Arizona-Mexico Trade: Inroads to private gain, Part 1

This series is dedicated to Krazy Bill.


If Arizona destroys part of South Mountain/Moahdak Do'ag to build the freeway, it will to a large degree support the trade traffic recently being promoted by the new Governor Doug Ducey in collaboration with one of the biggest beneficiaries of NAFTA-related reforms, the Mexican extreme billionaire Carlos Slim.
 
Yes, the South Mountain Freeway/Loop 202 extension concept dates before NAFTA, but Arizona's promotion of trade with Mexico has accelerated in the past couple of years, with an emphasis on the Phoenix/Tucson area as a trade hub called the Sun Corridor. Another road, Interstate 11, a mega-project that would connect Las Vegas with Phoenix and beyond creates a north-south trade route.

Costing billions of our tax dollars, the planned roads and other infrastructure would physically facilitate the trade that business and politicians desire. The federal and local facilitation of a public-private partnership (P3) arrangement, also aligned with free market ideology, is what seems to be pushing the Loop 202 plan along. A P3 can be understood as federal subsidization for private companies to build infrastructure that would prioritize projects that would benefit other private companies, such as mining companies--again, with our tax dollars.

There is a much-increased emphasis on infrastructure for trade with Mexico—a country whose people, except for the rich minority, were and continue to be negatively impacted by NAFTA and associated reforms and intervention including the drug war. The international trade corridor through Arizona would further promote the use of cheap labor south of the border, which also impacts US jobs, as many have experienced.

Ducey has gotten a lot of positive press in Arizona for reaching out to Mexico, but one can't help but notice, if one is aware of the circumstances in Mexico, the complete silence in this same press coverage around the recent and continuing homicides, disappearances, torture, massacres, and kidnappings in Mexico—something that should factor into a discussion on trade with our "good neighbor" to the south. Whether the authors and editors are ignorant, in denial, or playing pretend, this speaks to the successful public relations campaign to brand Mexico as tame and stable. The denial also stems from the fact that the same policies that support free trade with Mexico are largely to blame for this violence.

It wasn't that long ago that the threat of spillover violence was used to justify anti-immigrant laws and border militarization, but now the tragedy and turmoil that is in large part due to these free trade reforms can be ignored with the help of some very powerful people. Does Ducey actually believe that increasing trade with Mexico will improve the economy and well-being of both countries, as he says, or is it just media spin to attain infrastructural improvements for business gains?

Despite his expensive PR campaign, Mexico's president Enrique Peña Nieto is suffering a crisis of legitimacy, not only because of "El Chapo" Guzman's recent escape from prison, but due to the recent attack on the students of Ayotzinapa last fall—to name only the most attention-grabbing recent incidents. Meanwhile, the violence in Mexico would not be what it is if it weren't for neoliberal reforms and especially the Mérida Initiative, a U.S./Mexico plan purportedly meant to curtail the drug trade, but with the effect of benefiting transnational corporations seeking to accumulate more wealth from Mexico at the same time as increasing militarization and violence across the country.

The following is part one of a series in which the broader implications of Arizona-Mexico trade will be discussed as it relates to the public relations campaign to portray a calm and secure Mexico ready for trade. Both in Ducey's constant references to SB 1070 and Jan Brewer, and in Peña Nieto's enlistment of pro-NAFTA international consulting agency, can be seen a propaganda campaign to portray Mexico, NAFTA, and the drug war, as successful while achieving a misdirection away from Arizona and the U.S.'s role in perpetuating the violence. (See Part 2 here). Increased trade with Mexico will lead to increased border militarization, with consequences for those living along the border and those trying to cross. Attempting to politically and economically stabilize Mexico for transnational investment comes at an immense price. The series will address the pivotal roles of Governor Ducey and Carlos Slim (and a few other players) in the countries' relationship and what Slim's wealth and influence represent (Part 4 is in progress). The promotion of economic development is not about improving our lives, but is about cheap labor, resource extraction, and privatization (See Part 3 here). The relationship between Ducey and at least one mining company that epitomizes this, exploiting its workers and contaminating the environment, will be discussed as well. Finally, how trade and infrastructure impact and create demand for water will likely be included in the series.


The Roads

Back in April, multi-millionaire sports executive Jerry Colangelo and another Arizonan in real estate, Michael Ingram, who would both profit from one of the proposed alignments for Interstate 11, extolled the corridor in conversation with Carlos Slim, convincing him to promote its extension down to Mexico City.

Similar discussions about facilitating Arizona-Mexico trade were continued when Governor Ducey, claiming to polish Arizona's reputation that former Governor Brewer tarnished with SB 1070, took a trip to Mexico city in June, meeting with Slim again and also meeting with mining executives, other business leaders, and working on a few agreements with Mexican officials.

