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Fox News contributor Nelson Balido addresses the Automated Commercial Environment system and other border trade issues

Fox News contributor Nelson Balido addresses the Automated Commercial Environment system and other border trade issues

Tecma expert and Fox News contributor, Nelson Balido sees the Automated Commercial Environment and other improvements in border trade facilitations efficiencies on the horizon.

The Tecma Group of Companies:

Welcome to another installation of Tecma Talk podcasts. Today, we welcome an individual who is quite knowledgeable in terms of border trade issues. His name is Nelson Balido. Nelson works with the Tecma Group of Companies, as the vice president of external affairs, but he also does a number of things that are related to his area of expertise, and wears quite few hats. Welcome Nelson. How are you?

Nelson Balido:

Great to be with you. Thank you for this opportunity.

The Tecma Group of Companies:

Nelson, with respect to your expertise and border infrastructure issues, and, in addition to being the vice president of external affairs for the Tecma Group of Companies, can you please provide the listening audience with some biographic information about yourself?

Nelson Balido:

I appreciate that, and certainly I appreciate the Tecma Group of Companies always being supportive in getting involved with external organizations. In particular, with the Border Commerce and Security Council, which I chair. Previous to that I was the president of the Border Trade Alliance (BTA) for a number of years, after I left the Bush Administration. There I served in the Department of Homeland Security. Certainly Tecma is on the cutting edge of being an organization of adding value for its customers operating on the border. The Group is second to none. By being involved with outside groups such as the Border Commerce and Security Council and other organizations, it really adds a dimension that sets the company apart from others that ensures that we have proper access to government officials on both sides of the border to advocate for safety, for cross border trade facilitation, to address Customs issues on both sides of the border, and it gives us, again, another value-add to offer to the company’s customers, as well as those that are thinking of joining the Tecma Group of Companies for future manufacturing support in Mexico.

The Tecma Group of Companies:

It is good to have someone always out their looking at the horizon in order to find out what is new, and what is important in terms of issues that have to do with Customs and Border Protection, CBP, and the people at DHS. That is what we are going to talk about today. I have a few questions. Is it OK if we get started with them?

Nelson Balido:

Please do.

The Tecma Group of Companies:

When you look at Customs and Border Protection (CBP), what kind of initiatives, particularly in the areas of manpower and communications let’s say, being taken to speed up trade along the border? Obviously, we know that delays cost, and, to put it directly, time is money. What is being done by CBP to speed things up?

Nelson Balido:

This is a very interesting question, because, as we get involved with these things, it is very transparent to our customers that what we are doing is in their favor. By working with CBP, we have been very active in advocating for the resources that ensure that they have enough manpower. Manpower is key. Especially important is the effort to help the CBP get funding from members of Congress in Washington, D.C. to ensure that our ports are properly staffed. Properly staffed with the guys wearing the blue uniforms that receive cargo on a daily basis, and truly have an effect on
and authority over shipments. It is also important to ensure that the proper infrastructure is there, not only on the technical side and the communications side, but also the manpower to do those two things. It is essential to ensure that the manufacturing customers’ product gets over the border as over the border and to market as soon as is possible.

The Tecma Group of Companies:

Manpower is critical to making things move, but also, you mentioned the word “technology. Can you inform the listener as to what kind of state-of-the-art technology has been put into place by US Customs and Border protection to speed things up?

Nelson Balido:

The number one issue is the ACE, or Automated Commercial Environment. This has been in testing and development for years. It should go “live” by the end of this year. There will be a cut off date at which everyone has to be on ACE. This constitutes the next step in the future of trade for the United States, not only on our borders, but even at our maritime ports and beyond where there is going to be an integrated effort from Customs. Now, one of the things that I will say that we advocate for through the Border Commerce and Security Council is ensuring that, not only ACE gets funded and that the proper technologies get put into place, but also advocate for positive change on the other side of the border, as well. This also includes interacting with Mexican Customs,
and with departments dealing with transportation and motor carriers in the states that we operate in to make sure that they are “in check” with everyone else. Sometimes they need to be “coaxed” along, and helped along, because there is normally a big focus on US Customs Officers. Some of those other components are forgotten. We like to make sure that we take an integrated approach to the border, that communications is facilitated, and, really, Tecma is leading the way in ensuring that our customers are receiving transparent benefits that are related to the company’s activities
in this area.

