VZCZCXRO7079
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #6760/01 3392206
ZNR UUUUU ZZH
P 052206Z DEC 06
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 4460
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 04 MEXICO 006760 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EIND ECIN ETRD ELTN ETTC ELAB MX
SUBJECT: US-MEXICO "HYPERBORDER" CONFERENCE 
 
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Summary 
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¶1. (U) On November 16 and 17, Embassy EconOff and Ciudad 
Juarez ConOff attended the 2nd Annual Hyperborder Conference 
in Ciudad Juarez, Mexico and El Paso, Texas.  They also spoke 
with the Director General of the Associacion de Maquiladora 
A.C. Consul General Donna Blair offered remarks at the 
opening reception.  The conference sought to promote shared 
dialogue on challenges and opportunities of the cross-border 
region, while promoting a "multi-faceted" "Hyperborder" 
approach that promotes joint economic, social, cultural, 
government and academic links.  Experts and stakeholders from 
both sides of the border participated.  Common threads in the 
discussion included the need for more decisions to be made in 
the region as opposed to distant political capitals and 
business headquarters.   However, there were differing 
priorities between Mexican and U.S. interlocutors.  The 
Mexican stakeholders appeared more concerned with a 
comprehensive approach that would improve Juarez not just 
economically, but socially.  The 
 U.S. stakeholders placed paramount value on improving the El 
Paso/Las Cruces business climate.   For the "Hyperborder" 
concept to succeed a truly joint and comprehensive approach 
will be needed. 
 
---------------------------- 
Hyperborder and Its Creators 
---------------------------- 
 
¶2. (U)   The purpose of the "Hyperborder" effort is to build 
a platform for improved cross-border cooperation and 
understanding. Cecilia Levine (El Paso, TX) and Fernando 
Romero (Mexico City) joined together to give shape to this 
vision by designing a pedestrian bridge that would serve as 
an immigration museum, which crosses the border between the 
sister-cities of El Paso and Ciudad Juarez.  It has been five 
years since the concept of the Hyperborder Bridge was 
presented to the government officials of both countries and 
the bridge has yet to be built, but the "Hyperborder" concept 
has spurred a yearly conference of the same name.  The first 
Hyperborder Conference took place in 2005 and primarily 
discussed broad themes.  This year the ideas were more 
focused, especially in light of the recent Mexican 
Presidential election and the new government. 
 
¶3. (U) Cecilia Levine has owned and operated a maquiladora 
since 1990.  Born in Chihuahua, Mexico and having lived in 
the U.S since the mid-sixties, she in many ways represents 
the bi-national identity that is commonly felt among people 
living along the border.  She is the founder of US/Mexico 
Strategic Alliance, which networks with various organizations 
to improve the life of the U.S. and Mexican citizens living 
in the border region.  She is also a Director of the Dallas 
and El Paso branches of Federal Reserve Bank. 
 
¶4. (U) Fernando Romero is a renowned architect who strives to 
portray contemporary society through innovative architecture. 
 His most famous work is the winning entry for a concert hall 
in Portugal called Casa da Musica. His architectural firm 
Laboratory of Architecture (LAR) is based in Mexico City. 
 
------------------------ 
AMAC:  Maquila Evolution 
------------------------ 
 
¶5. (U) At a meeting with Econoff and Conoff, Jorge Pedroza 
Serrano, Executive Director of Associacion de Maquiladoras 
A.C. Ciudad Juarez (AMAC), outlined some of the significant 
concerns of the maquiladora industry.  Despite the turnaround 
of the maquila sector and evidence indicating the return of 
some business initially thought to have been lost to China, 
infrastructure issues and a supply chain throttled by the 
cross-border transportation difficulties, remain top concerns. 
 
¶6. (U) In response to concerns from the maquiladora industry 
about  expensive delays and costs associated with suppliers 
of raw materials (mainly from the U.S.),  AMAC is trying to 
establish raw material suppliers in Juarez to enable 
just-in-time production and subsequently take advantage of 
the geography for distribution of the finished products. 
AMAC is also undertaking a competitiveness study to determine 
how Mexico, particularly the border areas, can become 
competitive to mitigate threats from China.  One key factor 
is availability of energy.  Energy costs in Juarez are about 
40% higher than that in the U.S.  AMAC is looking into 
possibilities of purchasing cheaper energy from the U.S. 
border states. 
 
¶7. (U) Serrano explained that the type of industrial growth 
is also evolving, with maquilas moving from simple assembly 
type plants to more sophisticated production.  In 
 
MEXICO 00006760  002 OF 004 
 
 
collaboration with business, industry and academia, there is 
a push to establish a MEMS production facility.   MEMS (Micro 
Electro-mechanical Systems) are silicon micro-machines 
smaller than a human hair, which can move to accomplish a 
variety of tasks.  These include things like rotary electric 
motors, toothed gears, linear stepper drives, hinges, 
inclined planes, screws, pulleys etc.  These devices are 
small, cheap, robust, and can be integrated with digital and 
analog circuits.  This type of growth will perhaps give an 
added edge to Juarez, because the market for MEMS exists 
right there in already established production facilities. 
Investors are lined up and the project is imminent, according 
to Serrano. 
 
