1. MEXICO’S NORTHERN ECONOMIC CORRIDOR November, 2014

2. US Trade with Mexico

3. In 2013, 48 cents of every $1 of US-Mexico trade crossed at a Texas border POE by truck 3 Footer Text

4. Mazatlán-Matamoros Highway

5. Mazatlán-Durango section: 140 miles long 115 bridges 61 tunnels Mexico’s six-year national infrastructure plan: $316 billion Mazatlán-Durango Highway: $2.2 billion

6. Predictions: Travel Times  New, reduced travel times  Improved access to Midwest and East Coast markets Durango, MX Torreón, MX Monterrey, MX Pharr, TX Nogales, MX Mazatlán, MX to: 2:30 hours4:35 hours7:40 hours10:10 hours16:00 hours

7. Travel Distances

8. Destination of Mexican Truck and Rail Imports US Region US POEWestSouthMidwestNortheast Nogales, AZ41%7%48%4% Brownsville, TX4%68%22%6% Hidalgo, TX7%66%23%3% Laredo, TX12%44%38%6%

9. Predictions: Economic and Trade Effects Increased traffic to the Lower Rio Grande Valley, especially for produce – 62% growth of produce truckloads in Texas predicted by 2020 – Lower Rio Grande Valley is predicted to receive 59% of these new truckloads – Shortage of agricultural inspectors at the border will be a challenge Potential for increased economic development in regions surrounding highway

10. Traffic Estimates  Baluarte Bridge – 2,000 vehicles per day  Mazatlán to Durango portion – 3,000 vehicles per day (1 st year) – 6,500 vehicles per day – Eventually will handle 4 times as many vehicles as it did before  Shift from Nogales to Hidalgo – 24,000-48,000 trucks

11. Surrounding Mexican States  Sinaloa – Top agricultural producer in Mexico – Performs well on socioeconomic and human development indicators – High crime rate compared to other Mexican states  Durango – State economy is agriculture based, but Durango is not a significant producer on a national level – High poverty rate and low human development indicators – High crime rate compared to other Mexican states  Zacatecas – Is in the top ten of agriculture producing states in Mexico, but exports less than most states – Has one of the highest poverty rates and lowest earnings per capita in Mexico – Higher than average perception of insecurity, crime rate is similar to national average

12. Surrounding Mexican States  Crime is an issue  All the following states had higher than average murder rates, and lower than average perceptions of highway safety: – Chihuahua – Coahuila – Durango – Nuevo Leon – Sinaloa – Tamaulipas – Zacatecas

13. Surrounding Infrastructure  Port of Mazatlán – Cannot accommodate Panamax Ships – Handles only 2% of Mexican Pacific cargo – Dredging is planned, but there have been difficulties and Lázaro Cardenas is still expected to be the major port on the Mexican Pacific coast  Rail infrastructure from Mazatlán to Matamoros is deficient

14. Tolls  Five axel truck from Mazatlán to Durango: $US 110 (140 miles)  Nine axel truck from Mazatlán to Matamoros: $US 300 (720 miles)

15. Preparations in Arizona Arizona ‒ $220 million improvement for Nogales POE lane expansion ‒ Investment in trade corridors, especially highways

16. Preparations in Texas Texas – Increase of traditional and cold storage facilities in the Valley Four projects for cold storage in Reynosa Additional cold storage being built in McAllen Conversion of dry storage to cold storage in Pharr Produce companies shifting offices to McAllen Texas International Produce Association (TIPA) has seen 80% increase in membership – Marketing to attract more traffic to the Valley, especially refrigerated goods – Potential purchase of an Electron Beam Sterilization machine to extend produce shelf life

17. Conclusion  Mazatlán-Matamoros is an engineering feat  Unclear whether surrounding Mexican states will increase production or exports  Crime, safety, and high tolls are issues in Mexico  Produce imports from Mexico are increasing in Arizona and Texas, and both states seek to be competitive

18. QUESTIONS?