·1 ·2 ·3 ·4 ·5 ·6 ·7· · · · · · · BORDER TRADE ADVISORY ·8· · · · · · · · COMMITTEE MEETING ·9· · · · · · ·WEDNESDAY, MAY 31, 2017 10· · · · · · · · ·ALAMO COLLEGES 11· · · · · · · · 203 NORTON STREET 12· · · · · ·ATRIUM CONFERENCE ROOM #117 13· · · · · · SAN ANTONIO, TEXAS 78226 14 15 16 17 18 19 20 21 22 23 24 25· ·Reported by: PAMELA SUE PETERSON, CSR 8924 Page 2 Page 4 ·1· ·APPEARANCES: ·1· · · · WEDNESDAY, MAY 31, 2017, SAN ANTONIO, TEXAS ·2· ·Meeting Moderators: ·3· ·ROLANDO PABLOS, Secretary of State and Chair, Border ·2· · · · · · · · · · · · ·8:35 A.M. · · · · · Trade Advisory Committee ·4· ·CAROLINE MAYS, TXDOT ·3 ·5 ·4· · · · · · ·SECRETARY PABLOS:· Today is Wednesday, · · ·Panel Members/Speakers: ·6 ·5· ·May 31st. · · ·ALEJANDRA BUENO, CEO, R&I Solutions, LLC ·7· ·JORGE CANAVATI, Principal, J. Canavati & Co., LLC ·6· · · · · · ·And at this time I'd like to call to order · · ·RAMIRO CAVAZOS, President and CEO, San Antonio ·8· · · · Hispanic Chamber of Commerce ·7· ·today's meeting of the Border Trade Advisory · · ·THE HONORABLE JOHN CORNYN, U.S. Senator, Texas ·8· ·Committee.· I'd like to welcome everyone.· I know ·9· ·JESSE HEREFORD, Director of Public Affairs, North · · · · · American Development Bank ·9· ·that many of you have traveled from far and wide.· We 10· ·MIKE HOWARD, Chairman and CEO, Howard Midstream · · · · · Energy Partners, LLC 10· ·definitely have a big state, all the way from Sam 11· ·THE HONORABLE WILL HURD, U.S. House of 11· ·Vale's country over there to Jon Barela from El Paso. · · · · · Representatives, Texas 12· ·TRYON D. LEWIS, Chair, Texas Transportation 12· ·Thank you for being here.· Thank you for making time. · · · · · Commission 13· ·ROLAND C. MOWER, President and CEO of Port San 13· · · · · · ·At this time, I'd like to introduce two of · · · · · Antonio 14· ·TOM RAMSEY, CEO, Centurion Midstream 14· ·our very special guests we have with us today and · · ·THE HONORABLE PETE SAENZ, Mayor, City of Laredo 15· ·I'll ask to give opening remarks.· At this time I'd 15· ·JENNA SAUCEDO-HERRERA, President and CEO, San Antonio · · · · · Economic Development Foundation 16· ·like to introduce Ambassador Reyna Torres with SRE. 16· ·GERRY SCHWEBEL, Executive Vice President, Corporate · · · · · International Division, International Bank of 17· · · · · · ·Ambassador, thank you for being here. 17· · · · Commerce 18· ·Welcome to San Antonio.· Welcome to Texas.· I know · · ·SEAN STRAWBRIDGE, Deputy Executive Director and COO, 18· · · · Port of Corpus Christi Authority 19· ·that you're new in your role here in San Antonio.· So · · ·TOMMY TAYLOR, Director of Oil and Gas Development, 19· · · · Fasken Oil & Ranch 20· ·I'd like to welcome up and ask you to give some · · ·AMBASSADOR REYNA TORRES MENDIVIL, Consul General of 20· · · · Mexico in San Antonio 21· ·opening remarks, please. · · ·YURI UNNO, Director for International Trade Policy, 22· · · · · · ·AMBASSADOR TORRES:· Thank you so much, 21· · · · Government and Industry Affairs Toyota Motor · · · · · North America, Inc. (TMA) 23· ·Secretary Pablos, Commissioner Lewis and all the 22 23 24· ·planners and participants at the Border Trade 24 25· ·Advisory Committee.· Good morning, everyone. 25 Page 3 Page 5 ·1· ·APPEARANCES (Continued): ·1· · · · · · ·I'd like to thank the Border Trade Advisory ·2· ·Committee Members: ·3· ·JON BARELA, Borderplex Alliance ·2· ·Committee for the kind invitation to welcome the · · ·ANDREW CANON, Hidalgo County, MPO ·4· ·THE HONORABLE RAMSEY CANTU, Mayor, City of Eagle Pass ·3· ·participants to the first meeting, I understand, in · · ·PAUL A. CRISTINA, P.E., BNSF Railway ·4· ·2017 here in rainy San Antonio. ·5· ·ARTURO DOMINGUEZ, Kansas City Southern Railroad · · ·VERONICA ESCOBAR, Judge, El Paso County ·5· · · · · · ·Receiving the formal invitation from ·6· ·JOHN ESPARZA, Texas Motor Transportation Association ·6· ·Secretary Pablos to this event, I could not think of · · ·DONNA EYMARD, Port of Brownsville ·7· ·DANTE GALEAZZI, Texas International Produce ·7· ·a more significant and well-timed opportunity to talk · · · · · Association ·8· ·JOSUE GARCIA, JR., Cameron County Bridge System ·8· ·about the objectives that the government of Mexico · · ·THE HONORABLE ROBERT GARZA, Mayor, City of Del Rio ·9· ·shares with committee.· That is in general stressing ·9· ·JAKE GIESBRECHT, Presidio International Port · · · · · Authority 10· ·all the possible changes that take place every day 10· ·GABRIEL GONZALEZ, City of Harlingen 11· ·along our common board, and in particular, · · ·ROB HARRISON, Center for Transportation Research, 11· · · · UT-Austin 12· ·facilitating transportation and, therefore, trade. · · ·IVAN JAIME, Union Pacific Railroad 13· · · · · · ·We should continue developing this kind of 12· ·MARGA A. LOPEZ, Donna-Rio Bravo International Bridge · · ·GERMAN RICO, East Kelly Railport 14· ·shared strategic and institutional approach to all 13· ·SWAPNIL SAMANT, Texas Transportation Institute · · ·PAUL STRESOW, El Paso International Bridge System 15· ·our border issues, not only as qualified by national 14· ·SAM VALE, Starr-Camargo Bridge Company 16· ·agenda, but particularly at state and local levels. · · ·ALFONSO VALLEJO, City of Brownsville 15· ·RIGOBERTO VILLARREAL, McAllen-Hidalgo and Anzalduas 17· · · · · · ·Many historical, cultural and social · · · · · International Bridges 18· ·realities can be mentioned when talking about the 16 17· ·Other Attendees: 19· ·2,000 miles that unite us.· But what is certain is 18· ·LAUREN GARDUNO, TxDOT · · ·PETER SMITH, TxDOT 20· ·that the border is a source of enormous 19 21· ·opportunities.· A point of encounter and a privilege · · ·AUDIEL HUERTA, Office of Secretary of State 20 22· ·space to work for the well-being of our two 21 23· ·countries. 22 23 24· · · · · · ·Allow me to set the context for the 24 25 25· ·discussions today by reminding you of some parts that Page 6 Page 8 ·1· ·I'm pretty sure you already know. ·1· ·program at the Laredo International Airport, to ·2· · · · · · ·Together the 10 border states for the ·2· ·mention just a few. ·3· ·United States and Mexico have close to 15 million ·3· · · · · · ·I am not going to continue preaching to the ·4· ·residents and represent the world's fourth largest ·4· ·choir because you know all these very well.· You know ·5· ·economy.· Of course you know that we share with Texas ·5· ·how positive these changes that take place at the ·6· ·a longer segment of the border than with any other ·6· ·border are for both our two countries. ·7· ·state.· The border between Mexico and the United ·7· · · · · · ·Just allow me to finish by saying that the ·8· ·States is one of the busiest in the world with 56 ·8· ·level of ongoing cooperation between Mexico and the ·9· ·points of entry, 36 of them in Texas. ·9· ·United States on border issues is really 10· · · · · · ·We trade around $1 million and more than 10· ·unprecedented.· Today our border is more dynamic and 11· ·300,000 vehicle crossings take place every day, 11· ·secure than it has ever been. 12· ·including almost 100,000 travel units.· Close to 80 12· · · · · · ·Just a final thought.· We are more than 13· ·percent of bilateral trade crosses the U.S.-Mexico 13· ·business partners and neighbors, and our communities 14· ·land border, and more than 20 percent of U.S. jobs 14· ·at the border know this very well.· We are as close 15· ·are related to trade along the border.· Each year -- 15· ·as family.· And our common border should reflect the 16· ·and San Antonio knows this very well -- the U.S. 16· ·immediance of positive changes that take place on a 17· ·receives millions of Mexican tourists through the 17· ·daily basis between Mexico and the United States. 18· ·border who spend a significant amount of their 18· ·Our border should not separate, but unite; should not 19· ·disposable income in this country. 19· ·disconnect, but engage.· We have the responsibility 20· · · · · · ·Among the many institutions and agreements 20· ·to keep it working, to make sure our border will 21· ·created throughout the years, I'll mention just a 21· ·never become a source of resentment or suspicion, but 22· ·few.· We have the U.S.-Mexico 21st Century Border 22· ·instead remain a source of certainty and hope for a 23· ·Management declaration in 2010, which continues to be 23· ·future shared prosperity for both our two countries. 24· ·a referral to promote greater economic 24· · · · · · ·Thank you very much, and I wish you very 25· ·competitiveness and security.· The Executive Steering 25· ·successful discussions today.· Thank you.

Page 7 Page 9 ·1· ·Committee monitors and ensures the implementation of ·1· · · · · · ·SECRETARY PABLOS:· Thank you very much for ·2· ·specific actions to facilitate the movement of goods ·2· ·your kind words, but most importantly thank you for ·3· ·and people in a safe, efficient and expeditious ·3· ·accepting our invitation to be here.· Your presence ·4· ·manner. ·4· ·means a lot to me personally.· And to this group I ·5· · · · · · ·Also, we have the Border Master Plans that ·5· ·know it means a lot that you are engaged because ·6· ·help us coordinate infrastructure development and ·6· ·discussion and communication is so important.· And I ·7· ·close collaboration in transportation and customs ·7· ·would hope that after today you can walk with a great ·8· ·issues. ·8· ·sense of pride knowing that Texas is standing with ·9· · · · · · ·And there are two other institutions in ·9· ·Mexico, and we do value the importance of our 10· ·which the Mexican Ministry participates very 10· ·community.· So thank you for being here today. 11· ·actively:· The U.S.-Mexico Binational Bridges and 11· · · · · · ·At this time I'll pass it over to Chairman 12· ·Border Crossings Group meets two time a year to 12· ·Lewis, Chairman of the Texas Transportation 13· ·improve the efficiency of exiting crossings and 13· ·Commission, our partner.· We have only the best 14· ·coordinate planning for new ones; and the Border 14· ·intentions, Chairman, in ensuring that you continue 15· ·Liaison Mechanism chaired by U.S. and Mexican Consuls 15· ·to do great work, your team continues to do the great 16· ·that have proved throughout the years to be a very 16· ·work in ensuring that we have a proper infrastructure 17· ·effective means to deal with the wide variety of 17· ·along the border.· So if you could please give us a 18· ·local issues, including border infrastructure.· As a 18· ·few words I'd appreciate it. 19· ·result, additional border crossings and the shared 19· · · · · · ·CHAIRMAN LEWIS:· Thank you very much, 20· ·operations in years, several of them between Texas, 20· ·Mr. Secretary, and first thing I'd like to say is 21· ·Tamaulipas and (Spanish). 21· ·thank you very much, you and your team.· This is a 22· · · · · · ·I will continue working towards assuring 22· ·great event.· It's very difficult to put on a great 23· ·regional security and certain special procedures, 23· ·event.· There's a lot of work to be done, and you and 24· ·implementing several programs such as FAST lane 24· ·your staff have been just terrific about this.· And I 25· ·global entry and the cargo plane special pilot 25· ·think, speaking for all of us, we all appreciate it Page 10 Page 12 ·1· ·very much.· And I know there are people in ·1· ·appreciate it. ·2· ·San Antonio as well who have worked closely with your ·2· · · · · · ·SECRETARY PABLOS:· Thank you, Chairman. I ·3· ·team and thanks to them. ·3· ·appreciate your kind words.· I too am very grateful ·4· · · · · · ·It's an honor to be here with the ·4· ·to your staff for helping put this together.· This ·5· ·Ambassador, and along with the rest of us, I feel ·5· ·has been a team effort, but it's been a long time ·6· ·very fortunate also to have Senator Cornyn and ·6· ·coming. ·7· ·Congressman Hurd here this afternoon.· And then we ·7· · · · · · ·If I may, I'd like to first and foremost ·8· ·have an excellent program and thanks to all of you ·8· ·thank ACC, the Alamo Community Colleges, for hosting ·9· ·who have worked to put on that program. ·9· ·us.· This facility is a great facility, especially as 10· · · · · · ·But most of all I want to thank the members 10· ·it related to work force development, and so I wanted 11· ·of the committee.· Thank you for your work on this 11· ·to make sure that we thank them for their 12· ·committee, your service that you've done for your 12· ·hospitality. 13· ·communities for this state and this country in 13· · · · · · ·I also wanted to recognize Mayor Pete Saenz 14· ·providing infrastructure and services to facilitate 14· ·who's with us today.· Mayor, thank you.· You are also 15· ·trade that's so important to all of us. 15· ·present, sir, and I appreciate all your effort. 16· · · · · · ·You know, Governor Abbott is very focused 16· ·You've been doing a terrific job.· So thank you for 17· ·on enhancing the economic benefits to trade to the 17· ·making the time to be with us today. 18· ·border areas and also to all of Texas and then the 18· · · · · · ·If I may, I'd like to maybe set the tone a 19· ·importance to the United States.· And he showed that 19· ·little bit for this meeting.· You know, we just got 20· ·when he appointed Rolando Pablos as Secretary of 20· ·back from China on Friday, on Saturday, whenever it 21· ·State, someone who really knows this area and is 21· ·was, I forget.· But, you know, being in China and 22· ·dedicated to that and dedicated to enhancing the 22· ·promoting Texas was very easy, but at the same time 23· ·lives of all Texans by working on the -- in the trade 23· ·it was quite difficult because here we are trying to 24· ·industry. 24· ·explain to folks why it is so important to invest in 25· · · · · · ·So, you know, when the Governor gets 25· ·Texas, you know, there are things that we have to

Page 11 Page 13 ·1· ·focused, which he always is, then that focuses the ·1· ·offer the state. ·2· ·rest of us, and those of us on the Texas ·2· · · · · · ·And one of those items that we talk about ·3· ·Transportation Commission understand the charts that ·3· ·is the capacity we have, the infrastructure that we ·4· ·we have in that area, and we are working very hard to ·4· ·have, the quality of places, I like to call it.· When ·5· ·work with our local, both public and private, ·5· ·we talk about, you know, the road infrastructure, the ·6· ·stakeholders to try to enhance the border trade, make ·6· ·airports that we have, our maritime ports, our ports ·7· ·sure that we have the corridors of trade that we need ·7· ·of entry, 28 ports of entry, you know, a lot of the ·8· ·and as adequate as we can do them within the ·8· ·folks really didn't understand and comprehend the ·9· ·resources that we have. ·9· ·scale that Texas has to offer. 10· · · · · · ·So I'll look forward to hearing more 10· · · · · · ·We talk about our electric grid, the fact 11· ·from -- in this excellent program. 11· ·that we have more than three grids in the country. 12· · · · · · ·It is the 100th anniversary of the Texas 12· ·We talk about all the companies that are investing 13· ·Transportation Commission and the Texas Department of 13· ·here.· It was eye-opening to see how much more work 14· ·Transportation.· Despite what my staff thinks, I was 14· ·we need to do in promoting Texas, especially in Asia. 15· ·not there when that was initially signed into law, 15· · · · · · ·Right now, their discussion revolves around 16· ·but it's -- I am the beneficiary of a lot of people's 16· ·infrastructure, along with the One Belt-One Road 17· ·good work.· And it makes you think about the history, 17· ·initiative.· If you haven't heard of that, 18· ·so all the work that's taken to get where we are when 18· ·President Xi is intent on creating trade routes 19· ·you're on these magnificent bridges and ports of 19· ·towards Europe and up into, you know, Norway and 20· ·entry, both maritime and inland ports of entry and 20· ·Northern Europe and those areas.· And, you know, what 21· ·all of our interstates and other key corridors.· It 21· ·we talked about with him was the fact that we already 22· ·makes you understand how hard everybody worked to get 22· ·have trade routes.· The Camino Real, which leads from 23· ·us here, and we just need to be dedicated to continue 23· ·Mexico City to Santa Fe, New Mexico, was one of the 24· ·that work. 24· ·very first trade routes. 25· · · · · · ·So with that, thank you, Mr. Secretary, I 25· · · · · · ·We talked about the vast intrastate highway Page 14 Page 16 ·1· ·system that we have here, our Eisenhower Interstate ·1· · · · · · ·You mentioned, Ambassador, all of the ·2· ·Highway System, the ports of entry that we have.· And ·2· ·programs like preinspection and everything else we've ·3· ·so we were having a difficult time in explaining to ·3· ·tried to do.· You know, we've got many initiatives ·4· ·them that we already have the One Belt One Road here ·4· ·already in place.· But I think the role of this ·5· ·linking North America. ·5· ·committee is to ensure that from a state level we ·6· · · · · · ·But we also talked about the things that ·6· ·cooperate with federal agencies, but at the same time ·7· ·needed to be done.· And I told them about this ·7· ·through our Transportation Commission look at ·8· ·committee.· I talked to them about, you know, what ·8· ·opportunities that will help expand the possibility ·9· ·this committee is charged to do, and that is ensure, ·9· ·of bringing in and attracting more investment. 10· ·first and foremost, that we bring prosperity to the 10· · · · · · ·And that's what we need to do, is attract 11· ·border regions, which will in turn lead into 11· ·more investment.· Because the name of the game here 12· ·prosperity both into Texas and into Mexico. 12· ·is binational economic development.· We need to make 13· · · · · · ·Really, that's our job, to help bring 13· ·sure that everything that we do promotes binational 14· ·prosperity, do those things that need to be done to 14· ·economic development.· You know, if Mexico is strong 15· ·bring prosperity.· And prosperity only comes when you 15· ·Texas will be strong.· We've got to make sure that 16· ·create an infrastructure, when you create a setting, 16· ·along the border, in particular on the Mexican side, 17· ·a platform to develop jobs that will then bring in 17· ·we work together with our partners to make sure that 18· ·opportunities, new investment into communities and in 18· ·we promote our economies together, that we work 19· ·creating the capacity that's needed that companies 19· ·together to attract investment, and we also work 20· ·are looking for whenever they seek to come here. 20· ·together to promote infrastructure development 21· · · · · · ·In Texas, we're very fortunate.· We just 21· ·because that is exactly what is needed. 22· ·closed a deal, we just announced a $10 billion deal 22· · · · · · ·When we go out and talk to CEOs who are 23· ·with SABIC down in Corpus Christi.· We have many 23· ·invested on the Mexican side, like the Alora managers 24· ·other announcements that we made over the last four 24· ·and we asked them what their concerns are, it usually 25· ·and five months in investment in Texas.· You know, 25· ·revolves around work force on the Mexican side, but

Page 15 Page 17 ·1· ·Toyota with its headquarters.· We have Mitsubishi ·1· ·the most important thing is the ease of ·2· ·coming in.· Here in San Antonio, Hulu just announced. ·2· ·transportation across our bridges and our ports of ·3· ·And so we've got tremendous examples of companies ·3· ·entry. ·4· ·looking at Texas and coming here, but we can't sit on ·4· · · · · · ·And so I would like to make sure that as we ·5· ·our laurels. ·5· ·move through today, through our discussions, that we ·6· · · · · · ·We have our competitors nipping at our ·6· ·focus on the one thing that really we're talking ·7· ·heels.· They figured out the Texas formula.· We ·7· ·about here, and that is binational economic ·8· ·created an environment where we've created a fair ·8· ·development. ·9· ·taxing system, fair regulatory system, all those ·9· · · · · · ·Welcome, Mr. Cavazos, thank you for being 10· ·things that are important for a CEO and a board of 10· ·here. 11· ·directors when they're looking to invest in a 11· · · · · · ·So, you know, as we look at the issues that 12· ·community.· We've done that here.· And many have 12· ·we have in front of us today, I think we ought to use 13· ·tried to duplicate, and some of them have done a 13· ·this concept of binational economic development, 14· ·really good job at it.· The good news is that we've 14· ·bringing prosperity, especially to the border region, 15· ·been at this for almost a quarter century, since 15· ·because if we bring prosperity to the border region 16· ·George Bush was governor here before he went to the 16· ·the rest of the state and the rest of the country on 17· ·White House.· We started that path towards prosperity 17· ·the Mexican side will benefit. 18· ·in creating an environment that attracts business. 18· · · · · · ·So there is where it all begins, and we 19· · · · · · ·Part of that attraction is creating 19· ·have the ability to create some synergy, and so I 20· ·infrastructure, having the capacity that's needed. 20· ·look forward today's discussion. 21· ·And along the U.S.-Mexico border, that is the one 21· · · · · · ·That being said, I'd like to move on to our 22· ·place where we need it the most simply because of our 22· ·next item which is the adoption of our December 7 23· ·number one trading partner in Mexico.· You know, we 23· ·meeting minutes. 24· ·want to make sure that we provide every possible 24· · · · · · ·At this time, Ms. Mays, will you call roll 25· ·advantage for having ease of trade. 25· ·to make sure that we have a quorum, please. Page 18 Page 20 ·1· · · · · · ·MS. MAYS:· Good morning.· And, Secretary, ·1· · · · · · ·And one of the key things in the report is, ·2· ·after I do roll call, can you just make numbers, you ·2· ·you know, one Texas, one world, that the whole deal ·3· ·know, just kind of say key words. ·3· ·of integration, looking at the border as a whole, as ·4· · · · · · ·SECRETARY PABLOS:· Sure.· Of course. ·4· ·a region, a whole region within, you know, Texas and ·5· · · · · · ·(Roll call taken.) ·5· ·addressing it from a strategic perspective.· You ·6· · · · · · ·SECRETARY PABLOS:· Thank you.· Do we have a ·6· ·know, what are some of the key issues that, you know, ·7· ·quorum? ·7· ·cuts across the entire region?· And then from a ·8· · · · · · ·MS. MAYS:· Yes, we have a quorum. ·8· ·binational perspective some of the things that we ·9· · · · · · ·SECRETARY PABLOS:· So has everyone had the ·9· ·talked about already. 10· ·opportunity to review the minutes from the last 10· · · · · · ·So that's kind of broadly, you know, what 11· ·meeting on December 7th?· If so, I'd like to 11· ·that is really supposed to do, and this will help 12· ·entertain a motion for adoption. 12· ·feed into the master plan that will follow the 13· · · · · · ·MAYOR SAENZ:· So moved to adopt the 13· ·discussion, will follow later, which will be a much 14· ·minutes. 14· ·more in-depth analysis with the key issues, more data 15· · · · · · ·SECRETARY PABLOS:· Mayor Saenz.· Is there a 15· ·driven, got both transportation corridors, border 16· ·second?· Second is Gerry Schwebel. 16· ·crossings, binational and being much more 17· · · · · · ·Okay.· Any discussion on this item or any 17· ·comprehensive. 18· ·corrections that need to be made? 18· · · · · · ·So this work has kind of set the stage for 19· · · · · · ·Okay.· I'll take this up for a vote.· All 19· ·that.· So I just wanted to, you know, give that brief 20· ·those in favor, please signify by saying "aye." 20· ·overview so that you understand that what you're 21· · · · · · ·PARTICIPANTS:· Aye. 21· ·seeing here is a product from the committee. 22· · · · · · ·SECRETARY PABLOS:· Any opposed? 22· · · · · · ·SECRETARY PABLOS:· Thank you. 23· · · · · · ·(No response.) 23· · · · · · ·And, yes, in this item in particular, I'd 24· · · · · · ·SECRETARY PABLOS:· Okay.· That motion 24· ·like to encourage the committee to provide your input 25· ·carries. 25· ·forward with the presentation.

Page 19 Page 21 ·1· · · · · · ·We move to our second -- our third item, ·1· · · · · · ·Are we ready to get started?· Okay.· Please ·2· ·which is Texas-Mexico Border Strategic Transportation ·2· ·introduce yourselves. ·3· ·Blueprint. ·3· · · · · · ·MS. PROZZI:· Good morning.· My name is ·4· · · · · · ·Ms. Mays, I'll hand it over to you. ·4· ·Jolanda Prozzi.· I'm with the Texas A&M ·5· · · · · · ·MS. MAYS:· We have the team Jolando, Juan ·5· ·Transportation Institute.· And with me I have ·6· ·and Michael. ·6· ·Dr. Michael Bomba from the University of North Texas ·7· · · · · · ·And, Mr. Secretary, I will just kind of ·7· ·and my colleague Juan Villa also from the Texas A&M ·8· ·give a quick, you know, recap of this work that, you ·8· ·Transportation Institute.· Thank you. ·9· ·know, we're going to be discussing in the next few ·9· · · · · · ·Thank you so much for this opportunity this 10· ·minutes. 10· ·morning.· Can everyone hear me?· Let me see if this a 11· · · · · · ·This committee has been working on this 11· ·little better.· Better?· Okay.· Thank you. 12· ·report for about a year now, several meetings. 12· · · · · · ·I have been tasked this morning to provide 13· ·Really, what you're going to see today is what the 13· ·you with an outline of how we are going to spend the 14· ·committee has worked on, come up with, and what the 14· ·next hour.· So I'll start by giving you a road map of 15· ·team has tried to do is articulate that kind of a 15· ·what we want to achieve in the next hour. 16· ·little bit.· And the committee can kind of chime in 16· · · · · · ·First, we're going to start by just 17· ·because this is your product.· This is your work. 17· ·recapping what we're trying to do.· What is the 18· · · · · · ·Really, the key here was, can the committee 18· ·blueprint, what is the guiding principle of the 19· ·identify what the strategic issues are facing the 19· ·blueprint and what are the goals that we're trying to 20· ·Texas-Mexico border and then also identify, you know, 20· ·achieve with preparing this document.· We are not 21· ·kind of strategic directions.· This report wasn't 21· ·going to spend a lot of time on the mission, the 22· ·meant to identify a specific project but more from a 22· ·vision, the challenges and the objectives because for 23· ·big picture policy, you know, issues and, you know, 23· ·you that participated in Brownsville, you will 24· ·strategic recommendations on kind of how we take some 24· ·remember that we spent quite a bit of time getting 25· ·of this bigger picture issue forward. 25· ·input from the committee to massage and wordsmith and Page 22 Page 24 ·1· ·obtain input on that. ·1· ·these crossings and corridors. ·2· · · · · · ·Now, the document that was handed out ·2· · · · · · ·So if you remember, in the December ·3· ·earlier captures basically that discussion in ·3· ·meeting, we reviewed the specific challenges ·4· ·Brownsville.· What we want to focus on -- and at that ·4· ·associated with each of these five goals.· We spent ·5· ·stage I will hand over to Michael and Juan -- is the ·5· ·quite a bit of time reviewing more than 40 ·6· ·preliminary recommendations that we've worked on ·6· ·recommendations to address the challenges identified. ·7· ·since the Brownsville meeting.· We also want to get ·7· ·And it's all documented in the document that was ·8· ·your input on these recommendations, as well as ·8· ·shared with you. ·9· ·recommendations for what are the other ·9· · · · · · ·So based on the input that we received from 10· ·recommendations we should be working on. 10· ·the Secretary' office, Texas guided us to concentrate 11· · · · · · ·And finally, we need champions.· We need 11· ·initially on five recommendations and that -- those 12· ·champions to move these recommendations from concepts 12· ·are the five recommendations that you see now on the 13· ·and ideas into implementation. 13· ·PowerPoint.· Specifically, what we've been tasked to 14· · · · · · ·So what is the blueprint?· What is the 14· ·do is look at these five recommendations, link them 15· ·Texas Border Strategic Transportation Blueprint? 15· ·to a specific challenge that was identified, list the 16· ·Basically it's a framework for addressing both border 16· ·objectives that could be achieved by implementing 17· ·crossing and corridor needs on the Texas-Mexico 17· ·that recommendation.· And then finally, what are the 18· ·border.· That's what we're trying to achieve, build a 18· ·outcomes that would be expected from moving forward 19· ·framework for addressing those needs. 19· ·with this recommendation? 20· · · · · · ·The guiding principle is like what the 20· · · · · · ·And so we are hoping to get the same active 21· ·Secretary mentioned this morning, is to facilitate 21· ·participation and discussion that we received in the 22· ·and promote cross-border trade, but importantly 22· ·Brownsville meeting as we worked through these five 23· ·economic development in the border, in the state and 23· ·recommendations. 24· ·then also in the nation. 24· · · · · · ·And at this stage I'm going to hand over to 25· · · · · · ·The goals, the goals we worked on 25· ·Juan Villa who's going to do the first three, and

Page 23 Page 25 ·1· ·extensively over the past couple of months, and in no ·1· ·then he would be followed by Michael Bomba. ·2· ·specific order, the first goal is to achieve a ·2· · · · · · ·MR. VILLA:· Good morning.· I'm going to be ·3· ·comprehensive and unified vision for the Texas-Mexico ·3· ·moving around so, you know, I can get more input ·4· ·border.· We want to move away from regional visions ·4· ·because, as Jolanda mentioned earlier, we would like ·5· ·and a regional approach to a unified vision for the ·5· ·to see more participation from you in these ·6· ·entire Texas-Mexico border. ·6· ·particular five recommendations.· You know, at the ·7· · · · · · ·The second goal is to increase public ·7· ·end of the -- of this exercise what we'd like to do ·8· ·awareness and education about the importance of trade ·8· ·is to identify specific champions for each of those, ·9· ·with Mexico to the Texas economies, to the U.S. ·9· ·and then we can move that forward to the next level. 10· ·economies, but also to inform the public and 10· · · · · · ·Again, we have been discussing for the last 11· ·stockholders about the challenges that we're 11· ·four or five meetings about these, so I think these 12· ·experiencing on the border. 12· ·five recommendations, no particular order, you know, 13· · · · · · ·The third goal is to improve connectivity, 13· ·it's important to note that there's no specific order 14· ·last mile connectivity to the border crossings, to 14· ·on these ones.· But I think we should get into the 15· ·the Texas border crossings, between Texas border 15· ·level of moving forward into implementation. 16· ·crossings and the rest of the state and the nation 16· · · · · · ·So again, the first one is to establish a 17· ·through the transportation corridors, but also among 17· ·Texas-Mexico gateway corridor task force.· As you 18· ·border regions in this state. 18· ·recall, in Brownsville we discussed that there's no 19· · · · · · ·The fourth goal is the four Cs enhanced by 19· ·specific group other than this one where a discussion 20· ·national communication, coordination, collaboration 20· ·can take place between U.S. and Mexican stakeholders, 21· ·and cooperation in planning and investing and 21· ·public and private, to move -- or to improve.· Again, 22· ·identifying needs for border crossings and 22· ·one of the goals is to enhance the economic 23· ·transportation corridors. 23· ·development in the region.· So the idea is to 24· · · · · · ·And then the final goal is of course to 24· ·establish formally this task force, and we would like 25· ·improve the operation and efficiency and capacity of 25· ·to identify specific stakeholders that will Page 26 Page 28 ·1· ·participate.· We would like to move into, again, ·1· · · · · · ·SECRETARY PABLOS:· Please. ·2· ·implementation in the short term. ·2· · · · · · ·MAYOR SAENZ:· Yes, thank you very much. ·3· · · · · · ·So I think, you know, it's great we have ·3· · · · · · ·Yeah, expanding on that notion that ·4· ·the Ambassador here because that way we can start ·4· ·Mr. Schwebel presented, there is a degree -- can you ·5· ·moving that -- you know, cooperating with the Mexican ·5· ·all hear me?· Yes? ·6· ·authorities at the third level, but obviously at the ·6· · · · · · ·MS. MAYS:· When you all speak, please, ·7· ·state levels of, you know, Coahuila, Tamaulipas, ·7· ·identify yourself because we have a transcriber ·8· ·Chihuahua and Nuevo Leon, so we can move this that ·8· ·taking notes.· So, please, go ahead. ·9· ·direction. ·9· · · · · · ·MAYOR SAENZ:· Yes, for the record, Pete 10· · · · · · ·So we have the objectives listed here, you 10· ·Saenz, the Mayor of Laredo, Texas. 11· ·know, promote regional cooperation; provide the forum 11· · · · · · ·Just expanding on what Mr. Schwebel has 12· ·for binational communication, coordination and 12· ·stated, keep in mind, before we can have economic 13· ·collaboration; provide a forum for transportation and 13· ·development, we need to appease these issues, and it 14· ·economic development.· So the outcomes are also 14· ·may be beyond what the State has authority to do. 15· ·listed here, which are going to be the potential 15· ·The immigration issue, the fear of some people 16· ·specific outcomes that we would like to get from this 16· ·crossing the border and -- and there's been so much 17· ·specific task force. 17· ·rhetoric now with that S.B. 4. 18· · · · · · ·So with that, I would like to open the 18· · · · · · ·You know, S.B. 4 needs to be totally 19· ·floor for discussion.· If there is anything else that 19· ·evaluated.· You know, I understand it, I'm a lawyer 20· ·we need to add, for example, in the outcomes and to, 20· ·by trade, and I think it's balanced, frankly.· But 21· ·again, identify a specific champion. 21· ·some way, somehow, the rhetoric has escaped us and 22· · · · · · ·So any volunteers?· Gerry? 22· ·created so much fear.· Local police officers, my 23· · · · · · ·MR. SCHWEBEL:· Good morning.· I think this 23· ·understanding, and this is my interpretation, they 24· ·is -- is this thing on? 24· ·cannot stop anyone unless they have probable cause. 25· · · · · · ·MR. VILLA:· Yes. 25· ·They're not the border patrol, so to speak.· They may

Page 27 Page 29 ·1· · · · · · ·MR. SCHWEBEL:· Good morning, everyone. ·1· ·have certain authorities once there's probable cause ·2· · · · · · ·One of the things that I've noticed that, ·2· ·and they stop people, but short of that they can't be ·3· ·you know, in all the work that we did last year is ·3· ·randomly or whatever stopping folks and asking for ·4· ·that -- and I don't know where we'd be able to fit ·4· ·their documents, immigration documents. ·5· ·this in -- but it becomes relevant to the rhetoric ·5· · · · · · ·Anyway, that has to some way, somehow, us, ·6· ·that's going on right now in regards to NAFTA, is the ·6· ·either through whatever mechanisms, we need a better ·7· ·issue of security and providing security, a secure ·7· ·solution toward that or at least try to appease that ·8· ·trade environment.· And I know we've addressed this ·8· ·politically where people feel more comfortable coming ·9· ·in the Texas Freight Mobility committee meeting. ·9· ·to the U.S.· There's still uncertainty.· We -- we 10· · · · · · ·I know that even, you know, Mr. Chairman 10· ·depend heavily, I mean, heavily on the Mexican 11· ·Lewis, in your meeting this year with Transportation, 11· ·shopper.· You know, people from Mexico, rural Mexico 12· ·that that -- I don't -- where we could really make 12· ·particularly, coming to Laredo and the border area. 13· ·sure that communication does provide a secure trade 13· · · · · · ·So, I mean, that -- for me that's a first 14· ·environment in our borders, especially, you know, 14· ·step.· You know, some finding -- or at least 15· ·what's being talked about. 15· ·addressing that issue and then comprehensive 16· · · · · · ·And as I read the blueprint I didn't see 16· ·immigration reform.· More security is essential, and 17· ·more of that, and I think we -- I'd like to put that 17· ·we've been talking -- this is nothing new.· This 18· ·on the table to, as we take this blueprint and maybe 18· ·topic has been in the news for at least a year or so 19· ·project nationwide, it becomes part of the dialogue 19· ·or more.· So those issues need to be addressed and 20· ·in regards to NAFTA, that we may be able to appease 20· ·accommodated some way, somehow, where people will now 21· ·some of those that may be concerned about security on 21· ·feel comfortable coming. 22· ·our border by addressing that as an enhancement to -- 22· · · · · · ·And then once we meet those goals I think 23· ·to our -- to our goals. 23· ·the rest will follow, frankly.· I mean, people are 24· · · · · · ·MAYOR SAENZ:· Also, too, if I may, 24· ·eager, the Mexican folks are eager to visit the U.S., 25· ·Mr. Chairman? 25· ·but they -- they have this degree of fear.· Thank Page 30 Page 32 ·1· ·you. ·1· ·convention, and when you see what the retail industry ·2· · · · · · ·SECRETARY PABLOS:· Thank you, Mayor. ·2· ·does it creates an atmosphere that's positive when ·3· · · · · · ·Well, if I may, there are things we can do ·3· ·people are buying and sharing with each other.· That ·4· ·that are within our control that we can do as a state ·4· ·is right now being damaged and lost along the ·5· ·and as local communities, and, you know, we've began ·5· ·southern border and for the State of Texas in ·6· ·to do that to a certain extent because there's also ·6· ·general.· The traffic is -- in that capacity is down. ·7· ·fear of going into Mexico by many of the U.S. ·7· ·And it's not the peso devaluation.· That's part of ·8· ·business people who really don't understand that it's ·8· ·it.· But a big part of it is it's a mental concern. ·9· ·okay to cross and nothing is going to happen to them, ·9· ·Am I welcome?· Am I not welcome? 10· ·right? 10· · · · · · ·So I think that when we start talking about 11· · · · · · ·And so, you know, Senator Cornyn, a couple 11· ·gateways for a task force that we need to keep the 12· ·of years ago, came to Ciudad Juarez and, you know, 12· ·retail trade in mind too because it's easy for us to 13· ·led by example.· He crossed the border.· Will Hurd, 13· ·forget because we're used to going there or getting 14· ·Congressman Hurd has done the same thing, where he's 14· ·on the Internet.· We don't want them on the Internet 15· ·brought congressmen, you know, over a period of two 15· ·in Mexico.· We want them coming here and shopping 16· ·or three years, we've brought over 100 people from 16· ·with us. 17· ·Capitol Hill to Ciudad Juarez to show them that 17· · · · · · ·SECRETARY PABLOS:· Anyone else? 18· ·there's nothing wrong, that things could -- that they 18· · · · · · ·MS. MAYS:· Secretary, can I just make a 19· ·could cross and transact business and really allay 19· ·quick comment? 20· ·some of those fears that they have, right? 20· · · · · · ·The feedback we need from the committee is, 21· · · · · · ·And so being able to educate I think is 21· ·you know, establishing a Texas-Mexico specific, 22· ·very important.· And I think that's part of the goal 22· ·whether it's task force or a committee, that helps 23· ·here, as it was stated, is to educate about some of 23· ·address some of the issues you guys brought up, 24· ·these notions that are incorrect.· And it may be on 24· ·whether it's security, transportation, border 25· ·both sides, but most importantly, I think when we 25· ·crossings, corridors.· And what we need your help

