Californian and Mexican businesses struggle with border uncertainty

Driving at speed on the US Interstate 5 highway towards the Mexican border, West Barba's demeanour is grim. A Colombia native who has lived in the San Diego area for 17 years, Barba began Baja Border Tours three years ago, specialising in day trips to Mexico for wine-tasting and other site-seeing activities.

“When I started, I was getting only one customer a day. After three months, I had four,” he says. “It took a year to get really busy. But then I figured maybe I hit something here. It became a good business.”

But since US authorities closed the San Ysidro border crossing between San Diego and Tijuana for several hours on November 25th last, after 300 migrants attempted to rush the fence, his business has collapsed.

“Until a month and a half ago, I was a very busy man. Now I am not a busy man,” he says wryly. “Now, I only go to Mexico two or three times a week. Before it was every day.”

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The big issue, Barba says, is that customers feared that, while entering Mexico would be okay, getting back to the states could present a problem. He says he had about 300 cancellations, costing him tens of thousands of dollars. Twelve people cancelled in a single evening and, for those who didn’t, the tour had to be postponed as Barba hadn’t enough passengers to merit the trip.

Financial losses

“All my customers for that day, that week, that month all cancelled. All appointments stopped coming in,” he says. “Now I’ve got to put together 10 passengers, asking them to switch the days they want so that I can fill the van every three days. It’s changed a lot.”

Though just five hours long, the border closure, something that has happened only a handful of times since the 1980s, cost companies in San Ysidro more than $5 million (€4.3 million). About 700 companies on the immediate northern side of the border suffered financial losses due to the shutdown as 93 per cent of San Ysidro’s customers come from Mexico.

Businesses on both sides of the world’s busiest border station – 73.6 million northbound crossings in 2017 – are on the front line of the fallout of the migrant crisis and politicking, fuelled by US president Donald Trump’s demands for $5.7 billion (€4.9 billion) to build a border wall. He has threatened that the border with Mexico could be permanently closed.

For more than four weeks, a partial government shutdown slowed asylum applications at border points of entry, leading to migrants in Mexico taking desperate steps that have led to clashes with US border officers. The instability has had major adverse knock-on effects for local businesses.

Every day, well over 100,000 people commute on foot and in cars from Tijuana into California to work. Collaborative co-production that sees goods cross the border multiple times before becoming market-ready, amounts to $6 billion (€5.2 billion) every year, to a report underwritten by Samsung states.

According to the World Trade Center San Diego, the San Diego and Imperial counties that border Mexico export $2.1 billion (€1.8 billion) in goods to Baja California state in Mexico, while importing $4.1 billion (€3.5 billion) worth of products. Trade between California and Mexico was worth $26.8 billion (€23.3 billion) and grew by 311 per cent between 1995 and 2015, turning the latter into California's largest export partner. About 566,000 Californian jobs are dependent on trade with Mexico.

A number of major Irish companies are located in the region, though how they are affected by the border uncertainties is difficult to track.

In Tijuana, home to the world's largest medical device cluster, Dublin-headquartered Medtronic employs about 4,000 staff at facilities making catheters, stent grafts, heart valves and other products. When contacted by The Irish Times, its spokesman wouldn't say whether it transports its products across the border to California, where it has a site in Carlsbad, north of San Diego, or whether it is concerned by the possibility of further border closures, as threatened by President Trump.

Several years ago, Gerardo de la Concha, the founder of Medtronic's Tijuana operations, told Marketplace.org: "I can say that 95 per cent of my components come from the US side. My supplier base is in the US . . . People [are] coming from Ireland, moving into this region, working in the US and in Mexico and spending money on both sides of the border."

One of the top imports from Mexico through the nearby Otay Mesa border crossing that’s dedicated to heavy goods transit are medical instruments valued at $1.79 billion (€1.56 billion).

Corrugated packaging giant Smurfit Kappa operates 10 sites in Mexico within a few kilometres of the 3,145km-long border, including four in Tijuana. In 2016, Smurfit Kappa acquired two corrugated sheet plants in the Los Angeles area to bring to three the number of its California-based facilities.

The company declined to comment as to whether it is concerned or otherwise by the border and political vagaries.

The San Diego-based Irish Outreach Center said it believed migrant-related border concerns were minimal for Irish interests in the area. That's a sentiment broadly reflected by Co Tyrone native Conor McQuaid who has run a flooring company with his sons in San Diego for 15 years.

Families

“Some of our employees have families that live across the border who they go see at weekends and, on one occasion, some were delayed at the border,” he said. “But I’m not concerned at all; we don’t get any of our material from Mexico so it’s not an issue for us.”

Recent years have seen San Diego open up further to international and European trade. In June, a new international terminal was opened at San Diego airport and, in 2017, Frankfurt-based Condor Airlines began direct flights between San Diego and Frankfurt. It ended the route last year. Swiss carrier Edelweiss Airlines operates seasonal direct flights between San Diego and Zurich several times a week. British Airlines flies daily to Heathrow.

West Barba of Baja Border Tours says that, while the border issues have ill-affected his business, he regards himself as lucky to live in the US as there are multiple work opportunities. "You can always go and try something else," he says. "[But] my friends in Mexico just have one profession. My friend who sells churros only sells churros, the same for my friend who sells tamales to the tourists."

Businesses in the service and tourist industry in Tijuana have been particularly affected by the border concerns. The Tijuana Hotel Association said in November that as many as 8,000 room cancellations had occurred, in large part due to fears around the migrant caravans.

“We’ve had bloggers and photographers, who were working on the protests and migrant issues, stay with us in recent weeks but, overall, my business has been badly affected because fewer people are coming from California and Mexico,” says a man who runs a hotel in the Playas de Tijuana area along the Pacific Ocean coast, and who asked not to be named.

Little sympathy

He has little sympathy for the migrants. “If the Hondurans can stay here and work, hustle just like the Mexicans, why don’t they? Why do they want to go to America?” he says.

At the 52,000sq m (559,723sq ft) Las Americas Premium Outlets mall on the US side of the border, customers are overwhelmingly from Mexico, drawn by high-quality clothes and electronics such as televisions and computers that are far cheaper in the US than Mexico.

“I have friends in Mexico who come across the border to fill their cars with gas and eat at McDonald’s, because they say it tastes better here than in Tijuana,” says Barba. For a time last year, petrol was 43 cents per US gallon (3.78 litres) cheaper at pumps in San Diego than in Tijuana, he says.

Though the effects of the partial US government shutdown did not impact California in a significant way, with more federal workers employed here than any other US state, there had been concerns that the consequences could be severe had it dragged on into February.

“America has no foreign policy and that creates problems such as what’s happening here at the border,” says Barba, who believes another border closure in the future is unlikely. “We have a president who is really articulate when it comes to claiming the border was attacked and terrorised. That makes people think ‘I don’t want to go to Mexico’.”