to the part of San Diego , but in the future we want to and we are ready to have the permit for the AP and Rosarito to make another ferry from Rosarito to to San Diego so that those are the ways to have people crossing the border other than cars. But if we reduce people from using cars , as is going to help us. So that's why we need the trolley. We need bikes , we need ferries , we need to find wet trains. We need to find ways to make easier for people to cross the border and to move in Tijuana and also in San Diego instead of cars.
S5: We are really working parallel but now of start working and making the day breaks at.
S4: Work and with the or tied to or three east. I mean would we get stuck in the same situation as any drew like we're getting a bunch of new lanes but what good are new lanes ? They have half of what they have.
S5: You know what they do. Yeah.
S4: Yeah.
S5: Okay , let me do and I agree that I think they were , but something that I want to say. And the other side , the Caltrans and SANDAG did their job. They already have the highway all the way to where they will take to. It's going to be in our side. We have we didn't have nothing. Finally , because of our governor , I started being the leader of the project. Now we are ready. But the right plan for the highway , the same as Sandy and he's already purchased. Now we're going to start moving the towers of the CFA. Same is going to move their pipe and also the water that connects with San Diego. Then we we have a water that connects both countries. Those are going to start moving very soon. So with that in mind and also where the the facilities will be , is is in the process of purchasing all the land. But with that , we are going to be complying with the 2024 date to open the water to. So that's going that's something that is going to happen.
S4: Like what sandbags for you on it because I know like every year there's like you have great data and great studies on it. I like how there was something like extra 15 minutes of wait time at X amount of billions of dollars and economic losses.
S5: I go some buys to to San Diego or people in San Diego to go to buy Scuba California. So add that and then tourism people that comes from all over the world , they come to San Diego , they went , oh , Mexico is right there. We went out is another country like can visit or the other way around. So is the economy in between and that's why is that they the were coordinating these they're the most used in the world is because of that. So if government the Washington and Mexico is here but especially Washington needs to understand how the the big economy that we have here in order to bring to have more people because they need more people in the border. And I'm thinking about the blue uniform and Customs Protection. They need to have more people. So these more lines open because they have the facilities. They put a lot of money in Chinese to a lot of money and they have a lot of gate. So they open all the line will be very.
S4: Short and we haven't talked too much about just that balance of security and economy. Right. There's this rhetoric outside of San Diego where there's there's kind of a crisis at the border and there's open borders. And people who don't live in the border think of the border only in terms of security. And that kind of sucks up a lot of the oxygen and conversations we're having.
S6: It's one in the same. The more efficient you are , the more you use technology , the cross-border collaboration , information sharing across law enforcement agencies across the border. That is how you pinpoint and really ensure security and having , you know , a five hour wait time is not going to help improve security. You want to move the 95% of secured trade and travel through the port of entry. So then they can focus on that , you know , five , 10% that is illegitimate. And I think that's through efficiency and technology.
S2: And the security aspect that the biggest concern security wise that we have in manufacturing factories in Tijuana is really just contraband , that there's not a lot of. Fortunately , where and this has been proven out for the past 30 years , we don't have a major threat in terms of physical security or that type of thing. The main threat is really contraband. And actually , I have to recognize one of the programs that has been established , it started with the U.S. , CBP and Mexico has also adopted a very similar program. It's called CPAP. And in Mexico. And it's it's a program that establishes there's literally like 28 different characteristics or security and supply chain security factors that you have to take into consideration and apply in your factory to be able to get this certification. And what it is , is it's basically like a century for commerce. So you get access to a special lane. Privileged lane. That's a shorter wait time. That has a lot of benefits , obviously. And you're able to also ensure the US government and CBP that your cargo is going to be significantly safer than somebody who's not CPTPP certified , because you've got to have additional , you know , video security and just a lot of record keeping that is actually and checkpoints within the factory to make sure that what is leaving that factory goes straight to the border and gets across and there's no manipulation of the cargo in any way. So it's been a very successful program. We have probably at least ten client factories in Tijuana today and several other another ten or 20 in Juarez as well that are taking advantage of that program. And that's it's been a huge success. And the counterpart , the Mexican counterpart , has also been very successful to expand that and to encourage that that level of trade.