Page 31 Page 33 ·1· ·have U.S. investment in Mexico and we have people, ·1· ·with, these objectives, you know, the right ones for ·2· ·staffers advising members of Congress on border ·2· ·this. ·3· ·issues who've never been to the border, who don't ·3· · · · · · ·And then kind of the next step we ask about ·4· ·understand the border, then that's problematic, ·4· ·champions that will help us champion this to help us ·5· ·right?· And so I think educating. ·5· ·identify who from the Texas side, who from the ·6· · · · · · ·And sometimes you have to do the ·6· ·Mexican side should be on this task force.· And then ·7· ·hand-holding.· I mean, we used to have to cross ·7· ·also identify what would be specific issues, HUD, you ·8· ·people ourselves into Mexico to show them that, you ·8· ·know, security, we heard trade, we heard ·9· ·know, it wasn't what they had been hearing, and many ·9· ·transportation, that that group will be tasked with 10· ·of them, if not all of them, left with a much better 10· ·coming up, you know, with whatever the outcome would 11· ·impression.· So that's something that's definitely 11· ·like them to come up from a binational level, 12· ·within our control, is to be able to push back on a 12· ·Texas-Mexico specific.· You heard the Ambassador talk 13· ·lot of rhetoric and to show that the reality is much 13· ·about the U.S.-Mexico Binational Bridges and Border 14· ·better than what they've been hearing, especially up 14· ·Crossings Group that's, you know, national, but not 15· ·in Washington. 15· ·Texas-specific. 16· · · · · · ·Anybody else? 16· · · · · · ·So I want to kind of, you know, draw the 17· · · · · · ·MR. VALE:· You know, sometimes when we use 17· ·attention of the committee to exactly what we're 18· ·terms like "gateways" what we have to be careful is 18· ·trying to accomplish with this recommendation is that 19· ·that many of us are very interested in the commercial 19· ·when do we stand this task force?· In six months, you 20· ·cargo truck trade, rail trade, seaport trade.· But 20· ·know, or in a year, three months, you know?· So we 21· ·probably the basic thing that we have to be really 21· ·need you all to -- you know, couple of you to come on 22· ·supporting is not just border retail trade, it's 22· ·and say, I want to work on that subcommittee to help 23· ·statewide retail trade, it's the retail industry. 23· ·stand this task force within the next six months so 24· ·That floats all boats. 24· ·we can have some all these issues discussed from a 25· · · · · · ·I just got back from a Las Vegas 25· ·Texas-Mexico level. Page 34 Page 36 ·1· · · · · · ·SECRETARY PABLOS:· So let's break it down. ·1· ·side than they do on their side. ·2· ·So I guess the first component is the makeup of this ·2· · · · · · ·SECRETARY PABLOS:· Of course.· Of course. ·3· ·committee.· Are we talking about exclusively members ·3· · · · · · ·MR. VALE:· The economy's different, ·4· ·from this committee or other stakeholders at my ·4· ·decision making is different. ·5· ·command, particularly from the private sector, or ·5· · · · · · ·SECRETARY PABLOS:· Oh, no, absolutely. ·6· ·what is the thought there? ·6· ·Absolutely. ·7· · · · · · ·MS. MAYS:· Well, our thought when we ·7· · · · · · ·Okay.· Anybody, like any other agencies ·8· ·discussed with the team is, you know, we have some ·8· ·from the State? ·9· ·thoughts to stakeholders in private and public ·9· · · · · · ·MS. MAYS:· The Governor's Office of 10· ·sector.· On the public sector, you know, it goes to 10· ·Economic Development. 11· ·your office, TxDOT, Governor's Office of Economic 11· · · · · · ·SECRETARY PABLOS:· Economic development, 12· ·Development, you know, DPS because of inspection 12· ·yes. 13· ·issues at the border, Texas Department of 13· · · · · · ·What about Railroad Commission with gas 14· ·Agriculture, to name a few.· You know, there's a 14· ·pipelines? 15· ·broad range of entities within Texas that needs to be 15· · · · · · ·MS. MAYS:· Yes.· Yes, absolutely. 16· ·involved.· I know there's a broad range of private 16· · · · · · ·SECRETARY PABLOS:· All right.· Okay.· We 17· ·sector.· You know, bridge owners, local entities 17· ·don't want this getting too big either, but certainly 18· ·within the region.· So that's where we need dialogue 18· ·we're beginning to see the need for everyone to get 19· ·and direction. 19· ·involved. 20· · · · · · ·And on the Mexican side, kind of similar to 20· · · · · · ·Okay.· Now, what about at the local level? 21· ·Mexican states, we share -- several border states 21· ·We would have -- would municipalities be involved, 22· ·share the border with us.· And then SETSRE and other 22· ·right? 23· ·entities within Mexico that handles or address border 23· · · · · · ·MAYOR SAENZ:· We would have to be sure to 24· ·issues, you know.· So that's kind of where we're 24· ·participate.· Yes, sir. 25· ·looking broadly and then identify what the key issues 25· · · · · · ·SECRETARY PABLOS:· Okay.· So within

Page 35 Page 37 ·1· ·we want them to focus on.· What are the top, let's ·1· ·municipalities, I know, for instance, El Paso, we ·2· ·say, three or four issues we want this, you know, ·2· ·have the International Bridges Department. ·3· ·task force to focus on. ·3· · · · · · ·How do you all handle it down in the ·4· · · · · · ·SECRETARY PABLOS:· So on the government ·4· ·Valley, Sam, and who in order to get the City ·5· ·side we can look at local, state and federal ·5· ·involved down there? ·6· ·agencies, right?· On the private sector side, we can ·6· · · · · · ·MR. VALE:· Many of the cities are actually ·7· ·look at the various stakeholders.· And then on the ·7· ·bridge owners.· McAllen. ·8· ·nonprofit we can look at economic development ·8· · · · · · ·SECRETARY PABLOS:· McAllen. ·9· ·organizations.· Would those three areas be something ·9· · · · · · ·MR. VALE:· And Cameron County owns.· So you 10· ·that would make sense? 10· ·have the County and the City that are two large areas 11· · · · · · ·MS. MAYS:· Absolutely. 11· ·that can participate. 12· · · · · · ·SECRETARY PABLOS:· Okay.· So if I may, can 12· · · · · · ·SECRETARY PABLOS:· Okay. 13· ·we start with the government side.· So from the Texas 13· · · · · · ·MR. VALE:· You have the seaports.· You have 14· ·side we would certainly want agencies from the State 14· ·to keep them involved too. 15· ·that are involved in cross border issues on a daily 15· · · · · · ·SECRETARY PABLOS:· Of course.· Okay.· So 16· ·basis, like TxDOT, right?· Who else would be? 16· ·from a municipal perspective, I mean, we would need 17· ·Agriculture? 17· ·to have some representation from municipalities, 18· · · · · · ·MS. MAYS:· Yes. 18· ·particularly bridge-owning municipalities. 19· · · · · · ·SECRETARY PABLOS:· DPS.· Okay.· So let's 19· · · · · · ·MR. VALE:· Yes. 20· ·make that list.· TCEQ. 20· · · · · · ·SECRETARY PABLOS:· And then on the federal 21· · · · · · ·MS. MAYS:· Yeah. 21· ·level who would -- who would make -- 22· · · · · · ·SECRETARY PABLOS:· Okay. 22· · · · · · ·MR. VALE:· So when you bring in those 23· · · · · · ·MR. VALE:· When we look at certain things 23· ·municipalities like that that automatically brings in 24· ·like transportation and infrastructure, you got to 24· ·everything on economic development. 25· ·recognize that we have a different structure on our 25· · · · · · ·SECRETARY PABLOS:· Sure.· Absolutely. Page 38 Page 40 ·1· · · · · · ·MR. VALE:· And all of that.· So you don't ·1· ·think, as they do in other instances, they could ·2· ·have to have like three people in different sectors. ·2· ·coordinate.· There is a border office within the ·3· · · · · · ·SECRETARY PABLOS:· That's correct.· They ·3· ·Mexican Ministry of Foreign Affairs that is in charge ·4· ·can represent, yes, at that level. ·4· ·of all these issues, and they have the capacity to ·5· · · · · · ·On the federal level? ·5· ·include all the different local agencies within the ·6· · · · · · ·MS. MAYS:· CBP would be definitely one we ·6· ·states that border with Texas to make this possible. ·7· ·want or -- ·7· · · · · · ·SECRETARY PABLOS:· Okay. ·8· · · · · · ·SECRETARY PABLOS:· Foundry commission. ·8· · · · · · ·AMBASSADOR TORRES:· And of course there are ·9· · · · · · ·MS. MAYS:· Yeah, water commission.· We also ·9· ·going to be other federal institutions that should be 10· ·would like FMCSA, our Federal Motor Carrier Safety 10· ·involved like the Ministry of Transportation and the 11· ·Administration. 11· ·Secretaria de Comunicaciones also and some agencies 12· · · · · · ·SECRETARY PABLOS:· Okay. 12· ·that belong to (Spanish), for example, or the 13· · · · · · ·MR. VALLEJO:· I recommend Homeland Security 13· ·National Immigration Institute or the Treasury with 14· ·also.· For your information, the next week -- the 14· ·the SAT that you know pretty well. 15· ·next week is going to be symposium from Homeland 15· · · · · · ·SECRETARY PABLOS:· Okay.· Perfect. 16· ·Security in Brownsville, and it's going to be the 16· · · · · · ·MR. SCHWEBEL:· Mr. Secretary? 17· ·first international symposium for commerce.· And 17· · · · · · ·SECRETARY PABLOS:· Yes, sir. 18· ·welcome to attend.· They want to know what we want to 18· · · · · · ·MR. SCHWEBEL:· If I could.· I'm trying to 19· ·do in five years project.· All the entities: 19· ·understand clearly what we're trying to do here.· If 20· ·Commerce, TxDOT, everything, so... 20· ·we're trying to take this blueprint and go out there 21· · · · · · ·SECRETARY PABLOS:· Okay. 21· ·and project it as the State's blueprint for the 22· · · · · · ·MS. MAYS:· And then federal highway, 22· ·border, I think there's no better group than this 23· ·definitely, you know, federal -- yeah, GSA, and, you 23· ·group.· That's why we're here.· I think we have 24· ·know, literally, you know, most of USDOT, you know, 24· ·private sector, we have public sector engaged in this 25· ·that involve -- we'll identify all of the federal 25· ·work for this year.

Page 39 Page 41 ·1· ·agencies that have a role in border crossings and ·1· · · · · · ·My concern would be that if we open it up ·2· ·transportation infrastructure. ·2· ·to everybody we're going to be educating, you know, ·3· · · · · · ·SECRETARY PABLOS:· So as you can see, this ·3· ·new folks, and it's going to be a drawn-out process ·4· ·is really getting big, right?· We've got -- what I ·4· ·and -- you know, especially if you're trying to ·5· ·would like to see is a small group that is able to be ·5· ·incorporate key decision makers from the border that ·6· ·nimble and move quickly and not bog this down with ·6· ·can move this forward is project it nationwide. ·7· ·any type of bureaucracy.· You know, right now we're ·7· ·That's why -- I'm trying to make sure that we're ·8· ·just creating a list of potential participants, but I ·8· ·all -- you know, I don't want to make sure that we ·9· ·think we're going to have to pare it down to a size ·9· ·reinvent the wheel and we try to crowd outside 10· ·that makes sense, if you agree with me.· You know, we 10· ·federal and state.· There's folks in this committee 11· ·can't get in a situation where we have a large group 11· ·that are from state and -- and public and private 12· ·trying to make decisions, right?· And obviously we'll 12· ·sector that I think can contribute in making sure 13· ·speak as to the objectives because they need to be 13· ·that the recommendations and that the right decisions 14· ·very specific as well. 14· ·are made by the key players. 15· · · · · · ·Okay.· So moving on to the Mexican side. 15· · · · · · ·SECRETARY PABLOS:· I agree. 16· · · · · · ·Who would make sense, Ambassador, in your 16· · · · · · ·MS. MAYS:· Secretary, can I just -- that's 17· ·mind?· And I don't mean to put you on the spot, but 17· ·why we're asking for committee champions. 18· ·perhaps -- and we know the usual agencies that we 18· · · · · · ·MR. SCHWEBEL:· Put me down.· Put me down on 19· ·deal with.· Who would -- who would be some of the 19· ·the list. 20· ·agencies do you think should be involved? 20· · · · · · ·MS. MAYS:· Okay.· You don't want someone to 21· · · · · · ·AMBASSADOR TORRES:· I think for 21· ·be taking this and working on it and shepherding it, 22· ·coordination purposes I'm going to pass this 22· ·you know.· This is not going to be a separate effort 23· ·information to the Minister of Foreign Affairs. I 23· ·from this committee because whatever is done is going 24· ·know that this is something local and has to do with 24· ·to be reported back to this committee to ensure that 25· ·trade with Mexico, specifically with Texas.· But I 25· ·things are being implemented as we move forward.· So Page 42 Page 44 ·1· ·it's going to be driven by you all.· I'm not creating ·1· ·I guess the question was posed as when we should get ·2· ·something that's not part of BTAC. ·2· ·this up and running.· Sounds like you're suggesting ·3· · · · · · ·SECRETARY PABLOS:· And the agencies we've ·3· ·that we should do it yesterday. ·4· ·listed out are going to be most easiest resources. ·4· · · · · · ·MR. VALE:· Yes, I agree.· And some of us ·5· ·Simply, we can have the steering committee.· And if ·5· ·already have. ·6· ·you look at the expected outcomes with the critical ·6· · · · · · ·SECRETARY PABLOS:· Right.· And that's the ·7· ·operation, coordination, that could occur having many ·7· ·other thing, is that we've got independent groups, ·8· ·of these agencies as collateral support.· But ·8· ·you know, Gerry, we've been working on this with the ·9· ·definitely I agree that this needs to be a group that ·9· ·border group.· We've got a lot of different efforts, 10· ·is nimble and is able to project, you know.· There's 10· ·right?· And so I think this might be a good time to 11· ·many of you in this room, you know, are the experts 11· ·begin to consolidate a little bit, focused on the 12· ·and have been working on that. 12· ·needs of the actual Texas-Mexico border.· So I agree 13· · · · · · ·MR. VALE:· We have the key decision makers 13· ·with respect to the timing. 14· ·at the table, you know, what we're doing here, you 14· · · · · · ·Is there anyone here who disagrees with the 15· ·know, because, we say, well, let's look at it, then 15· ·fact that we should be starting quickly? 16· ·I'll go back three months later, well, somebody wants 16· · · · · · ·(No response.) 17· ·to change things, you know. 17· · · · · · ·SECRETARY PABLOS:· So what other items? 18· · · · · · ·SECRETARY PABLOS:· I completely agree. 18· ·The makeup, the timing with respect to the committee. 19· · · · · · ·So moving on to the private sector, you 19· ·What else do you need from us? 20· ·know, we should include the Chambers and EDOs.· Who 20· · · · · · ·MS. MAYS:· And the key objectives that we 21· ·else might be a good group to put on the list.· We 21· ·outline here, you know, you all okay with it?· Are 22· ·have the trade groups like the trucking association. 22· ·there any specific ones -- because I think if we're 23· · · · · · ·MR. ??:· I think there's a lot of groups 23· ·going to do this quickly maybe we need to focus on a 24· ·already from highway corridors to trade associates 24· ·couple of key objectives, you know, kind of quick 25· ·that are already here. 25· ·ones.· Instead of trying to do too much too soon, I

Page 43 Page 45 ·1· · · · · · ·SECRETARY PABLOS:· Uh-huh.· So -- I'm ·1· ·think maybe it should start small. ·2· ·sorry, go ahead. ·2· · · · · · ·MR. VALE:· Somebody needs to be looking at ·3· · · · · · ·MS. MAYS:· I was just going to say that we ·3· ·what are we going to -- I'm trying to get back to ·4· ·also need to think about the uses of the border ·4· ·this whole negotiation that's going on.· This is ·5· ·crossings, your Walmarts and the HEBs over the wall ·5· ·going to happen now.· It's going to happen in the ·6· ·that are bringing products in Mexico, the ·6· ·next 90 days. ·7· ·manufacturing community that we're missing from this ·7· · · · · · ·SECRETARY PABLOS:· And many of the ·8· ·dialogue.· You know, a lot that we have at the table ·8· ·objectives we already know the answer to.· I mean, we ·9· ·here are the people that actually run the ·9· ·already know what -- 10· ·infrastructure, but not the users.· We need the 10· · · · · · ·MR. VALE:· We just need to make that 11· ·users' perspective. 11· ·because if the rules change, everything we do for 12· · · · · · ·SECRETARY PABLOS:· I completely agree.· So 12· ·five years changes. 13· ·from the private sector perspective I think we 13· · · · · · ·SECRETARY PABLOS:· Right. 14· ·certainly need to make sure that we have some of 14· · · · · · ·MR. VALE:· So we need to know what the 15· ·those users as well.· Okay. 15· ·rules of the game are going to be. 16· · · · · · ·And other discussion as to the makeup of 16· · · · · · ·SECRETARY PABLOS:· At the end of the day, 17· ·this? 17· ·the goal here, particularly here as it relates to 18· · · · · · ·MR. VALE:· You know, when you're setting 18· ·NAFTA, is for Texas to have a seat at the table and a 19· ·this up, standing it up, as somebody referred to, 19· ·voice in the conversation, right?· And so we've 20· ·what are we going to do very short term because 20· ·already begun that.· And now the issue that's posed 21· ·they're already getting down on the fast track to 21· ·here is being able to determine what it is that we're 22· ·negotiating trade issues that could affect everything 22· ·bringing to the table as our needs, as our demands, 23· ·that we would do for the next three to five years? 23· ·as our requirements, right?· So many of those are 24· · · · · · ·SECRETARY PABLOS:· That's a good point, 24· ·already here. 25· ·Sam.· And that's the next item is the timing of it. 25· · · · · · ·Gerry, do you have any input as to how to Page 46 Page 48 ·1· ·address that? ·1· ·I think is creating, you know, this fear factor that ·2· · · · · · ·MR. SCHWEBEL:· Well, from our standpoint, ·2· ·we spoke about. ·3· ·definitely being engaged and being at the table.· I'd ·3· · · · · · ·SECRETARY PABLOS:· Okay.· So did you have a ·4· ·like to see us take, you know, out of today, you ·4· ·comment, sir? ·5· ·know, an agreed blueprint, you know, basic objectives ·5· · · · · · ·MR. HARRISON:· Yes.· Robert Harrison, ·6· ·that we could be handing out and be all speaking from ·6· ·University of Texas. ·7· ·the same voice of what Texas wants to be -- to look ·7· · · · · · ·I like your term "nimble."· That's a good ·8· ·like in the new NAFTA environment that we would be ·8· ·issue.· If we're going to spread this out, we have to ·9· ·in.· So that's why I'm encouraged about having this ·9· ·have a simplified structure.· And we have lots of 10· ·movement out and deciding -- I don't want to hash, 10· ·resources that have been undertaken at different 11· ·continue to hash.· I wouldn't want to continue to 11· ·levels, be we can't display them all because it takes 12· ·hash it out, you know. 12· ·up too much space.· It -- it takes away the 13· · · · · · ·Paul and I were just talking right now 13· ·concentration of the argument.· So we have to have a 14· ·that, you know, we in the private sector, 14· ·specifically distinct sort of argument that we can 15· ·stakeholders, the ones that use it every day, I think 15· ·all hold to in different areas and promote which is 16· ·can deliver that best message with the plan that we 16· ·consistent with the aims of strengthening trade with 17· ·have with this blueprint.· And I think we all should 17· ·Mexico. 18· ·all agree on this blueprint today, not leave it until 18· · · · · · ·SECRETARY PABLOS:· I agree.· And just so 19· ·the next meeting what we want to do.· Because as Sam 19· ·that we put things in context for the benefit of the 20· ·is saying, we've got to be able to deliver the same 20· ·community here, we have been working very closely 21· ·message. 21· ·with Governor Abbott and the Mexican private sector 22· · · · · · ·The communication I think needs to be right 22· ·to develop many of these points that we would put 23· ·now in the next 90 days to the members, the key 23· ·together.· So I would -- I would want to see those 24· ·members that are addressing this trade policy right 24· ·being incorporated.· We -- we've already been working 25· ·now.· And I -- you know, someone will be in 25· ·on developing the messaging.

Page 47 Page 49 ·1· ·Washington next week talking about this.· We'd like ·1· · · · · · ·And I think that being able to now make it ·2· ·to be able to say that Texas has got its blueprint ·2· ·Texas-specific and bring all of those efforts ·3· ·and has a plan, and this is what we want to be able ·3· ·together into one, rolling them up into one major ·4· ·to share with everyone so that other states can also ·4· ·effort, I think is really what is needed.· That way ·5· ·jump in and, say, hey, what's your plan? ·5· ·we're all speaking off of the same, you know, sheet. ·6· · · · · · ·SECRETARY PABLOS:· Absolutely. ·6· ·And it needs to be specific.· It needs to be ·7· · · · · · ·MR. VILLA:· If I may, Gerry, probably we ·7· ·something we can all use in our particular efforts as ·8· ·can also move to the third recommendation, which is ·8· ·we are going to Washington. ·9· ·public awareness, the plan that we discussed in ·9· · · · · · ·But make no doubt about it, there's no 10· ·Brownsville.· I think that one of the best 10· ·doubt about that Texas is in the driver's seat here. 11· ·recommendations may be linked.· Again, as Sam 11· ·We are -- people are looking at Texas to be able to 12· ·mentioned, we need to move fast.· So I think on this 12· ·delineate what it is that NAFTA should look like, and 13· ·one if we can start developing this, if we can 13· ·we need to bring all of our efforts together and this 14· ·start -- if we can start developing these 14· ·a perfect opportunity to do that.· So -- 15· ·recommendation on the awareness plan and develop some 15· · · · · · ·MR. SCHWEBEL:· So can we have a champion 16· ·documents that -- you know, the information is 16· ·for this also.· I mean, again, working together was 17· ·already there.· We don't need to reinvent the wheel. 17· ·number one. 18· · · · · · ·So we can gather that information, put it 18· · · · · · ·SECRETARY PABLOS:· Well, I think, Gerry, 19· ·together, as a State, you know, this is what Texas 19· ·you know, with what we've been doing already, I think 20· ·wants at this negotiations.· And I think we can work 20· ·that you can, you know, backfill that very quickly 21· ·together again on these recommendation and the first 21· ·and bring that to the table, the items -- 22· ·one and move forward. 22· ·particularly the items that the Mexican private 23· · · · · · ·MAYOR SAENZ:· Mr. Secretary, and if we 23· ·sector have brought to the table.· Very important. 24· ·could address or appease the psychological impact 24· · · · · · ·MR. SCHWEBEL:· You basically know what we 25· ·that the border issues have created, which personally 25· ·are doing, Mr. Secretary, and I think that it's just Page 50 Page 52 ·1· ·not -- talk to whoever you need to talk to here on ·1· ·enough how important it is for everyone to understand ·2· ·the committee and let's get something put together ·2· ·that people in Washington are looking to Texas. ·3· ·very fast and very quickly because it's not new ·3· · · · · · ·I know that Ambassador Geronimo Gutierrez ·4· ·stuff.· We all know -- ·4· ·is looking at Texas to show what it is that we need, ·5· · · · · · ·SECRETARY PABLOS:· No, it's not. ·5· ·especially given that we're each other's number one ·6· · · · · · ·MR. SCHWEBEL:· I think a smaller group of ·6· ·trading partnerships, right?· And so Texas has a very ·7· ·individuals willing to go to Washington, willing to ·7· ·important role, is playing a very important role, and ·8· ·travel, to be engaged, you know, I think it's key, ·8· ·I think that is the best forum from which to expound ·9· ·people have to make the commitment.· You know, we've ·9· ·on our requirements, our needs. 10· ·got, you know, in essence not just the next 90 days, 10· · · · · · ·There is no question that we will have a 11· ·but we've got a year or less to deliver the same 11· ·seat at the table.· It's just a matter of showing up 12· ·basic message here of the importance of what we're 12· ·after a long run of educating people up in Washington 13· ·planning here. 13· ·as it relates to our needs, whether they be, you 14· · · · · · ·And whoever wants -- and like I said, I'll 14· ·know, on the social side or on the business side as 15· ·be glad, you know, to be heavily -- we're already 15· ·well. 16· ·engaged.· You know, my company's heavily engaged -- 16· · · · · · ·So why don't we do this, then, why don't 17· ·and so at the end of day we want to make sure that 17· ·we -- we've got at least two individuals who have 18· ·the people that want to volunteer and be part of this 18· ·volunteered.· You can count me in. 19· ·group are people that are willing to, you know -- 19· · · · · · ·MAYOR SAENZ:· You can count me as well. 20· · · · · · ·SECRETARY PABLOS:· Commit. 20· · · · · · ·SECRETARY PABLOS:· Okay.· Mayor.· Okay. 21· · · · · · ·MR. SCHWEBEL:· -- commit. 21· · · · · · ·So why don't we do this, why don't -- we've 22· · · · · · ·SECRETARY PABLOS:· Yeah.· But it takes time 22· ·put together a group no bigger than 10 folks.· Then 23· ·and resources, right? 23· ·we'll get together maybe on a conference call. 24· · · · · · ·Jon, do you have any comments? 24· · · · · · ·Give you plenty of time to bring in, Jon, 25· · · · · · ·MR. BARELA:· Yeah.· Mr. Secretary, 25· ·what the Borderplex has already been doing, which is,

Page 51 Page 53 ·1· ·Chairman, members of the committee, Jon Barela, CEO ·1· ·you know, in line with IBC and what the Office of the ·2· ·of the Borderplex Alliance out of El Paso. ·2· ·Secretary of State has been doing. ·3· · · · · · ·Quick parenthetical.· It's good to see ·3· · · · · · ·Put maybe a one-pager together, Sam, ·4· ·Rolando.· He was the predecessor of mine, obviously ·4· ·nothing too complicated that delineates what the ·5· ·he worked very hard to set up the organization and ·5· ·general points are.· Pass them around via e-mail to ·6· ·get it where it was. ·6· ·this committee.· Get some very quick input. ·7· · · · · · ·Been on the job for seven months and count ·7· · · · · · ·And then have the steering committee then ·8· ·us in as a champion of this.· We work with other ·8· ·drive the message.· And it looks like with respect to ·9· ·communities.· And again, we're visiting Washington ·9· ·the expected outcomes we can certainly deliver the 10· ·quite a bit and working with other states, as a 10· ·messaging, which is really is educating and 11· ·matter of fact, on this very issue.· So count us in. 11· ·delivering the message as it relates to this NAFTA 12· ·It's absolutely critical that we get out and tell the 12· ·issue. 13· ·world, tell our national leaders how important these 13· · · · · · ·The clock is ticking on the 90 days.· But, 14· ·issues are.· But we've already started a number of 14· ·you know, we -- and a lot of work has already been 15· ·these Borderplex expected outcomes.· We'd love to be 15· ·done in Washington to educate, but this is something 16· ·able to pollinate some of those other issues and 16· ·that needs to be constant and continuous. 17· ·learn from others.· And by leveraging other's 17· · · · · · ·MR. SCHWEBEL:· At what -- this is Schwebel 18· ·experience I think we can do quite well, so.· But 18· ·again.· At what point will we actually deliver a 19· ·we've already started on this, certainly at 19· ·document to the governor, or are we going to show the 20· ·Borderplex, so count us in as a champion. 20· ·governor what this -- our work is -- 21· · · · · · ·SECRETARY PABLOS:· Thank you.· Thank you. 21· · · · · · ·SECRETARY PABLOS:· Well, at this time the 22· ·That's very important. 22· ·governor is expecting a document from the (Spanish). 23· · · · · · ·You know, as Sam mentioned, a lot of this 23· ·So we're still waiting on that. 24· ·work has already been done.· We just need to bring it 24· · · · · · ·Governor Abbott met with the (Spanish), 25· ·together as a group.· And again, I can't stress 25· ·which is the equivalent of the U.S. Chamber on the Page 54 Page 56 ·1· ·Mexican side.· We had about 18 individuals at the ·1· ·be a living, breathing activity.· It's not like this ·2· ·Governor's mansion here last month.· And the decision ·2· ·is it forever.· You've got to start with what we need ·3· ·there was that the group put together a set of ·3· ·to face.· The immediate urgencies right now are on ·4· ·recommendations that the Governor can then take with ·4· ·the trade rules and regulations and what's good for ·5· ·him when he travels to Washington to talk about NAFTA ·5· ·the State of Texas and what's good for the country. ·6· ·and talk about trade with Mexico and the importance ·6· ·And then we move on to how we build roads and bridges ·7· ·of the relationship. ·7· ·and do all the things you need to do to make that ·8· · · · · · ·MR. SCHWEBEL:· I'm talking about our ·8· ·work.· But the rules are going to be set in the next ·9· ·blueprint, our blueprint, our Texas blueprint of our ·9· ·six months.· They started very fast. 10· ·border plan, you know.· That's what I was asking 10· · · · · · ·SECRETARY PABLOS:· So, Chairman Lewis, if I 11· ·about. 11· ·may, I would like to commit from the Secretary of 12· · · · · · ·SECRETARY PABLOS:· Oh, I'm sorry. 12· ·State's office the staff and the resources required 13· · · · · · ·MR. SCHWEBEL:· At what point will we 13· ·to get this out sooner than 30 days and work with 14· ·actually say this is the work of committee, this is 14· ·your staff to make sure that we do that. 15· ·what we want to put in front of the governor and say 15· · · · · · ·Like I said, and like it's been mentioned 16· ·this is what we've been working on and this is what 16· ·here, this information is already -- it's already 17· ·we want to recommend. 17· ·there.· It's just really a matter of bringing it 18· · · · · · ·SECRETARY PABLOS:· Well, from what I'm 18· ·together and having the group agree, and I don't 19· ·hearing, it needs to happen immediately, right?· And 19· ·think we have a luxury of waiting too long.· And so 20· ·so if we're able to put the steering committee 20· ·I'd like to put some pressure on this and have it out 21· ·together, we're able to meet over conference, come up 21· ·in no longer than two weeks from today.· And you have 22· ·with a document, pass it around to the rest of the 22· ·my commitment to give it -- give all of the resources 23· ·committee for approval.· It shouldn't be more than a 23· ·we have. 24· ·couple of weeks, Gerry, I mean, if we're willing to 24· · · · · · ·And, Carolyn, I'm sorry that this is -- 25· ·put the effort in, especially given that the work's 25· · · · · · ·CHAIRMAN LEWIS:· You have my permission to

Page 55 Page 57 ·1· ·already been done.· The issues have been identified. ·1· ·talk to my boss. ·2· ·Everybody around the table here will have an ·2· · · · · · ·MR. SCHWEBEL:· We can follow that.· We can ·3· ·opportunity to -- ·3· ·follow that very fast. ·4· · · · · · ·MR. SCHWEBEL:· It's a question of bringing ·4· · · · · · ·SECRETARY PABLOS:· And again, you know, ·5· ·it down. ·5· ·this is a matter -- and, Juan Carlos, tell me if I'm ·6· · · · · · ·SECRETARY PABLOS:· Bringing it down to a ·6· ·off base here, but this is just a matter of putting ·7· ·point where everybody has the issues at hand. ·7· ·together the recommendations.· Many of those have ·8· · · · · · ·It is that -- Juan Carlos, is that ·8· ·already been studied.· There's been research on them. ·9· ·something that is acceptable, or is that something ·9· ·And getting it to a point where we have one document 10· ·that's in line with your vision? 10· ·that everybody here is able to use whenever we are 11· · · · · · ·MR. VILLA:· I would like Caroline to 11· ·running into our federal officials and those 12· ·respond to that. 12· ·individuals that make decisions. 13· · · · · · ·MS. MAYS:· Okay I was just talking to, you 13· · · · · · ·I don't think that the work is that much. 14· ·know, that we can get this document cleaned up within 14· ·I think what's going to take longer is getting 15· ·the next, you know, few weeks, within literally the 15· ·everybody's replies and going off of those replies. 16· ·next 30 days.· If we need to get it sooner, get this 16· ·That's going to take some work.· And so, you know, 17· ·document cleaned up, as long as we got clear 17· ·I'd like to look at two weeks with some flexibility. 18· ·direction from you all and we can outline, you know, 18· ·But, you know, I really wouldn't want to go with a 19· ·those key recommendations what we have here.· I think 19· ·full 30 days simply because we're already going to 20· ·it's five of them.· And outline those as the main 20· ·Washington.· This thing is moving fast, right? 21· ·ones but get the entire document ready, present it to 21· · · · · · ·And so we want to make sure that we 22· ·the Secretary and then, you know, he and decide, you 22· ·continue to be ahead of the curve as a state.· And 23· ·know, when he presents that to the Governor and 23· ·again, people are looking to us for advice on these 24· ·whatever, you know, the next steps are. 24· ·issues, and he have the expertise.· It's just a 25· · · · · · ·MR. SCHWEBEL:· Caroline, this is going to 25· ·matter of putting it in writing and making sure we Page 58 Page 60 ·1· ·all agree.· And I can get it to the governor very ·1· ·like to the rest of this committee for input, and we ·2· ·quickly too. ·2· ·would ask for a quick turnaround on your input so ·3· · · · · · ·MS. MAYS:· And I was just going to say, so ·3· ·that we can then have a document that we can take to ·4· ·that means next week there has to be a conference ·4· ·the Governor for his approval and go from there. ·5· ·call with the champions and literally like get things ·5· · · · · · ·MR. SCHWEBEL:· You're going to get that ·6· ·moving fairly quickly. ·6· ·list of the volunteers, those that are going to be ·7· · · · · · ·I was telling my bosses here that the next ·7· ·part of the group? ·8· ·30 days I'm going to be on the road with the ·8· · · · · · ·MS. MAYS:· Yes, I have the list of ·9· ·preplanned workshops across the state.· So -- but, ·9· ·volunteers. 10· ·yes, we can definitely -- we'll work within the two 10· · · · · · ·And then, Secretary, what I'll probably ask 11· ·weeks, and, you know, there's a slide we'll 11· ·is that -- today is Wednesday -- probably by Friday, 12· ·definitely let you know, work closely with your 12· ·please send me your thoughts so we can put it 13· ·staff. 13· ·together and then send it out so it will help with 14· · · · · · ·And on our end, you know, you have at least 14· ·the discussion next week.· Because if we wait till 15· ·my commitment with my boss's bosses here, that we 15· ·next week to have a discussion along the issues then 16· ·will do whatever it takes on our end to get this done 16· ·we're going to be behind.· But I think if we could 17· ·within two weeks, you know, and give you what you 17· ·get that out and then send it out to the group and 18· ·need, give the committee what the committee needs to 18· ·then that gives everybody a chance to kind of weigh 19· ·move forward. 19· ·in and make sure that everybody's in sync and aligned 20· · · · · · ·SECRETARY PABLOS:· Okay.· Juan Carlos? 20· ·in terms of thoughts and priorities. 21· · · · · · ·MR. VILLA:· I just want to clarify. I 21· · · · · · ·MR. SCHWEBEL:· I agree.· As long as they 22· ·think we're talking about two different things.· The 22· ·are going to be in Washington, you know, beginning of 23· ·blueprint, as Sam mentioned earlier, it's a 23· ·next week, and so, you know, the sooner the better. 24· ·long-range strategic plan. 24· ·And that's why, you know, I want to make sure that 25· · · · · · ·MR. SCHWEBEL:· But we got to get the rules 25· ·what I discussed earlier about I don't know how we

