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Government and business representatives from along the Arizona-Mexico border met at the Fresh Produce Association of the Americas in Nogales, Ariz., Friday to discuss commerce-related concerns for the region.

鈥淲hat I really want鈥� is to learn what we need to do specifically 鈥� when it comes to Nogales, when it comes to Douglas, when it comes to our border communities 鈥� to make sure that we鈥檙e doing everything possible so that this region can continue to prosper,鈥� said Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry.

鈥淭his whole area is an incredibly vibrant community,鈥� Hamer said. 鈥淚t鈥檚 leading the way for the state of Arizona.鈥�

State infrastructure, especially in the border region, has been of prime concern for Arizona Gov. Doug Ducey, said Juan Ciscomani, senior advisor for regional and international affairs at the governor鈥檚 office.

鈥淗e respects and appreciates this area; that鈥檚 why he鈥檚 been here quite often,鈥� said Ciscomani, who also serves as vice chair of the Arizona-Mexico Commission (AMC) board.

Ducey included funding in his fiscal year 2020 state budget plan for a cold storage inspection facility on the border in Nogales, he said.

鈥淭he relationship overall with Mexico has been a key priority for the governor, and [the AMC has] been saying and demonstrating that for now almost five years,鈥� Ciscomani said.

Guillermo Valencia, chairman of the Greater Nogales and Santa Cruz County Port Authority, started off the discussion by describing the interconnected nature of the Nogales communities on each side of the Arizona-Mexico border.

鈥淎s a community, Nogales, Arizona, doesn鈥檛 stand by itself,鈥� Valencia said. 鈥淣ogales, Sonora, is a very important part of our community.鈥�

鈥淥ur students go to school there; your students come to school here,鈥� he said. 鈥淲e go to church there; they come to church here. They come to our parks here; they come to our stores here. We go to the dentist over there; we go cut our hair over there. There鈥檚 a big synergy that goes on between both communities, and we depend a lot on each other.鈥�

Friday鈥檚 discussion focused on issues affecting businesses that depend on cross-border trade for success, specifically the produce and manufacturing industries.

The Tomato Suspension Agreement, a聽 between the United States and Mexico that kept tomato supply high and prices low, ended May 7, resulting in a 17.5 percent tariff on tomatoes.

鈥淲e鈥檙e now facing down duties this week,鈥� said Lance Jungmeyer, president of the Fresh Produce Association of the Americas. 鈥淎 typical tomato company in Nogales鈥� could be facing $500,000 in cash deposits per week just to stay in business. So, you multiply that over the course of a year, and you can see that it鈥檚 very difficult for companies to remain in this business.鈥�

On the other hand, there are new opportunities on the horizon, Jungmeyer said, such as the proposed cold storage inspection facility in the governor鈥檚 budget.

鈥淭hat鈥檚 an opportunity to bring in items that we鈥檙e not touching at all right now,鈥� Jungmeyer said. 鈥淲e barely bring in any berries at all, and that鈥檚 one of the fastest-growing items out of Mexico. There are other temperature-sensitive items that don鈥檛 come to Nogales at all. That鈥檚 going to open up a huge opportunity, so it鈥檚 a small investment that could pay off for years and years and years, and so that gives us opportunities to promote the corridor and the wait times and system improvements.鈥�

The local port authority in Nogales follows the business community鈥檚 lead to determine what the most important challenges are, said Bruce Bracker, vice-chairman of the board for the Greater Nogales-Santa Cruz County Port Authority and supervisor for Santa Cruz County鈥檚 third district.

First and foremost, Nogales ports of entry 鈥� DeConcini for vehicles and Morley Gate for pedestrians 鈥� are extremely shorthanded, leading to long delays crossing the border into the U.S. from Mexico, Bracker said.

鈥淏oth of these ports of entry just are not equipped to deal with the needs of today,鈥� Bracker said. 鈥淭hey were built 20, 30 years ago鈥� they鈥檙e a floodplain, they don鈥檛 have enough passenger vehicle lanes, they don鈥檛 have enough pedestrian lanes, and it鈥檚 choking our downtown.鈥�

Nogales is losing retail business on both sides of the border because residents don鈥檛 want to risk an excessive wait to cross, Bracker said.

鈥淭hey don鈥檛 know what they鈥檙e going to get when they walk up to the border 鈥� whether it鈥檚 going to be a 15-minute crossing, a 20-minute crossing or a two-hour crossing,鈥� he said.

Another issue is that the International Outflow Interceptor (IOI) 鈥� the sewer line from Nogales, Sonora, to the Waste Treatment Facility in Rio Rico, Arizona 鈥� needs to be upgraded. Misael Cabrera, director of the Arizona Department of Environmental Quality, is聽 to improve the line, Bracker said.

鈥淲e鈥檙e a great community; we鈥檙e a clean community,鈥� he said. 鈥淥ur air is clean, and our water is great. We just need to make sure that we protect our infrastructure so that it stays that way.鈥�

Issues such as outdated infrastructure and extended wait times at the border impact the region鈥檚 economy in both seen and unseen ways, Valencia said.