Arizona sees a lot of room for improvement if the state is to compete with Texas, California, and New Mexico in facilitating trade with Mexico. Arizona infrastructure, like roads such as the South Mountain Freeway Loop 202 Extension and Interstate 11, as well as border ports, rail, etc. are being built or expanded at the behest of business interests looking to create an international trade corridor through Arizona.

Interstate 11 has been in the works for years. After much lobbying, the interstate was designated as such by congress through MAP-21 legislation in 2012, due to its importance in completing the international corridor for trade freight traffic between Phoenix and Las Vegas since Route 93 was inadequate. The rest of what was called the "Canamex Corridor" already exists. However, as the years have gone by and different influences come into play, the emphasized international trade route has changed in some ways.

For example, likely due to the influence of Harry Reid and others in Nevada, the international trade corridor referenced with the Interstate 11 is called the Intermountain West Corridor and is a more western route north of Las Vegas to go through Reno then Oregon and Washington, rather than cutting over to Utah then through Idaho and Montana.

Because an interstate promises access to some federal funding, some people and organizations south of Phoenix have been pushing to have the Interstate 11 officially run down through Tucson and Nogales to the border with Mexico, as well. On July 30, the US Senate passed the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act, which "would designate the Sonoran Corridor as a future interstate to connect I-19 to I-10 south of the Tucson International Airport, and extend the future I-11 from Phoenix north to Las Vegas and I-80, and south to Arizona’s southern border."

Update: ADOT reported on December 4, 2015 that "The Fixing America’s Surface Transportation Act, or FAST Act, formally designates Interstate 11 throughout Arizona. It states that the I-11 corridor will generally follow Interstate 19 from Nogales to Tucson, Interstate 10 from Tucson to Phoenix, and US 93 from Wickenburg to the Nevada state line. From there, the Interstate 11 corridor extends north through Nevada, and is designated as an interstate highway north of Las Vegas, through Reno, connecting to Interstate 80...
ADOT is beginning work on a Tier 1 Environmental Impact Statement covering the area between Nogales and Wickenburg." More information at ADOT's website.

The Sonoran Corridor, which would run through Avra Valley and benefit corporations like Raytheon, may act as a piece of the Interstate 11 by connecting Interstate 19 with Interstate 10 south of Tucson. In reference to the legislation introduced, McCain said, “The Sonoran Corridor project will have a significant impact on state, regional, and national commerce by connecting major trade routes and improving transportation along the CANAMEX Corridor and the future Interstate-11.” I-11 legislation, a few steps from being enacted, would lead the way for funding from the federal government.

"Specifically, its designation would provide both states’ Departments of Transportation the flexibility to develop a Northern Nevada and Southern Arizona connectivity corridors as part of the I-11 effort," states the DRIVE Press Release. This means it'll be easier to prioritize and get financing for the transportation routes that are meant for trade.

Additional efforts in Nevada are being made to get funding for the interstate. Currently there is no sources of funds in either state, even for the route that is already designated as an interstate, and it will likely be composed of public-private partnerships, facilitated and incentivized by the federal government, either way. The first portion, the Boulder City Bypass, which may be contaminated with asbestos, is already under construction.

Now due to the meetings with Carlos Slim, Mexico may in the future also officially recognize I-11 as extending to Mexico City. Although perhaps not officially, the trade corridor called Canamex currently has its southernmost point at the Port of Guaymas where powerful mining companies such as Freeport McMoran (who was present at the meetings in Mexico City) and BHP Billiton (of Resolution Copper who plans to destroy Oak Flat/Apache Leap with their copper mine) do business. Mexico has already made improvements to Route 15 at the behest of Arizona officials.

An announcement came out prior to Ducey's trip to Mexico that it was expected that the meetings would result in four agreements, one of which included I-11's extension to Mexico City, but only three agreements resulted. What resulted regarding the I-11 issue was less specific according the the US Embassy website:

"[A Memorandum of Understanding] between Arizona Department of Transportation (ADOT) and the Ministry of Communications and Transportation of Mexico (SCT) for the establishment of a binational commission that will endeavor to conduct a study on how to further optimize the Arizona-Mexico trade corridor, including road and rail infrastructure and industrial clusters."

From Transportation and Trade Corridor Alliance website. The small square does not seem to include the Loop 202 extension but clearly that area is quite central to the trade corridor traffic flows.

While Interstate 11 is a long way from being completed, the Loop 202 South Mountain Freeway is nearing the beginning of construction, unless it is stopped. It has been pointed out by critics that the road is meant as a truck bypass, and although it is not part of the official CANAMEX Corridor route, it had been proposed as such (among other options) due to its location. Its position in relation to Phoenix and other freeways means it would very likely be used by many freight trucks with business in Phoenix. As shown in the TTCA website capture, the Loop 202 is in an area very central to the key commerce corridors.