Page 59 Page 61 ·1· ·down now. ·1· ·can incorporate a security element into the ·2· · · · · · ·MR. VILLA:· So, yeah.· But there's another ·2· ·discussion of secure trade in our trade initiative as ·3· ·document that we'll get out in two weeks, basically, ·3· ·part of that message as well. ·4· ·with specific recommendations, the Texas vision for ·4· · · · · · ·And I hope there was -- there's not much ·5· ·NAFTA negotiation, basically, with facts and figures ·5· ·objection to that, you know, from this group. ·6· ·and why this is important for Texas and why Texas is ·6· ·Because there are some sound ideas that have been ·7· ·important. ·7· ·already posed by others -- others of the border ·8· · · · · · ·MR. VALE:· And I think we're fortunate to ·8· ·region, as well private and public sector.· I just ·9· ·have a Secretary who has actually had this in his ·9· ·want to make sure that we won't, you know -- there 10· ·background.· So that's going to make it a lot easier 10· ·won't be any objection to that. 11· ·for us.· So I think that use your skills, and we'll 11· · · · · · ·MR. VALE:· This has been very beneficial 12· ·work with you. 12· ·because I know several groups that are going to be up 13· · · · · · ·SECRETARY PABLOS:· And I hope not to 13· ·there the first part of June.· And if this is already 14· ·complicate matters, Sam. 14· ·done then that's something that they can all take -- 15· · · · · · ·Okay.· So are we in agreement that we will 15· ·take to their visits and agree that we're supporting, 16· ·put together this task force or committee or whatever 16· ·we have a very strong Texas contingent.· So we need 17· ·we want to call it, steering committee, we'll call 17· ·to be put together -- I'm not even so sure that you 18· ·it, so that we can get this document out.· We'll have 18· ·can't even start with a skeleton outline that we'll 19· ·a conference call at the beginning of next week. 19· ·be responding and updating and correcting because 20· ·Those of you who would like to participate, please 20· ·that's all we have to do because the issues are 21· ·let us know.· Come to the conference call with items 21· ·knowledgeable.· All of us know the basic issues. 22· ·already that you have in mind.· We will categorize 22· ·It's the rules, what are the rules of the game going 23· ·them, put them into some type of a priority list and 23· ·to be?· That's the issue.· And what do we need the 24· ·then we will go from there. 24· ·rules to be? 25· · · · · · ·We will send out whatever that list looks 25· · · · · · ·SECRETARY PABLOS:· This is an exercise in Page 62 Page 64 ·1· ·harmonizing. ·1· ·put together the document ASAP. ·2· · · · · · ·MR. JAIME:· This is Ivan Jamie with Union ·2· · · · · · ·The other one that we had is the border ·3· ·Pacific.· I just had a question on -- from the ·3· ·trade gateways and corridor program.· So basically ·4· ·infrastructure side just to make sure I'm following. ·4· ·the idea here is to come up with a specific program ·5· · · · · · ·Does it make sense to also have an ·5· ·so we can identify needs and then have a ·6· ·infrastructure aspect along with this or -- I mean, ·6· ·comprehensive evaluation of investments under ·7· ·to Sam's point right now -- which by the way, I'm ·7· ·development that are in future, not only at the ·8· ·glad I'm not sharing a mic with Sam today -- but -- ·8· ·border crossings themselves, but also at the ·9· ·or does it -- so I guess the question really is, does ·9· ·gateways, the corridors leading to both border 10· ·it make sense to have an infrastructure aspect that 10· ·crossings. 11· ·we need? 11· · · · · · ·Identify funding for those potential 12· · · · · · ·For example, on the rail perspective, as we 12· ·projects that we -- that we will identify in this 13· ·are discussing the rules of the game, to use Sam's 13· ·program and also have the criteria developed to 14· ·labeling there, is, do we want to also go and say, 14· ·prioritize those. 15· ·hey, by the way, this is what it should look like, 15· · · · · · ·So again, that's a specific program.· I see 16· ·for example, we increase great separations at the 16· ·these more like a medium term, a specific action.· We 17· ·border, which Caroline knows is very important to our 17· ·cannot do it right away.· It's a program that needs 18· ·industry. 18· ·to be established.· So again, here we would need to 19· · · · · · ·So clarifying question on our end.· I just 19· ·have some specific champions of this initiative to 20· ·don't know that the two should be separated.· Usually 20· ·move forward this one into the next level, to 21· ·when you have an opportunity you seize it.· So that's 21· ·identify if these are the key objective, should we 22· ·my question. 22· ·have more, how do we go into developing this 23· · · · · · ·SECRETARY PABLOS:· I think they are both 23· ·particular program. 24· ·related, aren't they? 24· · · · · · ·So with that, I open the floor for 25· · · · · · ·MR. JAIME:· And to that end, then, 25· ·potential comments or volunteers for championing

Page 63 Page 65 ·1· ·Mr. Secretary, to the makeup of this stakeholder ·1· ·these recommendation. ·2· ·group, then maybe we do want to have at least one of ·2· · · · · · ·MR. CRISTINA:· Paul Cristina with BNSF. ·3· ·the railroads represented, either Paul or Art or ·3· ·This is another one that I would like to participate ·4· ·myself or somebody. ·4· ·in given the opportunity. ·5· · · · · · ·SECRETARY PABLOS:· So anyone around the ·5· · · · · · ·MR. VILLA:· Thank you, Paul. ·6· ·table here who would like to participate, just let ·6· · · · · · ·Anyone else? ·7· ·Caroline know.· Because that way you can bring in ·7· · · · · · ·MAYOR SAENZ:· Yes.· Mayor Saenz as well. ·8· ·your perspective.· And at that time we will ·8· · · · · · ·MR. VILLA:· Thank you. ·9· ·categorize the issues, right?· And we'll put them ·9· · · · · · ·Any comments on the specific objectives? 10· ·into categories. 10· ·Should we add, delete, improve those objectives? 11· · · · · · ·But all of it is interrelated, all the way 11· · · · · · ·MR. ??:· You may have to depending on what 12· ·from the concerns that the public may have to 12· ·comes out of the first part of this activity. 13· ·infrastructure to actual trade and tariff issues, 13· · · · · · ·MR. VILLA:· All right.· Well, Michael, do 14· ·right?· So all those issues are going to fall into 14· ·you want to move to the third one? 15· ·one.· And then we will be able to put the document 15· · · · · · ·MR. SCHWEBEL:· Wait one minute.· We 16· ·together based on that.· Okay? 16· ·actually have members of this committee that are also 17· · · · · · ·Any other comments on this item?· Okay. 17· ·involved in the Texas Freight Mobility Committee. 18· · · · · · ·MR. VILLA:· Should we go through the other 18· · · · · · ·MR. VILLA:· Yes. 19· ·recommendations? 19· · · · · · ·MR. SCHWEBEL:· You know.· And I think those 20· · · · · · ·MS. MAYS:· Yeah. 20· ·individuals are, I think, an automatic, you know, 21· · · · · · ·MR. VILLA:· Okay.· So basically what we 21· ·inclusion.· Same message. 22· ·already covered is the first one, the Mexico Trade. 22· · · · · · ·MR. VILLA:· Right.· And, Gerry, we don't 23· ·We'll have a separate group working on that. 23· ·want to, again, reinvent the wheel.· I mean, this 24· · · · · · ·The other one is the public awareness and 24· ·specific program will be tied into what the Freight 25· ·education.· Again, we'll combine those two so we can 25· ·Advisory Committee is going to come up with in the Page 66 Page 68 ·1· ·next month.· You're going to have all these meetings ·1· ·pleasure to see that, but, you know, the maps that ·2· ·throughout the state.· So again, we'll coordinate. ·2· ·we're talking about, but, you know, hopefully I'll ·3· · · · · · ·These are specifically going down to the ·3· ·bring it out, maybe during the break quickly, and you ·4· ·corridors and gateways -- I mean, corridors leading ·4· ·can see. ·5· ·to the port of entries and ports of entries ·5· · · · · · ·MR. BOMBA:· Can you hear me? ·6· ·themselves.· Because the freight line covers, you ·6· · · · · · ·Part of the condition is to implement ·7· ·know, the whole state, but this one will be more ·7· ·technology and innovative financial border ·8· ·specific on those particulars, infrastructure, ·8· ·strategies.· So as you know, the challenges after ·9· ·development projects. ·9· ·9/11, there was a lot of new restrictions and 10· · · · · · ·And again, Paul, I mean, not only roadways, 10· ·regulations and requirements placed upon the border. 11· ·but also rails as well as ports. 11· ·This increased wait times and inspection period, as 12· · · · · · ·MR. ??:· Gerry, how much are you using that 12· ·well as adding cost to shippers and carriers. 13· ·graphic that you all went to the trouble to develop 13· · · · · · ·And so we've identified a number of 14· ·that shows day one, day two, day three, day four, all 14· ·objectives to try to resolve that or objectives as we 15· ·the way through?· I don't think a lot of people in 15· ·try to resolve those issues. 16· ·Washington know that. 16· · · · · · ·First of all, reduce the cost of 17· · · · · · ·MS. MAYS:· Actually, we're using it a lot. 17· ·transportation of trade, as well as to alleviate 18· ·Recently, Commissioner Austin actually went to D.C., 18· ·impacts on the communities, externalities, vehicles 19· ·and we developed a map and he actually showed it. 19· ·idling over long periods of time. 20· ·Maybe later when we get a chance I'll look it up and 20· · · · · · ·Initiate dialogue among U.S. and Mexican 21· ·show you.· We did that.· Actually, it's updated. 21· ·stakeholders, as well as to advocate for pilot 22· ·It's actually showed I-69.· We had I-69.· He had, you 22· ·projects.· We want to facilitate the sharing of 23· ·know, great reviews from people over the country on 23· ·realtime data for binational management and to 24· ·the I-69 route.· So those maps are very powerful, and 24· ·identify public/private partnership opportunities to 25· ·I think -- 25· ·help incur the initial investment of these -- of

Page 67 Page 69 ·1· · · · · · ·MR. ??:· Especially when you do them all ·1· ·technologies and apply them to the border region. ·2· ·together.· It's not, you know, we don't want to look ·2· ·Sometimes they're very expensive, and local ·3· ·and say this corridor versus this corridor.· All the ·3· ·municipalities by themselves cannot push them ·4· ·corridors moving in day one, day two, day three, ·4· ·through. ·5· ·that's impressive. ·5· · · · · · ·Our expected outcomes would basically be an ·6· · · · · · ·MS. MAYS:· Yeah, we have that.· And ·6· ·improvement of wait times so that the wait times are ·7· ·actually now we have stuff coming down to Texas from ·7· ·shorter, inspection process is more efficient.· We ·8· ·all over the country and from Canada.· So we have ·8· ·have a couple of programs that have been implemented ·9· ·kind of reverse osmosis as well on those maps.· And I ·9· ·already that have shown some very dramatic 10· ·think that's going -- you know, part of the messaging 10· ·improvements at border crossings for secure origins. 11· ·is seeing how we can incorporate that into the 11· ·The border crossing times are reduced on average by 12· ·messaging that we talked about here to really show 12· ·54 minutes, which is quite a bit. 13· ·the impact of Texas when we're talking about, you 13· · · · · · ·And then this idea of joint inspections 14· ·know, the national, but also kind of North American, 14· ·where within Mexico you have U.S. and Mexican customs 15· ·you know. 15· ·together inspecting the cargo on a shipment.· They 16· · · · · · ·MR. ??:· Send it to the State Legislature 16· ·seal it so it can't be opened anywhere between that 17· ·too. 17· ·location and the border crossing and they pass right 18· · · · · · ·MS. MAYS:· Yeah.· But again, that's 18· ·through.· In Arizona they've been able to reduce the 19· ·something we developed, is your role, all of you to 19· ·inspection time to 24 minutes, what normally would 20· ·take that and use it in whatever form you go to, you 20· ·take three and a half to eight hours otherwise.· So 21· ·go to meetings, let us know, we'll be more than happy 21· ·these are very dramatic savings in terms of time. 22· ·to provide you with those maps and you can go and use 22· · · · · · ·Then in terms of money we can pass on those 23· ·that as part of your narrative, you know, when you do 23· ·savings.· One particular company has been able to 24· ·those meetings.· Yeah.· Very powerful. 24· ·save $700,000. 25· · · · · · ·Secretary, I don't think you had the 25· · · · · · ·So these are ideas that need to be Page 70 Page 72 ·1· ·promoted. ·1· ·is generated, the data that is generated is mostly ·2· · · · · · ·So anyway, who here would like to be a ·2· ·for the users, not necessarily for CBP to encourage ·3· ·champion? ·3· ·it to be more efficient. ·4· · · · · · ·SECRETARY PABLOS:· So I have a question, ·4· · · · · · ·MS. MAYS:· No, it is.· Yeah.· Because ·5· ·pardon me.· So are we talking about promoting these ·5· ·that's what CBP is using to, one, they're actually ·6· ·ideas or actually engaging in them because all of ·6· ·making decisions on the infrastructure or the ·7· ·this seems to be federal with this outside of our ·7· ·staffing because of the border wait time, information ·8· ·state control.· Or am I not understanding? ·8· ·that we're gathering.· They have actually made ·9· · · · · · ·MR. BOMBA:· Some of them are and some of ·9· ·changes and added more staff on certain hours because 10· ·them aren't.· So, for example, there are limitations 10· ·we've measured hour, day, you know, day of the week. 11· ·of technology at the border.· Oftentimes, it's been a 11· ·We have all of that information kind of analyzed and 12· ·local network by the border, bridge operators, for 12· ·mapped out.· And actually, they have been using that 13· ·example.· Right now there's an initiative to try to 13· ·to kind of gauge when they, you know, reduce or 14· ·use data that has been collected on border crossings 14· ·increase staffing, on what days or -- it's been very 15· ·and to use that data, push it out to the users of the 15· ·instrumental. 16· ·bridges in Mexico so that they can sort of allocate 16· · · · · · ·That's why they're actually putting in 17· ·themselves on a more sufficient crossing.· And that's 17· ·money to continue the program because that's what's 18· ·being promoted locally, not something to be done at 18· ·helping them to make the most out of their 19· ·the federal level, although they are going after 19· ·infrastructure about staffing decisions and 20· ·federal funding. 20· ·operational decisions as well. 21· · · · · · ·MS. MAYS:· And, Secretary, if I may, at 21· · · · · · ·SECRETARY PABLOS:· So they've used this 22· ·TxDOT we have been involved in implementing 22· ·data to adapt their operations; is that what you're 23· ·technology to actually, you know, look at border wait 23· ·saying? 24· ·times.· We've done that, what, one for the last 24· · · · · · ·MS. MAYS:· Yes. 25· ·four-plus years and actually right now TxDOT is 25· · · · · · ·SECRETARY PABLOS:· And it's been effective?

Page 71 Page 73 ·1· ·leading that effort on the entire southern border. ·1· · · · · · ·MS. MAYS:· Oh, yes, absolutely. ·2· · · · · · ·We actually have CBP is providing us with ·2· · · · · · ·MR. BOMBA:· I think more importantly is ·3· ·funding to keep the program going because now they're ·3· ·what the current acting commissioner and the ·4· ·using that information that we're collecting, you ·4· ·gentleman who's been nominated to be the ·5· ·know, through the technology that have been ·5· ·commissioner, who is Kevin McAleenan, is one of guys ·6· ·instrumented at most of the border crossings to ·6· ·that headed up the group within CBP to do pilots and ·7· ·provide information out to the general public on ·7· ·then expand them out because that's where these time ·8· ·actual border wait times. ·8· ·savings are coming from because they're -- the -- we ·9· · · · · · ·So CBP is not doing it on their own.· They ·9· ·got to get away from trying to think that every port 10· ·are using our system.· And they want to expand that 10· ·is two ports, like some of the things they've done in 11· ·entire system on the southern border so that whatever 11· ·California where they've got some -- you know, all of 12· ·information we're collecting, you know, is being 12· ·the preclearances are taken care of. 13· ·analyzed and they're posting that on their website in 13· · · · · · ·You've got some locations where -- by 14· ·terms of what is the wait time on the different 14· ·El Paso and Foxconn coming in with a deal out there 15· ·border crossings. 15· ·to where they're going to have clearance on the 16· · · · · · ·So -- yeah, so that's the federal, but then 16· ·Mexican side so they don't even hardly stop on the 17· ·they're the state.· There's the bridge owners that 17· ·U.S. side.· Those are the types of things when 18· ·are all involved in -- in the technology piece.· When 18· ·they're doing the joint inspections -- they have 19· ·you're talking about preclearance, doing inspections 19· ·another name for them.· I can't remember what they're 20· ·and things like that, again, you know, there's 20· ·calling it. 21· ·several layers.· So there's different pieces of 21· · · · · · ·And the whole thing is that they eliminate 22· ·technology, you know, that is being implemented at 22· ·the layers.· Because the biggest delays that we've 23· ·the border and there's -- almost everybody's involved 23· ·got after all these studies is basically the federal 24· ·in that process. 24· ·agencies at the border.· That's really the delays. 25· · · · · · ·SECRETARY PABLOS:· So the information that 25· ·The biggest one.· So to the extent that they can Page 74 Page 76 ·1· ·become one more harmonious, doing the inspections ·1· ·can help facilitate that, you know.· So again, for ·2· ·together in whatever way they have to do it for ·2· ·this group, it's key to articulate that in the ·3· ·jurisdictional purposes and, you know, what if they ·3· ·messaging that, you know, some of these border ·4· ·see something, who prosecutes, that kind of stuff. ·4· ·crossings could run more efficiently if, you know, ·5· ·Those are the big delays.· Getting those agencies to ·5· ·there were better technology deployments there and, ·6· ·work together. ·6· ·you know, look at joint -- you know, joint ·7· · · · · · ·They're talking about now that they would ·7· ·inspections.· And preclearance can help facilitate, ·8· ·maybe use one common gamma ray, x-ray system so that ·8· ·you know, a much smoother border crossing. ·9· ·both sides are seeing it at the same time.· So you ·9· · · · · · ·So again, not a short-term initiative or 10· ·don't have do it twice. 10· ·recommendation but more strategic and maybe a longer 11· · · · · · ·So these types of savings are -- for the 11· ·term and try, you know -- maybe the committee can 12· ·times is -- is important.· But I think that we need 12· ·help outline from this group what exactly is the 13· ·to support those initiatives, but I think that the -- 13· ·group supporting or would like to see when it comes 14· ·correct, that there are a lot of them are federal 14· ·to technology. 15· ·that have to make the decisions. 15· · · · · · ·MR. SCHWEBEL:· If I could, one of the 16· · · · · · ·SECRETARY PABLOS:· Well, look, I mean, I 16· ·things that I notice you say is advocate for these 17· ·know CBP has a very difficult job in ensuring they 17· ·pilot projects. 18· ·keep us safe.· And, you know, to a certain point I've 18· · · · · · ·This is Schwebel again. 19· ·become a bit jaded in certain instances where, you 19· · · · · · ·I'm with you, Mr. Secretary.· We find, you 20· ·know, the local efforts really haven't really 20· ·know, CBP telling us they want to try, they want to 21· ·delivered the results that we want, right?· And that 21· ·try that, but they're not very good at coming back 22· ·has to do with Homeland Security. 22· ·and telling us it succeeded or failed.· And I think 23· · · · · · ·And so what I wouldn't want to do is get 23· ·in order for us to have efficient point of entry 24· ·into a situation where we're acting on items that are 24· ·operations we need to hear about both stories, those 25· ·well beyond our control.· And if you're telling me 25· ·that are working and those that are not working.· But

Page 75 Page 77 ·1· ·that the data that we've been generating has been ·1· ·we don't hear that a lot. ·2· ·useful and has been delivered in a way where it has ·2· · · · · · ·We hear about there's a new pilot project, ·3· ·encourage CBP to adapt their operations, well, then ·3· ·we're going to try this, we're going to try that, we ·4· ·that's one thing, and I would certainly support that. ·4· ·want your support, you know, your border communities, ·5· · · · · · ·But if you go on the ground at the border ·5· ·you border leadership, support us on this.· They try ·6· ·and you interview the users themselves, I still ·6· ·it out or they do something, but we don't hear it, ·7· ·haven't heard a single one that's been satisfied with ·7· ·how it's working, you know. ·8· ·any of the border crossing efficiencies that have ·8· · · · · · ·And I think the expected outcome should be ·9· ·been allegedly delivered. ·9· ·a report back to the states, especially like Texas 10· · · · · · ·So I just want to make sure that whatever 10· ·that has more ports of entry than any other state, 11· ·it is that this committee does is well within our 11· ·that these pilot projects, you know, are working or 12· ·control as a state and not rely on the federal 12· ·are not working.· Because at the end of the day we're 13· ·government to deliver any of the results or the 13· ·looking for efficiency in our ports of entry. 14· ·expected outcomes. 14· · · · · · ·And I think under NAFTA on this servicing 15· · · · · · ·MS. MAYS:· And I totally agree with you, 15· ·side I think we have an opportunity to deliver the 16· ·Secretary.· I think the key what we're trying to do 16· ·right message as well there, through Texas. 17· ·here is outline strategic issues that are critical to 17· · · · · · ·SECRETARY PABLOS:· And I think the best way 18· ·officially facilitate trade.· And one of them is 18· ·to gauge success is not necessarily acquiring with 19· ·continued improvement and implementation of 19· ·CBP, but instead asking the users, you know.· So 20· ·technology to do that.· And I think this group, you 20· ·maybe in including part of this technology component, 21· ·know, should be supporting any efforts or 21· ·including a way to query the users because they're 22· ·initiatives, whether it's federal or local, that, you 22· ·the ones that are on the frontline.· They're the ones 23· ·know, advances technology deployment at the border. 23· ·using the bridges.· They're the ones with the 24· · · · · · ·Because again, when you talk about 24· ·constraints.· And so again, you know, inquiring with 25· ·security, Gerry, a lot of that, you know, technology 25· ·them to see if they've seen any differences probably Page 78 Page 80 ·1· ·the best gauge.· And so using technology, using ·1· ·purposes, so that may become a legislative issue. ·2· ·technology for that purpose I would certainly ·2· · · · · · ·And then finally, identify feasibility for ·3· ·support. ·3· ·creating a North American border infrastructure. ·4· · · · · · ·MAYOR SAENZ:· Yes, Mr. Secretary, what ·4· ·Again, this a longer term project.· It's another way ·5· ·better laboratory than Laredo?· So we offer the port ·5· ·to provide funding to some smaller areas that may not ·6· ·and of course all the entanglements that comes with ·6· ·have the funding -- or borrowing abilities that some ·7· ·it, good or bad, you know, to -- to provide hopefully ·7· ·of the larger border crossing members might have. ·8· ·some of these solutions that we're seeking for it. ·8· · · · · · ·Our expected outcome to be -- render ·9· ·And all these issues, to be honest with you, I should ·9· ·development or expedite development of border trade 10· ·be a member or at least my staff because we -- we 10· ·infrastructure, more stable and sustainable 11· ·face it every day and so whatever help we can 11· ·environment.· Again, if we remove some of that risk 12· ·provide, you know, you've got it. 12· ·that's inherent to some of these projects out of that 13· · · · · · ·SECRETARY PABLOS:· Great.· Thank you. 13· ·and make it a long-term sustainability environment in 14· · · · · · ·Okay.· So if you would like to participate 14· ·the borrowing and lending process, then I think we 15· ·in this particular effort please just get with 15· ·can see more of these over time. 16· ·Michael. 16· · · · · · ·Increase -- you know, in doing so, increase 17· · · · · · ·MR. BOMBA:· I have Mr. Saenz' name. 17· ·the general public sector interest in funding more 18· ·Anybody else that wants to join? 18· ·projects. 19· · · · · · ·MR. STRESOW:· City of El Paso. 19· · · · · · ·And then finally, we'll come up with new, 20· · · · · · ·SECRETARY PABLOS:· Okay.· Let's move on to 20· ·innovative ideas how to fund border infrastructure 21· ·the next item.· We have a little bit of time left in 21· ·projects, not only infrastructure projects 22· ·this particular section.· So would you like to go 22· ·themselves, but also improvements that help the 23· ·over the last one? 23· ·operations. 24· · · · · · ·MR. BOMBA:· Sure.· The last one is 24· · · · · · ·So are there any suggestions for what we 25· ·fostering private sector involvement.· So our 25· ·have here or anyone who's interested in being a

Page 79 Page 81 ·1· ·challenge is to engage the private sector, not only ·1· ·champion for this particular recommendation? ·2· ·to fund projects, but also to be involved in ·2· · · · · · ·SECRETARY PABLOS:· Anyone's interested, ·3· ·implementing trade from infrastructure and ·3· ·please let Michael know. ·4· ·operational improvements to foster international ·4· · · · · · ·Thank you very much.· Appreciate it. ·5· ·movement, international trade with Mexico. ·5· · · · · · ·Okay.· So let's move on to the next item, ·6· · · · · · ·So our objectives are, one, to identify ·6· ·and then we'll take a break. ·7· ·opportunities, reduce share or mitigate risk for ·7· · · · · · ·We'll now look into the Texas-Mexico Trade ·8· ·private sector investors.· A lot of these projects ·8· ·Transportation Master Plan Update. ·9· ·have a higher risk but they have higher return.· So ·9· · · · · · ·And, Caroline, will you please take this 10· ·if we can somehow mitigate some of those risks to the 10· ·item. 11· ·private sector, not only will with the ones that they 11· · · · · · ·MS. MAYS:· Yeah.· Secretary, Tim is 12· ·invest in early on, it will encourage others to 12· ·actually going to do most of the presentation, but I 13· ·follow. 13· ·wanted you -- we met with you a while back and talked 14· · · · · · ·Leverage public funding for private sector 14· ·about this.· I think, you know, I want you to kind of 15· ·investments of border crossings and the corridors, 15· ·articulate to the committee kind of what you shared 16· ·expand participation in the CBP's federal donation 16· ·with us about your vision for -- for the plan. 17· ·and reimbursements programs. 17· · · · · · ·We had discussions with the committee at 18· · · · · · ·Obviously, this is not our -- the first 18· ·the last meeting and shared with them and now we're 19· ·thing we want to do is to fund the federal 19· ·coming back with a little bit more details and kind 20· ·government, but if given that there are shortfalls in 20· ·of the next steps where we would like to go.· But I 21· ·the federal funding for inspection, inspectors and 21· ·think it would be helpful if you can share with the 22· ·other folks on the border, it may be necessary to do 22· ·committee kind of your thought on, you know, the 23· ·that and if maybe that there are tools that could be 23· ·direction that, you know, would like to see as we 24· ·used, local funding tools or statewide funding tools 24· ·move forward. 25· ·that may not be accessible right now for those 25· · · · · · ·SECRETARY PABLOS:· Sure.· Well, thank you. Page 82 Page 84 ·1· · · · · · ·So it goes back to what I said at the ·1· ·and effective manner. ·2· ·beginning.· I'd like to -- I'm envisioning a plan ·2· · · · · · ·And we see along the border many ·3· ·that is based on the concept of bringing prosperity ·3· ·manufacturing operations.· The trade that goes on in ·4· ·to the border region, bringing everything that will ·4· ·(Spanish) is incredible.· We see what's going on ·5· ·increase the quality of life for the citizens of the ·5· ·there. ·6· ·border on both sides of the border, everything that ·6· · · · · · ·And so if we are to convince a CEO that ·7· ·will encourage investment on both sides of the ·7· ·they should use your corridor for moving their goods ·8· ·border.· And so that's really based on binational ·8· ·then you need to be in a position where you can ·9· ·economic development. ·9· ·provide those components to them as they're effecting 10· · · · · · ·I'd like to envision a plan that takes into 10· ·their operations. 11· ·account a unified approach for economic development, 11· · · · · · ·This plan needs to include all of those 12· ·a unified approach for building that capacity.· And 12· ·items, needs to incorporate all of the elements that 13· ·so as we continue to develop this plan, I would hope 13· ·we could bring to the table, as I state, leveraging 14· ·that we keep going back to that concept of prosperity 14· ·not only our state agencies, but also our private 15· ·development.· And the way we do that is by ensuring 15· ·sector on both sides of the border.· And really, 16· ·that we understand what investors look for when they 16· ·that's the issue here is that I don't think that 17· ·want to invest in a community. 17· ·we've ever developed a vision at that level where it 18· · · · · · ·And looking at the quality of life of the 18· ·involved binational economic development. 19· ·community is very important.· CEOs want to know that 19· · · · · · ·In El Paso we see it with Juarez, El Paso 20· ·if they transfer their executives to the border 20· ·working together, trying to attract business 21· ·region that the executives and their families will 21· ·together, trying to change the landscape for 22· ·have the quality of life that they would expect.· And 22· ·investment together, understanding what each other's 23· ·so including components that would help improve 23· ·doing, not working in silos, having a master plan for 24· ·quality of life in the border area is important to 24· ·economic development where both sides are at the 25· ·me. 25· ·table.· Very important.

Page 83 Page 85 ·1· · · · · · ·Also quality of work force, including ·1· · · · · · ·You know, when we know that our RMAs on ·2· ·components that allow us to collaborate with agencies ·2· ·this side can invest on the Mexican side for ·3· ·like our Workforce Commission, work force development ·3· ·development, that ought to be good news for everyone. ·4· ·boards along the border that will convince investors ·4· ·But if we don't understand what each other's doing, ·5· ·that if they move to the border region that they will ·5· ·if the Mexican side and the Texas side aren't ·6· ·have an ample pool of qualified employees. ·6· ·communicating, collaborating, cooperating, and the ·7· · · · · · ·And, you know, making sure that whenever we ·7· ·four Cs that we mentioned earlier, then it's going to ·8· ·design this plan we also include small business ·8· ·be very difficult to achieve that objective. ·9· ·development, you know, anything that encourages small ·9· · · · · · ·And that's what I would like to see in this 10· ·business to grow, access to capital. 10· ·master plan is an added component of binational 11· · · · · · ·Gerry, we've talked about this with small 11· ·economic development.· We have the model in the 12· ·business. 12· ·Borderplex.· We've used it.· We've proven it is 13· · · · · · ·Because those are all the components that 13· ·effective.· I'd like to see that model be applied all 14· ·CEOs look for whenever they invest, and if they -- if 14· ·the way down to Brownsville.· Where both sides of the 15· ·we can encourage them to invest along the border, 15· ·border community are working together for that shared 16· ·then we will be well on our way to that path to 16· ·prosperity that we all need. 17· ·prosperity. 17· · · · · · ·And I think -- Mr. Chairman, I think we 18· · · · · · ·Infrastructure is perhaps, you know, the 18· ·have the ability to provide that in a master plan. 19· ·most important point here for this committee.· Making 19· ·Granted, this is much bigger than all of us, but I 20· ·sure that we develop the capacity that's required to 20· ·think we can at least insert components into this 21· ·prove to these investors that if they come to our 21· ·plan that will help us get well on our way.· That's 22· ·border they'll have easy crossings, that they will 22· ·really what I would like to see as we develop this 23· ·have the ability on move their components back and 23· ·master plan, is to inject a component of bringing 24· ·forth and ultimately their final product to the 24· ·prosperity to the border region. 25· ·distribution and ultimate destination in an efficient 25· · · · · · ·And if we do that prosperity will then come Page 86 Page 88 ·1· ·to the rest of the state, and on the Mexican side ·1· · · · · · ·And they were broken down into three ·2· ·will infiltrate all the way down to the more southern ·2· ·components:· the Laredo-Coahuila/Nuevo ·3· ·parts of Mexico simply because this is that gateway ·3· ·Leon/Tamaulipas Border Master Plan, the Lower Rio ·4· ·that has been bringing so much prosperity to us, but ·4· ·Grande-Tamaulipas Border Master Plan, and the ·5· ·now we need to make sure that we plan for the future. ·5· ·El Paso/New Mexico Border Master Plan. ·6· ·And in doing so it needs to have an economic ·6· · · · · · ·Based on this effort, our plan is to have ·7· ·development component. ·7· ·one Texas, one border, one plan.· As part of this ·8· · · · · · ·MS. MAYS:· Thank you very much, Secretary. ·8· ·procurement -- next slide -- in keeping with TxDOT's ·9· · · · · · ·I'll let Tim present and then really want ·9· ·Commission Task Force we are looking for one specific 10· ·to hear from the group.· I think, Secretary, as we 10· ·deliverable as being sought as part of this 11· ·did with the previous discussion, this is another one 11· ·procurement.· A reassessment would not only look at 12· ·that we really need the committee to provide us with 12· ·the border crossings, but also will consist of 13· ·feedback on kind of what you would like to see.· We 13· ·north/south and east/west corridors.· The assessment 14· ·presented it last time, but I think this time we have 14· ·would include all the needs along the borders, 15· ·a little bit of meat and you can comment on kind of, 15· ·including corridors into the crossings, as well as 16· ·you know, the direction we're trying to take, you 16· ·all aspects between them. 17· ·know, the plan. 17· · · · · · ·Three scenarios will be addressed during 18· · · · · · ·And then again, one thing, you know, Tim is 18· ·the needs assessment:· short-, medium- and long-term 19· ·going to talk about is that you all are going to be 19· ·investments.· A proactive public involvement process 20· ·helping us develop this plan.· Gerry and others that 20· ·will involve all stakeholders in all of the TxDOT 21· ·have been involved with the Trade Advisory Committee 21· ·districts and on both sides of the international 22· ·know that the Trade Advisory Committee, their main 22· ·border. 23· ·charge is to help TxDOT, work with TxDOT hand and 23· · · · · · ·To date, TxDOT has received input from the 24· ·hand to develop the Texas Freight Mobility Plan.· So 24· ·Federal Highway Administration, the U.S. Customs and 25· ·that's going to be a huge task for this committee. 25· ·Border Patrol, U.S. General Services Administration,

Page 87 Page 89 ·1· · · · · · ·Commitment.· Commitment for the next ·1· ·the U.S.-Mexico Joint Working Committee, and the ·2· ·several years to help shepherd this plan, to make ·2· ·Secretaría de Comunicaciones y Transportes. ·3· ·sure that it comes to fruition, to address, you know, ·3· · · · · · ·Today we are seeking guidance and direction ·4· ·the issues that the rest of us talked about, but also ·4· ·from the Border Trade Advisory Committee. ·5· ·address some of the issues that we talked about ·5· · · · · · ·Next slide. ·6· ·earlier, you know, from the blueprint perspective, ·6· · · · · · ·This is the proposed goal that TxDOT will ·7· ·but this one is taking it and drilling it more down ·7· ·be seeking a request for qualifications.· As noted by ·8· ·and actually, you know, talking about what's needed, ·8· ·the Secretary of State, many of those aspects are ·9· ·projects that need to be funded, timelines, ·9· ·included in this scope. 10· ·et cetera.· So it's a little bit of a deeper dive to 10· · · · · · ·We will have project management 11· ·really, you know, bring some of these big picture 11· ·administration and quality assurance, stakeholder 12· ·things down on how we achieve and implement those. 12· ·engagement, goals and objectives of the plan that 13· · · · · · ·So with that, I'll turn it over to Tim to 13· ·will be set forth by this committee and others, a 14· ·kind of give you a quick update on where we are. 14· ·true intensified data collection and inventory, trade 15· · · · · · ·MR. JUAREZ:· Good morning, Secretary of 15· ·corridor identification and designation, needs 16· ·State Pablos and Chairman Lewis and committee 16· ·assessment, forecasting for an anticipated 20-year 17· ·members.· I'm Tim Juarez with TxDOT's Transportation 17· ·time period, an economic analysis, recommendation and 18· ·Planning and Programming Division, and I serve as the 18· ·investment plan, an implementation plan and then 19· ·international trade and border coordinator, and I 19· ·final report. 20· ·will be specifically the project manager for the 20· · · · · · ·Our goal will be the identification of a 21· ·Texas Border Master Plan. 21· ·priority list of projects that can be implemented 22· · · · · · ·As part of this update, we wanted to give 22· ·within that short-, medium- and long-term effort. 23· ·you some background information.· The previous border 23· · · · · · ·I wanted to give you an update on where we 24· ·master plans were last updated in 2013. 24· ·are on the schedule of this particular procurement. 25· · · · · · ·Next slide, please. 25· · · · · · ·Please note that our pre-RFQ meeting was Page 90 Page 92 ·1· ·held on April the 13th.· TxDOT, based on federal and ·1· ·focused on those current ports where they have the ·2· ·state procurement rules, we are currently under an ·2· ·greater volume of activity and replicate that ·3· ·open procurement process.· After hearing your ·3· ·eventually with other ports, but at the same time ·4· ·specific comments and receiving your guidance, our ·4· ·make sure that, hey, let's give it all to everybody ·5· ·next step is to post the RFQ within the mid to late ·5· ·the same way and break it out. ·6· ·June time frame.· Upon receipt and evaluation of the ·6· · · · · · ·It may be a sensitive subject for many of ·7· ·RFQs, the TxDOT's Consultant Selection Committee will ·7· ·my colleagues on this committee.· But I find myself ·8· ·then short list the teams and then invite selected ·8· ·in looking at these plans a lot of times, well, we ·9· ·teams to interviews.· Once a team has been selected, ·9· ·got to do it for one, we got to do it for all.· Well, 10· ·TxDOT will then enter into negotiations with that 10· ·the volumes are clearly there.· We know where the 11· ·team. 11· ·trade activity is.· And like we used to say, it'll go 12· · · · · · ·Our goal is to have a contract execution by 12· ·like a river through the path of least resistance, 13· ·early to mid fall of 2017. 13· ·where there's more efficiency.· Whichever the most 14· · · · · · ·Next slide. 14· ·efficient ports are, that's where the trade volume 15· · · · · · ·So here is my information, as well as 15· ·will go. 16· ·Caroline, and our goal today is to have an open 16· · · · · · ·And I think whatever we plan on in the 17· ·discussion among the committee members and to get 17· ·master plan that we focus our attention on those 18· ·input and guidance from you that will help shape this 18· ·areas in the -- along the border where there is a 19· ·RFQ so that we can get a better product, not only for 19· ·need because we are behind in our infrastructure in 20· ·you, but also your local governments and this 20· ·our efficient ports of operation. 21· ·committee.· Thank you. 21· · · · · · ·SECRETARY PABLOS:· Anyone else? 22· · · · · · ·SECRETARY PABLOS:· Thank you. 22· · · · · · ·Paul, go ahead. 23· · · · · · ·Caroline, do you have any direction as to 23· · · · · · ·MR. CRISTINA:· Paul Cristina with BNSF. 24· ·how we should manage this discussion. 24· · · · · · ·I think we as being separate would be 25· · · · · · ·MS. MAYS:· Well, can you go back to the 25· ·interested in understanding more about what is going

