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Simplifying Border Crossings for Goods Will Help the Economy

The macroeconomic benefits of this could be significant. Our initial estimates suggest that these small changes in how we plan and fund cross-border infrastructure could increase U.S. GDP by one percentage point, about $220 billion...

Article by Matthew Rooney and Laura Collins October 13, 2016 //   3 minute read

Our land border crossings are choked with traffic and beset by long wait times. The safe transport of oil and gas products through cross-border pipelines is subject to a lengthy and opaque presidential permitting process. Cross-border electric lines, like those from the Energia Sierra Juarez wind farm in the San Diego-Tijuana area, are also subject to a similar presidential permitting process.

As remarkable as it sounds, there is no border infrastructure planning system that can address these problems and provide forward-thinking vision for the North American region.  As a result, the cost of making things in the U.S. is too high, limiting our global competitiveness and dampening economic growth and job creation.

The George W. Bush Institute’s North America Working Group has been working on a policy solution to this problem for over a year. The Working Group believes that a tri-lateral border infrastructure facility could be the solution.

This institution could coordinate the three countries’ border infrastructure planning while engaging market forces and private capital to fund cross-border projects. We think three main benefits will accrue with this approach: reduced pressure on budgets to fund cross-border infrastructure, lower production costs for the firms that rely heavily on the North American supply chain, and increased productivity.

The macroeconomic benefits of this could be significant. Our initial estimates suggest that these small changes in how we plan and fund cross-border infrastructure could increase U.S. GDP by one percentage point, about $220 billion, and reduce the federal budget deficit by 1.16% of GDP, nearly $250 billion, in the short term. This analysis does not include the economic and fiscal benefits that would accrue to our neighbors and most important allies, Canada and Mexico.

All of this could be accomplished at relatively little cost—if each of the three countries provided $250 million of paid-in capital, this proposed tri-lateral facility would have over $7 billion to leverage for cross-border infrastructure investments.

Our competitors in Asia and Europe are systematically planning and investing in border infrastructure, squeezing out unnecessary costs and opening opportunities for growth and prosperity for themselves – without compromising one bit on security.  We can and must do better.