Another tactic involves combining trade and labor, specifically hiring gaps at the border crossing. A bill by Arizona Senator Jeff Flake sought to secure funding for CPB jobs, but with his retirement, it will likely die on the Senate floor.
Flake’s retirement may not be the only stumbling block in the battle brewing between the Trump administration, border state governments, and NAFTA. Because of the uncertainty surrounding elections and the shifting political landscape, some believe it could be a year or more before NAFTA negotiations are even completed, let alone implemented.
Laws & Orders
In addition to the NAFTA negotiations, President Trump’s hard line on Mexican border security has created a ripple effect that is felt everywhere in Nogales.
“We had twelve years of relative stability in the industry in terms of federal regulation, and it feels right now like no one quite knows what to expect,” says Graney.
Those who expected a business- friendly environment under a Republican administration have been thrown by the specifics of the current leadership’s often hostile relationship with Mexico.
While there are legitimate concerns about border security, especially in terms of narcotics trafficking (fresh fruit and vegetables including bananas, watermelon, and peppers were among recent smuggling attempts), many are concerned continued fiery rhetoric may translate into legislative action that will ultimately hurt the produce trade in both countries (as well as Canada).
Unintended consequences
One prominent example of this law of unintended consequences is the disappearance of bank branches in Nogales. Federal regulations intended to halt money laundering by drug cartels—heavily enforced under the current administration—are taking a toll on the produce industry, which frequently involves regular and substantial transfers of cash between buyers and sellers in the United States and Mexico.
While completely innocuous in the context of the produce business model, it triggers red flags for law enforcement, and the frequency of disruptive investigations has caused a number of large banks, including Citigroup, Chase, and Bank of America, to simply close branches. This has jeopardized thousands of legitimate business accounts and left importers and distributors without adequate and critical financial services, from loans to lines of credit.
Many in the industry cite this chain of events as a perfect example of well-intentioned legislation that exaggerates a real problem to the degree that solutions are developed that ignore the daily realities of doing business across the border.