From ADOT 3D Fly-Through Video

To the dismay of many, largely because it would "remove over 4 Million cubic yards of South Mountain and make a cut 20 stories high and wide enough for 8-10 lanes through 3 mountain ridges," things are moving along on the freeway. However, a lawsuit poses a serious challenge to the project. Protecting Arizona's Resources and Children (PARC brought the first lawsuit, and the the Gila River Indian Community brought the second lawsuit. (Update, read Judge rules in favor of freeway, opposition builds). A failed attempt at getting a temporary injunction against the freeway is a setback but is not wholly discouraging. Other forms of resistance including a recent protest against a Loop 202 networking event, provide avenues for those outside the legal system, especially those who don't have much faith that the system works in favor of the people or the environment, especially indigenous people and sacred sites.

Currently, there's a shortlist for the public-private partnership to build the Loop 202. ADOT announced it would release a final Request for Proposals late this past spring, but it has not yet been seen. A developer will supposedly be chosen by the end of this year. ADOT is in the process of right-of-way acquisition. (Update: Connect 202 Partners was selected.)

As discussed in the "Trade and Growth" section of the post on this blog entitled "South Mountain Freeway Justified by Controversial Traffic Projections?" the traffic projections for the road, among other problems, likely were influenced by knowledge of the intentions and plans for the international trade corridor and its geographical relationship to the road.


The (Public-) Private Interests

Ducey may be taking credit for initiating a trade relationship with Mexico, but much has been in the works over the last few years. Notably, two Arizona trade offices have been opened in Mexico. Arizona, with the cooperation of Mexico has initiated upgrades to border ports and security, and expansion of a military checkpoint between Hermosillo and the border with Arizona, with Mérida Initiative funds. Of course, the Interstate 11 has been in study phase since 2012 as well.

The Arizona Department of Transportation (ADOT) has led the charge in driving these projects, along with the Arizona-Mexico Commission (AMC), the Arizona Commerce Authority (ACA) and their offspring: the Transportation and Trade Corridor Alliance (TTCA). The TTCA was created by former governor Jan Brewer as a public-private partnership unit that would carry on the role of the Governor's Camamex Taskforce (which had been started by the previous governor, Janet Napolitano). Led by members of ADOT, AMC, and ACA, with various private participants (including Freeport McMoran), the TTCA acts as Arizona's freight advisory committee. The AMC, with members including the governor and the director of ADOT, as described in Arizona's Roads Meant for Trade with Mexico Despite Corruption and Violence?, is largely responsible for moving the trade corridor along.

As outlined in From Ayotzinapa to Arizona: NAFTA Persists, AMC Canamex Expert and co-chair of the TTCA, Jim Kolbe, a former Congressman, was involved in the passing of NAFTA twenty years ago, along with various current colleagues.

A number of organizations including ACA as a presenting partner, and AMC as a sponsor, were involved in putting on the Carlos Slim event in Phoenix in April. Both men reported to have discussed I-11 with Slim, who are interested in the road passing along their Douglas Ranch project, are on the board of directors of the ACA; Jerry Colangelo also having been on the board of directors of the Interstate 11 Coalition, and Michael Ingram also on the board of directors of the AMC.

Marco Lopez, who works for Carlos Slim, was involved in the AMC and was central to the coordination of Slim and Ducey's meetings wrote in April for the Arizona Republic,

In 2009, Gov. Jan Brewer passed HB 2396 to promote the use of public private partnerships to improve Arizona's aging transportation infrastructure. We need to be far more aggressive in using that law to leverage private sector capital and expertise so we can improve and build new transportation infrastructure and safely increase the flow of trade and commerce into the United States and Mexico.

The AMC and the TTCA are very much in favor of the public-private partnership (P3) approach to the problem of lack of funds for transportation infrastructure. Essentially a form of privatization that is subsidized via federal incentives such as tax-free bonds and loans with low interest rates, P3s allow for the leveraging of state assets for projects that might not otherwise have funding. It is largely a project of financial institutions and consultants who profit off of complicated financial strategies, and is promoted by construction companies and engineering firms due to the promise of more funded projects. State officials are interested in gaining access to federal funding and being able to advance projects that businesses gain from, such as the Interstate 11 which would benefit Jerry Colangelo and others with real estate along a possible route.

Again, the plan is for the South Mountain Freeway to be a public-private partnership. It is likely to be a test run for more P3s in Arizona, including the Interstate 11.

Arizona officials would argue that all of this is for economic development. That's what they said about NAFTA and NAFTA has led to the enrichment of the few, and problems for many many others. Trade with Mexico benefits the mining and energy companies, and industries that rely on cheap labor and low environmental standards. Arizona wants to deny the damage it does by continuing this trade relationship, but check back for subsequent parts of this series that explores this further.

Read Part 2 here. 
Read Part 3 here.