• SDEB5Team

The Value of Border Towns and the Bi-National Experience

If the “new NAFTA,” now known as the U.S.-Mexico-Canada Agreement (USMCA), is an assurance of the importance of free trade ($1.2 trillion worth) in North America, then the connection between San Diego, CA and Tijuana, MX is even more valuable. You can even say these two cities are a microcosm for what inclusive economic development, entrepreneurial interdependence and political cooperation should look like across borders. The two cities are linked by sharing roughly the same size of population, though San Diego is more sprawled, the largest bi-national metropolitan region and the most trafficked international border in the world. (UCSD Cross Border Initiative)

Because of these factors, the governments of San Diego and Tijuana – with corporations like Uber, Thermo Fisher and Red Door Interactive quickly following suit – initiated incremental steps to work together in a number of ways. This includes economic development, planning and coordination, production marketing and development, infrastructure development, tourism and recycling. (City of San Diego) In addition to initiatives by governments and economic development corporations of both regions, there are countless other projects and initiatives that foster cultural, social and economic collaboration between the two. According to a 2017 report from the San Diego EDC:

  • Tijuana is a medical device manufacturing powerhouse; 97 companies employ 21,000 workers who produced $600M worth of product in 2014. 

  • In 2015, Tijuana graduated more than 8,000 university-level students – 29 percent of which received STEM degrees.

  • Tijuana ranked #8 on the New York Times' 2017 list of must-visit destinations around the world.

  • Between 2012 and 2016, FDI in Baja totaled $5.6 billion – 63 percent of which came from the U.S. Other sources of FDI include South Korea, the Netherlands, Japan and Spain.

  • When compared to China, Mexico is estimated to have 13 percent lower labor costs and an overall average direct manufacturing cost that is four percentage points cheaper than China. 

All of this put together increases investment opportunities, importing and exporting potential of the region as a whole. Not only is the cooperation between San Diego and Tijuana an interesting and unique social connection, but it is a great example of how border towns can come together to bolster the other’s economic strengths and transform their weaknesses to be more competitive on the global stage. University of California San Diego’s (UCSD) 2014 Jobs Without Borders study showed that the bi-national region yields a gross annual product of more than $200 billion. According to a 2017 San Diego Tribune article, private investors opened the $120 million Cross Border Xpress in 2015, “creating the world’s first binational airport. It allows travelers to park at and go through customs in Otay Mesa, by the border, then take a short walk in an enclosed bridge over a border fence to Tijuana’s international airport. Last year, more than 1.3 million people used Xpress.”

So, while immigration reforms, trade treaties and tariffs go through an upheaval, the San Diego-Tijuana region remains vigilant but optimistic as its sizable joint economies continue to grow.

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