El Paso is the axis point of international trade between Mexico and the United States.  Historically, the north and south trade corridors established during the conquest of the Spanish explorers in 1598 focused on the Camino Real road from Mexico City through the “Pass of the North” (i.e., Rocky Mountains at El Paso) to the New Mexico territory of Spanish settlements.  The east and west bound corridor known as Butterfield Trail began with the Pony Express and stagecoaches in the mid1800’s.  These corridors have now matured into modern interstate highways (I-25 & I-10) and are part of the Camino Real route that starts in Mexico, goes through the United States, then Canada, a modern railroad system (Union Pacific Railroad and Amtrak Services), and an international airport with cargo facilities.

What is a maquiladora?

      The name maquiladora is the Spanish word for a manufacturing plant in Mexico where assembly takes place.  Other terms used interchangeably include:  maquila, twin-plant, production-sharing and export-processing zone. 

      Mexico and the United States have fostered trade over the last four centuries leading to a sophisticated international marketplace.  The strength of El Paso, its sister city Ciudad Juárez, Chihuahua, Mexico, and neighboring Santa Teresa, N.M., are the people who shaped the region. El Paso’s location with state of the art communications facilities is critical for coordinating all areas of international trade operations. Its proximity to Mexico has shaped El Paso into a true bilingual community with more than 70 percent of its residents speaking English and Spanish.  Today, this region combined is the largest populated metropolitan area on the U.S.-Mexico border with more than 2 million residents.  It has been estimated that approximately 2,000 El Pasoans work in Cd. Juárez in a maquiladora’s occupying professional and management positions.  According to The Border Model: Forecast of El Paso’s Economic Performance to 2010, (Oct. 2004) a report by UTEP’s Institute for Policy and Economic Development reveals that there are more than 66,000 jobs attributable to exports as a demand source.  This report falls in line with older informal estimates that there were more than 30,000 jobs (transportation, customs brokerage, and freight forwarding services) in El Paso directly related to the maquiladora industry.

      The region’s cross-border strengths encompass customs brokerage services, intermodal services (air-ground-rail), and warehouse and distribution services, legal and accounting services.

Customs brokers

      There are more than 40 Customs Brokers offering trade compliance services which include, classification, valuation, document processing services, protests, drawback, quota imports, NAFTA regulations and consulting.  Customs brokerages employ licensed customs brokers, accounting, computer information and support personnel.  Some brokerages offer integrated services to their clients that may include, warehousing in a Foreign Trade Zone, bonded warehouse or container freight station, as well as transportation logistics.

Intermodal services

      The transportation industry has experienced rapid growth in El Paso, mostly due to the impact of NAFTA generated trade and other recent trade events.  El Paso has more than 80 trucking companies that provide cartage for bonded merchandise, trans-loading, drayage and long-haul transport across the nation.  Support services to the trucking companies include truck renting, leasing, parts, repairs and sales, trailer rentals, repairs, leasing, and storage. 

      EPIA is also home to the International Trade Processing Center, a one-stop shop for US Customs documentation and the administrative office of Foreign Trade Zone No. 68, known as the largest in volume Foreign Trade Zone on the border, and the fifth largest in the nation.  Foreign Trade Zone No. 68 operated by the city’s aviation department has been a part of the retention equation for U.S. companies using their location to reduce Customs and logistics costs, and maximize their distribution and storage of goods to serve the maquiladoras in Mexico.  Due to the rapid growth of international trade, railroad service has continued to grow through Union Pacific’s consolidation of freight services.  Rail service for domestic and international freight is provided through Union Pacific and Burlington Northern Santa Fe with direct connection to Mexico via Juárez, with FerroMex. 

Warehouse & Distribution

      The El Paso port of entry has about 25 bonded warehouses and 16 Foreign-Trade Zone warehouses that permit in bond merchandise (i.e., merchandise considered to be under Customs jurisdiction because it has not entered U.S. commerce) to be stored, transferred, manipulated and/or destroyed.  These bonded facilities are closely tied to the maquiladora industry in Mexico.  In addition, there are more than 60 freight forwarders that move In bond and domestic freight arriving via railroad or air cargo and southbound to Mexico; and northbound shipments for local, regional and nationwide transport.  Freight forwarders also offer integrated services such as warehousing and logistical transportation to expedite and consolidate shipments for their clients. 

Legal, accounting & other services

      There are more than 400 licensed attorneys in El Paso with some obtaining specializations in Customs law, immigration law, labor & employment law and tax law related to the international trade sector.  El Paso lawyers have established excellent working relationships with Mexican lawyers in coordinating assistance to clients that conduct business in Mexico.

      El Paso accounting businesses have long been involved in providing international business consulting to maquiladora businesses and other trades.  Some accounting firms provide Mexican tax compliance, individual tax preparation for Americans working in Mexico, auditing, litigation and accounting software advise.  Across the border in Juárez, the big 5 accounting firms are well represented.  

      Lately, the region has seen computer software and networking companies take an interest to develop new programs and technical support for the international trade markets that require special Customs, WMS, purchasing, and accounting support.

Industrial development

      El Paso’s industrial development is characterized by a high demand for warehouse and distribution to support the large manufacturing plants in Mexico and for non-labor intensive operations to set up shop and take advantage of the educated and skilled labor market and its gateways to global markets.  Many industrial suppliers are readily available to support and feed the maquiladora demands of Juárez.  Major industrial developers are evident in this supply market that has increased to 50 million square feet of industrial space.  Demand for manufacturing space is higher in Juárez because of its attractive lower labor cost and its short supply of available space; while demand for warehouse and distribution is lower than El Paso due to higher fixed cost.

      El Paso’s port of entry has been a leader among all U.S. cities and metropolitan areas as a place for importing and exporting goods, especially to Mexico.  Its sister city Juárez is home to 288 maquiladoras with a workforce of over 200,000.  It is considered the largest Maquiladora region in Mexico.  This region’s cross-border economy is the largest in the world, and is impacted by each countries national economy and global market conditions.

      In 2005, El Paso’s port of entry accounted for $41.5 billion in value.  This data is made available by the Texas Center for Border Economic & Enterprise Development website.   During the same year, exports from El Paso’s port of entry accounted for $17.6 billion and ranked second in terms of total exports among U.S. Border cities.

      Forecasts for the Camino Real region are positive with state and local governments in El Paso, Juárez and New Mexico building closer ties and promoting the region jointly to world markets.   The World Trade Center of El Paso/Juárez has taken an active role in organizing regional trade missions and conferences that highlight the united front of the Camino Real Trade Corridor.  Its WTC Logistics Committee has been spearheading these events that have garnered the support and cooperation from the City of El Paso, City of Juárez, Chih, the State of Chihuahua, the New Mexico Border Authority, the Customs Brokers Associations of both El Paso and Juárez, and Desarollo Económico of Juárez.  There is a strong message of embracing international trade by this region, and it has been doing it for over 400 years.