Page 91 Page 93 ·1· ·slide with the scope one.· Yes, that one. ·1· ·into the needs assessment on a -- from a multimodal ·2· · · · · · ·I think this is where we -- Secretary, we ·2· ·perspective and what types of data or questions are ·3· ·need the committee's input to see if we've captured ·3· ·being asked with regard to multimodal transportation ·4· ·everything or are we missing anything.· And, you ·4· ·solutions.· We've provided similar input or ideas on ·5· ·know, if we are missing anything, what are we ·5· ·how that can work in the freight forum and also in ·6· ·missing?· And then the second one would be within ·6· ·this body.· We'll be happy to talk about that offline ·7· ·kind of this outline, are there any specific areas of ·7· ·or just given a chance to review the document and ·8· ·emphasis or any specific burning issues that we need ·8· ·provide written comments, if you don't mind. ·9· ·to make sure we need to incorporate into, you know, ·9· · · · · · ·SECRETARY PABLOS:· Okay.· Yes, sir. 10· ·the RFQ process the scoping process that you all 10· · · · · · ·MR. GARCIA:· Josue Garcia with Cameron 11· ·would look to see. 11· ·County. 12· · · · · · ·MR. SCHWEBEL:· This is Schwebel. 12· · · · · · ·You know, I think the Texas Border Plan was 13· · · · · · ·I think one of the things we want to make 13· ·initially a child of a joint working committee. I 14· ·sure that we clearly understand what the current 14· ·know that the Border Master Plan started in 15· ·makeup of our state and our trade policy is in place 15· ·California, and they're into their second or third 16· ·right now.· And I know when we talk about going out 16· ·generation.· So we might want to tap into them to see 17· ·and getting funding or trying to come up with 17· ·what -- you know, what has worked for them and, you 18· ·initiatives we try to be fair with everybody, you 18· ·know, what they've been able to come up with. 19· ·know, spread it out evenly. 19· · · · · · ·SECRETARY PABLOS:· Okay. 20· · · · · · ·Want to make sure, I think, that we 20· · · · · · ·MS. MAYS:· Yeah.· I was just going to 21· ·understand clearly that there is a deed in specific 21· ·respond to Paul's comment, and question is, we're 22· ·ports like El Paso, like Laredo, like Nuevo Leon, you 22· ·looking for comments.· So if you can send that to us. 23· ·know, not -- not to demean or not saying anything 23· ·We cannot necessarily share the document because 24· ·less about the other ports of entry, but when we look 24· ·we're in an open procurement process.· But whatever 25· ·at the plans, I think we need to make sure that we're 25· ·feedback you give us we can incorporate that, and we Page 94 Page 96 ·1· ·can definitely talk offline on what those specific ·1· ·require relocation of manufacturers, but it's likely ·2· ·issues are. ·2· ·the assembly of products will actually still not be ·3· · · · · · ·But, you know, multimodal plan from a ·3· ·at the border for many of the groups:· San Antonio, ·4· ·transportation perspective, looking at all modes of ·4· ·Dallas perhaps, Victoria.· It'll be in Texas and ·5· ·transportation because all of it is used across the ·5· ·beyond Texas, but not necessarily at the border. ·6· ·border, whether it's pipelines, air cargo, rail, ·6· · · · · · ·SECRETARY PABLOS:· Good point. ·7· ·seaports, land, air, all of that is used to transport ·7· · · · · · ·Any other?· Yes, sir. ·8· ·goods across the border.· So we're going to be ·8· · · · · · ·MR. GALEAZZI:· Yeah.· Dante Galeazzi with ·9· ·looking at all of that. ·9· ·Texas International Produce Association. 10· · · · · · ·And then from a needs assessment, and going 10· · · · · · ·On that same topic, you know, is there 11· ·back to what Gerry talked about, is looking at the 11· ·something in here where we're going to look at cargo 12· ·volumes, how much is moving via rail, by all these 12· ·analysis?· Because on those same lines, it's very 13· ·modes across the border.· And then we're going to 13· ·important what's in the vehicles coming across or 14· ·look at forecasting that and kind of have a better 14· ·going either direction?· How does it affect the 15· ·idea of what we're talking about. 15· ·crossing, the wait time, the efficiency, the flow? 16· · · · · · ·And we're going to look at scenarios 16· ·And so just making sure that that's a piece that I 17· ·because, you know, with a lot of discussions we're 17· ·think would be very important as well. 18· ·talking about here earlier.· NAFTA changes, what does 18· · · · · · ·SECRETARY PABLOS:· Okay. 19· ·that mean, status quo, does it stay the same, you 19· · · · · · ·MS. MAYS:· And the answer there is, yes, 20· ·know.· So we're going to have some scenario analysis 20· ·we're going to be looking at commodities, not just 21· ·incorporated into this process so that at least we're 21· ·the volumes, but the commodities.· We know about 22· ·having a better guess game, to say the least. 22· ·crosses pretty much.· You know, we might not know 23· · · · · · ·But we think we have enough time before we 23· ·specifically what's in each of the trucks, but we 24· ·get to that point that maybe the dust would have 24· ·know, you know, whether it's automotive parts or 25· ·settled on kind of where the policies are moving at 25· ·whether it's, you know, tomatoes or it's avocados. We

Page 95 Page 97 ·1· ·the federal level.· But, yes, we will engage on that, ·1· ·kind of know volumes when it comes to commodities. ·2· ·and again, we have any thoughts on who sent it. ·2· · · · · · ·So we're going to look at, you know, ·3· · · · · · ·SECRETARY PABLOS:· Rob. ·3· ·current but also projecting to the future.· And like ·4· · · · · · ·MR. HARRISON:· Rob Harrison.· I just wanted ·4· ·Rol mentioned, the dynamics are a little bit ·5· ·to offer a point of information about the previous ·5· ·different.· You know, we're going to see different ·6· ·three border plans that were undertaken at CDR.· They ·6· ·ports, they have different commodities crossing, and ·7· ·were split up for management purposes, although they ·7· ·that's going to be figured into the analysis to be ·8· ·used essentially the same method.· So the same method ·8· ·able to identify the needs of -- of each of the ·9· ·was applied, but the characteristics of the three ·9· ·crossings, but also the corridors that are being used 10· ·areas remain different.· And so that was why this was 10· ·by these different commodities are also critical. 11· ·brought and you can bring it together. 11· · · · · · ·MR. SCHWEBEL:· Caroline -- this is 12· · · · · · ·So whoever does the master plan will 12· ·Schwebel -- I think we also can't forget the plans 13· ·actually address the three broad areas.· The Latino 13· ·that are in place right now on our conductivity 14· ·operations in the El Paso growing very successful. 14· ·initiatives, you know, from other -- within the state 15· ·Laredo much deeper into Mexico reaching quite the way 15· ·of Texas we have, you know, connectivity from the 16· ·down to central Mexico.· At the -- in the Valley 16· ·valley that stretches out through the other parts of 17· ·there's growing agricultural imports coming in, 17· ·the border, as well as to our seaports like Houston 18· ·they're processed and then transported and eaten 18· ·and so forth.· So the connectivity needs to be 19· ·elsewhere.· And the port has strong links to 19· ·considered in any of this planning as well.· That 20· ·Monterrey. 20· ·they go hand in hand potentially. 21· · · · · · ·So basically it's going to reveal, whoever 21· · · · · · ·MS. MAYS:· Yeah, let me respond to that. 22· ·does it is going to reveal there's a whole lot of 22· ·Yes, we're going to be looking -- you know, one thing 23· ·generators, origin and destination generators in the 23· ·we didn't mention is that we're looking at, you know, 24· ·United States and Mexico passing through these 24· ·kind of a tiered approach whereby we're looking at, 25· ·gateways.· It will of course provide jobs, and it may 25· ·okay, 50 miles from the border and then the entire Page 98 Page 100 ·1· ·state of Texas and then kind of nation and then kind ·1· ·more inclusive.· So we've kind of gone back and forth ·2· ·of trinational, you know, looking at the sphere of ·2· ·and tweak the language and change it.· And we're ·3· ·influence, you know, at the border and where it ·3· ·still working on that based on where we are here ·4· ·connects. ·4· ·today. ·5· · · · · · ·You know, the heat maps Sam talked about ·5· · · · · · ·And out of discussions we're making sure ·6· ·earlier, that's going to help us kind of understand ·6· ·that this go-around will be very inclusive by being ·7· ·where does all of this trade that crosses the border ·7· ·very proactive and strategic about how we do this, ·8· ·goes, you know, one, within this 50 miles of the ·8· ·engage as much as possible and then really making ·9· ·border region, but within Texas and, you know, U.S. ·9· ·sure that this committee, you know, take ownership of 10· ·and Canada and Mexico.· So all of those we're going 10· ·the plan being, you know, the ones that develop it, 11· ·to be looking at and not just focusing now on the 11· ·we're not quitting, you know, three separate steering 12· ·border because the sphere of influence at the border 12· ·committees.· This group is going to be the group that 13· ·is much bigger than the border. 13· ·provides us with feedback and direction and, you 14· · · · · · ·SECRETARY PABLOS:· Any other comments? 14· ·know, key milestones on where we need to go. 15· · · · · · ·MR. GIESBRECHT:· I've got one. 15· · · · · · ·MR. GIESBRECHT:· Yeah, because I was in 16· · · · · · ·SECRETARY PABLOS:· Yes, sir. 16· ·contact with Mr. Terron and Jaime Campos.· And my 17· · · · · · ·MR. GIESBRECHT:· Mr. Secretary, this is 17· ·question is that, you know, I don't see him here, but 18· ·Jake from Presidio.· In Presidio we have a very 18· ·people like that maybe should be coming.· And then 19· ·unique location because it's so small, and we have a 19· ·the next thing, like I said, Presidio, we're very 20· ·geographical area of very local traffic.· And we've 20· ·small, we have our issues very well identified 21· ·identified a lot of trade issues, especially Mexico. 21· ·already that we have.· And one of them is cinesica on 22· · · · · · ·My question is, on the Mexican side where 22· ·the Mexican side. 23· ·are you -- which committee are you working with?· Are 23· · · · · · ·And then on the U.S. side, it's USDA and 24· ·you working with like with Binational -- the one that 24· ·Texas Department of Agriculture where we have trade 25· ·Sylvia does or -- 25· ·issues that work like bottlenecks.· It's like Gerry

Page 99 Page 101 ·1· · · · · · ·MS. MAYS:· Yes.· Actually, we were in ·1· ·said, this works like a river and if you have little ·2· ·Mexico City in March with the Joint Working ·2· ·bumps in the river, the water will go a different ·3· ·Committee, JWC, which Sylvia -- ·3· ·way.· But we have infrastructure needs there in ·4· · · · · · ·MR. GIESBRECHT:· Sylvia Grijalva? ·4· ·Presidio, both southbound and northbound. ·5· · · · · · ·MS. MAYS:· Yes.· She's the federal highway ·5· · · · · · ·And the main thing that we need to do over ·6· ·staff that coordinates all the -- not -- the U.S. and ·6· ·there is balance our trade.· Because if we just have ·7· ·Mexico border at the federal highway.· We have had ·7· ·one-way trade, it's no good, we're out of the market. ·8· ·discussions with them.· We had discussions at JWC ·8· ·And that's what we're really trying to concentrate on ·9· ·when we were there in March and talked to the ·9· ·is balancing trade.· We have a scope of work that we 10· ·Mexicans, talked to a lot of all the federal 10· ·are working on right now that we will be presenting 11· ·partners.· We actually gave them opportunity. 11· ·to TxDOT in the near future of what we need in 12· · · · · · ·Some of what you see here was based on 12· ·Presidio.· You know, we're very small and we have a 13· ·discussions from the JWC meeting back in March with 13· ·very unique geographical area that we're 14· ·the federal agencies.· CBP chimed in and other 14· ·concentrating on. 15· ·federal agencies chimed in to, you know, state one -- 15· · · · · · ·SECRETARY PABLOS:· And that, if I may, 16· ·one of the key issues that, you know, they identified 16· ·dovetails perfectly into my comment, which is, I 17· ·is, overstressed was the binational staple, the 17· ·would like to see, I don't know, within maybe the 18· ·engagements, that this has to be a Texas-Mexico plan. 18· ·data collection component here, but we need to have 19· ·And the Mexicans stated the same thing too. 19· ·at least a general understanding of what the local 20· · · · · · ·And originally we just had the Texas Border 20· ·vision is for community development. 21· ·Master Plan, but now it's actually the Texas-Mexico 21· · · · · · ·I mean, this plan needs on both sides of 22· ·Border Master plan because the Mexicans indicated to 22· ·the border.· It needs to include an analysis of what 23· ·us that we needed to be much more inclusive.· Texas 23· ·it is that the community is trying to do outside of 24· ·Border Plan just means it's a Texas plan.· But if we 24· ·trade and transportation.· Obviously, they're all 25· ·say the Texas-Mexico Master Plan then it must be much 25· ·linked together, but we also need to know what their Page 102 Page 104 ·1· ·plan is for developing their local economy, whether ·1· ·We're working with the rail division, Gil Wilson and ·2· ·it's tourism or advanced manufacturing. ·2· ·the like in the city of Laredo on a rail ·3· · · · · · ·I know in El Paso we have Fort Bliss.· It's ·3· ·comprehensive plan in Laredo. ·4· ·a big component.· You have military. ·4· · · · · · ·So is that included under the data ·5· · · · · · ·And so having a good solid understanding of ·5· ·collection and inventory?· Just because there's ·6· ·each community's needs as it relates to their vision ·6· ·already a lot of really good data out there that ·7· ·for economic development I think is -- would be an ·7· ·could be utilized. ·8· ·integral part of the analysis because then you're ·8· · · · · · ·MS. MAYS:· Yes.· Yeah, the short answer is ·9· ·able to design the plan and the recommendations based ·9· ·yes.· In general, one would use studies and plans, we 10· ·on what it is that the local community is trying to 10· ·look at existing studies and plans to glean not just 11· ·do. 11· ·the data that's being collected and used for those 12· · · · · · ·I know in El Paso we have an 12· ·studies, but recommendations, so that we're not, you 13· ·industry-cluster-based approach to economic 13· ·know, starting from scratch or reinventing the wheel. 14· ·development.· We've identified several industries and 14· ·So, yes, we're normally scouting around for all the 15· ·focused on those.· And I'm sure the other communities 15· ·studies that are related on the data collection and 16· ·along the border have something similar. 16· ·analysis and taking that and using that.· I mentioned 17· · · · · · ·So not having the understanding of those 17· ·a blueprint is going to be feeding into the plan as 18· ·local intentions will probably yield results that may 18· ·well. 19· ·not mesh with the reality of the local communities' 19· · · · · · ·MR. JAIME:· And that really helps.· I mean, 20· ·efforts.· So having an understanding of economic 20· ·I commend Gil for that because it also frees us up to 21· ·development initiatives I think should be something 21· ·work on some of the other items.· Since we've already 22· ·that's got to be included here. 22· ·provided the data for those studies it just reduces 23· · · · · · ·MR. GIESBRECHT:· In Presidio one of our 23· ·the workload on us so that we can really focus on 24· ·balances is also the tourism industry.· We're next to 24· ·where we need to focus.· So we really appreciate 25· ·the major parks in the state of Texas, and that's why 25· ·that, Caroline.

Page 103 Page 105 ·1· ·we really want to concentrate on the tourism ·1· · · · · · ·SECRETARY PABLOS:· Okay.· We're coming up ·2· ·industry, which is also going to be involved in the ·2· ·on the end of this, the end of this particular ·3· ·rail division.· So we're trying to do both.· We're ·3· ·section.· Are there any other comments? ·4· ·trying to do both rail and port. ·4· · · · · · ·MR. JUAREZ:· So all we would need is just ·5· · · · · · ·MR. HARRISON:· I'd like to say that I think ·5· ·to develop a time frame where we can get additional ·6· ·the responsibility for flexibility in terms of ·6· ·comments from the committee so that we can continue ·7· ·providing information relies both with the BTAC and ·7· ·forward with the development of the RPQ and that ·8· ·this outline in terms of any master renegotiations. ·8· ·TxDOT can proceed with the procurement process. ·9· ·If those are accelerated, as they might be, then we ·9· · · · · · ·SECRETARY PABLOS:· And what do you see that 10· ·may have a number of scenarios that we need to 10· ·time frame being? 11· ·respond to, and that may outweigh any of the 11· · · · · · ·MR. JUAREZ:· Well, our target goal is still 12· ·discussions we've been having to date. 12· ·mid to late June.· Unless the committee is needing 13· · · · · · ·But I think that the work that's -- the 13· ·additional time, we would say within one to two weeks 14· ·work that exists and the resources that the committee 14· ·that we could receive additional comments, if that 15· ·has makes it our responsibility to provide 15· ·sounds acceptable. 16· ·information to and feedback on what are the likely 16· · · · · · ·SECRETARY PABLOS:· So you're asking the 17· ·impacts. 17· ·committee -- in those two weeks you're asking the 18· · · · · · ·SECRETARY PABLOS:· Agreed. 18· ·committee to provide comments on this? 19· · · · · · ·Yes, sir. 19· · · · · · ·MR. JUAREZ:· Yes, if acceptable. 20· · · · · · ·MR. JAIME:· Ivan Jaime with Union Pacific 20· · · · · · ·SECRETARY PABLOS:· Is that acceptable to 21· ·again. 21· ·the committee?· Do you have any comments to provide? 22· · · · · · ·My question, Caroline, is going to be on 22· · · · · · ·MR. JUAREZ:· As to scope, yes, sir. 23· ·the existing studies that are out there.· For 23· · · · · · ·SECRETARY PABLOS:· As to the scope.· Okay. 24· ·example, the GAO not too long ago conducted a study 24· ·Very well, then.· We will do that.· Good work.· Thank 25· ·on the impacts of rail freight on border communities. 25· ·you for all your good work. Page 106 Page 108 ·1· · · · · · ·Okay.· So at this time, being 10:43, why ·1· ·that example.· It's one of many, many examples that ·2· ·don't we just take a break and we will reconvene at ·2· ·we have here, but it's of key importance to what this ·3· ·11:00 a.m. for the next topic. ·3· ·committee is about, which is called binational shared ·4· · · · · · ·(A brief recess was taken.) ·4· ·production. ·5· · · · · · ·SECRETARY PABLOS:· Okay.· At this time I'd ·5· · · · · · ·If you notice in recent years how ·6· ·like to reconvene today's meeting of the Border Trade ·6· ·San Antonio and its vicinities has turned into a very ·7· ·Advisory Committee and get started with our next ·7· ·strong distribution center.· Millions of square feet ·8· ·panel, Local Perspective on the Importance of Trade, ·8· ·in distribution centers have developed here.· And ·9· ·Logistics, Transportation and Economic Development. ·9· ·that's not by chance.· That's because of the 10· · · · · · ·We have with us experts in this field 10· ·infrastructure that we have here in roads and rail. 11· ·today.· I would like to hand it over to Jorge 11· ·And much of -- some of these distribution centers 12· ·Canavati to introduce our panelists. 12· ·have their production.· Some are in Mexico. 13· · · · · · ·MR. CANAVATI:· Secretary, thank you very 13· · · · · · ·We also have the issue of regional 14· ·much. 14· ·development of business.· The Port of Corpus Christi, 15· · · · · · ·Welcome, everybody.· My name is Jorge 15· ·Sean Strawbridge, he's in the audience, he'll talk 16· ·Canavati, President of Jorge Canavati and Company. 16· ·about that on his panel.· Corpus Christi is going to 17· ·I'm going to introduce our panel now the Secretary 17· ·turn into one of the major suppliers of the natural 18· ·mentioned.· You can find more on their bios in the 18· ·gas to the Monterrey industry. 19· ·program. 19· · · · · · ·You know, you need to think about how this 20· · · · · · ·To my left, Jenna Saucedo-Herrera, the 20· ·works.· They're going to be the supplier of energy to 21· ·President of the San Antonio Economic Development 21· ·these plants, and at the same time these plants are 22· ·Corporation.· Immediately, Ramiro Cavazos, the 22· ·going to be supplying our region and distribution 23· ·President and CEO of the San Antonio Hispanic Chamber 23· ·through here to the rest of the state.· And this is 24· ·of Commerce.· And my dear friend Jesse Hereford of 24· ·how we develop the binational economic development, 25· ·the North American Development Bank.· Welcome, you 25· ·through at least the length of my expertise.

Page 107 Page 109 ·1· ·folks to our panel. ·1· · · · · · ·We have, you know, the Port of San Antonio ·2· · · · · · ·We're going to discuss -- I'm just going to ·2· ·as well to start.· This is another regional piece ·3· ·set the tone with some minor topics on four items and ·3· ·that we're going to discuss. ·4· ·then the panel will take over.· We're going to ·4· · · · · · ·So what you have is these symbiotic supply ·5· ·express the importance of the link between the ·5· ·chain.· This is what all this is about.· We have ·6· ·Texas-Mexico border and the rest of our state through ·6· ·energy supply from our state into Mexico.· And then ·7· ·the lens of our local community, which has an impact ·7· ·we have the supply back of products and other items ·8· ·on the state. ·8· ·back into our state for distribution. ·9· · · · · · ·One important topic, which I was very ·9· · · · · · ·With these remarks, I'd like to open the 10· ·pleased that the Secretary touched upon earlier 10· ·session with Jenna, who, of course being a gentleman, 11· ·today, and he discussed binational economic 11· ·ladies go first.· And she's more beautiful than 12· ·development, which is part of something that I am 12· ·everyone else, let's be honest. 13· ·involved with often, the binational shared 13· · · · · · ·MS. SAUCEDO-HERRERA:· Well, thank you, but 14· ·production.· And a good example of that, we're also 14· ·clearly Ramiro and I are not here friends of Jorge 15· ·going to talk about regional energy distribution. 15· ·so. 16· ·But for an example, the binational shared production, 16· · · · · · ·MR. CAVAZOS:· No, we're not. 17· ·how it has a bit pocket on cross border is the local 17· · · · · · ·MS. SAUCEDO-HERRERA:· He made that very 18· ·Toyota plant that we enjoy here. 18· ·clear to me.· We can be. 19· · · · · · ·This plant assembles automobiles.· There's 19· · · · · · ·Thank you so much for the introductory 20· ·a rail service that commenced because the chassis 20· ·remarks and, Secretary Pablos, thank you for the 21· ·producers in Monterrey now have direct service.· Air 21· ·invitation to speak here.· Jorge, thank you as well. 22· ·cargo has been developed.· The suppliers to this 22· · · · · · ·It's such a pleasure to be here.· I have 23· ·plant supply plants in Mexico, and suppliers in 23· ·been in my role at the Economic Development 24· ·Mexico supply this plant as well.· There's an 24· ·Foundation for San Antonio since the latter part of 25· ·incredible economic impact of this plant.· And I give 25· ·June -- or latter part of -- so, yeah, June of 2016. Page 110 Page 112 ·1· ·Relatively new to the role.· And for those of you who ·1· ·to know that we will get through this.· We just need ·2· ·aren't as familiar, the Economic Development ·2· ·to have civil discourse and come up with a plan that ·3· ·Foundation is a public/private entity that's charged ·3· ·we can follow.· So I want to thank Secretary Pablos. ·4· ·with diversification and growth of the San Antonio ·4· ·He's past chair of our board in San Antonio of the ·5· ·regional economy.· And that is through domestic and ·5· ·Chamber, also the Free Trade Alliance and followed ·6· ·international business development and of course ·6· ·his work at the Borderplex Alliance and the great ·7· ·market strategies. ·7· ·work that he did there.· So I just want to commend ·8· · · · · · ·So this conversation, the entire agenda for ·8· ·our Secretary Pablos.· We're very proud of your ·9· ·the day is of significant importance to the Economic ·9· ·leadership and the quiet work that you are also doing 10· ·Development Foundation and all of our local 10· ·behind the scenes to make sure that the U.S. and 11· ·businesses in the San Antonio community because of 11· ·Mexico are connected.· So I look forward to more 12· ·the direct impact.· So we are obviously supportive of 12· ·conversation.· We're proud to be with you today, and 13· ·continued relationships with our finest partner in 13· ·each of you as a leader in this discussion. 14· ·Mexico and our largest trading partner for Texas. 14· · · · · · ·MR. HEREFORD:· Secretary Pablos, thank you 15· ·And at the end of the day we look forward to working 15· ·again for convening the group.· It's good to be here 16· ·with our advocacy arms in the Hispanic Chamber and 16· ·among so many friends along the border.· Born and 17· ·Free Trade Alliance in San Antonio to continue to 17· ·raised in Laredo.· So, Mayor, thanks for being here, 18· ·have conversations and make sure that San Antonio, 18· ·always representing. 19· ·San Antonio's economy and of course as a component of 19· · · · · · ·I work for the North American Development 20· ·Texas is a part of the conversation at the national 20· ·Bank.· The bank was born in 1994.· We were born out 21· ·and international level.· Thank you for having me. 21· ·of the NAFTA legislation, but we are not part of the 22· · · · · · ·MR. CANAVATI:· Thank you, my dear friend. 22· ·NAFTA agreement because that's a trilateral 23· · · · · · ·Jorge Canavati. 23· ·agreement, and we are a binational agreement between 24· · · · · · ·I wanted to thank Secretary Pablo and 24· ·the U.S. and Mexico. 25· ·Chairman Lewis and of course Ambassador Reyna Torres 25· · · · · · ·Local perspective.· We have 88 employees.

Page 111 Page 113 ·1· ·for convening today's session. ·1· ·We're headquartered here in San Antonio.· Love being ·2· · · · · · ·Trade is the life blood of south Texas. ·2· ·in downtown San Antonio.· Beautiful place to work and ·3· ·Major economists around the world predict that the ·3· ·great place to raise a family.· Bigger picture, we're ·4· ·region between Austin, San Antonio through south down ·4· ·an infrastructure bank.· We finance infrastructure on ·5· ·to Saltillo Monterrey is going to be the strongest ·5· ·both sides of the U.S.-Mexico border.· Our mission is ·6· ·economic region in the next 100 years.· Big part of ·6· ·to enhance the quality of lives of residents that ·7· ·that is industry-related, not just automotive, but ·7· ·live on the U.S.-Mexico border. ·8· ·it's the 300-year history that exists between all of ·8· · · · · · ·To date, in Texas, we've completed 59 ·9· ·the trade corridors that our country represents, ·9· ·projects, financed about $607 million and leveraged 10· ·along with our neighbor in Mexico. 10· ·that, 607 to about $1.7 billion in total 11· · · · · · ·It's an honor to represent the San Antonio 11· ·infrastructure in sole cost.· We talked about an 12· ·Hispanic Chamber of Commerce.· We're America's first 12· ·infrastructure bank.· The President's talking about 13· ·Latino Chamber formed, ironically, in 1929, more than 13· ·his infrastructure plan.· He has an infrastructure 14· ·200 years after this was settled by the Spanish and 14· ·bank here.· He just doesn't know about it yet.· So 15· ·the Mexicans, but it was created to provide an 15· ·we're a best-kept secret, but we're not going to be a 16· ·advocacy group that needed to support one another 16· ·secret soon. 17· ·during tough times.· That was the year of the Great 17· · · · · · ·We've completed 107 projects in the United 18· ·Depression, as many of you know.· It was also a time 18· ·States, 52 in Texas, so almost half of all of our 19· ·when there was great questions (Spanish), prejudice 19· ·projects have been along the Texas border.· Total, 20· ·and racism in this region.· And so I say that to say 20· ·we've done 235 projects, including Mexico.· So we're 21· ·that we are living during some great economic times, 21· ·very proud of your record on both sides of the 22· ·but we're also challenged today.· And some of you 22· ·border.· We've done water, some air quality, 23· ·have already noted that. 23· ·expansion of ports of entry.· And that's really what 24· · · · · · ·I want to commend Secretary Pablos for 24· ·this group is focused on.· It's a sector that we're 25· ·always taking the high road and the big-picture view 25· ·trying to move into. Page 114 Page 116 ·1· · · · · · ·And so as you talk about trade and ·1· · · · · · ·MR. CAVAZOS:· Well, right here it's Sam ·2· ·logistics, one of the biggest problems we have on the ·2· ·Vale.· Jorge, he is directly involved.· I -- he was ·3· ·border is a lack of infrastructure.· They're talking ·3· ·just showing me during the break that we have until ·4· ·about a third bridge at Eagle Pass.· Del Rio's ·4· ·June 12th to get our comments in.· So if there is a ·5· ·studying another bridge.· I know there's expansion in ·5· ·better advocate than Sam Vale for NAFTA, please name ·6· ·Section 559 thanks to Senator Cornyn, Congressman ·6· ·them.· I can't think of one.· I know when we were ·7· ·Cuellar, Congressman Hurd and others. ·7· ·last in Mexico City -- ·8· · · · · · ·Now communities can pay so they don't have ·8· · · · · · ·MR. VALE:· Sounds like a setup. ·9· ·to wait this line for federal funds.· So they can put ·9· · · · · · ·MR. CAVAZOS:· I am a Chamber guy, you know, 10· ·their money down and expand the federal facilities to 10· ·Sam was talking about NAFTA then and saying it's old 11· ·help get more throughput at our international 11· ·news, and it is old news.· It needs to be reopened. 12· ·borders.· And the bank being able to loan on both 12· ·It needs to be renegotiated.· Let me share a little 13· ·sides of the border, we can either help on the U.S. 13· ·bit about the importance of, as you all know, of 14· ·side or on the Mexican side or on both on some of 14· ·NAFTA. 15· ·these projects.· So that's a sector we're very 15· · · · · · ·NAFTA created a great trading block between 16· ·interested and look forward to discussing financing 16· ·three countries:· Canada, U.S. and Mexico.· Only two 17· ·some of your projects as we go through the day. 17· ·of the three countries were developed.· It was the 18· · · · · · ·Thank you again for the opportunity, 18· ·first time there was a trade agreement between 19· ·Secretary, and Jorge, thanks for allowing me to be on 19· ·underdeveloped or a lower developed countries. 20· ·your panel. 20· ·Mexico clearly has expanded.· In fact, two years ago 21· · · · · · ·SECRETARY PABLOS:· I just wanted to welcome 21· ·its gross domestic product was 3.9 percent higher 22· ·the mayor.· Mayor Cantu, welcome.· I didn't realize 22· ·than the U.S.'s.· So we cannot take for granted this 23· ·you had stepped in.· Thank you for being here. I 23· ·tremendous agreement.· It needs to be changed. 24· ·appreciate it. 24· · · · · · ·Much of the original agreement was not 25· · · · · · ·MAYOR CANTU:· And I apologize, 25· ·fully implemented.· I think the cross-border trucking

Page 115 Page 117 ·1· ·Mr. Secretary, we had tried to make -- ·1· ·provisions could have been greatly expanded.· I want ·2· · · · · · ·SECRETARY PABLOS:· No, don't apologize. ·2· ·to commend the Port of San Antonio, its leaders, ·3· · · · · · ·MAYOR CANTU:· -- as part of the discussion ·3· ·Roland Mower and the board, for having the vision to ·4· ·earlier today, but thank you so much for the ·4· ·create this area in San Antonio that is about trade. ·5· ·recognizing welcome. ·5· · · · · · ·The last point I want to make, since NAFTA ·6· · · · · · ·MR. CANAVATI:· So, Jesse, we have a federal ·6· ·was passed in '92, '93, trade has expanded five ·7· ·project practically born of NAFTA, a binational ·7· ·times, trilateral trade between Canada, U.S. and ·8· ·project, federal, binational federal project in ·8· ·Mexico.· And so I've been in Washington about three ·9· ·San Antonio that is supporting border infrastructure, ·9· ·or four times this year -- I mean, this year, and 10· ·especially as it relates to the environment.· And so 10· ·I'll be back next week.· I believe that NAFTA will be 11· ·these are the types of things, as we opened up our 11· ·negotiated at the local level and discussed. 12· ·session, that we need to -- and I know that this is 12· · · · · · ·The folk we've met with in Washington at 13· ·the objective of the committee -- to develop further 13· ·the federal administration, many of them do not have 14· ·on. 14· ·the experience of many of you in this room.· It is 15· · · · · · ·The trade does not stop.· This is growing, 15· ·our time to speak up and speak loudly.· And I love 16· ·in fact, beyond anything that my little mind can 16· ·the dialogue and the planning that is going on and 17· ·comprehend.· And we have the example of Corpus 17· ·thoughts of the Secretary to be nimble and move 18· ·Christi and the energy.· And the energy reforms 18· ·quickly because we don't have a lot of time.· But we 19· ·appropriate.· We talked about that during lunch.· So 19· ·should not assume that we will not be paid attention 20· ·these are the type of efforts that we must continue 20· ·to. 21· ·going forward. 21· · · · · · ·We need to let them know what we want to do 22· · · · · · ·But as a whole, and this is a panel 22· ·here in Texas, because I agree with the Secretary, 23· ·question, who in our community or how is the effort 23· ·they are looking to us for leadership.· They're not 24· ·for the future of NAFTA being laid?· Where are we 24· ·going to admit it.· But we are the tenth largest 25· ·with this?· This is a panel question. 25· ·economy in the world.· And just last year Texas, in Page 118 Page 120 ·1· ·San Antonio, Texas exported more than $95 billion. ·1· ·that TJX is a parent company of Home Goods, ·2· ·We imported 85 billion.· So we have a trade surplus ·2· ·Marshalls, et cetera.· They're a Fortune 89 company. ·3· ·right now.· In just San Antonio alone we exported ·3· ·So it's a significant one for San Antonio with all of ·4· ·$5 billion.· That is more than 42 states export to ·4· ·our partners. ·5· ·Mexico in the U.S.· So we have the power of the ·5· · · · · · ·I would -- I would echo your sentiment. I ·6· ·economy that we are leading every day. ·6· ·think that it's not just San Antonio proper, it's our ·7· · · · · · ·And so, Jorge, to answer your question, ·7· ·broader region, but it's prime for investment in ·8· ·it's in our hands.· We just need to not be shy about ·8· ·those types of facilities primarily because of the ·9· ·what we want and need from a transportation ·9· ·infrastructure that you previously cited. 10· ·standpoint.· Ivan knows that these corridors are all 10· · · · · · ·You mentioned energy, right, which is the 11· ·going through Texas right now between the U.S. and 11· ·common denominator throughout.· And the tie between 12· ·Mexico, and a strong Mexico, as was said earlier, is 12· ·energy and our investment and also in the Mexican 13· ·a strong U.S.· And so I think it's in our hands. 13· ·economy, I think that's key.· But in addition, you 14· · · · · · ·MS. SAUCEDO-HERRERA:· Just to add, I know 14· ·know, we're just -- our advantageous geographic 15· ·that Ramiro threw some bouquets to folks in the 15· ·location is key as well.· So remembering that we're 16· ·audience, but I'd be remiss if I didn't acknowledge 16· ·in the Central Time Zone, which is helpful to folks, 17· ·Ramiro directly and the Hispanic Chamber in 17· ·and of course close proximity to Mexico and other 18· ·San Antonio.· Because we all know that NAFTA's about 18· ·partners down south.· So it makes a lot of sense. 19· ·more than just trade.· It's about economic 19· · · · · · ·If you couple that with of course reliable 20· ·integration.· It's about jobs.· At the EDF we were 20· ·and affordable energy, the available work force, and 21· ·specifically interested in investment and jobs. 21· ·just overall competitive cost of doing business, 22· · · · · · ·We rely on our advocacy partners in the 22· ·San Antonio and the broader region is prime for a 23· ·Hispanic Chamber to really champion that message. 23· ·distribution facility investment.· I think we will 24· ·And we have the oldest or the first Hispanic Chamber 24· ·continue to see an uptick in that specific segment. 25· ·in the United States, but we also have the strongest, 25· · · · · · ·MR. CAVAZOS:· What I just wanted to say,

Page 119 Page 121 ·1· ·in my opinion.· And I agree with Ramiro, with support ·1· ·how glad I am that Chairman Lewis is here. ·2· ·of our partners at the state level and at the federal ·2· ·Transportation is a big part of economic development. ·3· ·level, I do think that we will be heard, but it is ·3· ·I had the honor of serving for seven years as the ·4· ·through his efforts and through his team's efforts. ·4· ·City of San Antonio's director of economic ·5· · · · · · ·MR. CANAVATI:· I mentioned earlier in ·5· ·development when we negotiated the deal for -- to ·6· ·opening remarks and this -- this question's going to ·6· ·bring Toyota to our community. ·7· ·be for his remarks and being for Jenna.· I have been ·7· · · · · · ·A native of Weslaco in the Valley, so I ·8· ·taken aback at the level of distribution facilities ·8· ·definitely had that immigrant mentality that I think ·9· ·in recent years in San Antonio and our immediate ·9· ·serves us well even if you're a seventh generation 10· ·vicinity.· I mean, it's millions upon millions of 10· ·Texan, which some of us are. 11· ·square feet of high class distribution.· And the list 11· · · · · · ·Having the partnership with the 12· ·is long.· Amazon.· It just goes on and on. 12· ·Transportation Commission was critical to bring a 13· · · · · · ·And from my port, San Antonio, they should 13· ·major distribution center, a major manufacturing 14· ·just say, well, this is of course part of the 14· ·facility in Toyota.· We had zero automotive 15· ·infrastructure we have, our road, 35, and so and so 15· ·manufacturing jobs in south Texas.· And by recruiting 16· ·on.· But what I see, Jenna, is that the industry 16· ·Toyota with the help of TxDOT and many partners we 17· ·looking at San Antonio proper as a general 17· ·were able to create a supply chain of 8,000-plus 18· ·distribution for a greater region because of the 18· ·automotive manufacturing jobs with 21 tier one 19· ·level of size, what's happening.· Can you explain all 19· ·suppliers. 20· ·that? 20· · · · · · ·The reason I mentioned TxDOT is that our 21· · · · · · ·MS. SAUCEDO-HERRERA:· I would also add that 21· ·proposal at the time, Governor Perry was in his 22· ·we recently announced a significant distribution 22· ·second or third year of office, and it was a 23· ·facility in TJX.· And I think we made that 23· ·challenging time for San Antonio because at the time 24· ·announcement about two weeks ago.· So it's about 24· ·our mayor had endorsed his opponent, Tony Sanchez, 25· ·$150 million of investment.· And that you all know 25· ·who was runner for governor from Laredo, and our Page 122 Page 124 ·1· ·county judge, Nelson Wolff, endorsed his opponent, ·1· ·legislative process. ·2· ·Tony Sanchez.· Meanwhile, we're negotiating one of 64 ·2· · · · · · ·MR. CANAVATI:· Absolutely.· We're going to ·3· ·sites in the U.S.· Fortunately, San Antonio became ·3· ·talk more about that in our lunch panel.· That has a ·4· ·the site in Texas.· But to Governor Perry's credit ·4· ·very, very critical component to everything. ·5· ·and the State, they put a significant amount of ·5· · · · · · ·And, you know, getting back to how ·6· ·transportation resources to recruit Toyota to town. ·6· ·San Antonio's been developing in the distribution ·7· · · · · · ·In fact our proposal was five times less ·7· ·arena, I have to be honest, we spoke transportation, ·8· ·than our biggest competitor of Arkansas, Tennessee ·8· ·distribution, logistics, we couldn't do what we do ·9· ·and Mississippi.· Our proposal was $138 million.· Our ·9· ·here without the processes that we have with our 10· ·competitive counterproposal was $550 million.· So 10· ·border partners.· I mean, that's it.· You know, this 11· ·it's not just about the money.· It's about the 11· ·is through where our international trade goes, most 12· ·partners.· And I agree with Jenna that I believe that 12· ·of it.· And we would not be able -- on the 13· ·this region needs to think big and work with the 13· ·international side of course, when I mean this issue, 14· ·State.· Because transportation is one of the five key 14· ·not be able to develop or companies would not be 15· ·elements to have good economic development. 15· ·interested in coming here. 16· · · · · · ·You need education, an educated work force, 16· · · · · · ·As Jenna said, we're close to Mexico.· What 17· ·you need water, you need energy, you need leadership. 17· ·does that mean?· We could not do this our -- the 18· ·All of us who represent that elected.· And you need 18· ·processes and our border partners as in the custom 19· ·transportation.· Those are the five basic elements 19· ·house brokers and forwarders and everything else. 20· ·for any community in Texas to have good economic 20· ·So, you know, we spoke earlier about -- the 21· ·development.· And so I appreciate the chairman being 21· ·Ambassador brought out the preclearance Mexico 22· ·here because we cannot move forward without garnering 22· ·customs at the Laredo International Airport.· That is 23· ·more resources for this rapidly growing 23· ·mostly for auto parts, you know, secure -- some of 24· ·infrastructure.· More bridges.· Well, I know Gerry's 24· ·our suppliers here with Toyota are part of that 25· ·troubles there on the I-35 corridor, and that's go 25· ·process for the Mexico assembly plant.· It's all