S3: So my perception is a tad different. Okay. Because we're on the road , we're there and there are areas in Tijuana where we won't go after dark. I mean , I'll send my son. He's lived a good life. He's 34. He's done everything he needs to do. But no , all kidding aside , there are areas in Tijuana where we will not go after dark. If you take a look at what's happened in the barrio , when the barrio initially started to expand , there were where the major auto manufacturers went. You know , the Nissan GM , you know , they located there. We took 15 different Japanese companies that are in Tijuana into the barrio to open manufacturing operations for our auto supply , which is not a big one in Tijuana. And right now , the barrio is a very dangerous place. It's a reality. But what you need to do is you need to use your head. It's just like areas in San Diego. I won't go at night. You know , there's areas in Chicago I won't go in night or in New York I won't go at night. So you just need to use your head. And there are it's just something to keep in mind. We always are watching where we stop and what we do. And that's just what you do when you're in Mexico. But you do the same thing on this side. You know , it just gets a much bigger ride up there. But to pretend like there's no like there's no issue is not a realistic , you know , not realistic. But in general terms , what Ernesto was saying about contraband is is true. But we need to use our head the same as we do in big cities in the U.S. side.
S4: Do we know , like we've talked about it being boom times right now , which is kind of odd to think about because we've just been through a pandemic which kind of hurt the economy. So like , what was the the impact or what has been the impact of the pandemic on cross-border ? It sounds like from the outside looking in , it sounds like it kind of helped a little bit in terms of bringing some of the pre-existing supply chain issues to the forefront , kind of speeding up some of that departure from China and Asia.
S2: I would say I may there's two things that immediately happened that we're still living with that impact. Number one , obviously initially back in 2020 and this was around March timeframe when we kind of realized that the scope and the the level of what we were facing , obviously the first interest was just safety and health and and making sure that we have the proper protocols in place and making sure that we we attend to we focus on on safety and the health of the staff in the factories. And that was actually very successful. I think. I hope everyone here would agree. I think in the factories in Tijuana , for a lot of cases in terms of the level of care people would receive from the medical services that usually factories have and from the level of education that people received and personal protective equipment as well. I think the factories in many cases and for many people were the safest places that they could possibly be because of the level of protocols that were implemented early on. And we still continue to see that today. Very strict adherence to those protocols and to and the evolution as we've seen the pandemic evolve and we've been reacting to that. So number one , that was an important aspect of it , I think. I think we took that very seriously. It was very successful. And also , I think that led to a lot of collaboration across the border and also between government and the public and government and the private sector in Tijuana specifically. So that was one aspect. The second aspect , and I think it's related to part of the things we've talked about today in terms of the lack of available space , but immediately. The developers , the people that build the buildings and finance the buildings in Tijuana for factories to be set up and immediately froze. And that was actually the second time in probably about five years that it immediately frozen three or three or four years that that all construction stopped. People interested in coming to Tijuana didn't start in the companies , but construction stopped , and that was because of the level of risk. This happened again in or it happened once in 2017 as well , when the topic of canceling NAFTA was out there and hit the media and everyone was talking about it. Construction stopped back then as well. And so , unfortunately , it took six months or a year for that construction to ramp back up again. And we saw that in 17. We saw that in 2020 again. And that is , I think , one of the factors that has led to that , the scarcity of space that we have today and that we're still dealing with. And that hopefully , however , on a positive side , we're seeing that innovation in Tijuana. Developers are now building their own power stations to be able to supply power to to industry. And we're seeing that level of innovation because everyone recognizes , I think , morale on this panel , certainly. And I think with with your efforts to to to communicate to to everyone here in the region , we have an incredible opportunity for growth. And this growth , I think , can go on for five , ten years , if not longer recession or no recession. Whatever happens in the near term , in the long term , we have years and years of opportunity that will benefit the quality of life for people on both sides of the border. And it's just a humongous and we're excited to be a part of this and thankful , I think.

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The economy may not be the first thing that comes to mind when San Diegans think of the border region. But the region known as Cali-Baja is an economic powerhouse. It produces a gross domestic product of nearly $250 million according to a recent report from the University of San Diego. That's more than 23 U.S. states. And, industries in the region from manufacturing to biotech generate thousands of jobs on both sides of the border. So today on Midday Edition we're bringing you a conversation about the cross-border economy with a panel of guests who have spent a lot of time thinking about the topic.