MCALLEN, Texas - Dr. Daniel Covarrubias is director of the Texas Center for Border Enterprise and Economic Development.
The center is housed within the A.R. Sanchez, Jr., School of Business at Texas A&M International University in Laredo.
Covarrubias recently spoke at a Friends of COSTEP quarterly meeting, held at the Cambria Hotel McAllen Convention Center in McAllen. COSTEP stands for Council for South Texas Economic Progress.
Covarrubias spoke about the impact tariffs can have on the economy, plus a white paper he recently penned, and two others he has in the works. All three white papers reimagine a new-look USMCA.
After the event had ended the Rio Grande Guardian International News Service secured an exclusive interview with Covarrubias about his new white papers. Here is a video recording of the interview:
The first white paper Covarrubias produced was penned in collaboration with Gerónimo Gutiérrez Fernández, the former Mexican Ambassador to the United States. It was titled “The Binational Customs Agency – A Vision for U.S.-Mexico Joint Customs Operations,” and argued for combining customs operations between the U.S. and Mexico, and potentially Canada too.
The next white paper out of the chute, Covarrubias said, will be titled “The American Industrial Coordination Council. He said it will argue for a permanent institutional framework to align industrial strategies across the U.S., Mexico and Canada, leveraging complimentary strengths to enhance North American competitiveness.
“What we're proposing here is having that committee within the framework of USMCA. I know that there's a competitiveness committee within the USMCA. The thing with that is that it has very little private sector participation,” Covarrubias said.
“So, for this to work, we need a lot of private sector participation. So, basically, with this North American Industrial Coordination Council, we're proposing a permanent institutional framework to align industrial strategies across the US, Mexico and Canada.”
Covarrubias said the idea would be to leverage the strengths of each country. He then listed them.
“Mexico, well, you can't just build a manufacturing base there for 30 years, and expect it to disappear, right? So Mexico has a very strong manufacturing base and capability to it. The United States, innovation, research, development, smart manufacturing, those are the main points and the strong points of the United States. So let's focus on those. I'm not saying manufacturing can't come back to the United States. I'm just saying that it's a certain type of manufacturing that will work, and it's called Smart Manufacturing. And Canada has all the natural resources that the other countries lack and that the other countries need.”
Covarrubias continued: “So, focusing on those three areas, putting together this North American industrial policy strategy, I think can help North America go forward and compete again. This North American Industrial Coordination Council, I think, can position North America as a cohesive economic powerhouse capable of competing effectively…”
Covarrubias said the third white paper, coming later this year, will be titled “Digital Infrastructure: Breaking Down the Digital Wall.”
Of this, Covarrubias said: “So, we have the financial customs agency as an institutional innovation that that can work on producing more security, more efficiency for the United States-Mexico border that can certainly grow to Canada as well. By that I mean, the relationship that CBP has with its Canadian counterparts can also be included in this.”
Making the case for uniting the digital infrastructure utilized by the three countries in USMCA, Covarrubias said:
“In Laredo, we have 20,000 trucks crossing (the border) every day. So, that's 10,000 trucks that I'm trying to get from the United States to Mexico when the system falls. So, imagine what 10,000 trucks put together represents. And sometimes it (the system) falls for hours. But other times it falls for the whole day. We can't have that anymore. So, that's why we need this digital infrastructure. We need to take advantage of blockchain.”
Covarrubias said he is aware CBP is doing some projects with what it calls a verifiable, trusted certificate.
“It is another fancy name for blockchain. We need to give governments and companies much more visibility on what's going on, real-time risk assessment, automated documentation, integrated tracking systems. Any container that comes on a ship has all these sensors. You can manage for temperature, if it's open, if it's closed, if it has moved around, if somebody touched it, and so on. Why can't we bring that to trucking? I know it's expensive, but we're going to have to invest in it.”