Page 123 Page 125 ·1· ·for years.· That is where we need to go. ·1· ·linked.· We're all linked. ·2· · · · · · ·MR. HEREFORD:· Yeah.· Jorge, you had ·2· · · · · · ·And that brings me to -- does anyone have a ·3· ·mentioned energy, and I would be remiss if I didn't ·3· ·comment on this, what I just mentioned?· No, we're ·4· ·mention the bank is also trying to move into that ·4· ·good. ·5· ·area so we have natural -- what we're interested in ·5· · · · · · ·This brings me to my final remark before we ·6· ·is entering the natural gas as a market sector for ·6· ·open up to questions and answers.· One of the few ·7· ·us.· Mexican natural gas consumption is supposed to ·7· ·smart things I hear in Washington today has come from ·8· ·double, according to the Texas Railroad Commission, ·8· ·the trade representative, and he said that what he ·9· ·by 2020. ·9· ·envisions -- and he's absolutely correct -- is the 10· · · · · · ·And so what we want to do is help finance 10· ·North American trade block to compete with the world, 11· ·pipelines going into Mexico and then actually 11· ·not to sell products between us.· So that's -- we've 12· ·building the combined cycle power plants so we have 12· ·been doing that for hundreds of years now.· We have 13· ·the end user.· Considering where the Eagle Ford Shale 13· ·to have the trade block, the efficiencies to compete 14· ·is and considering the Permian Basin's geographic 14· ·with other parts of the world. 15· ·locations, it makes perfect sense for us to export 15· · · · · · ·This is especially important in advanced 16· ·natural gas south as opposed to flaring it, burning 16· ·manufacturing.· I've been one of the advocates for 17· ·it off.· And so now we have you cleaner product being 17· ·Mexico and San Antonio, in this case, to partner on 18· ·used in Mexico so it helps our air quality. 18· ·aerospace.· Mexico's a very advanced country in 19· · · · · · ·So that's also something that Senator 19· ·aerospace.· And not just sell parts between 20· ·Cornyn and Congressman Hurd and Congressman Cuellar 20· ·ourselves.· That's -- anyone can do that.· But to 21· ·are helping us navigate through.· And, you know, we 21· ·partner together and compete in worldwide contracts. 22· ·were born out of the first NAFTA agreement, the 22· ·And this is the way -- this is where we're going, and 23· ·legislation, not the actual agreement, so we're 23· ·this is how we have to think for the future.· It's 24· ·hoping that there will be an opportunity to expand 24· ·one block, it's one group of companies and one group 25· ·some of our sectors as we move through the 25· ·of people. Page 126 Page 128 ·1· · · · · · ·Any final remarks on this, folks? ·1· ·working along the border, San Antonio, Dallas, ·2· · · · · · ·MS. SAUCEDO-HERRERA:· Well, I would add ·2· ·Houston, they're strategically headquartered ·3· ·that aerospace is one industry where we can further ·3· ·locations.· This is where the headquarters region, ·4· ·collaborate.· But as you're very familiar, energy is ·4· ·the headquarters are located.· And so it's easy to be ·5· ·one as well, especially because of the model that ·5· ·pro job for economic development whenever you're ·6· ·we've deployed with our new energy economy in ·6· ·getting the headquarter-type jobs. ·7· ·San Antonio.· So I know that the conversations have ·7· · · · · · ·But a lot of actual manufacturing is taking ·8· ·been had.· We've had several visits down to Mexico. ·8· ·place along the border, which comes with growing ·9· ·I know Alejandra is on your next panel.· Has ·9· ·pains.· And you all have decades of experience 10· ·participated in some of those visits. 10· ·putting together public/private partnerships, which 11· · · · · · ·We're also having conversations 11· ·is obviously a buzzword, but they're not very easy to 12· ·specifically with our partners in (Spanish) about 12· ·put together when we're doing them out in the field 13· ·aerospace collaboration because they have implemented 13· ·and whenever you have impacts to air quality, you 14· ·an infrastructure extremely well.· I think those 14· ·have impacts to traffic and congestion and lack of 15· ·conversations need to continue.· But we should also 15· ·housing and schools. 16· ·step back and think about how that collaboration 16· · · · · · ·What advise can you give those of us in the 17· ·could really impact us across different industries, 17· ·private sector and in the public sector here on how 18· ·not just aerospace, or even energy, for that matter. 18· ·to work together to make these work and how you can 19· · · · · · ·How do we engage more broadly in 19· ·deal with growing pain in the industry, which are 20· ·manufacturing, or what is that supply chain, what 20· ·just exactly that, growing pains that hopefully we 21· ·does that ecosystem look like, and there should be a 21· ·will grow into.· So I'd like your advice because you 22· ·concerted effort, in my opinion, to review just that. 22· ·all have decades of experience in that. 23· · · · · · ·MR. HEREFORD:· Not really to your point, to 23· · · · · · ·And Jesse has great hair, every meeting I 24· ·of Ramiro's points, Ramiro talked about the five keys 24· ·point that out. 25· ·to a community success.· And at the bank, you know, 25· · · · · · ·MR. HEREFORD:· And I think the decades of

Page 127 Page 129 ·1· ·we help provide clean drinking water and wastewater ·1· ·experience was directed to Ramiro. ·2· ·treatment along the border.· We have done some minor ·2· · · · · · ·MR. CAVAZOS:· Well, the guy with bad hair ·3· ·transportation projects.· We're looking at ports of ·3· ·will talk first.· I am having a bad hair life, not a ·4· ·entry.· Now we're trying to move into energy.· So of ·4· ·bad hair day. ·5· ·the five that Ramiro mentioned, we're trying to play ·5· · · · · · ·I wanted to talk about how excited I am ·6· ·in three of those areas. ·6· ·about the bill that was passed by Congressman Cuellar ·7· · · · · · ·And I think it's important to commend the ·7· ·and Senator Cornyn, a true bipartisan bill, and it's ·8· ·leadership.· Our previous managing director, Geronimo ·8· ·the Cross-Border Trade Enhancement Act.· It passed in ·9· ·Gutierrez, who is now the Mexican Ambassador to the ·9· ·December of 2016.· And it is targeting border 10· ·United States, and our current managing director, 10· ·communities to supplement resources that the federal 11· ·Alex Hinojosa, for the leadership that they provided 11· ·government may have for customs and brokering and 12· ·the bank to move us into these sector that are not 12· ·transportation at the border. 13· ·only important for the Texas economy, but for the 13· · · · · · ·During peak periods, he learned that 14· ·U.S. and Mexican economies as a whole. 14· ·sometimes there may only be three lanes open, and so 15· · · · · · ·MR. CANAVATI:· Thank you very much.· We're 15· ·what it allows is local communities and working with 16· ·open for questions and answers.· Any questions for 16· ·the private sector to supplement federal resources 17· ·me?· Our friend from the Kansas City Railroad, 17· ·that in many instances because of budgetary reasons 18· ·please. 18· ·are limited.· It is a bill that really hasn't 19· · · · · · ·MR. ?? (Kansas City):· Art is much better 19· ·received, in my opinion, the amount of recognition 20· ·looking and more experienced. 20· ·that it is. 21· · · · · · ·MR. CANAVATI:· I just had to do it. 21· · · · · · ·It's, in my opinion, very innovative, is 22· · · · · · ·MR. ??:· No, all of you are obviously 22· ·you have a Democrat and a Republican introducing this 23· ·really knowledgeable, and I appreciate all of you and 23· ·legislation.· It got passed.· But it's aimed at 24· ·really respect the work that you have done. 24· ·allowing border communities to have their manifest 25· · · · · · ·A question that I often get in my role 25· ·destiny, their ability to take whatever existing Page 130 Page 132 ·1· ·federal resources might be at a bridge and enhancing ·1· ·international port of entry.· So he already has a ·2· ·them with local dollars, either public or private. I ·2· ·public/private partnership. ·3· ·think that is something that is critical, for all of ·3· · · · · · ·MR. VALE:· It's a little one. ·4· ·us to look at and maybe look to leverage that ·4· · · · · · ·MR. HEREFORD:· Yeah, it's a little one. ·5· ·resource.· So that's one point to your question. ·5· ·But it's your 1 percent, right? ·6· · · · · · ·My second point is, I love data, and I love ·6· · · · · · ·But so 560 passed.· Then there's five pilot ·7· ·facts.· I'm like many of you, it tells a story.· And, ·7· ·programs you apply for throughout the entire country. ·8· ·for example, the Rio Grande Valley, to use it as a -- ·8· ·Texas gets four and the border gets two of the five. ·9· ·there are 1.5 million people living in the Valley, ·9· ·And Paul from El Paso, El Paso got the other one. 10· ·often overlooked, somewhat separated by the rest of, 10· · · · · · ·So Sam put together a consortium with 11· ·in our opinion, those of us that grew up there, from 11· ·Cameron County, City of McAllen, himself, City of 12· ·the rest of civilization by ranches and farms before 12· ·Pharr and Laredo to pay overtime hours, and each 13· ·you get to the larger urban populations of Corpus and 13· ·community has their own pot of money to pay overtime 14· ·San Antonio, Houston and Laredo. 14· ·hours, and El Paso did the same thing.· So Ramiro's 15· · · · · · ·But the reality is that there are 15· ·point, the innovation behind this and is the 16· ·1.5 million people living there.· It's booming 16· ·leadership on the border, I mean, to get two of the 17· ·economy, like all border economies.· The Valley has 17· ·five projects nationally is incredible. 18· ·more people than the state of Hawaii has.· It has 18· · · · · · ·For Texas to get four of the five, really 19· ·more people than the state of Montana has.· It has 19· ·shows that Texans are willing to put their money 20· ·more people than the state of Rhode Island and the 20· ·where their mouth is and ensure that we get -- if we 21· ·state of Alaska.· Think about the federal and state 21· ·have the money put toward the federal government 22· ·resources that are leverage for a population that is 22· ·where it's a -- clearly a federal responsibility, but 23· ·smaller than the Rio Grande Valley, and yet this is 23· ·they don't have the budget during these times. 24· ·where 40 percent, up to Laredo, 60 percent, of the 24· · · · · · ·SECRETARY PABLOS:· We have five minutes. 25· ·U.S.-Mexico commerce is flowing. 25· · · · · · ·MS. CANAVATI:· Any other questions?

Page 131 Page 133 ·1· · · · · · ·So what we need to do is make a very strong ·1· · · · · · ·MR. SCHWEBEL:· I have just an observation, ·2· ·economic impact and business case for why we need ·2· ·I guess.· I've been a strong supporter of ·3· ·more federal and state resources and really speak ·3· ·public/private partnerships.· My only concern with ·4· ·very clearly and eloquently about what the economic ·4· ·559 program or 560 program is that we don't send a ·5· ·return will be on that, the ROI, Ivan.· And so that's ·5· ·message, you know, to Washington that, hey, you know, ·6· ·where something like you with Union Pacific, someone ·6· ·don't send us anymore money, we can pay for it ·7· ·that understands the border has that clear ·7· ·ourselves.· And therefore, you're going to put border ·8· ·perspective, and you need that perspective. ·8· ·ports against each other, and, you know, saying those ·9· · · · · · ·Many of the folks we bring from Washington ·9· ·that can afford it and those that cannot.· So I 10· ·to south Texas have never been to the border.· They 10· ·think -- I know that we get -- you know, we get 11· ·have no concept.· And we cannot assume that they know 11· ·enamored with the euphoria that we're able to get 12· ·what we know here.· And so I appreciate all of the 12· ·through the bureaucracy of Washington. 13· ·border leadership that's here and the perspective of 13· · · · · · ·But I want to raise a concern to my friends 14· ·our Secretary, who obviously understands the border. 14· ·to the committee that we say that we're willing to 15· ·We have a story to tell.· We need to tell it better, 15· ·donate and to give all this stuff away, well, maybe 16· ·and we need to use legislation also to leverage more 16· ·not everybody can do it, and that puts some in a 17· ·resources.· That would be my answer to your question. 17· ·noncompetitive basis.· So I don't like to, you know, 18· · · · · · ·MR. HEREFORD:· And just to dovetail off of 18· ·to brag too much about it, quite frankly, guys, 19· ·Ramiro.· So Section 560, Cross-Border Trade 19· ·because at the end of the day we're not getting our 20· ·Enhancement, started as 560, and really started 20· ·share of what we should be getting now, not only in 21· ·because of the City of McAllen.· McAllen had a 21· ·Texas, but throughout the southern border entirely. 22· ·presidential permit, federal government didn't have 22· · · · · · ·So I would hate to see that the feds say, 23· ·money so they wouldn't do that process.· So they went 23· ·it's okay, let those ports pay for it themselves 24· ·through that process -- actually, the pioneer in this 24· ·because they need it right now, therefore, I'll 25· ·room is actually Sam Vale.· So Sam owns a private 25· ·appropriate it to something else.· We have never, Page 134 Page 136 ·1· ·should never stop, you know, demanding, you know, ·1· ·of jobs for people, we need to understand that it's ·2· ·more funding for our ports of entry in the southern ·2· ·never an end game.· We've always testified.· We've ·3· ·border because we don't get our share, period. ·3· ·told them there's no such thing as a free ride.· When ·4· · · · · · ·And I think every mayor, you know, that's ·4· ·we invest in the federal government, we expect ·5· ·here would agree with me.· So let's -- let's make ·5· ·something back. ·6· ·sure that we don't forget the message that's got to ·6· · · · · · ·Now there's people starting to discuss, do ·7· ·be there that we don't get our fair share, we're ·7· ·we want to reimplement the merchandise processing fee ·8· ·willing to step up to the plate and participate, but ·8· ·and have that funds come to the ports of entry. ·9· ·quite frankly, we should get reimbursed.· What do you ·9· ·There's an indirect kind of game on.· Now, these 10· ·think? 10· ·are -- that's dangerous grounds.· We fought for years 11· · · · · · ·MAYOR CANTU:· And I can echo the sentiment. 11· ·to get rid of the merchandise processing fee.· But 12· ·It's Mayor Cantu from the City of Eagle Pass.· You 12· ·there are people right now -- I've gotten some 13· ·know, we just recently had to invest into some 13· ·e-mails today -- maybe we can take that back in but 14· ·partnerships with the port of entry and the 14· ·only to fund the ports of entry. 15· ·investments that we've seen, but that becomes a 15· · · · · · ·Well, that's it.· It's going to come from 16· ·question of the city council, and it's a strong 16· ·one kind of a tax or another, but there's no money to 17· ·concern that we have that, yes, we can do our part, 17· ·give to anybody that didn't come from some federal 18· ·but the federal government also needs to understand 18· ·appropriation of some sort.· So we have to look at 19· ·that just as our communities are benefiting, the rest 19· ·all of this in a more comprehensive way because it's 20· ·of the United States is also benefiting from these 20· ·easy to say that's a federal responsibility.· Who is 21· ·importations and exportations of goods. 21· ·the federal?· It's the taxpayer.· And there's only so 22· · · · · · ·And that is the key here, that we as a 22· ·much you're going to get out of that grape. 23· ·collective voice of leadership here, need to focus 23· · · · · · ·SECRETARY PABLOS:· Jorge, I'd like to leave 24· ·on, on those efforts and keeping that message.· Yes, 24· ·you with the last word.· We're up on time.· So, 25· ·the 599 and 560 programs are great.· They do help at 25· ·please.

Page 135 Page 137 ·1· ·an immediate need.· However, we do need to continue ·1· · · · · · ·MR. CANAVATI:· We just continue, we just ·2· ·advocating for additional funding regardless. ·2· ·continue working towards all these goals because ·3· · · · · · ·MR. VALE:· I agree.· Just the impact alone ·3· ·trade is going to continue growing.· We are here and ·4· ·on the trucks flying by 35, you know, what it has on ·4· ·we're not going anywhere.· And then we need to think ·5· ·the infrastructure, San Antonio environment, I mean, ·5· ·about these regional blocks that we just mentioned. ·6· ·you know, safety, I mean, there's issues, and that's ·6· · · · · · ·And in closing, I would very much ·7· ·not even freight that's staying here.· You're ·7· ·appreciate a hand for our panel. ·8· ·absolutely correct, Sam.· I'm sorry. ·8· · · · · · ·SECRETARY PABLOS:· Yes, thank you. ·9· · · · · · ·MR. VALE:· Sam Vale here.· There is a ·9· · · · · · ·Moving on to our next panel, so those in 10· ·component that you need to understand.· When you go 10· ·the next panel, please make your way up to the front 11· ·to Washington, you've got to tell them you've got 11· ·table, please. 12· ·skin in the game.· They don't want to hear it if 12· · · · · · ·Thank you.· I'd like to introduce Gerry 13· ·they're Missouri or they're from Wisconsin that 13· ·Schwebel and ask Gerry to introduce our panel. 14· ·you're just asking for something.· But when you show 14· · · · · · ·Thank you, Gerry. 15· ·that you're willing to belly up to the bar, as we do 15· · · · · · ·MR. SCHWEBEL:· Thank you, Mr. Secretary. 16· ·in Texas and pay for our own beer, then it's good. 16· · · · · · ·Good morning, everyone.· Our next panel 17· ·Now, it's not the end game.· It's a temporary stopgap 17· ·addressees continuation of the first panel, and we're 18· ·with a purpose of getting past a messed up federal 18· ·going to focus now with our speakers, which also 19· ·budget.· That's what we're doing. 19· ·their resumes are included in the program, but I'll 20· · · · · · ·The whole problem here is that the federal 20· ·introduce them in no particular order. 21· ·budget is so messed up, so screwed up in the way it 21· · · · · · ·As we address the topic of now, our trade 22· ·allocates funds, the amount of money that goes places 22· ·gateways, our seaports, our land ports and our inland 23· ·that nobody has any control over, and then where 23· ·land ports -- our inland ports as well.· And we 24· ·we're generating jobs with what we are doing, because 24· ·haven't seen today, it might be in a year in Port 25· ·even the smallest port on the border generates a lot 25· ·San Antonio, the beauty of watching double stacking Page 138 Page 140 ·1· ·railroad cars here outside and all the trucks that ·1· ·number one land port of the entire Americas.· We do ·2· ·flow through this part of the world, that's we ·2· ·over $200 billion worth of trade.· And I see some of ·3· ·address those issues in our particular ports for us, ·3· ·the railroad partners that we have here.· KCS and UP. ·4· ·those of us that live and work in Texas every day. ·4· ·And they contribute tremendously. ·5· · · · · · ·Today, thank you not only to our Secretary ·5· · · · · · ·We experienced a storm, as you all know, 10 ·6· ·of State for his leadership, but also for Chairman ·6· ·days ago, Sunday the 21st, but that showed that we ·7· ·Lewis.· In February, when the Texas Transportation ·7· ·had plans in effect.· We coalesced as a community: ·8· ·Forum was held, I was excited being there to hear ·8· ·CBP, SOD, the state, the local people, the -- ·9· ·from Chairman Lewis talk about the importance of ·9· ·Chairman Lewis is not with us, but I thanked him 10· ·transportation and the importance of the role of the 10· ·publicly, the fact that we opened up, we freed the 11· ·border for Texas transportation network.· So this 11· ·toll mechanism of the Columbia Road.· I mean, that 12· ·continuation of the State of Texas to our governor 12· ·was a tremendous help.· We had over 12,000 trucks, so 13· ·and the leadership of our Secretary of State and our 13· ·to speak, kind of blockading our thoroughfares there 14· ·Texas Transportation Commission, I think it's 14· ·around the World Trade Bridge. 15· ·indicative that we're talking about the topics that 15· · · · · · ·Luckily, we have a second bridge, which is 16· ·are more relevant in the creation of jobs and 16· ·the Columbia Bridge, which took the overflow, 17· ·economic vitality of Texas. 17· ·frankly, and that bridge is underutilized.· But the 18· · · · · · ·So today, our panel we have today includes 18· ·main things is we have plans in effect, we put them 19· ·the Honorable Mayor Pete Saenz to my left.· And I'm 19· ·into effect and it worked. 20· ·glad to see that every panel has some Laredo 20· · · · · · ·And I'll describe other features of our 21· ·connection, you know, throughout the course of the 21· ·port as we continue this dialogue.· Thank you. 22· ·day, if you're not from Laredo or you're not born in 22· · · · · · ·MR. STRAWBRIDGE:· Good morning.· Thank you 23· ·Laredo or you're not the mayor of Laredo and you do 23· ·for having me here.· I want to thank chairman -- or 24· ·business in Laredo, you got there as fast as 24· ·Secretary Pablos.· I want to thank Chairman Lewis 25· ·everybody could to get to Laredo. 25· ·sharing the stage here with Mayor Saenz from Laredo.

Page 139 Page 141 ·1· · · · · · ·So our mayor is here.· He'll be addressing ·1· · · · · · ·I'm with Port of Corpus Christi.· My name's ·2· ·his perspective of the border.· We have Rolando Mower ·2· ·Sean Strawbridge.· I'm new to Texas.· I've only been ·3· ·from the Port of San Antonio here as well.· And also ·3· ·here about two years.· I came from California where I ·4· ·Sean Strawbridge as we hear the seaport perspective ·4· ·was head of port operations and chief commercial ·5· ·in Corpus Christi being such a key player, not only ·5· ·officer for the Port of Long Beach, which is the ·6· ·in the south Texas region, but for all of these three ·6· ·second largest port in the country by container ·7· ·main ports have such national significance to the ·7· ·volume.· And I'm happy to report that the Port of ·8· ·dialogue and the debate of what's going on, ·8· ·Corpus Christi, we do absolutely zero containers. ·9· ·especially today. ·9· · · · · · ·We are an energy port.· The energy 10· · · · · · ·So my remarks will be limited.· I'll let 10· ·renaissance that this nation's experiencing is 11· ·each one give some introductory remarks.· Then we'll 11· ·essentially our story.· 10 years ago we were a sleepy 12· ·open up to dialogue and discussion on some of the 12· ·little port with a lot of land and no money.· Now 13· ·topics that will be addressed. 13· ·we're in a vastly differently situation.· Our assets 14· · · · · · ·Mayor. 14· ·have nearly quadrupled.· Our revenues have tripled. 15· · · · · · ·MAYOR SAENZ:· Secretary Pablos, thank you 15· · · · · · ·And currently in the Coastal Bend Region of 16· ·so much for the invitation and of course your 16· ·Corpus Christi, coastal bay region, we're 17· ·impetus.· It's easy to recognize the quality of 17· ·experiencing $50 billion of private industrial 18· ·information that you bring forth.· I really hadn't 18· ·investment in and around the Port of Corpus Christi. 19· ·had a chance to actually visit with you, but based on 19· ·That is probably the largest single concentration of 20· ·the questions and the insights that you bring, I 20· ·industrial investment that's going on in this 21· ·think we're truly served as a committee and by having 21· ·country.· And what's driving that? 22· ·you as our Secretary of State.· Thank you very much. 22· · · · · · ·Well, of course it's the energy renaissance 23· · · · · · ·You know, Laredo, as you know, it's not 23· ·that is driving a good portion of that because of the 24· ·because I mention this, me being the mayor, but by 24· ·cheap state of supply of energy.· But it's also a 25· ·the mere metrics of our port.· You know, we're the 25· ·concentration, it's near a deep-water port, the Port Page 142 Page 144 ·1· ·of Corpus Christi, which is the second largest port ·1· ·50 percent of their total energy consumption is ·2· ·in the state of Texas and the fourth largest port in ·2· ·imported, and we are the largest refining center near ·3· ·the country by pure tonnage. ·3· ·the Mexican border.· And so it's an extremely ·4· · · · · · ·But in addition to that, the other four ·4· ·important market for us, and that's why I'm pleased ·5· ·things that we have going for us are we have a lot of ·5· ·here today to share in these ideas and share our ·6· ·available land in and around the port for industrial ·6· ·narrative with this group. ·7· ·development.· As I said, we have the deep water port. ·7· · · · · · ·MR. MOWER:· Good morning, Secretary. ·8· ·We have a cheap state of supply of energy.· We have a ·8· ·Welcome to Port San Antonio.· My name is Roland ·9· ·very well-trained professional and tradecraft ·9· ·Mower.· I'm the chief executive officer for Port 10· ·workforce.· And we also have a lot of connectivity. 10· ·San Antonio. 11· · · · · · ·So ports are essentially just a lay point. 11· · · · · · ·I actually this morning jotted down some 12· ·You've got to have good road connectivity.· You've 12· ·notes, what you'll see in black on these, and after I 13· ·got to have good rail connectivity.· And it's good to 13· ·got here and listened to the dialogue this morning, I 14· ·see all three of the western class ones here because 14· ·rewrote some notes based on discussion you guys have 15· ·all three of them serve at the Port of Corpus 15· ·been having.· I know very little about trade.· I know 16· ·Christi. 16· ·a lot about economic development, about an economic 17· · · · · · ·We also have something that I haven't yet 17· ·recovery.· I'm an economic developer with 30 years' 18· ·heard here, but it's very important for us to drive 18· ·experience.· I've worked in three states and six 19· ·that industry development, and that is the area in 19· ·communities. 20· ·the Coastal Bend Community is still what's in air 20· · · · · · ·I came to Port San Antonio about three 21· ·attainment status.· That means that the quality of 21· ·years ago.· I was on a board who was working our 22· ·our air is so good that if you are doing industry 22· ·organization from a real estate management 23· ·investments and you are having some emissions, like, 23· ·development company into an economic development 24· ·you don't have to buy credits to offset those 24· ·organization, one focused on job creation.· That's my 25· ·emissions.· That is extremely valuable for industry. 25· ·mission.· We adopted a strategic framework to add

Page 143 Page 145 ·1· · · · · · ·And therefore, we as a Port Authority are ·1· ·5,000 jobs at Port San Antonio by the year 2020. ·2· ·going to attempt to protect that air quality as best ·2· ·We're well on our way. ·3· ·we can to continue to stimulate that investment. ·3· · · · · · ·I am predisposed to support and deliver ·4· ·Which is why when we're looking for companies to ·4· ·regional economic development.· Really important, ·5· ·invest in our area and what we essentially engage in ·5· ·I've been an advocate for binational economic ·6· ·public and private partnerships as our business model ·6· ·development, and as well as a participant with our ·7· ·every day, we look for companies that have good track ·7· ·START program that Jorge mentioned earlier, which is ·8· ·records in environmental sustainability and ·8· ·the coordinated -- is a coordinated marketing effort ·9· ·stewardship, as well as safety, as well as good ·9· ·between the Port of Corpus Christi and Port 10· ·corporate citizenry. 10· ·San Antonio and the Laredo Chamber, where we have 11· · · · · · ·And that's why you're seeing companies like 11· ·tried to not only market south Texas, but recently we 12· ·Exxon, who just announced a $10 billion ethylene 12· ·took a delegation to Monterrey to look at how can 13· ·cracker last month in the area, along with companies 13· ·south Texas and north Mexico work together in 14· ·like Cheniere and many others.· Foreign direct 14· ·marketing the region for all of our best interests or 15· ·investment as well.· About $10 billion of that fifty 15· ·for all of our benefit. 16· ·is FDI. 16· · · · · · ·A little bit about Port San Antonio.· We 17· · · · · · ·These are all the things that's really 17· ·are redeveloping former Kelly Air Force base, about 18· ·driving our business. 18· ·1900 acres, 10 million square feet.· Our historic 19· · · · · · ·But our number one market is of course 19· ·mission for San Antonio was maintenance repair and 20· ·Mexico.· And what's driving that is Mexico's economy 20· ·overhaul of military aircraft. 21· ·has grown 90 percent since 1990.· Its energy 21· · · · · · ·Today we're working to expand our aerospace 22· ·consumption demand has grown 70 percent in that same 22· ·offerings.· We want to move from the military side to 23· ·period of time.· And their net short on our 23· ·the commercial side.· We want to advance nose-to-tail 24· ·transportation fuels.· They're also net short on 24· ·capability at the Port so aircraft owners can come 25· ·energy for driving their power sector.· So about over 25· ·in, not only have their air frame or have completion Page 146 Page 148 ·1· ·work done or engine work done, but they can have ·1· ·you, panel members. ·2· ·avionics, et cetera. ·2· · · · · · ·The focus of this panel will be to draw ·3· · · · · · ·In addition to aerospace or historic ·3· ·attention to the facilitation of trade and how we ·4· ·missions, we've seen significant growth in ·4· ·can -- you know, to the creation of economic ·5· ·cybersecurity, leveraging the assets of the 24th and ·5· ·activity, job creations, as well as how to remain ·6· ·25th Air Force here in San Antonio.· We've seen a ·6· ·competitive.· So today this panel will address those ·7· ·number of defense contractors move in to have ·7· ·key points, understanding clearly that if we ·8· ·adjacency to those -- to the 24th and 25th. ·8· ·concentrate on the ability to move goods quickly in ·9· · · · · · ·We're also a home for advanced ·9· ·the most cost-effective manner, you know, it will 10· ·manufacturing.· We have a recent foreign direct 10· ·continue to create business of jobs, enhance the 11· ·investment from India, which is -- should be up and 11· ·quality of life for our community.· So that's what 12· ·operating here in about 30 days.· They're an additive 12· ·we've been talking about this morning. 13· ·manufacturing, meaning metal injection molding. 13· · · · · · ·So I'd like to ask the panel members to -- 14· · · · · · ·We're also a logistics platform.· We have a 14· ·they can focus on one, maybe two key areas of what 15· ·400-acre rail yard.· We have access to the U.S. 15· ·they would like to see improve in the facilitation of 16· ·Highway System.· We have an 11,550 foot runway.· And 16· ·the movement of goods in order to compete globally, 17· ·we have our own port.· I'm breaking news here today. 17· ·what would they be, what would you like to see in 18· ·Did you guys know that the Port of San Antonio 18· ·your respective ports perhaps be better or could be 19· ·actually has a water capability?· It's 140 miles down 19· ·enhanced in order for us to remain competitive? 20· ·Highway 37.· I let Sean use it on weekends. 20· · · · · · ·MAYOR SAENZ:· Yes, thank you so much for 21· · · · · · ·But anyway, the importance of the proximity 21· ·the question.· Obviously, the program we discussed to 22· ·to the Port of Corpus Christi for us is the product 22· ·some extent in Laredo is, has committed to a FAST 23· ·either outbound or inbound can be from the Port of 23· ·lane through the World Trade Bridge.· That FAST lane 24· ·Corpus Christi to Port San Antonio in two hours with 24· ·will take care of the -- not only the empties, you 25· ·zero stoplights.· Think about that.· Two hours to 25· ·know, the empty trucks coming through our bridge, but

Page 147 Page 149 ·1· ·move product from Corpus Christi to San Antonio. ·1· ·more importantly the certified carriers. ·2· ·10 hours to get it to El Paso.· You can't get product ·2· · · · · · ·The emphasis for us as a port, you know, ·3· ·out of Houston in 10 hours.· So great advantage. ·3· ·obviously time is money, as the gentleman stated, if ·4· · · · · · ·My only comment on trade.· Again, I'm not ·4· ·we can get more companies certified and moving ·5· ·an expert.· But when I talk to experts it seems like ·5· ·through that FAST lane, it's going to cost us 10 ·6· ·the most important things we have to do is to ·6· ·million bucks and that's the City of Laredo.· The ·7· ·increase velocity, the movement of the goods, get ·7· ·City of Laredo owns four bridges.· Of course a rail ·8· ·them up to speed faster.· And anything that this ·8· ·bridge is owned by KCS, but it's arranged that also ·9· ·group can do to improve the velocity or flow of goods ·9· ·to be used by UPS, we know. 10· ·from whether it's the United States to Mexico or 10· · · · · · ·But these bridges is really the lifeline 11· ·Mexico to the United States, that drives cost out of 11· ·for our city.· We haven't increased ad valorem rate 12· ·the equation for the producers, and that means 12· ·for the last 14, 15 years as a result of the bridge 13· ·companies can make more profit. 13· ·revenue that we use to operate. 14· · · · · · ·Profit is not a bad word.· In a market 14· · · · · · ·So anyway, that FAST lane I think would be 15· ·economy you will not get by, you will not get an 15· ·tremendous.· We're in the process of doing that.· But 16· ·investment if it cannot generate a profit.· So 16· ·we're also planning to expand the World Trade by 17· ·investment drives jobs.· Jobs drive payroll.· Payroll 17· ·amending our presidential permit to expand the eight 18· ·buys good and services and churn local economies. 18· ·lanes to 16 lanes and all corresponding lanes within 19· · · · · · ·But if a company cannot generate profits 19· ·the operative area of the World Trade Bridge within 20· ·it's not going to locate regardless of how good the 20· ·the very near future, hopefully in the next two years 21· ·quality of life is.· So profits is good.· We need to 21· ·or so. 22· ·make sure that we're reducing costs in the process. 22· · · · · · ·So for us, you know, infrastructure and of 23· · · · · · ·So that's my whole spiel on trade.· So, 23· ·course working very closely with TxDOT as these 24· ·thank you, Mr. Secretary, I'm glad to be here. 24· ·trucks exit the World Trade Bridge into the I-69 25· · · · · · ·MR. SCHWEBEL:· Thank you, Roland.· Thank 25· ·corridor and also the Mines Road area.· And we're Page 150 Page 152 ·1· ·blessed, as I stated earlier, of our geographic ·1· ·new starts.· And ours is not even considered a new ·2· ·location.· Once you enter Laredo, and obviously I-35 ·2· ·start.· It's considered a continuation.· There were ·3· ·is the main corridor but, you know, there's access to ·3· ·four new starts that funded in this country: ·4· ·the west, and that's from the Ports-to-Plains area. ·4· ·Charleston to 52 feet; Jacksonville, Tampa and ·5· ·You know, we can serve as a west -- a portion of the ·5· ·Boston.· All four of those ports import Chinese-made ·6· ·U.S., of course Canada. ·6· ·goods.· That's their primary business is importing ·7· · · · · · ·And of course to the east, if you take the ·7· ·finished goods made from China that only contribute ·8· ·I-69 corridor, which is in the process of being ·8· ·to our trade deficit. ·9· ·developed now, you can basically access all of the ·9· · · · · · ·Here is a port right here in Texas that's 10· ·Corpus Christi area, Houston and further north to 10· ·been authorized by Congress for a decade that still 11· ·Canada as well.· And so we -- we have the location. 11· ·could not get its funding.· So if we could get -- and 12· ·We have the business.· It's a matter of just making 12· ·somewhere the process breaks down between the Corps 13· ·it more efficient.· Thank you. 13· ·and the Office of Management and Budget, somewhere 14· · · · · · ·MR. STRAWBRIDGE:· Gerry and panel, for us 14· ·the program breaks down there in terms of the 15· ·it's a very simple, what would we like to see 15· ·funding. 16· ·improved, and that is -- our biggest asset is the 16· · · · · · ·If we could streamline that, and we're 17· ·Corpus Christi ship channel.· It's 36 miles of 17· ·obviously in an environment where there's an absence 18· ·essentially a highway for vessels.· And currently it 18· ·of earmarks.· Most infrastructure projects were 19· ·is at 45 feet mean low water or 47 feet mean lower 19· ·funded historically as earmarks.· So in the absence 20· ·low water.· These are technical terms.· But that's 20· ·of earmarks, it's made these projects much more 21· ·essentially what it's at right now.· It was 21· ·difficult to get funding and takes them much longer 22· ·authorized to go to 52 feet in 2007.· Congress 22· ·to get finished. 23· ·authorized that deepening. 23· · · · · · ·So from our standpoint, if we could clear 24· · · · · · ·Here we are 10 years later and we have not 24· ·the mud off our boots, the bureaucratic mud off our 25· ·been able to get our federal partner because it is a 25· ·boots, so to speak, with our federal partner, the

Page 151 Page 153 ·1· ·federal channel so the federal sponsor of the ·1· ·Army Corps of Engineers, to get their funding, we ·2· ·maintenance and capital dredging of that channel is ·2· ·would be able to improve the overall competitiveness ·3· ·the United States Army Corps of Engineers.· They are ·3· ·of the Port of Corpus Christi and the nation, and we ·4· ·the ones that perform the work.· They're the ones ·4· ·are now able to export crude oil.· We're one of the ·5· ·that have to authorize it.· And we as a nonfederal ·5· ·largest ports to export U.S. produced crude oil in ·6· ·sponsor essentially write a check for our portion of ·6· ·the country.· And we exported the first shipment two ·7· ·it. ·7· ·weeks after the export ban was lifted.· There was a ·8· · · · · · ·We have had our portion of that project ·8· ·40-year ban.· It was lifted December of '15.· And we ·9· ·funding in the bank collecting less than a hundred ·9· ·exported the first shipment two weeks later.· And 10· ·basis points for years.· And we have not been able to 10· ·since then we've seen tremendous growth in that area. 11· ·get the Corps to get the appropriation that they need 11· · · · · · ·If we can go deeper we can export more and 12· ·to start the project.· And in the absence of them 12· ·we can ultimately improve the state and national 13· ·getting even one dollar of appropriation, if we 13· ·economy. 14· ·started the project with our own money, we would be 14· · · · · · ·MR. MOWER:· I'm just going to add on to my 15· ·responsible for the entire cost of the project. 15· ·thoughts earlier about velocity and anything we do to 16· · · · · · ·The project, right now the estimated cost 16· ·improve velocity is going to require binational 17· ·is $350 million.· We believe, based on our economic 17· ·solutions that embrace the notion of shared pain and 18· ·projection, that by going deeper we will be able to 18· ·shared gain.· We need to have resources, the 19· ·triple the amount of export volume.· We are a net 19· ·technology, the personnel to make these improvements. 20· ·export port by a factor of two to one.· Two-thirds of 20· · · · · · ·MR. SCHWEBEL:· So here you have with this 21· ·our tonnage is export to other countries, which 21· ·panel, you know, as you alluded to earlier, Roland, a 22· ·essentially are improving the trade, lowering the 22· ·good example of cooperation between the cities of 23· ·trade deficit in this country right now. 23· ·Corpus Christi, San Antonio and Laredo, each with a 24· · · · · · ·And we were very disappointed when we saw 24· ·respective port needs and the features of that is the 25· ·the President's budget last week that there were four 25· ·benefits.· So do you all see that type of synergy Page 154 Page 156 ·1· ·between, you know, ports, the connectivity concept, ·1· · · · · · ·MAYOR SAENZ:· Yes, absolutely.· Yeah, I ·2· ·how important do you see that?· Has it been ·2· ·would echo the same sentiments as well.· Yeah, I ·3· ·productive, fruitful, or is it something we should go ·3· ·consider -- well, we consider Laredo the Port of ·4· ·in a different direction? ·4· ·Corpus Christi, you know, the extension of our land ·5· · · · · · ·MR. MOWER:· I'm going to say, on the ·5· ·port into a water port, and of course San Antonio, ·6· ·investment side, on the economic development side, ·6· ·the distribution centers that you all here too as ·7· ·none of our communities are large enough to attract ·7· ·well.· We're all connected, and we should see ·8· ·global attention by themselves, I think.· If you go ·8· ·ourselves as a region.· Thank you. ·9· ·back to 2007 when Tianjin Pipe group company was ·9· · · · · · ·MR. SCHWEBEL:· A couple of weeks ago I 10· ·looking at investing $1.3 billion in the Coastal 10· ·happened to be in Washington, and I was attending a 11· ·Bend, they looked at Corpus Christi with its 11· ·meeting of the Coalition for America's Gateways and 12· ·population of 300,000, they wondered where they were 12· ·Trade Corridors, a network, and one of the things 13· ·going to get their workforce.· The market was going 13· ·that they focused on was in how our freight networks, 14· ·to be principally Texas, but also exporting to the 14· ·you know, remain congested.· Some of them are 15· ·Caribbean, as well as Canada. 15· ·unreliable.· Some of them may be unsafe.· And that 16· · · · · · ·I think it behooves to work together so 16· ·continues to be a struggle for our country and 17· ·that when you think about travels to China, I think 17· ·costing this country $27 billion annually as a result 18· ·the Secretary was just in Shanghai, Shanghai is about 18· ·of those -- of those issues:· congestion, you know, 19· ·30, 32 million people now.· It's grown quite a bit 19· ·unsafe conditions. 20· ·since I've been there.· When you're going to visit 20· · · · · · ·So what could we do better, you know, down 21· ·them and you roll out that you're a community of 21· ·here in Texas, what could we do better, you know, to 22· ·300,000, I mean, that's an apartment complex.· You're 22· ·alleviate or reduce some of those issues because 23· ·just not relevant to them. 23· ·we're addressing them.· I'm sure in Texas congestion 24· · · · · · ·So I think it behooves us to work together 24· ·is a big issue.· What could the ports do better or, 25· ·in all or our best interests.· Because the old adage 25· ·for that matter, what is a challenge that your ports