The Tecma Group of Companies:

Can you fill us in as regards what Mexico is doing on its side to ensure the smooth flow of goods back and forth across the border?

Nelson Balido:

You bet. There are three ports of entry that are currently under testing, and I say testing because they have been under testing for a while. There have been some administrative and policy issues on both sides of the border that have slowed the process down, but, for a number of years now, at the Otay Mesa Port of Entry, the Santa Teresa Port of Entry and the Laredo Port of Entry have been active. This means, Laredo being an airport pre-clearance into the interior of Mexico, while both Otay Mesa and Santa Teresa are land pre-clearance points in Mexico for goods entering into the commerce of the United States. With the Automated Commercial Environment, or ACE, coming on-line and, perhaps, future technologies that will be put into place that will better track shipments from the time they leave the maquiladora, or manufacturing plant, to destination. I think that in the future, what we will see on our borders is the emergence of kind of a “virtual border.” Trucks will be leaving the plant and traveling right through Customs to destination, because they have been monitored, pre-cleared and pre-checked for consistency in the handling of merchandise and in regard to the background check of the drivers that are behind the wheel of the commercial conveyances. These things will facilitate that trade. Those pre-clearance areas are of
crucial importance. They allow Mexican and US Customs agents to, literally, work side by side to ensure that there is seamless interaction and communication, and through their working together at the same location. This ensures that cargo passes through the ports of entry as soon as and as fast as is possible.

The Tecma Group of Companies:

Nelson, you have mentioned the Automated Commercial Environment, or the ACE, several times in your comments. It looks like this program is going to play a major role, not only in matters of US-Mexico-Trade, but also with trade between the US and countries all over the world. Hopefully, we can get together to record a podcast on entirely on this subject in the future?

Nelson Balido:

You are absolutely right. When it comes to coordinating activities between the US and the countries with which it trades, the Automated Commercial Environment technology is going to play a leading
role.

The Tecma Group of Companies:

What do you feel, despite what you have described that is in the pipeline and already in place, are improvements that still need to be worked on to increase the agility of the movement of goods and services across the border, and in both directions?

Nelson Balido:

There are a couple of things that come straight to mind: First, is the issue of coordination with Border Patrol check points. This is another barrier to the free flow of trade. The Border Patrol check points that are located about twenty to thirty miles outside of either the northern or the southern border of the United States that are within the country have “hold” authority over shipments, privately owned vehicles and so forth. This is another location at which there forms a bottleneck at which things come to a stop. This could be coordinated, however. If a company has a shipment coming across the border into the United States, and it is monitored, why does it have to get stopped again thirty miles into the country? If information on the carrier and its contents
could be transmitted from the checkpoint at the border to the check point manned by the Border Patrol, certainly there is no reason to exercise hold authority. The idea here is to shift the focus onto the cargo that we do not know anything about, and, conversely, letting the cargo that we know everything about flow right through. There is no way of checking every truck, or opening every hold. There is no way of doing that based upon today’s trade volume and the numbers that we see on the border in terms of 100,500 trucks moving across our southern border on a daily basis. Let’s figure how to segment risk by focusing on areas in which we have little information, especially upon companies that are not C-TPAT compliant, that are not NEEC compliant, which is the Mexican
counterpart to the C-TPAT initiative. Both are “trusted shipper” programs. We should look at shipments belonging to companies that have chosen not to be a part of either one of those two programs. In other words, those that we know little about. As we segment risk, those are things that certainly can improve the free flow of commerce across our borders.