鈥淭here are people that say, 鈥業 won鈥檛 go. I won鈥檛 use it… I won鈥檛 cross the border,鈥欌�� Valencia said. 鈥淎nd they eliminate that from their plans, so that hurts.鈥�

Workforce shortages and border wait times are affecting the local manufacturing industry as well, said Joshua Rubin, account manager at Javid, a Nogales, Arizona-based maquiladora founded in 1983.

Mexican maquiladoras are unique to other manufacturers in that they operate under聽 established to lower production costs for U.S. manufacturers. Production equipment can enter Mexico duty-free, and finished products can be exported to the U.S. from Mexico at lower tariffs than from other countries.

鈥淭he maquila industry, we鈥檙e growing,鈥� Rubin said. The industry is expanding, and Javid is seeing more clients than ever before, he said.

There are about 3,000 vacant jobs in the maquiladora industry now, even with an employment increase of 4,000 employees in the past year, Rubin said. As the industry continues to grow, the need for a larger workforce supply grows, too, he said.

鈥淥ne of the big things that we鈥檙e noticing is that a lot of the U.S. companies are seeing the talent that there is here in Mexico,鈥� Rubin said. 鈥淚t鈥檚 a little bit cheaper to be able to manufacture down here, so we have customers that are sending a lot more of their product line down here.鈥�

One of Javid鈥檚 clients is even closing down its Pennsylvania facility in favor of having 100 percent of its operations in Mexico, he said.

鈥淭he population growth is at a lower pace than the demand for new employees of the maquiladora industry right now,鈥� said Humberto Ram铆rez, vice president of Javid. 鈥淲e do need the regional increase of people coming up from out-of-state to come to the borders to look for better-paying jobs, especially now that the minimum wage at the border line increased to double, and it鈥檚 a lot higher than it is in the rest of the country, so we can compete salary-wise with the rest of the country.鈥�

One unintended consequence of Mexico鈥檚聽 near the U.S. border 鈥� the result of sweeping economic changes by the country鈥檚 current聽 鈥� is that lower-wage jobs are now approaching or even surpassing the wages of entry-level manufacturing jobs, Ram铆rez said.

鈥淭he Oxxos, the supermarkets that were paying way below the industry 鈥� because of this minimum wage increase, all of a sudden they were at the same level,鈥� he said. 鈥淭hey鈥檙e competing with us, which created a spiral of turnover鈥� so we鈥檙e just adapting to those [changes].鈥�

Now, the maquiladoras want to hire migrant workers from other parts of Latin America, Rubin said.

Companies are hiring, and migrants want to work, but it is difficult for migrant workers to obtain work visas because they are often undocumented and do not have the necessary identification, he said. Many migrants also hope to move on to the U.S. rather than stay in Mexico, he said.

The mayor of Nogales, Sonora, is 鈥�100 percent in support鈥� of maquiladoras hiring migrants, but the industry 鈥� which makes up about 55 percent of the GDP in Nogales, Sonora 鈥� needs Mexican immigration services to get involved so workers can obtain visas, he said.

In total, there are about 100 to 120 maquiladoras employing more than 42,000 workers in Nogales, Sonora, Ram铆rez said.

Kevin Adam, rural transportation liaison for the Rural Transportation Advocacy Council, said infrastructure 鈥� statewide and at the border 鈥� needs immediate improvement.

鈥淲e鈥檙e under-investing by more than a billion [dollars] a year statewide, and that is no more evident than at the border,鈥� Adam said. 鈥淒ouglas has a plan; they need the funding for it to go. San Luis 鈥� same thing.鈥�

Adam said he fears the issue will not be addressed until the state sees a noticeable loss of revenue, which could create 鈥渢remendous problems鈥� for the border region.

鈥淎t the same time, [there is] tremendous opportunity for economic development if in fact you do see the positive changes,鈥� he said. 鈥淲e need the infrastructure down here to be a selling point for trade; we don鈥檛 need to be shooting for minimal standards.鈥�

Adam and Jungmeyer pointed to State Route 189, which will see聽, as an example of much-needed infrastructure improvement projects.

It took seven years to 鈥渃obble together鈥� funding for SR-189, said Gail Lewis, director of the Office of P3 Initiatives and International Affairs at the Arizona Department of Transportation (ADOT).

Luis Pedroza, finance director for the city of Douglas, said his city suffers from many of the same issues as Nogales.

鈥淭he city of Douglas, we鈥檙e running out of space; we need more space,鈥� Pedroza said. 鈥淭hat鈥檚 why we鈥檙e asking for a new port of entry. Those are our issues plaguing us.鈥�

Mexico is Arizona鈥檚 largest trading partner, with two-way trade of $16.6 billion in 2018, and visitors from Mexico contribute 60 to 70 percent of sales tax revenue in Arizona border communities,聽 the Arizona-Mexico Commission.