Page 155 Page 157 ·1· ·in economic development is, if not here, then near. ·1· ·face in light of what I just said, that that is ·2· ·Okay?· So if they can't be in San Antonio, I want it ·2· ·costing every day business and communities a lot of ·3· ·be in Corpus, Laredo.· If they can't be there, then ·3· ·money? ·4· ·somewhere in South Texas.· If they can't be there, ·4· · · · · · ·MAYOR SAENZ:· I begin, you know, what's the ·5· ·maybe northern Mexico.· I mean, the closer that ·5· ·alleviating factor, money.· We've identified ·6· ·activity occurs to where I'm working, the more the ·6· ·projects.· We know where the bottlenecks are.· We ·7· ·benefit I'm going to get at Port San Antonio. ·7· ·know the choke points in the Laredo area as they go ·8· · · · · · ·MR. STRAWBRIDGE:· Yeah, I couldn't agree ·8· ·west, central and east.· But it's money, and it's ·9· ·more.· Collaboration amongst the entire region, ·9· ·working with TxDOT and of course working with 10· ·there's much more that we have to offer by having us 10· ·Washington.· The bulk of the money comes from 11· ·all at the table and bringing our disparate but 11· ·Washington, as we know, and ends up with the TxDOT 12· ·functional solutions and synergy.· I think that Jorge 12· ·folks and they in turn distribute that. 13· ·mentioned the term "symbiotic."· That's really what 13· · · · · · ·But again, maybe -- and I know there's been 14· ·it is, a symbiotic relationship between our border 14· ·discussions here too as to reformalizing the 15· ·partners, obviously a large population area in 15· ·formulas, frankly, as to what truly drives economic 16· ·San Antonio and course down in Corpus, where we have 16· ·development for the state of Texas and of course our 17· ·all the things that I talked about that are 17· ·nation, and I don't think it's a secret.· It's 18· ·interesting for industry. 18· ·basically trade and trade, I mean, international 19· · · · · · ·Without that and without us all having a 19· ·trade comes from the border area, and the borders are 20· ·seat at the table and having a voice, you can't 20· ·identified as those corridors, those principal viable 21· ·really do things in a vacuum and, therefore -- there 21· ·corridors that, you know, feed the rest the nation 22· ·are many other communities out there that do a great 22· ·and the world, frankly. 23· ·job of attracting additional economic stimulus and 23· · · · · · ·So it's just money and just better planning 24· ·investment because they're working together.· When 24· ·and better management.· But as far as projects, I 25· ·you don't work together, that's where it breaks down. 25· ·mean, we've got projects that, you know, to construct Page 158 Page 160 ·1· ·from now until whenever.· Thank you. ·1· ·about it.· We can move product any way we want to. ·2· · · · · · ·MR. STRAWBRIDGE:· We at the Port of Corpus ·2· ·And if it's information, we can move it through wire. ·3· ·Christi, we don't have much congestion on the land ·3· · · · · · ·So we're probably in a better position than ·4· ·side because we don't handle containers, as I ·4· ·a lot of regions are, or at least a lot of regions in ·5· ·mentioned.· Our product comes in in a closed loop ·5· ·the United States at least, so. ·6· ·system called a pipe, it goes into a tank, it goes ·6· · · · · · ·MR. SCHWEBEL:· I think with that, I'd like ·7· ·into a refinery, it goes back into a tank, it's goes ·7· ·to open up to questions from the members of the ·8· ·into a vessel and it goes out, so.· We do have some ·8· ·committee that are here and anyone who has any ·9· ·congestion on the water side. ·9· ·questions they would like to post to the panel 10· · · · · · ·But I will share with you an experience 10· ·members.· We have about 12 minutes. 11· ·that I had when I was in California.· We had 11· · · · · · ·Mr. Canavati. 12· ·tremendous congestion in California.· And at that 12· · · · · · ·MR. CANAVATI:· I'm not a member of the 13· ·time the ports were only open during daylight hours. 13· ·committee, but I have a remark. 14· ·They did not run gates at night.· And so the -- in an 14· · · · · · ·MR. SCHWEBEL:· Any other questions?· Any 15· ·effort to improve the flow of cargo, to improve air 15· ·other questions from the committee? 16· ·quality and ultimately to improve the capacity of the 16· · · · · · ·MR. CANAVATI:· No, I just want to give some 17· ·ports, they started having night gates. 17· ·real examples of what the panel just discussed, true 18· · · · · · ·And if you were picking up your cargo 18· ·examples that we've been involved with for some time. 19· ·during the day you're actually paying a fee.· And if 19· · · · · · ·You know, we have San Antonio Energy 20· ·you were picking up your cargo at night you didn't 20· ·Company that have their refineries in Corpus right 21· ·pay a fee.· And what happened is 55 percent of the 21· ·now.· And at the same time a lot of the frac sand 22· ·volume shifted to the night.· And therefore, we 22· ·that's coming into East Kelly Railport, brilliantly 23· ·didn't have the same amount of truck congestion on 23· ·managed by German, and I mean that seriously, is 24· ·the 710 and the 405 freeway that we had before that 24· ·going into the wells a little bit further south from 25· ·program.· It's called a pure path program.· And it 25· ·here.· This is going into Corpus.· This is being

Page 159 Page 161 ·1· ·turned out to be wildly successful in not only ·1· ·refined.· And it's going on rail down to Mexico over ·2· ·reducing the amount of traffic and congestion during ·2· ·our land ports, much through Laredo. ·3· ·the day, but it also increased the fluidity at the ·3· · · · · · ·And we have the pipeline option.· We're ·4· ·ports. ·4· ·going to talk more about that during lunch. ·5· · · · · · ·I think the bottom line is having some ·5· · · · · · ·But this is for real.· This is happening ·6· ·creative solutions with the private sector, having ·6· ·now in volumes that are just mind-boggling.· And this ·7· ·the private sector come up, that was a private sector ·7· ·is a lot of the cooperation that Roland was talking ·8· ·solution, by the way, having the private sector come ·8· ·about right now.· It means the San Antonio companies ·9· ·up with some ideas on how to reduce congestion and ·9· ·with refineries in Corpus, these products are now 10· ·improve fluidity.· These are the folks that are on 10· ·being sent down by rail over the border communities 11· ·the frontline that are operating their trucks, their 11· ·and being processed into markets.· Mexico, actually, 12· ·rail every day.· They probably have some ideas that 12· ·is going to -- as I mentioned earlier, probably the 13· ·we as government officials should be listening to and 13· ·largest consumer of south Texas gas, natural gas for 14· ·potentially engaging with private programs as well. 14· ·the industry. 15· · · · · · ·MR. SCHWEBEL:· Roland, you have some 15· · · · · · ·So, you know, these aren't conceptual ideas 16· ·congestion problems, don't you? 16· ·and kumbaya, regional we love each other stuff.· This 17· · · · · · · MR. MOWER:· No, we have no congestion 17· ·is for real stuff.· And it's going to keep growing as 18· ·problems. 18· ·our regional block continues to grow.· You know, and 19· · · · · · ·You know, I'm going to focus my comments 19· ·it's all south Texas.· It's all border.· It's all 20· ·again on the region, the San Antonio, Corpus, Laredo 20· ·Corpus Christi.· San Antonio.· And then it keeps 21· ·region.· If you think about it, and this is not my 21· ·coming.· It keeps coming. 22· ·terminology, but one from a client we had a number of 22· · · · · · ·You know, Sean, can you mention something 23· ·years ago.· South Texas has logistics optionality. 23· ·quickly on the vessel you just had, the petroleum 24· ·The company can move raw product and finished product 24· ·vessel? 25· ·by pipeline, truck, rail, barge, ship and air.· Think 25· · · · · · ·MR. STRAWBRIDGE:· The Port of Corpus Page 162 Page 164 ·1· ·Christi just had what's called a VLCC, a very large ·1· ·driven by consumer demand.· 90 percent of the ·2· ·crew carrier, we're not very creative with the name, ·2· ·container trade is consumer goods.· And so it was ·3· ·things in our industry.· So a VLCC is essentially the ·3· ·really looking at what we called westbound traffic. ·4· ·largest, for the most part, I won't get into too much ·4· · · · · · ·That's originating in Asia, where 65 ·5· ·detail, but the largest mainstream modality vessel ·5· ·percent of our Asian trade is China, going through ·6· ·for trading crude oil on the international markets. ·6· ·the canal and then going to east coast ports like ·7· ·It will hold roughly two million barrels on one ship. ·7· ·Savannah, Charleston, Norfolk and New York. ·8· · · · · · ·When it's fully laden it will drop more ·8· · · · · · ·But there is a -- our story is going back ·9· ·than 65 feet of water.· At the Port of Long Beach, we ·9· ·the other way.· And the primary commodity is 10· ·had 76 feet of water.· We received one of those 10· ·essentially LNG, LPG, butane, a lot of the NGLs that 11· ·vessels every three days either from Saudi Arabia or 11· ·we are seeing coming out of Corpus Christi going back 12· ·Prudhoe Bay in Alaska to support the southern 12· ·to the Asian market.· So it's a great story for us 13· ·California refining process.· All of their crude 13· ·because essentially the way the Panama Canal works, 14· ·stock came in my vessel. 14· ·half the day vessels are going one way, the other 15· · · · · · ·Corpus Christi, we're authorized to 52 15· ·half of the day the vessels are going the other way. 16· ·feet.· We're still not there.· So the companies that 16· ·And if you don't have cargo going the other way, 17· ·are -- that brought that vessel in will bring it in 17· ·they're going to not make that lane available. 18· ·to test their facility, their dock facility.· But 18· · · · · · ·So we're trying to send as much as we can 19· ·they have also engaged us to look at private funding 19· ·through the canal.· And companies like Cheniere, 20· ·to go even deeper because they cannot wait another 20· ·who's building the largest LNG liquefaction plant in 21· ·generation, which is essentially what it appears it 21· ·the country using Corpus Christi to make it up and 22· ·would take if we followed the current process with 22· ·operational.· The Asian market is a big factor in 23· ·the Army Corps of Engineers to go to 65 feet. 23· ·their business plan.· So we're ready for that today 24· · · · · · ·So they actually are interested in putting 24· ·in those markets. 25· ·in private capital, and the Port would be willing to 25· · · · · · ·Crude, those vessels cannot traverse even

Page 163 Page 165 ·1· ·do its potential, its cost share, what our normal ·1· ·the new canal locks.· So they're either going to have ·2· ·cost share would be if our partner were the Corps of ·2· ·to go around the Cape, or they're going to have to ·3· ·Engineers.· This is how important it is to have this ·3· ·terminal on an Atlantic port in Panama, pipeline over ·4· ·type of infrastructure to be competitive on the ·4· ·to the Pacific and then load back up to the Pacific. ·5· ·global market. ·5· ·And all of that is being looked at in the energy ·6· · · · · · ·So that's the first time a vessel that size ·6· ·markets right now. ·7· ·has called at a U.S. Gulf port.· It came in very ·7· · · · · · ·The bottom line is, the energy markets are ·8· ·light, if you saw pictures of it, there's a red line ·8· ·moving much faster than the infrastructure can keep ·9· ·on the hull, that's usually -- all of that should be ·9· ·pace with.· And so we are most definitely behind the 10· ·in the water.· About half of what you saw was red and 10· ·curve at this point. 11· ·the other half is black.· So essentially the vessel 11· · · · · · ·MR. CANAVATI:· Thank you, Gerry. 12· ·was coming in extremely light.· Right now 25 percent 12· · · · · · ·SECRETARY PABLOS:· Sean, if I may, I have a 13· ·of all the vessels that call at the Port of Corpus 13· ·question. 14· ·Christi have a design draft keel of greater than 14· · · · · · ·MR. STRAWBRIDGE:· Yes, sir. 15· ·45 feet, which means 25 percent of the vessels go out 15· · · · · · ·SECRETARY PABLOS:· So first and foremost, 16· ·or come in light.· And that's additional money that 16· ·with respect to the LNG and the Asian market, I will 17· ·our economy is leaving on the table by not having the 17· ·attest that they are in negotiations going on for LNG 18· ·capability to loading deeper. 18· ·trade into China.· The U.S. Embassy in China is way 19· · · · · · ·MR. CANAVATI:· What is the Panama -- the 19· ·ahead on that.· And so there's definitely a market 20· ·new Panama Canal, what is the impact of the new 20· ·for that.· They're also talking about beef, but 21· ·Panama Canal on the Port of Corpus Christi? 21· ·that's another topic for later. 22· · · · · · ·MR. STRAWBRIDGE:· Yeah.· For us it's -- a 22· · · · · · ·My question is, Veracruz, what are you all 23· ·lot of the Panama Canal, deepening and widening, and 23· ·doing to develop relationships with Mexico's largest 24· ·it's a new set of locks, was focused on the container 24· ·port?· I think, you know, not only Guzman, but 25· ·trade because 70 percent of the U.S. economy is 25· ·Veracruz itself seem to be ripe for developing a Page 166 Page 168 ·1· ·bilateral relation there.· What are you all doing for ·1· ·Christi.· The product will move in bonds to ·2· ·that? ·2· ·international markets as well. ·3· · · · · · ·MR. STRAWBRIDGE:· Well, we do spend a lot ·3· · · · · · ·So it's important that when we have those ·4· ·of time, Mr. Secretary, talking to our port partners ·4· ·border relationships we're also looking at them as an ·5· ·in and around the Americas, and we do have ·5· ·extension for us as well.· So at the end of the day, ·6· ·relationships.· Our port -- I think our closest ·6· ·somebody mentioned cargo is like water, find the path ·7· ·Mexican Port is Altamira.· We view them somewhat as a ·7· ·of least resistance, that's absolutely true, and ·8· ·partner, somewhat as a competitor.· I think Tuxpan is ·8· ·that's why we've got to constantly make sure that ·9· ·probably a better fit for us from a relationship, ·9· ·we're looking at all options to keep that fluidity 10· ·particularly given the pipeline from Tuxpan to Mexico 10· ·and ultimately that cost competetiveness. 11· ·City that's being contemplated.· There's a road now, 11· · · · · · ·MR. SCHWEBEL:· That's a very good way to 12· ·highway between Tuxpan and Mexico City.· And it's a 12· ·close this panel.· It doesn't stop at the border, 13· ·natural feed to the -- you know, the central Mexican 13· ·continues on, and I think that the synergies between 14· ·market. 14· ·cities like Corpus, cities like San Antonio, working 15· · · · · · ·But at the end of the day, you have to have 15· ·together with border ports, as well as other cities 16· ·those relationships because, for example, if we're 16· ·of Mexico, I think it's key for the North American 17· ·the pitcher as an export port, we're going to need a 17· ·economy in general. 18· ·catcher at the other end.· And so having those 18· · · · · · ·So please join me in thanking the panel 19· ·relationships with ports like Veracruz and Tuxpan are 19· ·members.· Thank you.· Thank you, Mr. Secretary. 20· ·extremely important to us. 20· · · · · · ·SECRETARY PABLOS:· Thank you all very much. 21· · · · · · ·And inland ports as well.· We want to make 21· · · · · · ·MS. MAYS:· Okay.· So this is kind of 22· ·sure that there's connectivity in places like Toluca, 22· ·logistics for the next panel.· It's going to be a 23· ·dry ports that ultimately serve the automobile 23· ·lunch panel.· So at this point we're going to take a 24· ·market.· We've got big automotive, steel producers 24· ·quick break just to give the committee members a 25· ·now starting up in Corpus, and the Mexican market is 25· ·chance to go grab your lunch.· When you get out of

Page 167 Page 169 ·1· ·their primary focus.· So we want to make sure that ·1· ·the door, staff is going to direct you to the room ·2· ·they've connectivity, working with class one ·2· ·where the box lunch is, you can pick it up and bring ·3· ·railroads as well as the ports on the Mexican east ·3· ·it back here and sit back at your table.· And then we ·4· ·coast. ·4· ·will give the next panel a chance to get up here. ·5· · · · · · ·SECRETARY PABLOS:· Fascinating. ·5· ·And once committee members are back seated, then ·6· · · · · · ·MR. SCHWEBEL:· Any other questions? ·6· ·we'll get started. ·7· · · · · · ·MR. VALLEJO:· I have a comment. ·7· · · · · · ·Please, for the audience, allow the ·8· · · · · · ·MR. SCHWEBEL:· Comments are this afternoon. ·8· ·committee members to go get their lunch and if you ·9· ·The questions are right now. ·9· ·had RSVP'd most likely we do have lunch for you.· But 10· · · · · · ·MR. VALLEJO:· We informed you about 10· ·if you did not RSVP, chances are that we might not. 11· ·Altamira.· They have a groundbreaking ceremony for 11· ·But at least allow the committee members to grab 12· ·the pipeline for gas in -- from Jamira to Mexico 12· ·their lunch and then come back and then we'll get 13· ·City.· They did groundbreaking ceremony last week. 13· ·started with the next panel.· Thank you. 14· ·So they mention that it's going to come to Texas, so. 14· · · · · · ·(A brief recess was taken.) 15· · · · · · ·SECRETARY PABLOS:· We like to hear that. 15· · · · · · ·SECRETARY PABLOS:· Okay.· Folks, we're 16· · · · · · ·MR. VALLEJO:· Right. 16· ·going to go ahead and get started.· At this time 17· · · · · · ·MR. STRAWBRIDGE:· And that's one of the 17· ·we'll begin our Working Lunch Panel:· Private Sector 18· ·things that we try to impress upon our Mexican 18· ·Perspectives on Trade and Transportation.· I'd look 19· ·trading partners particularly in places like 19· ·to -- yeah, so who's going to be -- Jorge.· Okay. 20· ·Tamaulipas.· Look at Corpus Christi as an extension 20· ·Jorge. 21· ·of north Mexico.· Your product moves in bond.· We 21· · · · · · ·MR. CANAVATI:· Why are you not surprised? 22· ·obviously have NAFTA.· The infrastructure doesn't 22· · · · · · ·SECRETARY PABLOS:· Okay.· Mr. Canavati, 23· ·have to stop and the relationships don't have to stop 23· ·please help us introduce our panel. 24· ·at the border.· We are constantly impressing upon 24· · · · · · ·MR. CANAVATI:· Thank you very much. I 25· ·them they can export from Mexico through Corpus 25· ·appreciate it, Mr. Secretary. Page 170 Page 172 ·1· · · · · · ·We regret that Tommy Taylor could not make ·1· · · · · · ·So the suggestion in Mexico, we need to ·2· ·it today.· But to my immediate -- let's start with ·2· ·understand this because this is the way that our ·3· ·ladies first, as always, Alejandra Buena, the CEO of ·3· ·markets really complement.· There's an oversupply of ·4· ·R&I Solutions.· And then Yuri Unno, the director of ·4· ·resources in Texas and in the U.S.· But at the same ·5· ·International Trade Policy for Toyota.· And Mike ·5· ·time, there's enormous need and a huge market that is ·6· ·Howard, CEO of Howard Energy.· And Tom Ramsey, the ·6· ·available in Mexico.· So a lot of our energy is ·7· ·CEO of Centurion Midstream.· We have the privilege of ·7· ·imported.· 51 gasoline in February of 2015.· These ·8· ·these fantastic foursome being with us today as we ·8· ·numbers have been increasing.· 29 percent of the gas, ·9· ·discuss a very important topic, which is the -- their ·9· ·that has increased a lot since then, and 77 percent 10· ·perspective, the users on the challenges of cross 10· ·of it is available.· Right now I think it's around 70 11· ·border, transportation and trade.· Their bios, again, 11· ·percent. 12· ·are on the program. 12· · · · · · ·The problem is that transportation is 13· · · · · · ·I'd like to start off with Alejandra.· She 13· ·saturated.· What we have in infrastructure in Mexico, 14· ·has a presentation she would like to share with us, 14· ·and you can see my terminals are saturated at 15· ·please. 15· ·90 percent.· Pipeline capacity saturated at 70 16· · · · · · ·MS. BUENO:· Thank you so much. 16· ·percent and storage capacity saturated at 80 percent. 17· · · · · · ·Thank you for this invitation, Secretary 17· ·So there's a huge need, a huge opportunity, 18· ·Pablos.· Thank you so much to the Advisory Committee. 18· ·challenge, we need an infrastructure, but a good 19· ·It's a pleasure, an honor to be here today discussing 19· ·opportunity.· So that's a slide from Wood Mackenzie 20· ·and advising on the conversation for these important 20· ·that was presented last week here in San Antonio. 21· ·topics.· And I promise, I just have four slides. I 21· · · · · · ·This is the perspective and this is what is 22· ·promise they won't be boring.· But I would like to 22· ·expected in terms of the market for natural gas. 23· ·start by putting things into context, bringing some 23· ·It's going to grow.· The imports are going to 24· ·data on trade with Mexico in energy.· So if that's 24· ·continue to Mexico.· And this is an interesting chart 25· ·okay I can -- anyone can help me to set up just the 25· ·also.· It tells about the production in Mexico,

Page 171 Page 173 ·1· ·slides? ·1· ·refined products, gasoline and diesel.· That's the ·2· · · · · · ·So this is just -- just four slides, but I ·2· ·lower part of the bars.· And then the second part of ·3· ·would look to put things into context.· I'm glad ·3· ·the bar is other import.· And the last one or the top ·4· ·there are several screens.· But this is an ·4· ·one is U.S. imports to Mexico of refined products. ·5· ·interesting slide.· It is a result of the work of a ·5· ·So that tells a lot about what's going on between the ·6· ·North American energy cooperative effort that is ·6· ·markets.· And obviously I would like to see Texas ·7· ·keeping track of all the international -- I'm sorry, ·7· ·separated in this bar, and it will be huge from that ·8· ·cross border infrastructure between the U.S. and ·8· ·last purple bar. ·9· ·Canada and the U.S. and Mexico. ·9· · · · · · ·This is the last slide.· I promise it will 10· · · · · · ·And as you can see, this is going to be 10· ·be short, but this is interesting.· This is from the 11· ·available for you to see, but it's divided in crude 11· ·Energy Regulatory Commission.· And this tells us the 12· ·oil, natural gas, refined products and electricity. 12· ·cost for logistics and transportation of these 13· ·And can you see -- can you hear me well?· You can see 13· ·refined products.· Everything is happening right now. 14· ·that Mexico is in a very preliminary stage of the 14· ·As I said, Pemex has been using and saturated most of 15· ·collaboration with the U.S.· So this is going to be 15· ·the infrastructure in Mexico.· However, now there are 16· ·available.· I think it's interesting data. 16· ·open seasons by which private participants can -- can 17· · · · · · ·Like there are no cross border 17· ·use those storage facilities and pipelines 18· ·interconnections for crude oil.· And pipelines and 18· ·facilities. 19· ·natural gas, post of the pipelines are for private 19· · · · · · ·We recently heard that Tesoro opened system 20· ·use and also for refined products.· Most of the 20· ·with -- to transport their refined products into 21· ·pipelines are for Pemex use.· However, now there is 21· ·Mexico.· So they are the first private entity that is 22· ·some open season that will allow private entities to 22· ·using infrastructure from permits.· That's important, 23· ·use those -- those -- that infrastructure.· And for 23· ·and that's going to continue.· But it's slow.· And 24· ·electricity there are 11 interconnections, which only 24· ·obviously there are a lot of deficiencies with that 25· ·five are for private use. 25· ·infrastructure that Pemex is putting available to Page 174 Page 176 ·1· ·use. ·1· ·benefits that Toyota has had on cross border ·2· · · · · · ·So the real solution and it's building more ·2· ·logistics and supply chain.· What is your vision? ·3· ·pipelines.· There is a congestion at the border that ·3· ·What has your experience been? ·4· ·it is -- should be an environmental concern because ·4· · · · · · ·MS. UNNO:· Yes, thank you. ·5· ·of all those trucks.· Rail is not a problem, but ·5· · · · · · ·So we have 14 manufacturing plants ·6· ·obviously trucks, moving the product by truck, it's ·6· ·throughout North America, 10 in the U.S., two in ·7· ·very expensive on one hand, and it's causing an ·7· ·Canada, two in Mexico.· And we have just-in-time ·8· ·environmental problem.· So I've been discussing this ·8· ·process.· So any delay at the border could be ·9· ·topic with some of my colleagues, but they are ·9· ·critical to our production because we don't stock our 10· ·considering now to planning some natural gas 10· ·parts.· In a just-in-time system, you have to have 11· ·projects, infrastructure.· And it will be interesting 11· ·timely transportation of all the parts so we get the 12· ·to advance in the conversation in financing also 12· ·parts on time. 13· ·pipelines for moving crude -- sorry, refined products 13· · · · · · ·Great thing about our Texas plant here in 14· ·to Mexico. 14· ·San Antonio, though, we have 22 suppliers on the 15· · · · · · ·So that's it.· I just wanted to put some 15· ·site.· So how can you be more just-in-time system 16· ·information here for everyone available and thanks. 16· ·than that, like it's right there behind you.· They 17· · · · · · ·MR. CANAVATI:· Thank you, Alejandra. 17· ·have -- we have suppliers who can supply on the 18· · · · · · ·So your opinion through the forms, you 18· ·timely manner.· But that's the only plant we have 19· ·know, this infrastructure you just mentioned, it's 19· ·system like that.· I think everybody else throughout 20· ·making -- or would it make it easier for this type of 20· ·North America, we have supplies throughout. 21· ·investment with foreign direct investment and 21· · · · · · ·And, like, we have over 250 suppliers 22· ·domestic investment?· Would it make domestic and 22· ·supplying to our Mexican plants and then around the 23· ·foreign easier for the reforms for the infrastructure 23· ·same amount of suppliers supplying to Canadian 24· ·needed? 24· ·plants.· So cross border, a smooth cross border and 25· · · · · · ·MS. BUENO:· I think that is ideal for here. 25· ·trade facilitation is very important to us.

Page 175 Page 177 ·1· ·I think that that's the whole idea of the energy ·1· · · · · · ·MR. CANAVATI:· Excellent.· So we know, in ·2· ·reform in Mexico, to allow for private participation ·2· ·fact, I've been watching this process for years now, ·3· ·in the entire supply chain.· And that, we always have ·3· ·and I've seen -- even your binational moves and you ·4· ·to remember that that includes electricity as well. ·4· ·mentioned earlier the chassis coming from Monterrey, ·5· ·There's a huge market that is opening, the wholesale ·5· ·how efficient that is, in fact, on the rail to the ·6· ·electricity market in Mexico that represents also ·6· ·plant here.· And that's an efficient machine.· You ·7· ·important opportunities for trade in electricity. ·7· ·know, you mentioned the chassis are already in stop ·8· · · · · · ·But, yes, definitely, I think that the ·8· ·cross.· You know, that's been working well. ·9· ·platform, the logistic platform is already there to ·9· · · · · · ·And I think that tools like what we have in 10· ·utilize.· And obviously a lot of challenges, the 10· ·Laredo, preclearance of Mexico customs in Laredo, 11· ·devil is in the details, and limitation of all these 11· ·Texas, the air freight parts, you know, for your 12· ·regulations is bringing a lot of challenges and 12· ·plants, all this makes things very efficient for you. 13· ·learning from all the players and participants.· But 13· ·So that's good.· I'm glad that, you know, it's -- you 14· ·a lot of opportunities because of the size of the 14· ·haven't seen any major -- major issues in your 15· ·market, the need of the market.· And I'm fascinated 15· ·movements.· That's good.· Thank you very much for 16· ·about how well Texas and Mexico complement each other 16· ·that. 17· ·on these energy markets. 17· · · · · · ·Mr. Howard.· Well, Mike, this is very 18· · · · · · ·And it's also a topic of, in my opinion, of 18· ·interesting because you're going to be or in the 19· ·energy security.· So that's something that we don't 19· ·process of being a major player in supply in Mexico. 20· ·talk a lot, but it will be good for all of us to 20· ·And, you know, I wanted to see what your feeling is, 21· ·visualize ourselves as a region and to collaborate 21· ·what you see, you know, as this process develops for 22· ·more from federal to federal. 22· ·the industries through your infrastructure and 23· · · · · · ·MR. CANAVATI:· Thank you very much. 23· ·developments. 24· · · · · · ·I'd like to ask Yuri a little bit about 24· · · · · · ·MR. HOWARD:· Yeah.· So when we started our 25· ·what -- in her vision, what are the challenges and 25· ·company in 2011, we were supplying already Mexico Page 178 Page 180 ·1· ·through our pipeline over near Eagle Pass.· When the ·1· ·users or marketing companies or -- or people that are ·2· ·brewery was being built over there, we were already ·2· ·distributing refined products in Mexico today access ·3· ·supplying that natural gas across to Mexico.· Just ·3· ·directly to the molecule where we're building the ·4· ·that little crossing, that little bit of gas started ·4· ·highway, we're building the infrastructure, and they ·5· ·a conversation on another pipeline we had that was ·5· ·are driving on the infrastructure with their molecule ·6· ·six miles from the border near Laredo.· We had ·6· ·to deliver.· And what we hope that does is spur more ·7· ·acquired a system in 2012 near Laredo. ·7· ·business. ·8· · · · · · ·And there was a power plant being permitted ·8· · · · · · ·If people have access to cheap energy, it ·9· ·right there at the crossing of Columbia.· There was ·9· ·should bring more Toyotas or more concrete plants and 10· ·an independent power plant because as reform not only 10· ·more -- whether it be on one side of the border or 11· ·helped the importation of hydrocarbons, it also 11· ·the other, it's helping -- it's helping our economy. 12· ·deregulated electricity, to an extent, and private 12· ·I'm from south Texas.· And so I'm very interested in 13· ·power plants are getting built.· And so there was a 13· ·bringing more jobs to the area and more trade that is 14· ·private company coming across the border looking for 14· ·happening easier.· So we're doing our small part for 15· ·molecules of natural gas on the U.S. side.· Since we 15· ·that infrastructure. 16· ·were only six miles from that crossing, it was very 16· · · · · · ·MR. CANAVATI:· Well, it's a big -- I'm very 17· ·natural for us to develop a relationship with that 17· ·proud of what Howard's doing.· I really am, and I 18· ·power plant. 18· ·really appreciate you, especially being a San Antonio 19· · · · · · ·The power plant hasn't been built yet, but 19· ·company.· Thank you very much, sir. 20· ·that relationship led to another relationship that 20· · · · · · ·Tom, what has been your -- what do you feel 21· ·led to this cross border pipeline.· It's the first 21· ·as you -- you know, your Midstream.· You're in 22· ·true cross border pipeline natural gas, Nueva Era is 22· ·logistics.· So what do you see when you've been to 23· ·the name of it, that where it's 50 percent 23· ·Mexico?· And you just talked a moment ago often -- 24· ·Mexican-owned by private Mexican owners, and then our 24· ·what do you see how it's been developed, how it's 25· ·private company, and they own the U.S. side, we own 25· ·been developing?