The other thing has to do with the consistent debate on long haul trucking. Although NAFTA has been in place for more than twenty years now, this is still going on. Still, if you are the owner of or involved with a trucking company from Mexico, there has been pilot programs conducted on and off that restrict the movement of trucks into and within the United States. This has been a continued point of non-compliance with the NAFTA that the US has perpetuated. This continuing situation is the result of union pressure for additional regulation during the current and past administration. Because of this, we have been sanctioned more than twice by the Mexican government in terms of the imposition of tariffs because we have not been in compliance with the terms for cross border trucking that were agreed upon as a result of the signing of the NAFTA in terms of long haul Mexican trucks. What needs to happen is that we need to allow Mexican trucks to flow into the United States in a long haul capacity. What has been found in the studies that have been conducted on this topic is that when a comparison is made between US and Mexican long haul trucking firms, many times the Mexican carriers have a better history in terms of safety than our own domestic carriers. This flies in the face of the popular promulgated by some that Mexican trucks are rolling down the road in unsafe mechanical conditions with drunk drivers behind the wheel. This scenario is far from the truth. An improvement that can be made by the United States would be to come into compliance with what has been negotiated on this issue.

The Tecma Group of Companies:

Would it correct to say that there has been some kind of movement forward on the Mexican trucking issue over the last six months or so?

Nelson Balido:

There has been some movement, but, as much as we sometimes make a movement forward sometimes, unfortunately, things simultaneously go backwards. What needs to happen is that all parties come into compliance with NAFTA regulations, i.e., those that agreed upon when the accord was first signed and to quit playing games.

The Tecma Group of Companies:

That’s pretty cut and dry. With regard to the word “infrastructure,” we have heard that term mentioned in various venues and by various people, over the course of the last several years. Infrastructure, physical and otherwise, is an important thing as it relates to international trade. When you look at the border, Nelson, what is your assessment, do you think that we need more?

Nelson Balido:

No. I don’t think that we need more. When Tecma did studies over the last couple of years on the trucking environment by equipping trailers with tracking systems, we quickly discovered that we are dealing mainly with what is a communications issue between the agencies that are involved in the process. What we found out through the programs that we put into place is that we were actually able to speed up trucks by simply segmenting the traffic allowing CBP to have information on our trucks in advance. This would free resources to focus on the trucks for which there was no
information. Customer through put in moving things across the border was sped up by more than thirty-three percent. Our trucks were getting through Customs at a thirty-three percent faster speed then some others were. That is important when you look at speed to market for our clients, and an important factor to consider by those that might contemplate doing business with Tecma as a potential partner in Mexico.

The Tecma Group of Companies:

Nelson, I had an opportunity to read some of those reports. Beyond the obvious benefits of moving goods across the border faster other benefits were discovered that were related to this approach. Secondary benefits that were pretty fascinating included, number one: the amount of time that trucks spend waiting in line decreased and the resulting decrease in engine idling saves fuel, cuts emissions, and achieves things like reducing traffic congestion border communities. Beyond just moving trailers back and forth more quickly, a focus on these issues, i.e., using technology to speed up the crossing process, there are ecological and quality of life benefits that accompany this, as well.

Nelson Balido:

There is no question that there are, up to, tertiary benefits that are felt throughout the process. Certainly, economic gains are tied to each of those benefits. What we found out very quickly is that communications between the agencies is key. Mexican Customs need to know what US Customs is doing and, conversely, US Customs needs to know what its Mexican counterpart is doing. The Federal and State Departments of Transportation and other entities involved in making the process happen need to be on the same page as well. So many times, things are focused on the “guys in blue,” (US
Customs officers), however, all the other agencies are forgotten. We recognize that the issues that have to do with the entirety of the process, and we advocate for everybody to ensure that there are better communications and better technologies. At the end of the day, our customers benefit and they may not even be aware of it.

Tecma Group of Companies:

Nelson, it is good that you are out there and keeping your eyes on what is on the horizon. It is very needed. Also, from my own experience, I know that you are a very accessible guy who is willing to explain things. I am hoping that you are willing to extend that same accessibility to the listeners of this podcast. How can people get in touch with you with questions that go beyond the scope of what our discussion has been during this podcast?

Nelson Balido:

The best way is to send an email to the nelson@tecma.com address. People who want to call me can do so at 210-363-2688. I am available to answer questions.

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