Fred DuVal, Democratic candidate for governor, thinks Arizona would be better off if state officials focused more on economic cooperation with Mexico, especially the neighboring state of Sonora. He believes less time should be spent on costly court battles and erratic local border security efforts that do little to improve border security.
His suggested change in emphasis has merit because trade and transportation can help transform economies. When the Erie Canal opened in 1825, the economic growth fostered by the canal helped turn New York City into a major port and financial center. As railroads developed in the 1848-56 period, the small village of Chicago was transformed into a transportation hub and manufacturing center.
Arizona has gained a reputation for its madcap politics and a legislature that is quite a bit to the right of the politics of the general population. Although entertaining, the distorted political environment does not do much to help the state’s economy.
While Gov. Brewer’s defense fund for SB 1070 brought in $3.8 million in donations to fight court battles, few other states followed Arizona’s lead in plunging into immigration law enforcement. As the SB 1070 court battles made headlines, Arizona developed a reputation as a place that tolerated racial profiling and immigrant bashing.
The once strong links between the legislature and business interests frayed somewhat due to the damage inflicted by the SB 1070 affair and the foolish attempt to pass SB 1062. Outsiders noticed that while the Great Recession was suffocating Arizona’s economy, the legislature’s actions made things worse.
Economists don’t expect Arizona’s economic growth rate to exceed 2.5% due to the collapse of the construction sector and relatively high unemployment rate. The state’s lagging investment in infrastructure and education also tends to deter growth. In the past, the flow of people moving into Arizona supported economic upturns. The needed inflow of people is developing more slowly during this recovery.
Across the border, President Enrique Pena Nieto of Mexico is pushing a multitude of reforms in areas ranging from education to energy. The reforms are designed to revamp Mexico’s economy. Plans have been announced to build a new $9.2 billion international airport in Mexico City. It would quadruple the passenger carrying capacity of the existing airport.
The seaport at Guaymas, Sonora is undergoing a major expansion which offers the possibility of increasing the movement of goods through Arizona. The Mariposa port of entry in Nogales, the fourth busiest land port in the U.S., has been enlarged.
The two way trade between the U.S. and Mexico is valued at over at over $506 billion per year. The yearly value of U.S.-Canada trade is over $634 billion. In 2013, Arizona firms exported merchandise valued at $7.0 billion to Mexico and $2.2 billion to Canada. Due to the expanding trade volume, freight traffic between the U.S., Canada and Mexico is increasing. If the proposed I-11 interstate highway (part of the Canamex trade corridor) is constructed, Arizona will benefit. Tucson could find itself ideally placed to grow a regional distribution center.
While halted at Arizona’s railroad crossings, people pay little attention to the nondescript shipping containers moving by on rail cars. The trucks carrying them on the highways and city streets are part of normal traffic. These hardly noticed 20 and 40 foot standardized steel shipping containers account for approximately 90% of non-bulk cargo moving worldwide by ship.
Developed in the 1950s by commercial shippers and the U.S. military, standardized containers can be easily moved by truck, rail or ship. They are never opened during transit, speeding up the movement of cargo and reducing shipping expenses. There is a strong possibility that more containers could be moving through the state in the future. Fred DuVal believes Arizona should grab the business and take full advantage of the economic opportunities offered by its location.