Page 179 Page 181 ·1· ·the Mexican side, 50-50, so it truly crosses the ·1· · · · · · ·MR. RAMSEY:· Yeah.· So our project is ·2· ·border so it gives access to molecules directly from ·2· ·really focused on bringing crude out of the Permian ·3· ·the wellhead to the industrial user. ·3· ·Basin through a facility we're building in Port of ·4· · · · · · ·That's very unique in the way cross border ·4· ·Brownsville.· Donna's here representing the Port of ·5· ·trade has happened in natural gas up to this ·5· ·Brownsville.· And been working on this project for ·6· ·pipeline.· Most of the deals stop at the border and ·6· ·several years.· And through the project and through ·7· ·then start at the border and most of them are done ·7· ·the relationship we've had with Mexico with Pemex and ·8· ·with payments at the border.· This one crosses the ·8· ·PMI, we've seen a -- kind of a gradual evolution ·9· ·border.· And so what that -- what our vision was is ·9· ·where the market is getting much more open to 10· ·how can we supply Mexican industrialist and 10· ·bringing in foreign product such as from the U.S. in 11· ·residential users with the cheapest molecule in 11· ·a much bigger way, in a much more efficient way. 12· ·Mexico.· It's by giving them direct access to the 12· · · · · · ·So with our project that we're building in 13· ·molecule where we are not a marketing company.· We're 13· ·Brownsville we'll be able to supply Mexico with the 14· ·simply a transportation company.· We've built -- 14· ·cheapest source of refined products that they can buy 15· ·we're building the road, and they're driving on it. 15· ·on the market today.· We're doing that through a 16· ·They own the capacity.· And so we -- we don't own the 16· ·long-term contract with Pemex and PMI. 17· ·capacity.· And so that is a very new concept for 17· · · · · · ·But the evolution, I think, over the last 18· ·people in Mexico. 18· ·couple years is a realization on the Mexican side of 19· · · · · · ·The other project that you may have read 19· ·the border that they don't have the proper 20· ·about is our refined product pipeline that will leave 20· ·infrastructure, and then Alejandra pointed out 21· ·out of around the Port of Corpus Christi and cross 21· ·there's a lot of it needed.· You need private funds 22· ·over in the same area that it was as this pipeline. 22· ·to do it.· That's if markets started to open up. 23· ·It's Two Eagles/Dos Aguilas.· That is kind of 23· ·They are finding more way to get private funds.· But 24· ·revolutionary in the fact that it's the same model 24· ·then it was quicker to build something in the U.S. 25· ·that we use on the Nueva Era.· It's giving private 25· ·just over the border, then buy most of the capacity Page 182 Page 184 ·1· ·of that project into the market that needs it. ·1· ·been drilling for over 100 years here in Texas.· It's ·2· · · · · · ·The Mexico fuels market's growing very ·2· ·the perfect place to come get a very derisk molecule. ·3· ·quickly.· They've just changed standards on quality ·3· ·I think Mexico is figuring out that's probably a lot ·4· ·to make it a much cleaner fuel.· Very similar to the ·4· ·easier way to do it than go try to do it themselves. ·5· ·world standard on diesel and gasoline.· So, you know, ·5· · · · · · ·MS. BUENO:· Yeah, the oil tenders have been ·6· ·our project will be purpose built to supply the ·6· ·slow.· Slow and cautious with unconventionals.· There ·7· ·Mexico market and with the collaboration on the ·7· ·is a lot of resources, shale resources in Mexico and ·8· ·contracts we've been working on, you know, we both ·8· ·natural gas, and obviously that would be very good ·9· ·found the parts we do well.· They distribute fuel ·9· ·for the economy.· But the lack of infrastructure, but 10· ·very well as Pemex because they own the 10· ·I will add something, an element, obviously mineral 11· ·infrastructure.· We'll be able to make it most 11· ·rights is an issue and all the steps that accompany 12· ·efficiently and then work together to, you know, grow 12· ·(Spanish) will have to comply in order to finally 13· ·the business. 13· ·achieve that, that production.· And that problem is 14· · · · · · ·MR. CANAVATI:· Now, what has Mexico devoted 14· ·cultural. 15· ·to infrastructure for drilling?· What do you see, is 15· · · · · · ·I think the Mexican government is quite 16· ·this going to be a fierce competitor?· Is this 16· ·afraid of launching an unconventional tender in 17· ·complementary?· What do you see with that? 17· ·Mexico.· It's highly criticized, and they are working 18· · · · · · ·MR. HOWARD:· You know, we've been following 18· ·on more education for -- for the Mexican population. 19· ·for quite some time, we've -- you know, as a 19· ·That is an issue that can affect in particular the 20· ·gathering company, we not only do cross border 20· ·production of natural gas, and it's going to come 21· ·pipelines, we do we have, you know, a very successful 21· ·slow and probably mixed with other types of tenders. 22· ·relationship with the Port of Brownsville, successful 22· ·So they're going to put probably conventionals and 23· ·relationship with the Port of -- in Port Arthur.· And 23· ·unconventionals.· But they are very cautious about 24· ·we also gather natural gas out in the field from 24· ·launching that tender in Mexico. 25· ·wellheads where they're drilling natural gas. 25· · · · · · ·MS. UNNO:· So infrastructure in Canada --

Page 183 Page 185 ·1· · · · · · ·And in our assessment it is -- we would ·1· ·Mexico is definitely a challenge for us.· You know, ·2· ·have thought that it would have been further along in ·2· ·we will not build a plant unless we have a railway ·3· ·the five years since reform has happened, but it's ·3· ·access or big highway access, which is true in Mexico ·4· ·going to be a lot longer than people are expecting. ·4· ·as well, but in the United States once you have an ·5· ·Drilling in Mexico will take a lot longer than what ·5· ·access to the plant, there's, like, a really great ·6· ·you're reading about, in my opinion, because of the ·6· ·network within the country so we can just, you know, ·7· ·mineral ownerships and the land ownership, that ·7· ·ship it to everywhere within the country.· But for ·8· ·-- the way it's structured.· It's going to be a large ·8· ·our Mexican production -- we actually ship everything ·9· ·hurdle. ·9· ·in the U.S., whatever we make, and then we 10· · · · · · ·One of the things we enjoy in the U.S. is 10· ·redistribute to Mexico from the U.S. because 11· ·private mineral ownership.· And that just -- it's 11· ·domestically within Mexico it's really hard to move 12· ·promoted entrepreneurism of people wanting to get 12· ·the vehicle that we built in our plant in Mexico.· So 13· ·that resource out of the ground and monetize it, 13· ·it's actually easier to bring them back in the U.S. 14· ·where in Mexico it's not that way.· And so it gets 14· ·and then re-export to Mexico. 15· ·hung up in a lot of red tape, nationalism, whatever 15· · · · · · ·MR. CANAVATI:· Cost. 16· ·you want to call it.· And so while it's easy to talk 16· · · · · · ·MS. UNNO:· Yes. 17· ·about the offshore stuff, which you read about a lot 17· · · · · · ·MR. CANAVATI:· Now, with that said, you're 18· ·because it's very big and big guys can come in, but 18· ·a mind reader, let's use the term "foreign trade 19· ·when you get to onshore, which is where we trade, 19· ·zone" or (Spanish).· A foreign trade zone in Mexico, 20· ·it's going to take years. 20· ·you know, could be designed to your specific needs in 21· · · · · · ·And I think what they're finding is 21· ·that regard, you know, plant or part where you -- I 22· ·importing the molecule from somewhere that has a 22· ·don't know, I'm just -- you know, just coming up 23· ·regulatory environment to extract the hydrocarbon 23· ·designing things. 24· ·from the ground and not taking the production risk. 24· · · · · · ·MS. UNNO:· Yeah.· So better network of 25· ·They can just import a cheap molecule, where we've 25· ·infrastructure throughout the country is definitely Page 186 Page 188 ·1· ·helpful.· And one of the problem with the free trade ·1· · · · · · ·MR. CANAVATI:· Absolutely. ·2· ·zone is that it requires a lot of paperwork. ·2· · · · · · ·MR. HOWARD:· And your question being ·3· · · · · · ·MR. CANAVATI:· That's correct. ·3· ·answered more completely regulatorywise. ·4· · · · · · ·MS. UNNO:· So, like, even in the U.S. we're ·4· · · · · · ·MR. CANAVATI:· Tom? ·5· ·not always taking advantage of it, we're just paying ·5· · · · · · ·MR. RAMSEY:· I would say, you know, you're ·6· ·tariffs on these things because it's just so much to ·6· ·going to end up probably with a lot more ·7· ·keep track of all the vehicles coming in and out and ·7· ·intermediation from people who would be willing to ·8· ·parts coming in and out of zone.· And so that's ·8· ·take that risk.· So in they're pricing, for example, ·9· ·another challenge, yeah. ·9· ·if you are buying puts at a certain level, so, you 10· · · · · · ·MR. CANAVATI:· Challenge amongst itself. 10· ·know, when prices fall, you're going to need some of 11· · · · · · ·Okay.· Well, thank you very much. 11· ·the big global, you know, energy traders -- I worked 12· · · · · · ·Let's get a back a little bit.· I'm glad 12· ·for one when I worked for Vitol -- and they would do 13· ·Mr. Howard, Mike, brought out the situation, and I've 13· ·things in very risky countries where you have a very 14· ·had this question for years, and Alejandra always 14· ·similar perspective or maybe they invest in or they 15· ·chuckles when I ask this question, because we know 15· ·partner with somebody and be the hedge provider. 16· ·that mineral rights in Mexico, subsoil are owned by 16· · · · · · ·So you think you're going to need a lot 17· ·the government.· Period.· That's never going to 17· ·more intermediation to take care of the problem 18· ·change. 18· ·you're talking about, to solve the problem Mike's 19· · · · · · ·So how do you -- Mike, how do you -- how do 19· ·talking about. 20· ·you hedge, you go in and contract, you buy the oil, 20· · · · · · ·MR. CANAVATI:· Right, I agree.· Because I 21· ·you know, when does your hedge take effect, when it 21· ·can't see you going short, you don't know own it 22· ·hits the wellhead?· You know, how do you hedge -- you 22· ·until the well hits, you would put the puts in your 23· ·know, it's not yours yet in the ground, but it hits 23· ·cost infrastructure. 24· ·the wellhead, there's time goes by, the market could, 24· · · · · · ·MR. RAMSEY:· Right. 25· ·pardon my expression, could -- I won't say it -- will 25· · · · · · ·MR. CANAVATI:· I mean, that's --

Page 187 Page 189 ·1· ·just fall and what do you do?· You buy goods, you buy ·1· · · · · · ·MR. RAMSEY:· That's exactly right.· I think ·2· ·calls, you know, how do you -- how do you hedge that? ·2· ·back to your previous question too, the other problem ·3· ·It's an open question again. ·3· ·with just the drilling element, the mineral right, I ·4· · · · · · ·MR. HOWARD:· Yeah.· And I am not an expert ·4· ·mean, it's all the infrastructure you need to get ·5· ·on that because we don't buy a lot of products at the ·5· ·that to market.· All the pipelines, all the rail, all ·6· ·wellhead.· We do have a couple marketing companies ·6· ·that infrastructure needs to go with it.· That's ·7· ·that does some acquisitions, but all that is in the ·7· ·another additional cost.· So Mike's point of buying ·8· ·U.S.· And in order to hedge you have to have a ·8· ·it from the country where you have a much more ·9· ·willing counterparty. ·9· ·well-established network and a political and, you 10· · · · · · ·MR. CANAVATI:· Correct. 10· ·know, kind of the structural realm of leadership is a 11· · · · · · ·MR. HOWARD:· And get that proof of 11· ·little easier today.· Not that it's not going to 12· ·ownership.· And I think that's where the breakdown 12· ·happen.· Just as Mike said, I agree, it's going to 13· ·is.· I don't know how to do it in a country where you 13· ·take a lot longer. 14· ·don't open the thing.· So there's no way to -- what 14· · · · · · ·MS. BUENO:· But there are legal avenues, 15· ·we do is we put money at risk where when we get out 15· ·yes, that the mineral rights belong to the nation, 16· ·and lay a pipeline to some well, we're putting money 16· ·but it's also once you get the contract with 17· ·a risk because we know the transfer of ownership from 17· ·(Spanish), then you can pledge those resources for 18· ·this person to that person to this person is a very 18· ·hedge funds. 19· ·coordinated thing.· Down there you don't know that 19· · · · · · ·MR. CANAVATI:· Right. 20· ·because it's not really set up, and so we would have 20· · · · · · ·MS. BUENO:· So after -- after that moment 21· ·a hard time putting money at risk.· And it's hard to 21· ·in time.· So I'm just... 22· ·promote entrepreneurism and infrastructure on the 22· · · · · · ·MR. CANAVATI:· But even, like, when you -- 23· ·come, you have to do these big, long tender contracts 23· ·I think when you sign the agreement, instead of going 24· ·because no one's willing to put theirselves out there 24· ·short, you just buy your puts anyway.· But I agree. 25· ·without profit. 25· ·That's absolutely right. Page 190 Page 192 ·1· · · · · · ·MR. CANAVATI:· This is excellent.· So, you ·1· · · · · · ·MR. SCHWEBEL:· If I could.· The slide that ·2· ·know, some time ago the President Peña Nieto asked ·2· ·you put up, Alejandra, at the beginning of the ·3· ·somebody, Why don't we have pipeline at work in ·3· ·presentation with all the refineries, that's a very ·4· ·Southeast Mexico?· And the answer was, well, we don't ·4· ·powerful picture, and I'd like -- could we have ·5· ·have infrastructure, we don't have business, well, we ·5· ·access to that, you know, provide that to us? ·6· ·don't have business because we don't have a pipeline ·6· · · · · · ·MS. BUENO:· Sure. ·7· ·network.· Oh Mexico began to develop a pipeline ·7· · · · · · ·MR. SCHWEBEL:· Because that -- you know, it ·8· ·network.· And I'm excited because the purpose of ·8· ·prompted my question, was, with all the ·9· ·NAFTA was for the development of Mexico as a whole. ·9· ·manufacturing, Mexico manufacturing, the northern 10· · · · · · ·And if you noticed throughout the years, 10· ·border, you know, the source of energy and power for 11· ·development has been put on line from Pacific to 11· ·that part of the region has always been a challenge, 12· ·Atlantic to the Gulf and to Mexico City, up north, 12· ·you know, by many communities up and down the border. 13· ·and the south was just left behind.· My point is, 13· ·So what would you look for that picture to look like, 14· ·with the reforms and the development of pipelines in 14· ·you know, 10 years from now? 15· ·southeast Mexico, now perhaps in the future we may 15· · · · · · ·MS. BUENO:· A little bit resembling more 16· ·have companies like Toyota investing and so on and so 16· ·what happens at the border between -- the 17· ·forth industry.· This is an open market for the 17· ·infrastructure between Canada and U.S.· So more 18· ·panel.· I screwed up everybody? 18· ·interconnectivity, more pipelines, more 19· · · · · · ·MR. HOWARD:· You have an opinion.· We've 19· ·infrastructure in general.· And I think we are headed 20· ·looked at doing projects south of Mexico City.· It is 20· ·in that direction.· And right now the time is not 21· ·two Mexicos, the one that is north of Mexico City and 21· ·particularly -- I mean, there's lot of controversy 22· ·the one that is south of Mexico City.· They operate 22· ·around trade and all this stuff.· But you think 23· ·politically as two different countries.· And it is 23· ·everybody is agreed that energy is something that 24· ·going to be a lot longer for infrastructure to have 24· ·it's crucial for the region.· And you see all the 25· ·that.· That will be government coordinated south of 25· ·appointments and all the administration and where

Page 191 Page 193 ·1· ·Mexico City.· Private investment south of that is ·1· ·we're headed, I think right now is an important ·2· ·very, very difficult. ·2· ·moment for thinking about expanding collaboration and ·3· · · · · · ·MS. BUENO:· Yeah.· And there will be a lot ·3· ·energy within the entire region.· My opinion. ·4· ·of issues with the right-of-way and the negotiation ·4· · · · · · ·MR. SCHWEBEL:· Because I feel, following ·5· ·with the original communities because that's what ·5· ·Mr. Howard's comments, is this something that was in ·6· ·happens a lot in those areas and that adds a lot ·6· ·your radar five years ago, 10 years ago, two years ·7· ·of -- another level of complexity to it. ·7· ·ago? ·8· · · · · · ·MR. CANAVATI:· We have -- Mr. Secretary, if ·8· · · · · · ·MR. HOWARD:· We were down there in 2009 ·9· ·you'd agree, I'd like to open up because this is an ·9· ·working under the original reform back in 2005.· And 10· ·important topic.· You know, I'm sure we have 10· ·It just didn't take hold the way we would have 11· ·questions from our panel. 11· ·thought.· And it was -- when 2012 hit that's when we 12· · · · · · ·SECRETARY PABLOS:· Yuri wants to -- 12· ·felt like all the political parties in Mexico really 13· · · · · · ·MR. CANAVATI:· Oh, Yuri, I'm sorry. 13· ·got together and really make change happening.· We 14· · · · · · ·MS. UNNO:· I just wanted to mention, when 14· ·say constitutional amendments happening.· And it was 15· ·we make an investment decision, we look at a whole 15· ·not on the radar before that, no.· You know, we 16· ·series of items, not, you know -- all kinds of stuff, 16· ·tried, but it just -- it couldn't happen. 17· ·like education level, skill level of workers to, you 17· · · · · · ·MR. CANAVATI:· Sir? 18· ·know, incentives quite a bit and infrastructure and 18· · · · · · ·MR. VALE:· Yes.· With all of the 19· ·pipelines.· You know, so there are a lot of reasons 19· ·uncertainty that we're facing with not knowing what 20· ·that we decide to invest.· So definitely anything 20· ·an update of NAFTA would be like, since Yuri is a 21· ·that helps with the, you know, local economy is 21· ·policy director, I would like to hear some of your 22· ·helpful, yes. 22· ·opinion.· What do you think is going to happen and 23· · · · · · ·MR. CANAVATI:· That's excellent.· Thank you 23· ·how is it going to affect companies like yours? 24· ·very much.· Thank you. 24· · · · · · ·MS. UNNO:· And so an auto industry, 25· · · · · · ·Questions, ladies and gentlemen? 25· ·everybody in the U.S. is at least not asking for Page 194 Page 196 ·1· ·changes that's working and just modernize the part ·1· ·already talked to the President and said, look, this ·2· ·that's new, like when NAFTA was negotiated, we didn't ·2· ·is the results for the United States, these are the ·3· ·have any E-commerce chapters and cross border data ·3· ·results for our companies, you know.· And you can ·4· ·flow is actually important to Toyota because we have ·4· ·tell because it's been quiet on the tweeting site. ·5· ·a data center in Texas that collects information from ·5· · · · · · ·But the point is, I think, that to your ·6· ·vehicles that we sell in Canada or other countries. ·6· ·point, it's -- I think private industry in the United ·7· · · · · · ·And if certain countries put a limit to the ·7· ·States, private industry has already expressed this ·8· ·cross border of the data, that kind of inhibits us ·8· ·view successfully, you know.· I mean, that's just -- ·9· ·from doing analysis of the data, consumer driving ·9· ·go ahead, Gerry. 10· ·behaviors for future research in the U.S., as well as 10· · · · · · ·MR. SCHWEBEL:· I -- quite frankly, I think 11· ·autonomous vehicle that we're conducting in the U.S. 11· ·we're not -- we're not there yet.· I think we're not 12· ·So that kind of newer agreement that was included 12· ·organized.· We don't have a strong enough coalition 13· ·under TPP should be also considered under NAFTA 13· ·with the same message.· That's why these meetings are 14· ·modernization -- well, we're calling it 14· ·critical and very important that we all participate 15· ·modernization.· We're not negotiating.· We're not 15· ·and build on that coalition together so that we get 16· ·renegotiating.· The part that's working, we're 16· ·the message from the auto sector and we all repeat 17· ·keeping it. 17· ·that same message.· So I -- you know, I saw it back 18· · · · · · ·Because I mean, we do so much trade and 18· ·in -- you know, Sam and I, back in the '90s, we had a 19· ·supply chain throughout North America, it's so 19· ·strong coalition, and it was a united coalition of 20· ·integrated, anything that jeopardizes that 20· ·U.S. Chamber, National Association of Manufacturers, 21· ·integration is not going to -- it's going to stop the 21· ·business round table.· We don't have that right now, 22· ·factories in the U.S. because of this, if the supply 22· ·and the clock is already ticking.· So that's a 23· ·chain stops.· So we don't want that.· The President 23· ·concern that we need to have that dialogue. 24· ·wants to ensure the jobs in the U.S., he should not 24· · · · · · ·MS. UNNO:· As you know, part of the problem 25· ·be touching the part that's working.· That's in 25· ·is, is the President is so worried about trade

Page 195 Page 197 ·1· ·general. ·1· ·deficit.· And we've been telling the President, look ·2· · · · · · ·MR. VALE:· Now, that's probably a very ·2· ·you can't just look at the trade deficit and say it's ·3· ·important point because you don't need energy if ·3· ·bad.· I mean, we have a lot of trade deficit with ·4· ·these guys aren't working. ·4· ·Mexico, therefore trade with Mexico is not working. ·5· · · · · · ·So how do we get to the point where we ·5· ·That's not how it works.· And we've been trying to ·6· ·convince them these are the parts that are working ·6· ·tell him that.· But the fact that you guys -- I mean, ·7· ·and these are the parts that need modernization? ·7· ·Texas State has surplus with Mexico.· That's a great ·8· · · · · · ·MS. UNNO:· Right.· So we're already having ·8· ·story to tell because he's so -- and that's helping ·9· ·several different meetings with USDR and Department ·9· ·to create more jobs in Texas is a great story to 10· ·of Commerce on this topic.· And also they're 10· ·tell.· He needs to hear more of that, and he needs to 11· ·collecting comments right now on NAFTA modernization, 11· ·disconnect the trade deficit and job correction in 12· ·and we're planning to submit a comment as a company, 12· ·the U.S. 13· ·as well as I'm working with many at the U.S. Chamber, 13· · · · · · ·MS. BUENO:· Channels are left open to the 14· ·other trade associations that we're part of to make 14· ·federal registry.· I think is very important that 15· ·sure that their comments reflect our interests. 15· ·everybody can put a word out because it's the 16· · · · · · ·MR. VALE:· He needs some of that 16· ·official channel right now to discuss trade. 17· ·information, Mr. Secretary. 17· · · · · · ·MS. UNNO:· And they're holding a hearing, 18· · · · · · ·MS. UNNO:· And -- right.· And the business 18· ·so maybe, you know, Texas state government can send a 19· ·community in Washington in general, nobody wants to 19· ·rep to testify for NAFTA.· That would be great too. 20· ·touch what's working.· So we all have that and 20· · · · · · ·MR. CANAVATI:· Okay.· Well, we appreciate 21· ·everyone's been sending that message and hopefully... 21· ·it very, very much.· May I have an applause, please, 22· · · · · · ·MR. CANAVATI:· If I may, I agree with Yuri, 22· ·for our wonderful panel. 23· ·and I am convinced personally that the U.S. private 23· · · · · · ·MS. MAYS:· Thank you, everybody.· We are 24· ·sector has already relayed this message.· I mean, I 24· ·going to have a setup for the next panel, which is 25· ·can sense it.· I think that the companies have 25· ·the executive panel.· And for those of you sitting in Page 198 Page 200 ·1· ·the audience, I would suggest if you're way in the ·1· ·to Ciudad Juarez.· We walked the streets of Ciudad ·2· ·back, please move up -- up front.· We have a lot of ·2· ·Juarez.· We toured some manufacturing operations. ·3· ·empty seats up front.· So please do me a favor, if ·3· ·And at that time you told me that that was very high ·4· ·you're way in the back, please move up front.· And ·4· ·on your list of priorities.· So I just want to ask, ·5· ·we're going to take a few minutes to set up for the ·5· ·why do you think that relationship is so important. ·6· ·next panel. ·6· · · · · · ·SENATOR CORNYN:· Five million American jobs ·7· · · · · · ·SECRETARY PABLOS:· Okay.· Folks, let's get ·7· ·depending on binational trade with Mexico. ·8· ·started here. ·8· ·Obviously, we have our common border and a rich ·9· · · · · · ·Well, good afternoon, everyone.· It's my ·9· ·cultural heritage that shapes who we are, both in the 10· ·pleasure to welcome today very distinguished guests. 10· ·United States and in the state of Texas and in 11· ·We've had a very productive meeting this meeting this 11· ·Mexico.· And tremendous economic opportunity for -- 12· ·morning.· And at this time I'd look to introduce our 12· ·for our countries, particularly with the -- now the 13· ·panel for our next discussion. 13· ·energy revolution, the big important changes in 14· · · · · · ·With us today we have Senator John Cornyn. 14· ·Mexico has made in its laws allowing investment, 15· ·Senator, thank you for everything that you do for 15· ·newest technology and money and resources to develop 16· ·Texas, for Mexico, for the Texas-Mexico relationship. 16· ·the energy that Mexico has.· As somebody pointed out 17· ·We really appreciate you making the time to be here. 17· ·to me, the Eagle Ford Shale doesn't stop at the Rio 18· · · · · · ·I'd also like to introduce Congressman Will 18· ·Grande.· So there's tremendous opportunity there.· So 19· ·Hurd.· Congressman, thank you as well for everything 19· ·our destiny, to my way of thinking was, are joined 20· ·that you're doing, your leadership, taking very 20· ·together.· And the better Mexico, does the better 21· ·strong positions on the importance of the U.S.-Mexico 21· ·we'll do and vice versa. 22· ·relations.· We really appreciate that. 22· · · · · · ·SECRETARY PABLOS:· Well, that is certainly 23· · · · · · ·CONGRESSMAN HURD:· I just don't want you to 23· ·a strong message.· A strong Mexico will certainly 24· ·be mad at me. 24· ·mean strong U.S., strong Texas.· So I certainly agree 25· · · · · · ·SECRETARY PABLOS:· Never.· Never at all. 25· ·with that.

Page 199 Page 201 ·1· ·We're actually very proud for you and of you.· So ·1· · · · · · ·Congressman Hurd -- thank you, Senator. ·2· ·thank you very much. ·2· · · · · · ·You know, Congressman, I always get asked ·3· · · · · · ·And we also -- I'd also like to introduce ·3· ·the question regarding NAFTA.· I'm always being asked ·4· ·Chairman Lewis, Chairman of the Texas Transportation ·4· ·what's going to happen with NAFTA.· And what I try to ·5· ·Commission.· Chairman, thank you for being here. ·5· ·remind individuals, as a state official, that's not ·6· ·Thank you are helping putting this event together. ·6· ·really within my purview, but certainly it is within ·7· · · · · · ·We've had a very productive discussion this ·7· ·yours.· Could you speak a little about what you ·8· ·morning and I'd like to continue that today as well. ·8· ·envision this NAFTA discussion looking like and what ·9· · · · · · ·So with that being said, I'd like to also ·9· ·is it shaped to be? 10· ·mention that we did invite the Secretary of 10· · · · · · ·CONGRESSMAN HURD:· So the President has 11· ·Communications and Transportation of Mexico. 11· ·made clear that he's interested in renegotiating 12· ·Unfortunately, he was traveling and was unable to 12· ·NAFTA.· He's let both Houses of Congress know. 13· ·attend.· It was your intention to have him be part of 13· ·That's a 90-day notification.· There's 90-day 14· ·this distinguished panel. 14· ·notification for the partners within NAFTA so the 15· · · · · · ·So we do have the Ambassador with us today 15· ·U.S., Mexico and Canada.· And soon, hopefully by the 16· ·representing Mexico.· So I want to thank you, 16· ·middle of the summer, the Department of Commerce 17· ·Ambassador, for being here today, this morning and 17· ·should be articulating what in their areas they are 18· ·for being here during this particular event.· Thank 18· ·willing to negotiate.· And I'm hoping that it looks 19· ·you. 19· ·at -- the number one issue is the energy. 20· · · · · · ·So what I'd like to do is just jump right 20· · · · · · ·As Senator Cornyn had said, a revolution 21· ·in and begin our discussion.· Senator, I'd like to 21· ·there.· Here in south and west Texas with the changes 22· ·begin with you, and I'd like to ask you why you think 22· ·in their constitution on foreign direct investment, 23· ·the relationship between U.S. and Mexico, 23· ·this is one area where we can do.· The need for 24· ·particularly Texas and Mexico is so important. I 24· ·energy in Mexico is huge, and we can help fill that. 25· ·know that a couple of years ago you honored us coming 25· ·We can help fill it for our friends in Mexico for Page 202 Page 204 ·1· ·significantly less than how they're importing it on ·1· · · · · · ·SECRETARY PABLOS:· And that's a great segue ·2· ·their -- for the western part of the country. I ·2· ·for my next question, Chairman Lewis.· You know, we ·3· ·think that's one area where this -- what I would call ·3· ·spent the entire morning talking about trade, talking ·4· ·NAFTA 2.0 should be based upon. ·4· ·about the impact of trade and what it's going to take ·5· · · · · · ·The second area is, under the trade and ·5· ·to be prepared.· So in your mind, as it related to ·6· ·digital need for services.· 23, 24 years ago, when ·6· ·transportation and infrastructure, what do you see ·7· ·NAFTA was signed here in San Antonio, the commercial ·7· ·the impact of this trade being on Texas? ·8· ·use of the Internet is not where it is.· And in this ·8· · · · · · ·CHAIRMAN LEWIS:· You know, Secretary, it's ·9· ·trade agreement we can make the relationship between ·9· ·almost mind-numbing when you start looking at the 10· ·the U.S. and Mexico and Canada on where you store 10· ·numbers and the numbers start almost not to make any 11· ·data.· Be example for the rest of the world.· That's 11· ·sense because they're so big. 12· ·going to help small businesses.· That's going to help 12· · · · · · ·Mexico and U.S. trade is about $600 billion 13· ·anybody as we evolve into a digital economy.· And we 13· ·a year in trade.· And it's -- by and large, it's a 14· ·have a real opportunity in NAFTA to do that.· So I 14· ·Texas-directed trade.· It's trade that comes through 15· ·think those should be the two areas that we focus on. 15· ·Texas.· About 75 percent of that $600 billion is 16· · · · · · ·This is going to be -- the President has 16· ·traveling in and out of Texas.· So that -- certainly 17· ·made clear, this is being negotiated under the TPA, 17· ·rail's a big component of that.· But a lot of it, a 18· ·the Trade Promotion Authority.· So it will come to 18· ·lot of it is trade, it's trucks, as those here in the 19· ·Congress for an up or down vote.· And I think we need 19· ·room know.· So we're having about, you know, 20· ·to make sure that Texas has influence in this 20· ·75 percent of that is on our highways.· So it's -- it 21· ·conversation.· This should be a Texas centric focus 21· ·is a huge component of what we do, and it's something 22· ·on this renegotiation because of the importance in 22· ·that we need to be very mindful of. 23· ·our -- to our state.· And that we spend so much time 23· · · · · · ·There are over 10,000 trucks coming into 24· ·doing that.· And I know that's something that I'm 24· ·Texas every day from Mexico, just the one way, not 25· ·proud to play a little part in that, along with 25· ·counting the ones going back.· Just one way.· I know

Page 203 Page 205 ·1· ·Senator Cornyn and anybody who rallies to champion ·1· ·that Mayor Saenz thinks that it had to be at least ·2· ·for the state of Texas. ·2· ·15,000 thousand coming through Laredo.· And he's not ·3· · · · · · ·SECRETARY PABLOS:· You know, we've had ·3· ·far wrong.· Laredo's probably about half that ·4· ·meetings and discussion with the CEO of Pemex, with ·4· ·traffic. ·5· ·the Undersecretary of Hydrocarbons, Secretary of ·5· · · · · · ·But it's pretty well distributed throughout ·6· ·Energy about the possibility for investment in ·6· ·the state.· We have fairly finite trade corridors ·7· ·Mexico, the Mexican infrastructure and in Texas ·7· ·and -- and they're being -- they're being heavily ·8· ·companies.· You know, Texas seems to be the partner ·8· ·used.· So it is an enormous economic benefit to this ·9· ·of choice, seems to be the ideal partner, and so I'm ·9· ·state. 10· ·glad to hear you saying that energy would be 10· · · · · · ·One thing that I didn't know until I 11· ·something that you would want to see. 11· ·actually took this job is just how heavily we lean on 12· · · · · · ·CONGRESSMAN HURD:· And what about, the 12· ·Senator Cornyn and on his staff and on Congressman 13· ·chairman over here he's doing a great job in helping 13· ·Hurd and his staff and the other congressmen who, 14· ·to build that infrastructure to ensure that we take 14· ·especially along the border -- with everybody, but 15· ·advantage of the amount of trade that could increase 15· ·especially those along the border and their staff 16· ·between the U.S. and Mexico.· We got to make sure we 16· ·every day.· You can't do anything without money.· And 17· ·have the infrastructure there to do that.· My hope, 17· ·they have gone to bat for us with what's called FAST 18· ·as we look at funding for the Department of Homeland 18· ·act to provide -- close that gap between federal 19· ·Security, some of that money goes to our points of 19· ·funding coming from the fuel tax and sort of 20· ·entry to make sure that we can secure our border and 20· ·historical levels. 21· ·facilitate to newer business services at the same 21· · · · · · ·They have gotten us border infrastructure 22· ·time.· And I think TxDOT is doing a pretty fantastic 22· ·money that we have used on these ports and worked 23· ·job of making sure that we're prepared to deal with 23· ·hard for us to -- equity in funding.· Texas is not 24· ·that so that we can continue to drive the Texas and 24· ·necessarily always gotten its share just by the way 25· ·the U.S. economy. 25· ·the formulas are, and that has been -- that gap has Page 206 Page 208 ·1· ·been closed, to some extent.· And -- and they're ·1· ·border relationship with Mexico from an economic ·2· ·always working for Texas interest to make sure we get ·2· ·development perspective.· So would you speak a little ·3· ·our fair share.· So I think on behalf of all of us we ·3· ·to that, please. ·4· ·appreciate it. ·4· · · · · · ·SENATOR CORNYN:· Well, as you know, the ·5· · · · · · ·SENATOR CORNYN:· May I address something? ·5· ·federal government has underfunded infrastructure ·6· · · · · · ·SECRETARY PABLOS:· Yes, sir, please. ·6· ·along the border.· And, frankly, until such time as ·7· · · · · · ·SENATOR CORNYN:· Of course it's great to be ·7· ·we're able to get additional resources, which we're ·8· ·with you, Rolando, and my friend Will and -- but I ·8· ·always working on, trying to come up with innovative ·9· ·have to tell you, it's especially good to be here ·9· ·tools like public/private partnerships to help local 10· ·with the chairman of TxDOT.· Someone once told me 10· ·communities provide additional funding for those 11· ·years ago that the single most powerful public 11· ·infrastructure or staff, which as you know, both of 12· ·official in Texas -- when the Texas Legislature was 12· ·which are important. 13· ·not in session -- is the chairman of TxDOT.· So I've 13· · · · · · ·So we initially were able to get this 14· ·always remembered that.· And the Legislature is not 14· ·Section 559 pilot program, which allowed for 15· ·in session today. 15· ·reimbursement of services and donations accepted.· As 16· · · · · · ·CHAIRMAN LEWIS:· Sine die.· Let's get to 16· ·a pilot project and then working with Congressman 17· ·work.· Pardon me, I've got some stuff to do. 17· ·Hurd and the rest of the Texas delegation, we were 18· · · · · · ·SECRETARY PABLOS:· Yes, Congressman. 18· ·able to pass the Cross-Border Trade Enhancement Act 19· · · · · · ·CONGRESSMAN HURD:· Secretary, I think 19· ·to make this a permanent feature of federal law. 20· ·there's an important element here is that these are 20· · · · · · ·It -- it's been pretty successful.· So far 21· ·mayors of the towns along the border.· And we have to 21· ·we've had a number of participants in this program, 22· ·stop thinking about as just a border issue.· This is 22· ·even in the short period of time since it's become 23· ·an issue that affects the entire United States of 23· ·the law, and I noticed that some of the more recent 24· ·America.· And Ohio and Iowa, they benefit from Ramsey 24· ·additions in terms of being beneficiaries of the 25· ·coming to the Mayor of Eagle Pass and Mayor Garza in 25· ·program include the City of Laredo, Mayor Saenz; the

Page 207 Page 209 ·1· ·Del Rio and Mayor Saenz in Laredo.· These are ·1· ·City of Donna, Cameron County, Anzalduas Bridge ·2· ·important conduits in which a significant part of our ·2· ·Board, among others. ·3· ·economy comes through. ·3· · · · · · ·So this is -- I think demonstrates what -- ·4· · · · · · ·And they are participating and they are ·4· ·when we're all working together, we can come up with ·5· ·taking advantage of these public/private partnerships ·5· ·creative new ways to come up with tools that you can ·6· ·that Senator Cornyn shepherded through ·6· ·use in order to provide for that infrastructure. ·7· ·Washington, D.C. in order to make sure that not only ·7· · · · · · ·We are working with the reauthorization of ·8· ·are their communities benefited, but all the other ·8· ·the highway bill to do a long-term highway bill for ·9· ·communities in the United States of America benefit. ·9· ·the first time in a long time.· The inadequacy of the 10· ·So they are an equal partner in all of this and the 10· ·gas tax, which the chairman addressed as a chronic 11· ·relationship that TxDOT is working with these local 11· ·problem, and we still got to come up with more ways 12· ·municipalities. 12· ·to tailor this infrastructure, particularly with 13· · · · · · ·SECRETARY PABLOS:· That's a great point. 13· ·growing states like ours. 14· ·The Harland tour that was so popular in getting the 14· · · · · · ·But I think we've been fairly creative.· We 15· ·word out to the rest of America about the impact of 15· ·created this coordinated border initiative which 16· ·the trade that occurs was, I think, one of the best 16· ·dedicated 5 percent of the funds that came to the 17· ·things that's happened.· So thank you for mentioning 17· ·state that can be used at the discretion of the 18· ·that. 18· ·governor to fund infrastructure projects along the 19· · · · · · ·Senator, I have a question.· The last years 19· ·border.· There's already been, I think, about 20· ·you introduced the Cross-Border Trade Enhancement 20· ·$60 million in funds granted for that purpose. 21· ·Act.· It was signed into law in December.· Can you 21· · · · · · ·So there's a lot of things we can do if 22· ·tell us a little bit about that and how it might 22· ·we're trying to be creative.· In the meantime, I 23· ·impact TPPs along the border?· How might that help us 23· ·think the federal government is talking about 24· ·with economic development?· Earlier today I stressed 24· ·spending more money along the border, and we want to 25· ·the importance of looking at the entirety of our 25· ·make sure it's being spent in productiveness and not Page 210 Page 212 ·1· ·wasted.· And so that's a little project that ·1· ·This impacts the entire state and the rest of the ·2· ·Congressman Hurd and I are working on. ·2· ·nation. ·3· · · · · · ·SECRETARY PABLOS:· Well, you know, earlier ·3· · · · · · ·SECRETARY PABLOS:· Senator. ·4· ·today we spent quite a bit of time talking about ·4· · · · · · ·SENATOR CORNYN:· So let me just riff off ·5· ·sending the right message to Washington, having it be ·5· ·what Will said.· I think in addition to having the ·6· ·a unified message from all along the border.· We've ·6· ·leadership at the local level and the state level to ·7· ·come together and come up with some policy points. ·7· ·continue to articulate the benefits of trade at a ·8· ·We're going to present it as a committee. ·8· ·time when sometimes it's not always universally ·9· · · · · · ·Congressman, you were very instrumental in ·9· ·politically popular.· It really is important to 10· ·helping get the message as it relates to the 10· ·remember that getting things done in Washington is 11· ·importance of the Texas-Mexico border by bringing 11· ·all about the math.· And we need to add to our 12· ·down some of your colleagues to the border.· You 12· ·numbers. 13· ·brought down some members of Congress.· We went 13· · · · · · ·And part of what you all can help us do, 14· ·across to Juarez.· And I'm happy to report that the 14· ·particularly in these trade routes that go all the 15· ·remarks that we heard after that were, you know, 15· ·way up into Canada, the five million jobs in the 16· ·close to astonishing.· These individuals this no 16· ·United States that benefit from cross border trade 17· ·idea, you know, how great things really were. 17· ·with Mexico are created in all 50 states, and to help 18· · · · · · ·And so in your mind, aside from groups like 18· ·us show the evidence of what the benefits are in 19· ·this coming together, you know, Governor Abbott has 19· ·those states, that helps us do the math.· Get to 50 20· ·asked for our input as it relates to the actual NAFTA 20· ·percent plus one in the House and the 51 vote in the 21· ·negotiations.· What is it that you see that we can be 21· ·Senate.· It's just that simple. 22· ·doing together and working with Congress to get that 22· · · · · · ·Trade is not -- can be a decisive issue. 23· ·message across about NAFTA? 23· ·For example, when we passed Trade Promotion 24· · · · · · ·CONGRESSMAN HURD:· First, local and state 24· ·Authority, we had 13 Democrats join 47 Republicans to 25· ·official have to articulate the importance of NAFTA 25· ·pass Trade Promotion Authority.· A lot of the unions