¶8. (U) On September 20th, the Center for Research in Science 
and Technology (CICTA) (situated inside the Institute of 
Engineering and Technology of the Universidad Aut"noma de 
Ciudad Ju rez (UACJ)) was formally opened by regional 
officials. This Center will develop technology projects, new 
products and patents for industry; and will offer incubation 
services for enterprises.  CICTA will be supported by 
different groups of researchers from the UACJ in areas like 
electronics, digital systems, manufacturing and biomedical 
sciences. It will also collaborate with institutions, which 
are part of the MEMS-Mexico Network, as Centro de 
Articulacion Productiva MEMS (CAPMEMS). 
 
----------------------------------------- 
CG Delivers Remarks at Conference Opening 
----------------------------------------- 
 
¶9. (U) The conference opened at the headquarters of the 
Asociacion de Maquiladoras AC (AMAC) with broad themes for 
the conference outlined by Tomas Mena Sanchez, President of 
AMAC and CG Donna Blair of the U.S. Consulate General in 
Ciudad Juarez.   The event included a presentation by Dr. 
Maccario Schettino, professor at the Tecnologico de Monterrey 
and Planning Coordinator of the El Universal newspaper.  In 
her comments, the CG welcomed the commitment of stakeholders 
and international experts in helping create programs to 
enhance economic opportunities while improving quality of 
life, growth and stability. 
 
¶10. (U) In light of regional priorities to increase 
competitiveness in an increasingly globalized world, the CG 
emphasized the Consulate's commitment to ensuring a vital 
flow of traffic across the border, which facilitates 
bi-national commerce, education, and personal travel.  She 
pointed out that in the next five years, hundreds and 
thousands of business/tourist, work and investment visas will 
be renewed on top of those that will be issued, which will 
help in further economic development in this region.  The 
Consulate will also continue to issue student visas, which 
will help in creating creative brainpower of the inventor, 
the entrepreneur, and the skilled worker who will then bring 
innovation and technical competency to the modern 
marketplace. 
 
¶11. (U) The CG observed that markets succeed as long as 
people have confidence in their public institutions.  She 
noted that regional movements supporting transparency in 
government have helped make Chihuahua state one of the most 
stable and attractive international investment alternatives. 
To further underscore the US commitment to bi-national 
growth, the CG announced the approval of a new position of a 
full time Political/Economic Officer to the Consulate staff. 
 
--------------------------------------------- --------------- 
Infrastructure, Education and Reform: Key to Mexican Success 
--------------------------------------------- --------------- 
 
¶12. (U) Professor Schettino's analysis of Mexico from a 
social, political and economic perspective used figures 
published by the Economist showing that Mexico is poised to 
become the 4th largest world economy by the year 2050, 
displacing Germany.  However, Schettino said Mexico will not 
achieve this goal unless its leaders show the political will 
to increase productivity by improving human capital and 
infrastructure through changes in laws and regulations. 
Schettino argued that Mexican leaders are now making 
decisions based on a Mexico that does not exist.  In the 
past, the government's share of the economy allowed it to 
greatly influence growth.  Now, the situation has changed and 
the government can only provide the environment that leads to 
growth.  To do this, the government needs to build 
infrastructure, revitalize the education system and support 
reforms that provide the basis for economic growth. 
 
¶13. (U) Schettino cited the need for fiscal reform.  He 
provided an economic model showing that if the government 
continues as usual, with the projected depletion of Mexico's 
largest oil reserve by 2009 and the increase in pensions 
needed over the same period, Mexico will experience a 5-6 
 
MEXICO 00006760  003 OF 004 
 
 
percent budget deficit by the end of the decade.  But, if the 
government enacts fiscal reform by raising tax revenues, 
along with reforms to increase exports in other sectors, 
Mexico can continue to thrive despite the oil and pension 
problems. 
 
¶14. (U) Lastly, Schettino discussed the political outlook for 
the next administration.  His analysis showed that Calderon 
will be able to successfully run the government if he is able 
to form a coalition of the center left and the right. 
Additionally, the PRD would cease to be a problem as they 
lacked the numbers required to keep a constitutional 
amendment from passing.  This, according to Schettino, boded 
well for the reforms that are needed to make Mexico 
competitive. 
 
--------------------------------------------- -------------- 
Stakeholders: Growth Will Continue, But Some Changes Needed 
--------------------------------------------- -------------- 
 
¶15. (U) The second day of the conference was held at the El 
Paso Community College and focused on large and small 
business issues.   While the small business sessions 
consisted of seminars on the logistical aspects of running a 
cross border business, the large business track focused on 
broader economic issues, border integration and investment. 
Both tracks seemed to concentrate more on the perspective 
from a U.S. based or branched company, and these sessions 
included more U.S. representatives than had attended the 
first day of the conference in Juarez. 
 
