Binational pact aims to keep industrial plants in border region

Brownsville officials were among Rio Grande Valley economic development leaders who signed a binational collaboration agreement on March 5 between South Texas and the state of Tamaulipas, Mexico, aimed at boosting economies on both sides of the border.

The initiative was led by the Rio South Texas Economic Council and the Ministry of Economic Development of the state government of Tamaulipas, with the signing ceremony in Weslaco. Besides officials from Brownsville, also participating were economic development leaders from Alamo, Donna, Edinburg, Harlingen, Hidalgo, Laredo, McAllen, Mission, Palmview, Pharr, Roma, Rio Grande City, San Benito, Sullivan City and Weslaco.

From the Mexican side, in addition to Matamoros, were leaders from Altamira, Camargo, Ciudad Victoria, Diaz Ordaz, Guerrero, Madero, Mier, Miguel Aleman, Nuevo Laredo, Reynosa, Rio Bravo, Tampico and Valle Hermoso.

According to RSTEC, the agreement is intended to strengthen investment recruitment and job creation in communities north and south of the Rio Grande.

Mario Lozoya, executive director of the Greater Brownsville Incentives Corporation and one of the agreement’s signatories, said the agreement was forged partly in response to a situation with U.S.-owned maquiladoras (industrial plants) in Matamoros that has prompted some of them to relocate to the United States or Mexico’s interior.

A mandate from Mexico’s new president, Andres Manuel Lopez Obrador, doubling the minimum wage along a narrow strip of the country’s northern border, led to a dispute between labor unions demanding higher wages for employees making above minimum wage and “maquila” management, who refuse to raise wages, arguing that their employees were already making the wages Obrador sought to bring about.

Another piece of Obrador’s northern-border program entailed slashing the value-added tax on maquilas in the border region so they could afford the wage increase. At any rate, tens of thousands of maquila workers have walked off the job in Matamoros.

Lozoya said the agreement between South Texas and Tamaulipas is aimed partly at keeping those plants in the region, even if they relocate to the other side of the border, since a significant number of jobs in the region depend on them. The hope is that maquilas looking to relocate will move the plants to Brownsville or South Texas rather than taking them to another U.S. state or the interior of Mexico, he said.

“By signing the regional agreement we are now supporting each other from a regional perspective,” Lozoya said. “Matamoros is saying, man, I’m going to lose five maquilas. It’s better to lose them to Brownsville than see them go back to Ohio. There are lots of employees who live here and drive daily to Matamoros. It’s the same with McAllen and Reynosa and the whole border.”

Lozoya said the collaboration agreement is unprecedented to his knowledge.

RSTEC Executive Director Matt Z. Ruszczak said working together and combining resources puts South Texas and Tamaulipas “on the global map” and that the agreement kicks things up a notch.

“Our strength is the ability to promote the communities in both states as one region,” he said. “The ability to have operations on both sides of the Rio Grande … is what makes companies look at our region favorably.”