Page 211 Page 213 ·1· ·to the great state of Texas.· And that is -- that is ·1· ·were not particularly favorable to that.· And ·2· ·going to help us as we move forward on this topic. ·2· ·whatever the politics are, we need to be able to get ·3· ·Opportunities to get my colleagues to see what's ·3· ·the votes to be able to get things done.· So that's ·4· ·really going on is important.· I would say that ·4· ·why it's so important to pass Trade Promotion ·5· ·most -- many of my colleagues probably don't ·5· ·Authority so when NAFTA comes up we can pass it with ·6· ·recognize that Mexico City is one of the most ·6· ·an up or down vote. ·7· ·cosmopolitan in the world and has more Michelin star ·7· · · · · · ·But always remember, it's about the math. ·8· ·restaurants in that one place than Paris, right? ·8· ·It's more than just about your Texas officials.· This ·9· · · · · · ·And I always say when you take folks over ·9· ·is about being friends and allies who benefit from 10· ·into Juarez or Piedras, if you see somebody walking a 10· ·trade all across the country to work with us in and 11· ·dog, that's probably a safe neighborhood, you know. 11· ·recognize there's a benefit for their constituents as 12· ·And so when people see that with their own eyes it 12· ·well. 13· ·matters.· There's so many people in the interior part 13· · · · · · ·SECRETARY PABLOS:· Thank you, Senator. 14· ·of the country that talk about trade, that talk about 14· · · · · · ·Chairman Lewis, you know, we -- this 15· ·border security that have never been there.· So the 15· ·morning we talked about the increasing traffic flow 16· ·opportunity to bring people down here.· We have to 16· ·from the border area.· What do you see -- you know, 17· ·articulate this Texas solution to folks up in 17· ·definitely we have way more traffic than we saw maybe 18· ·Washington, D.C. and friends in other states as well. 18· ·10 years ago, but what do you see 20 years from now 19· · · · · · ·And what the elected officials and the 19· ·happening along the border, hoping that this NAFTA 20· ·business community can do isn't doing.· And I know -- 20· ·round here really ends up being what we hope that it 21· ·and I saw Dennis Nixon earlier, you know, he's been a 21· ·is, which is a very positive thing for both sides. 22· ·big advocate for trade, but we need to make sure 22· ·What do you see that looking like for infrastructure 23· ·that, you know, companies and businesses in Dallas 23· ·in terms of efficiency? 24· ·and Houston, you know, are pushing this as well too. 24· · · · · · ·CHAIRMAN LEWIS:· Well, from all the 25· ·Because this is not just a south of west Texas thing. 25· ·indications we have, the trends that we've seen will Page 214 Page 216 ·1· ·continue.· Basically, in the 10 years from 2005 to ·1· ·million people of Mexico, their GDP is -- oh, it's ·2· ·2015, trade with Mexico just about doubled.· Just ·2· ·about maybe 12th in the world, if you measure it. ·3· ·about the value of that trade just about doubled. ·3· ·It's lower that GDP by per capita, but that's going ·4· ·And the actual truck traffic went up, I think, 20, ·4· ·to come up.· And that's going to come up fast with ·5· ·30 percent, something like that, but the value of the ·5· ·what we're seeing in Mexico.· They want to buy ·6· ·trade has gone up.· And it's both ways. ·6· ·American goods, we want to sell them American goods ·7· · · · · · ·The great thing about trade with Mexico is ·7· ·and we want to buy their goods. ·8· ·reciprocal trade.· As was mentioned by the previous ·8· · · · · · ·So I think all of the trends are going to ·9· ·speaker, we have about $200 billion worth of trade ·9· ·continue, Mr. Secretary, and we're going to see a lot 10· ·with Mexico to Texas and Mexico, and it's about 50/50 10· ·more trade, we to put the resources there are at 11· ·split, about a hundred slack winners in it, but it's 11· ·these key points of entry, whether it be Brownsville, 12· ·about a hundred billion dollars' worth of what we 12· ·Rio Grande Valley, Laredo, Eagle Pass, Del Rio, 13· ·send there and about a hundred billion that comes 13· ·Presidio, all of them.· If I missed anybody fill in 14· ·back here.· So it's beneficial trade.· It's not like 14· ·the blank for me.· But we're going to need all of 15· ·some trade partners that we have that it's mostly we 15· ·them.· Thank you. 16· ·buy their goods.· Trade with Mexico is beneficial 16· · · · · · ·SECRETARY PABLOS:· Senator, what about what 17· ·both ways.· It's the healthiest kind of trade. 17· ·do you see in the future as it relates to the trade 18· · · · · · ·And I think that, from what I can tell, all 18· ·itself.· If you had to name an ideal situation, what 19· ·of the trends are going to continue.· What you see in 19· ·would that be for you? 20· ·Mexico is they're certainly hitting a level of belief 20· · · · · · ·SENATOR CORNYN:· Well, I agree with 21· ·in market system, of infrastructure on their side. 21· ·Chairman Lewis.· It's -- I can see it going nowhere 22· ·If there are ever better trade partners, and there's 22· ·but up.· And as I mentioned earlier, obviously our 23· ·no reason that that won't continue.· You know, 23· ·future is tied inextricably to Mexico because we're 24· ·they're -- the number that always gets me is there 24· ·joined together by a common border.· And as much as 25· ·are over 80,000 engineering undergraduates in Mexico. 25· ·some people talk about getting a divorce, we can't

Page 215 Page 217 ·1· ·Now, ours isn't that much higher than that.· We're ·1· ·get a divorce, we've got to make the marriage work. ·2· ·maybe 10 percent higher than that.· They've got 120 ·2· ·And we are doing that.· And I think to our mutual -- ·3· ·million people.· That's the quality of education, the ·3· ·it is a reciprocal benefit. ·4· ·quality of dedication that they have. ·4· · · · · · ·But I think to me the most exciting thing ·5· · · · · · ·And obviously it's up to the citizens of ·5· ·happening really almost anywhere is the energy ·6· ·Mexico to decide Mexico's future.· And so far that ·6· ·revolution that we were alluding to earlier and the ·7· ·future looks pretty big.· And what means is more ·7· ·prospect now of Mexico having changed its laws to ·8· ·trade, not less trade, more trade, and dramatically ·8· ·allow for investments and foreign investment into ·9· ·more trade. ·9· ·the -- into the country and help them with the 10· · · · · · ·Some of the committee members earlier were 10· ·technology and the expertise to be able to produce 11· ·talking about trade being like a river and you put 11· ·the natural resources they have there is really 12· ·impediments in it and it changes the flow.· But what 12· ·exciting.· Because I think that gross domestic 13· ·we may see is a flood and it goes over all of those 13· ·product could go up, the standard of living is going 14· ·impediments. 14· ·to be much higher.· As Chairman Lewis said, they're 15· · · · · · ·And one thing we need to did is to take 15· ·going to able to buy more of the stuff we make and 16· ·some of the resources that Senator Cornyn, 16· ·sell.· And that's really, really tremendously 17· ·Congressman Hurd and others and those in our 17· ·exciting.· So I think the future is very bright. 18· ·Legislature, Governor Abbott, are providing for us to 18· · · · · · ·Obviously we need to continue to work with 19· ·make sure we have all of our ports of entry 19· ·our Mexican counterparts to help them with some of 20· ·adequately served and be sure that we enhance all of 20· ·the security issues they have internally, which 21· ·our ports of entry so that trade from Mexico, as it 21· ·continue to be a challenge for them, primarily here 22· ·ever increases, both surface trade, both rail and our 22· ·in the United States.· We need to come to grips with 23· ·key trade corridors, highways, are adequate, as best 23· ·that demand problem, which creates the funds for the 24· ·as adequate as we can make them to carry that trade. 24· ·cartels.· But I think overall I'm very optimistic. 25· · · · · · ·Because I think it's going to be 120 25· · · · · · ·SECRETARY PABLOS:· Congressman, you know, Page 218 Page 220 ·1· ·earlier today we talked about binational economic ·1· ·is reliant on capital, right?· I was just in China. ·2· ·development, cross border economic development, being ·2· ·One thing that was eye-opening to me was that One ·3· ·in a position like we were when we designed the ·3· ·Belt One Road initiative where they're trying to ·4· ·border pledge where we have the promoting economic ·4· ·expand trade routes into Europe from Asia, right? ·5· ·development on both sides, understanding what each ·5· ·And what I told them is that we already have trade ·6· ·side needs and working together towards a common ·6· ·routes.· We've already been developing that.· But ·7· ·goal. ·7· ·certainly, you can't do that without cooperation, and ·8· · · · · · ·Here in San Antonio we have the NADBank. I ·8· ·binational cooperation, as you said, I think is ·9· ·think the NADBank because as it relates to renewable ·9· ·extremely important. 10· ·energy have been doing a great job.· What is your 10· · · · · · ·Chairman Lewis, I have one question for 11· ·experience and what do you believe the NADBank can 11· ·you.· What has TxDOT done to facilitate that trade 12· ·add to its discussion to improving our border 12· ·along with Governor Abbott?· What are some examples 13· ·economy? 13· ·that you can point to that show that we've developed 14· · · · · · ·CONGRESSMEN HURD:· Well, the NADBank does 14· ·these trade routes and that you're continuing to 15· ·so much when it comes to helping some of these 15· ·improve upon that in order to create the capacity 16· ·communities that are along the border, whether it's 16· ·that's needed to withstand the great trade that's 17· ·energy projects or -- you know, in my district 17· ·coming? 18· ·there's people that still don't have clean water or 18· · · · · · ·CHAIRMAN LEWIS:· Well, as you know, 19· ·sewage, and NADBank has been vital to that. 19· ·Mr. Secretary, as -- probably better than anybody, 20· · · · · · ·Also, I'd like to see NADBank grow a little 20· ·the dedication that the Governor has to trade and to 21· ·bit more in some of the natural gas projects along 21· ·the border areas and to make sure that that 22· ·the border.· We have such an important resource and 22· ·prosperity that's out there, that it continues to 23· ·many of these communities could be solving their 23· ·grow, that they have the infrastructure, that we have 24· ·energy problems using natural gas.· And I think 24· ·the infrastructure in the border areas that we need 25· ·NADBank can be an important part of that.· That's why 25· ·to facilitate that trade, very dedicated to it.

Page 219 Page 221 ·1· ·we have to make sure that it's reauthorized.· That's ·1· · · · · · ·It said a lot to me when he appointed you ·2· ·why we have to make sure that they're able to use the ·2· ·as Secretary of State because that's -- no one is ·3· ·capital they already have access to and -- because ·3· ·more skillful in that area, more knowledgeable in ·4· ·it's dramatically important.· I've seen the impact it ·4· ·that area, more dedicated to that area than you are. ·5· ·has on communities in my district alone.· And I think ·5· ·And you've assembled a great team to continue that ·6· ·it's an important tool.· And if we can use the ·6· ·work and to enhance that work. ·7· ·conversation around NAFTA 2.0 to strengthen the ·7· · · · · · ·And Senator Cornyn, I think, mentioned ·8· ·NADBank, then I'd be in support of that. ·8· ·the -- that the -- in the federal legislation on the ·9· · · · · · ·SECRETARY PABLOS:· Senator, do you have any ·9· ·monies that we get, certain monies, 5 percent can be 10· ·opinion on that? 10· ·designated by the governor to go to border areas. 11· · · · · · ·SENATOR CORNYN:· No, I agree with what Will 11· ·And two years ago the Governor exercised that option, 12· ·said.· I think it's very important.· I know that some 12· ·but set over $60 million as specifically for certain 13· ·people are concerned about the budget that came out 13· ·border projects.· And what we did with that money is 14· ·of the White House.· And I can tell you my 14· ·to enhance trade in Congressman Hurd's district and 15· ·experience, no presidential budget controls the 15· ·help with his staff as far as, you know, just 16· ·deliberations of Congress when it comes to Congress. 16· ·logistics and everything. 17· ·I remember last -- last -- the last Obama budget we 17· · · · · · ·We had connections, better connections 18· ·put it up for vote and it got one vote.· And that's 18· ·between Eagle Pass and Del Rio had not been adequate, 19· ·not -- no disparagement of President Obama.· That's 19· ·so they're more adequate.· Built a new bridge to make 20· ·true for all presidents.· So I think this is 20· ·trade more adequately in Presidio.· It's that kind of 21· ·statement, of course it's the executive branch's 21· ·project that we've been doing and that's -- and those 22· ·priority.· But Congress is going to write the budget, 22· ·things are true I think throughout Texas.· In the 23· ·not the White House. 23· ·Valley or Laredo, when we did the BCP, we have 24· · · · · · ·SECRETARY PABLOS:· Absolutely.· Well, look 24· ·applied monies there on the key priorities to make 25· ·I think everything that we've heard today certainly 25· ·sure that their key priorities are recognized by the Page 222 Page 224 ·1· ·Commission and that we work on them and that we'll -- ·1· ·grow into.· And this is where we need to be thinking ·2· ·you know, that will continue in the future. ·2· ·on what actually happens at our ports and if we can ·3· · · · · · ·Also, within TxDOT there's a border task ·3· ·move traffic quickly, then, you know, Mayor Cantu ·4· ·force to work on coordination among all of our ·4· ·does not have to have people calling and saying, hey, ·5· ·districts that are along the border, TxDOT districts, ·5· ·there's a train in the way in the community and it's ·6· ·to make sure that they are coordinated. ·6· ·delaying kids getting to school. ·7· · · · · · ·We have this group that is absolutely ·7· · · · · · ·So this is where we need to be and this is ·8· ·viable to what we're doing.· And certainly, I am very ·8· ·where we need a force and then push customs, the ·9· ·impressed with the quality of this group under your ·9· ·border patrol to thinking into the future.· And this 10· ·leadership, Mr. Secretary.· It's -- you know, 10· ·is something that with the business community on both 11· ·sometimes you have committees just, well, you're 11· ·sides of the border articulating where we see trains 12· ·supposed to have a committee.· And then you have 12· ·going to be in the future so we can make decisions 13· ·committees that change Texas, and that's the kind of 13· ·based on future traffic rather than past performance. 14· ·committee that you have assembled and kind of work 14· · · · · · ·SECRETARY PABLOS:· Thank you, Congressman. 15· ·that you're getting.· So I want to thank everybody 15· ·Thank you, Chairman. 16· ·here.· And of course this trade plan update that 16· · · · · · ·Gentlemen, would it be okay with you if I 17· ·you're working on is viable. 17· ·open it up for a couple of questions?· We have time 18· · · · · · ·So we've got about -- in our three border 18· ·for a couple of questions, and then we'll step into a 19· ·districts, about $3 million dollars pretty evenly 19· ·press conference.· Would that be okay? 20· ·distributed, a little bit over $3 million in the UTP 20· · · · · · ·SENATOR CORNYN:· As long as they're true or 21· ·for projects.· That sounds like a lot of money, but, 21· ·false. 22· ·you know, we're going to need to make sure every 22· · · · · · ·SECRETARY PABLOS:· Is there a question from 23· ·dollar counts and then try to get every other dollar 23· ·anyone? 24· ·we can.· Because we make money off this. 24· · · · · · ·MR. VILLA:· Want to come up and speak on 25· · · · · · ·You know, one thing about highways and 25· ·the microphone, that would be great?

Page 223 Page 225 ·1· ·infrastructure, certain government projects ·1· · · · · · ·SECRETARY PABLOS:· Any questions?· Don't be ·2· ·redistribute wealth.· Some of them, creation of ·2· ·shy. ·3· ·wealth.· And what we're doing here I think is ·3· · · · · · ·MR. VILLA:· He must have a question. ·4· ·creating wealth.· It helps the local communities and ·4· · · · · · ·MR. CAVAZOS:· Thank you, Mr. Secretary of ·5· ·private persons, people to create wealth, create ·5· ·State, for putting me on the spot. ·6· ·jobs.· And that's our job.· So we want to make sure ·6· · · · · · ·Thank you all, especially the members of ·7· ·these are good investments that you all believe in, ·7· ·committee and to this great panel.· You all are true ·8· ·that you all back and that all of Texas can benefit ·8· ·champions of free trade, and we at the Hispanic ·9· ·from.· I think we will. ·9· ·Chamber are have espoused that for close to 100 10· · · · · · ·CONGRESSMAN HURD:· Can I add on to that? 10· ·years. 11· · · · · · ·SECRETARY PABLOS:· Yes, Congressman. 11· · · · · · ·My question is to really Senator Cornyn, 12· · · · · · ·CONGRESSMAN HURD:· TxDOT is doing a great 12· ·and I know Congressman Cuellar, who isn't with us 13· ·job on our side making sure were getting up and to 13· ·today, but Congressman Hurd love to have you weigh in 14· ·the border as well and the Mexican officials on the 14· ·on the Border Trade Enhancement Act.· I think that's 15· ·other side are working on that as well too.· But can 15· ·one of the best pieces of legislation that is 16· ·we improve the efficiency at our point of entry. 16· ·bipartisan that we have witnessed in the last year. 17· ·Presidio in my district, they're having difficulty 17· ·I know that it's not aimed at not having federal 18· ·getting some cold storage back and forth because on 18· ·funds come to the border that already are dedicated 19· ·the Mexico side they don't have the right staff to be 19· ·for trade and infrastructure, but it's really meant 20· ·able to do that. 20· ·to allow local communities to put skin in the game. 21· · · · · · ·Is there an -- you know, do we have to do 21· ·Local leverage, as the Chairman knows, when we're 22· ·things twice in our ports?· Can we leverage resources 22· ·seeking TxDOT monies in San Antonio, we've got to put 23· ·and human capital on the Mexican side and the U.S. 23· ·up our fair share. 24· ·side and do it once?· And, you know, I think Pharr is 24· · · · · · ·If you're going to a bank to seek a small 25· ·an example of, you know, a place where we can all 25· ·business loan and it's a 504 S.B.A. loan, the bank Page 226 Page 228 ·1· ·requires a 10 percent equity stake, along with the ·1· ·stakeholders and that we do it in a smart way in a ·2· ·percentage that is guaranteed by the bank and then ·2· ·way that enhances both security and trade. ·3· ·the federal government.· So really wanted to get you ·3· · · · · · ·SECRETARY PABLOS:· Thank you. ·4· ·all's thoughts on how we could really propel that Act ·4· · · · · · ·CONGRESSMAN HURD:· And I'll speak on behalf ·5· ·and really make it a very active, engaging piece of ·5· ·of Henry Cuellar.· You can tell him I'm speaking on ·6· ·success for us, Senator. ·6· ·his behalf.· Mayor Saenz, I believe you like to call ·7· · · · · · ·SENATOR CORNYN:· Well, Ramiro, for me the ·7· ·Henry the Congressman of Laredo since he does so ·8· ·key to success in dealing with border issues is ·8· ·much, for San Antonio as well, but, you know, the ·9· ·collaboration and consultation with the stakeholders. ·9· ·reason this bill was bipartisanship and something 10· ·And as we were visiting with all of you, the mayors 10· ·that Senator Cornyn's leadership is important on is 11· ·and the stakeholders along the border, you would say, 11· ·it gives more tools to local communities to make 12· ·you know, the real problem we have is the federal 12· ·these decisions.· And in a tight resource environment 13· ·government got these antiquated ports of entry that 13· ·we're going to all have to work together to solve 14· ·haven't been updated in 50 years or whatever length 14· ·this problem.· And the folks that are on the ground 15· ·period of time.· Some of them look like old Soviet 15· ·have a better idea. 16· ·style infrastructure.· And so we need to come up with 16· · · · · · ·And this worked so well, this was 17· ·some ways to enhance that where we need it and also 17· ·actually -- we authorized almost two years prior to 18· ·we're willing to make some contribution that directly 18· ·the end of the -- of the test case.· I think that 19· ·affects our economy. 19· ·doesn't happen that often in Washington, D.C., at 20· · · · · · ·So that led of course to the pilot program, 20· ·least not in my short time there.· This shows the 21· ·which is a good way to test ideas, and it was 21· ·success and the importance of this piece of 22· ·enormously successful, as you know, and that led us 22· ·legislation. 23· ·to basically a consensus piece of legislation, 23· · · · · · ·SECRETARY PABLOS:· Chairman Lewis, before I 24· ·Cross-Border Trade Enhancement Act, and Will and I 24· ·give of Senator the last word, do you have any 25· ·and Henry worked on primarily.· That just seems like 25· ·parting comments?

Page 227 Page 229 ·1· ·a win-win. ·1· · · · · · ·CHAIRMAN LEWIS:· I just want to thank you ·2· · · · · · ·I alluded to this earlier, but maybe it's ·2· ·again and all the committee members.· I certainly ·3· ·the 800-pound gorilla in the room, you know, the ·3· ·learned a lot, you know, being here today.· Being on ·4· ·federal government, particularly the ·4· ·this panel.· I learned about Michelin ratings.· And ·5· ·administration's, talking about spending more money ·5· ·I'm from Odessa.· Michelin rating does mean tire ·6· ·along the border.· And as I've told many of you, I ·6· ·tread.· You know.· So I've learned there are other ·7· ·want to make sure that the federal government is ·7· ·references here.· But mostly I want to thank all of ·8· ·going to step up and spend more money along the ·8· ·you very much.· And thank you, Secretary. ·9· ·border it's done in a constructive of way and ·9· · · · · · ·SECRETARY PABLOS:· Thank you, Chairman. 10· ·something that actually accomplishes the stated goal. 10· · · · · · ·Senator. 11· · · · · · ·And I believe that border security is 11· · · · · · ·SENATOR CORNYN:· Well, I'll just conclude 12· ·important, but I believe that trade is important as 12· ·by saying we'll Henry Cuellar's praises.· Henry's a 13· ·well.· And if we can channel that federal investment 13· ·great partner.· And one of the things I've learned in 14· ·in ways that enhance both, I think that's win-win. 14· ·the Senate in my time in Washington is nothing 15· ·But they're going to need our help.· You know, we 15· ·happens without bipartisan support.· And you can have 16· ·can't rely on people from other parts of the country 16· ·great Congressman like Will Hurd and we'll do our 17· ·who do not understand what the U.S.-Mexico border is 17· ·part to help on our side of the aisle, but if you 18· ·like and the mutual benefits it confers. 18· ·don't have a partner on the other side of the aisle 19· · · · · · ·I can't them really by default to tell us 19· ·that's willing to focus on the issue be constructive, 20· ·how we ought to do this.· So that's why we're working 20· ·it's not going to go anywhere.· So Henry has been 21· ·hard on this issue.· There's going to be more federal 21· ·tremendous.· He tends to be great partner working 22· ·money spent along the border to supplement what we've 22· ·with Will and I going forward.· And I think you can 23· ·been able to leverage through the Cross-Border Trade 23· ·rely on us to do everything we can to continue to 24· ·Enhancement Act.· We want to make sure that, number 24· ·advocate for the cause of trade and the U.S.-Mexico 25· ·one, we're consulting with you and all the 25· ·relationship. Page 230 Page 232 ·1· · · · · · ·As I said earlier, we're not getting a ·1· ·circle back to what I mentioned, which is creating ·2· ·divorce.· We are going to make the marriage work. ·2· ·prosperity and doing binational and economic ·3· ·It's going to be mutually beneficial.· So thanks for ·3· ·development. ·4· ·having me. ·4· · · · · · ·So I would like to open it up for ·5· · · · · · ·SECRETARY PABLOS:· Thank you.· Thank you. ·5· ·discussion.· I'd like to hear your comments.· I'd ·6· · · · · · ·Well, that being said, I will join the ·6· ·like to know what we can do better next time.· We've ·7· ·panel at a press conference.· We'll take a break, and ·7· ·got some homework. ·8· ·then we'll be back to conclude our business for the ·8· · · · · · ·Gerry, you volunteered for a bunch of ·9· ·day.· Thank you, Gentlemen.· Very much appreciate it. ·9· ·things so I look forward to working with you, as 10· · · · · · ·(A brief recess was taken.) 10· ·always.· So tell you what, Gerry, why don't you get 11· · · · · · ·MS. MAYS:· Okay.· We're ready to reconvene. 11· ·us started, if you don't mind.· Let us know what you 12· ·Okay.· Folks, let's take the next 30 minutes to wrap 12· ·think about today and how it is that we can make this 13· ·it up.· Hello.· Can we take our seats.· We're 13· ·committee better for next time, in August is when 14· ·convening the meeting.· Thank you.· Please take your 14· ·we'll be meeting. 15· ·seats.· Hello.· I know exactly.· Ring the bell. 15· · · · · · ·MR. SCHWEBEL:· Thank you, Mr. Secretary. 16· ·Hello in the back.· In the back, we're reconvening. 16· · · · · · ·I think what's more and more important is 17· ·We're reconvening in the back.· Hello.· Yeah. 17· ·that all of us be fully committed and fully -- be 18· · · · · · ·SECRETARY PABLOS:· Okay.· So let's go ahead 18· ·fully engaged in the task that we have before us.· So 19· ·and reconvene.· The time as 2:35.· Let's take a few 19· ·I think, you know, we have a short window, it's a 20· ·moments to wrap it up, to just have an open 20· ·window of opportunity, but it's a short window of 21· ·discussion about today. 21· ·work that we have to do to deliver the right message 22· · · · · · ·I want to thank everyone for being here. 22· ·to the powers that be.· So I really welcome those 23· ·Thank everyone for your input.· In particular, I want 23· ·that are going to be participating in this process to 24· ·to thank TxDOT for all the great work that the great 24· ·stay engaged.· I worry about those that are not 25· ·men and women of TxDOT did to make this possible. 25· ·present today and that we don't have to go back and

Page 231 Page 233 ·1· ·Again, thank Alamo Community College District for ·1· ·reeducate them. ·2· ·hosting. ·2· · · · · · ·So I would welcome, make sure that we get ·3· · · · · · ·I am very excited about what we did today. ·3· ·the message out to everyone, that to be part of this ·4· ·Not only did we move the agenda forward as it relates ·4· ·committee is a big responsibility, not only for the ·5· ·to our work as a committee, but we also heard from ·5· ·cities that we represent or the state that we ·6· ·subject matter experts.· I wanted to make sure you ·6· ·represent.· So that's one thing. ·7· ·heard from the individuals who are on the ground ·7· · · · · · ·I think the discussion today continuing ·8· ·living this every day.· These are the individuals who ·8· ·with the blueprint that we've been working on, those ·9· ·have to conduct business in this environment.· And so ·9· ·of us that have been engaged in this process for a 10· ·the question that I pose to you is, what is it that 10· ·number of years, that it does continue.· I think it 11· ·we can do as a committee, as a state, as local 11· ·is an evolving document.· I think it is something 12· ·communities, as municipalities, what is it that we 12· ·that we need to add to it as we work along those 13· ·can do to not only make our state, our communities 13· ·areas that need to be done. 14· ·more attractive for investment, but also to 14· · · · · · ·I alluded to the security portion of secure 15· ·facilitate that trade that's already occurring? 15· ·trade and having some alternative solutions to what 16· · · · · · ·You know, in economic development, we speak 16· ·is being -- to enhance the blueprint.· And I'm sure 17· ·in terms of retention and expansion, recruitment. 17· ·there are others.· There are other things that are 18· ·Well, with respect to retention and expansion, you 18· ·out there.· So those that are going to join -- Jon 19· ·know, that means taking care of the companies that 19· ·Barela, he's not here anymore, join Jon and Paul and 20· ·are already invested, ensuring that they grow.· And 20· ·everybody else that's -- that wants to be part of 21· ·we already have a tremendous amount of investment 21· ·this process.· Understand that it's going to be a lot 22· ·that depends on cross border trade.· So how do we 22· ·of work. 23· ·work with them to ensure that they grow, that they 23· · · · · · ·Caroline, you know, you're are -- you got 24· ·continue to create jobs, they continue to invest in 24· ·the whip on us and you're hounding us every day and 25· ·the community.· And that's really where we go full 25· ·that's what needs to be done, and we need to be Page 234 Page 236 ·1· ·responsive to you as well.· Because we don't have ·1· ·out there.· We need to get our message.· It needs to ·2· ·much time. ·2· ·be a unified message, but we need to make sure that ·3· · · · · · ·SECRETARY PABLOS:· Absolutely.· I'd like to ·3· ·it gets delivered.· Otherwise, you know, they're not ·4· ·hear from the mayors, you know, what would be your ·4· ·going to hear us. ·5· ·perspective? ·5· · · · · · ·Mayor Cantu. ·6· · · · · · ·MAYOR SAENZ:· Yeah, thank you so much, ·6· · · · · · ·MAYOR CANTU:· Yes.· Thank you, ·7· ·Gerry.· I'll take Gerry's lead. ·7· ·Mr. Secretary.· First, I'd just like to congratulate ·8· · · · · · ·But following on your question too, ·8· ·you.· I think this has been one of the most ·9· ·Mr. Secretary, I think, although we see ourselves as ·9· ·productive of meetings that we've had.· A lot of 10· ·a region, the south Texas or the Texas border area, 10· ·great information that came before the group. 11· ·you know, each municipality, entity, you know, has to 11· · · · · · ·And of course commend TxDOT for their work 12· ·be more competitive, more completive.· In other 12· ·because, as Mr. Schwebel said it, Caroline does an 13· ·words, doing more with less because that's -- you 13· ·exceptional amount of work to ensure that their goals 14· ·know, unfortunately, we don't have much.· You know, 14· ·and missions are completed. 15· ·monies are short.· Ours too from Texas.· The needs 15· · · · · · ·But overall, you know, as it's been 16· ·are so great. 16· ·mentioned, we just need to continue with the unified 17· · · · · · ·Washington, we've heard from our Senator 17· ·message and assure that issues are brought to the 18· ·and of course our Congressman.· They're asking the 18· ·table.· They're followed through with.· It's not just 19· ·local communities to -- you know, to play skin in the 19· ·talk, but there's action.· And I know that that is 20· ·game, which we are.· Some of us may have that -- the 20· ·something that we are working tirelessly for.· So, 21· ·ability or the capacity.· Others don't.· So in 21· ·you know, I commend the entire group for the efforts. 22· ·essence, it's just teamwork.· Again, it comes down to 22· · · · · · ·And I just -- you know, the only thing that 23· ·us, each -- each entity and what can you do with less 23· ·I can add to that, I know it was mentioned earlier. 24· ·and then that create that synergy and then, you know, 24· ·As far as when we're talking ports of entries and the 25· ·just make it happen.· It's happened in the past. 25· ·needs of importation and exportation of goods, I

Page 235 Page 237 ·1· ·It'll continue to happen in the future.· But, you ·1· ·truly hope that we -- not to take any -- anything ·2· ·know, with this energy that we're creating as we ·2· ·away from any port itself, but we do need to be ·3· ·speak.· Thank you. ·3· ·looking at the ports of entries that are showcasing ·4· · · · · · ·SECRETARY PABLOS:· Thank you, Mayor. ·4· ·greater needs and greater infrastructure and the ·5· · · · · · ·Mayor Garza, anything you'd want to add? ·5· ·numbers that are showcasing at this point. ·6· · · · · · ·MAYOR GARZA:· I would echo Mayor Saenz's ·6· · · · · · ·You know, case in point, in Eagle Pass ·7· ·comments.· I thought today was very enlightening. ·7· ·we're seeing a huge increase in traffic.· And, you ·8· ·And I particularly enjoyed having both Congressman ·8· ·know, there's a lot that we can do as a community, ·9· ·Hurd and Senator Cornyn, getting their feel on what ·9· ·but we of course don't have the budgets that the 10· ·the general spirit is in D.C. and how -- at least 10· ·larger cities have.· And we need to just be aware of 11· ·it's encouraging, that there's maybe some light there 11· ·that and cognizant as a group that as we're working 12· ·to help us with our unique expenses on the border. 12· ·toward this that we can work towards where the 13· · · · · · ·SECRETARY PABLOS:· They sit on very 13· ·numbers are going and where the need is currently 14· ·powerful committees.· You know, Will Hurd is an up 14· ·maybe at a priority level for the state so that we 15· ·and coming leader.· He's already proven himself.· So 15· ·can move in a more efficient and effective manner for 16· ·he's got the attention of many in Washington.· And 16· ·cross border trade. 17· ·obviously Senator Cornyn is a top leader in 17· · · · · · ·SECRETARY PABLOS:· Excellent. 18· ·Washington.· So we -- we're very fortunate to have 18· · · · · · ·Anyone else on the committee? 19· ·him, along with Henry Cuellar.· So we've got great 19· · · · · · ·MR. DOMINGUEZ:· Art Dominguez, Kansas City 20· ·advocates. 20· ·Southern Railway.· I agree with you did a fantastic 21· · · · · · ·I think the most telling message that I got 21· ·job, very productive meeting. 22· ·from -- I think it was Congressman Hurd, is he said 22· · · · · · ·I think one of the things that we might 23· ·that we need to hear from our local and state level, 23· ·want to look at is who we are here as a people who -- 24· ·you know, stakeholders.· And I think that is exactly 24· ·and that we're discussing, it looks -- it seemed to 25· ·what we talked about this morning.· We need to get 25· ·me that we're just one of the citizens in Emerald Page 238 Page 240 ·1· ·City talking about their cities. ·1· ·items that we have discussed.· But, you know, we'll ·2· · · · · · ·One of the flags that was flown during the ·2· ·certainly -- we won't do anything without you looking ·3· ·election and subsequently contributed to the current ·3· ·at it first. ·4· ·administration was the flag that the Rust Belt was ·4· · · · · · ·Caroline, do we have any other items that ·5· ·suffering as a result of NAFTA.· That's a huge ·5· ·we need to discuss before we break. ·6· ·statement.· It's a tough challenge that we have in ·6· · · · · · ·MS. MAYS:· Yeah, there's two things. ·7· ·order to neutralize, much more combat, that argument. ·7· · · · · · ·Send your ideas on this NAFTA piece to me ·8· ·So I think we do need to be unified as a region, as a ·8· ·by this Friday so that we can at least compile it and ·9· ·state, because it's a powerful message we're going to ·9· ·had shoot it out to those who have, you know, 10· ·get in delivering the positive news that NAFTA has 10· ·indicated that they would like to volunteer for that. 11· ·done for us. 11· · · · · · ·But again, this is the entire committee, 12· · · · · · ·SECRETARY PABLOS:· There's definitely the 12· ·it's not just the folks that volunteered to work on 13· ·need to push back on rhetoric and important to push 13· ·the piece.· If you have an idea, you know, you can 14· ·back on negativity and also to share the facts in a 14· ·volunteer, send it to me by Friday to allow for the 15· ·way that is not offensive, in a way this that, you 15· ·conference call next week.· So that's kind of one 16· ·know, is matter of fact so that we can deliver our 16· ·action. 17· ·message and get it -- have it reach the right ears, 17· · · · · · ·Then the next action item we presented kind 18· ·you know, the decision makers, as the Congressman 18· ·of the draft scope of the master plan.· And also need 19· ·said.· So I agree with that. 19· ·to implement.· And I know we've given you two weeks, 20· · · · · · ·Anyone else? 20· ·but I'm probably going to cut that because, you know, 21· · · · · · ·MS. LOPEZ:· Marga Lopez from Donna Bridge. 21· ·we got to get things going out and -- you know, so 22· · · · · · ·Just like Mr. Nixon here created this, we 22· ·within the next week and a half, you know, you could 23· ·do need to produce something of this quality and just 23· ·send me your ideas or any comments that you have on 24· ·condense and be concise and as a unit on all items 24· ·that so we can move forward with, you know, 25· ·that we discussed.· So this is my first meeting.· It 25· ·finalizing this scope.· I think that would be

Page 239 Page 241 ·1· ·was very well structured.· So thank you. ·1· ·helpful. ·2· · · · · · ·SECRETARY PABLOS:· Well, thank you. ·2· · · · · · ·And then, Secretary, we just need to talk ·3· · · · · · ·And so that leads us to our homework ·3· ·about the next meeting. ·4· ·assignment.· And so the first item I think we need to ·4· · · · · · ·SECRETARY PABLOS:· So our next meeting is ·5· ·do, we need to work on, which is the one that ·5· ·scheduled for August.· Let's see. ·6· ·requires immediate attention, is developing the NAFTA ·6· · · · · · ·MS. MAYS:· Place and date. ·7· ·copy.· And so we have individuals who have ·7· · · · · · ·SECRETARY PABLOS:· We need to come up with ·8· ·volunteered.· We've taken down names.· We will have a ·8· ·a place and date.· You know, why don't we -- you ·9· ·conference call sometime at the beginning of next ·9· ·know, I'm very intrigued by the seaport discussion 10· ·week.· Please come to the call with your items.· As a 10· ·that we had today.· I'd love it for the next meeting 11· ·result of that, we'll develop a draft document, which 11· ·to be by a seaport.· I don't know how we worked the 12· ·we'll then circulate to the entire community for 12· ·queuing.· We had Houston.· Maybe we can do it in 13· ·comments. 13· ·Houston, if it's okay by you all.· But I think having 14· · · · · · ·I'd ask you to please look for it so that 14· ·a wider perspective on our seaport might be 15· ·we can get your comments and feedback immediately so 15· ·important.· But I'll leave that to everyone to 16· ·that we can come up with something hopefully within 16· ·discuss.· I don't think we have to make that decision 17· ·the two-week period.· And then that will allow us, 17· ·today. 18· ·then, to begin to identify that as the document that 18· · · · · · ·Perhaps what we could do is send out a -- 19· ·we can all use in your discussions when we engage 19· ·you know, an e-mail survey of sorts that allows to 20· ·decision makers or stakeholders or whoever it is. 20· ·give your input, and then we'll make that decision. 21· ·Maybe we can also use that at the local level to 21· ·If you give us the authority to make the decision 22· ·draft some opinion pieces in our local papers.· And 22· ·based on your input, then I think that might be the 23· ·we can work with our communications team to maybe 23· ·best way to do it.· I think right now might be a 24· ·have -- have my -- have us develop an op ed that I 24· ·little too rushed to come up with anything. 25· ·would then -- and have that placed based on those 25· · · · · · ·Is that acceptable to the group?· Great. Page 242 Page 244 ·1· ·Okay. ·1· ·IN THE STATE OF TEXAS· · ) ·2· · · · · · ·MR. SCHWEBEL:· In regards to timeline · · · · · · · · · · · · · · · ) ·2· ·COUNTY OF BEXAR· · · · · ) ·3· ·again, one of the things that came up this morning is ·3 ·4· ·that there's an opportunity for us to submit comments ·4· · · · I, PAMELA SUE PETERSON, Certified Shorthand ·5· ·for USDR by June the 12th.· Is that something -- ·5· ·Reporter in and for the State of Texas, do hereby ·6· ·should that be something that we want to make sure ·6· ·certify: ·7· ·that we -- Texas participating in some of that ·7· · · · That said transcript of proceedings was taken ·8· ·before me at the time and place therein set forth and ·8· ·comment period with some of the ideas that we're ·9· ·was taken down by me in shorthand and thereafter was ·9· ·trying to get into? 10· ·transcribed into typewriting under my direction and 10· · · · · · ·SECRETARY PABLOS:· So that gives us a 11· ·supervision, and I hereby certify the foregoing 11· ·little -- 12· ·transcript is a full, true, and correct transcript of 12· · · · · · ·MR. SCHWEBEL:· Well, what I'm saying is 13· ·my shorthand notes so taken. 14· · · · I further certify that I am neither counsel for 13· ·that I think it's important that we have -- Texas has 15· ·nor related to any party to said action, nor in any 14· ·to submit something.· What better group than this 16· ·way interested in the outcome thereof. 15· ·group for us to have, you know. 17· · · · IN WITNESS WHEREOF, I have hereunto subscribed 16· · · · · · ·SECRETARY PABLOS:· Well, then, let's go 18· ·my name this 31st day of May, 2017. 17· ·ahead and focus on having something to submit by the 19 20 18· ·12th.· You know, it's just shy of a couple -- it's 21· · · · · · · · · · · ·______19· ·shy of the two weeks, and so I think -- I think it's · · · · · · · · · · · · ·PAMELA SUE PETERSON, CSR 20· ·not outside of the realm of reasonable. 22· · · · · · · · · · · ·Texas CSR 8924 - Expires 12-31-18 21· · · · · · ·MR. SCHWEBEL:· I agree.· I agree. · · · · · · · · · · · · ·Firm Registration No. 631 22· · · · · · ·SECRETARY PABLOS:· Thank you for that 23· · · · · · · · · · · ·Kim Tindall & Associates, LLC · · · · · · · · · · · · ·16414 San Pedro, Suite 900 23· ·input. 24· · · · · · · · · · · ·San Antonio, Texas 78232 24· · · · · · ·Anybody else have any comments before we · · · · · · · · · · · · ·(210) 697-3400 25· ·break? 25

Page 243 ·1· · · · · · ·(No response.) ·2· · · · · · ·SECRETARY PABLOS:· Okay.· Well, that being ·3· ·said, the time is 2:50, and I'd like to adjourn ·4· ·today's meeting of the Border Trade Advisory ·5· ·Committee.· Thank you for being here today. ·6· ·(Whereupon, the proceedings were concluded at ·7· ·2:50 p.m.) ·8· · · · · · · · · · · · · ·-o0o- ·9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25