¶16. (U) A broad representation of speakers from academia 
(University of Texas - El Paso), government (Federal Reserve 
Bank and the Governor's Economic Council), associations (El 
Paso Chamber of Commerce, Plan Juarez, New Mexico Economic 
Development, etc.) and private business (Delphi, Baker and 
McKenzie, Hunt Oil, etc.) noted the success Juarez has had as 
the maquila sector has rebounded during the past 3 years. 
They agreed that despite the expected slowdown in the U.S. 
economy, the maquila sector in general and Juarez in 
particular should be able to maintain its growth - albeit at 
slightly lower rates.   They also agreed on problems that 
slow the development of the sector including high energy 
rates, border transportation problems, limited flexibility in 
supply chain, lack of labor flexibility and corruption/rule 
of law issues. 
 
----------------------------------- 
Juarez Needs Comprehensive Approach 
----------------------------------- 
 
¶17. (U) Veering from the topics of other speakers, who 
concentrated on the business aspects of the border, Lucinda 
Vargas of the Juarez Strategic Plan, spoke on the overall 
development of Juarez.   The Juarez Strategic Plan is based 
on a similar plan implemented in Bilbao, Spain for the 
purpose of encouraging development in that city.   Vargas 
noted that in Juarez, "population growth and economic 
dynamism have not equaled overall development".  She said job 
creation had not equaled infrastructure development, and in 
order for Juarez to actually develop, a comprehensive plan 
was needed that included public and private sectors, academia 
and social groups.   She said a multi-faceted, bi-national 
approach such as that intended with the Hyperborder concept 
was the way to make growth finally equal development. 
 
---------------------------------- 
Border Region Lacks Powerful Voice 
---------------------------------- 
 
¶18. (U) The conference concluded with a roundtable discussion 
with commerce promotion associations from both sides of the 
border.   One of the main issues raised was the lack of true 
cross border cooperation in lobbying so that more decisions 
are made locally, as opposed to in Washington, DC, Mexico 
D.F., and at corporate headquarters in places like Detroit 
and New York.  Businesses complained that turnover in key 
decision-making positions made it harder to promote local 
businesses in the supply chain.   They also said more 
cross-border investment promotion was needed, and 
intra-border data needed to be developed to assist businesses 
in making decisions. 
 
¶19. (U) The association representatives countered that they 
did work together, but that the region was not currently in a 
position to effect change so that decisions are taken 
locally. Importantly, while they seemed willing to cooperate 
fully on simple matters such as data reporting, the 
associations were almost entirely domestic leaning in their 
ideas for promotion development.  For example, the expansion 
of Fort Bliss and the revitalization of the El Paso 
International Airport were repeatedly cited by the U.S.-based 
associations as large economic boons for the region though 
 
MEXICO 00006760  004 OF 004 
 
 
they had little information on how these would affect Juarez. 
 
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Comment 
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¶20. (U) The "Hyperborder" concept is a great idea in theory. 
The open dialogue highlighted perspectives that limit 
cross-border linkages.  However, the term "Hyperborder" 
implies that both El Paso and Juarez must develop 
complimentary economic models.  Because the border region is 
strongly linked, growth on either side of the border can 
spread throughout the larger region.  In practice, however, 
the respective business communities seem primarily interested 
in helping themselves more than promoting comprehensive 
cross-border linkages.   We observed that there were very few 
U.S. representatives at the Juarez event and few Mexican 
representatives at the El Paso event.    It appears that the 
U.S. business community sees relations with Ciudad Juarez as 
just another component of the business process and does not 
view Juarez as a full and complete partner.  By the same 
token, the Mexican business community is aware that, for the 
majority of them, good business means working closely with 
the U.S., even if Ciudad Juarez is not experiencing the 
development it desires 
 
¶21. (U) Economic growth on the U.S. side of the border does 
provide some benefits for Juarez.  However, the commercial 
advantages of thousands of Mexicans traveling to El Paso to 
go shopping far exceeds that of the smaller number of 
Americans who cross the border for business or pleasure.  The 
ongoing Fort Bliss expansion and planning by El Paso leaders 
to bring defense related industries to the area offers an 
optimistic model for growth.  The planned revitalization of 
downtown El Paso is also a positive factor.  These plans 
could provide increased benefit to Juarez as well, but the do 
not investigate the possibility.  In sum, Cecilia Levine has 
her work cut out for her in trying to promote the Hyperborder 
concept.  The goal is for the Juarez-El Paso border region to 
achieve a sustainable economic model that draws on strengths 
of each side. If this model works, it could be of great 
interest in the border region, and may also be a model for 
sister-cities.  It would also encourage leaders on both sides 
of the border to work together on problems that can only be 
solved jointly.  In the end, before a true Hyperborder can 
exist, Ciudad Juarez must resolve its basic problem of 
underdevelopment while the El Paso/Las Cruces border region 
must come up with a sustainable economic model that also 
complements efforts in Juarez. 
 
Visit Mexico City's Classified Web Site at 
http://www.state.sgov.gov/p/wha/mexicocity 
GARZA