Retailing in the Age of Terrorism - The terrorist attacks of Sept. 11, 2001, changed life along the U.S.–Mexico border. Tougher security measures have resulted in long waits at entry points and fewer crossers. The number of people traveling from Mexico into the U.S. declined from 290 million in 2000 to 253 million in 2002. The most recent data available show that number dropped to 242 million in 2004. While the number of people crossing has fallen 16.5 percent since 2000, retail trade along the border has actually increased since 9/11.
Tom Fullerton, economics professor at the University of Texas at El Paso and director of the Border Region Modeling Project, has developed an econometric model to measure the impact of 9/11 on El Paso’s economy. The results indicate that tighter border control has reduced some categories of cross-border bridge traffic, especially passenger vehicles. Retail sales grew over the same period, however, suggesting that fewer trips by Mexican nationals to El Paso may be offset by increased sales per shopper.
J. Michael Patrick, director of the Texas Center for Border Economic and Enterprise Development at Texas A&M International University, argued that 9/11 had a short-lived, negative impact on cross-border shopping. U.S. border retail sales grew 3.7 percent in 2001, he said, even though northbound traffic by foot fell 17.9 percent and by vehicle 24.4 percent between September and November 2001.
Patrick pointed to other factors with the potential for long-term impact, such as the US-VISIT program, which checks the digital fingerscans and photos of those seeking visas against a database of known criminals and suspected terrorists. When the visitor arrives at the port of entry, the fingerscans are used to verify that person is the same one who received the visa. Entry procedures have been fully implemented since the end of last year, with few major problems. Exit procedures, however, are still being tested. Although the government touts the program as a way to enhance security and facilitate legitimate travel and trade, many worry it will adversely affect the border economy.
Patrick expects retailing along the U.S. border to continue growing, driven mostly by healthy population increases in the region. This growth could be significantly hampered, however, if US-VISIT exit procedures are inefficient. Patrick estimates that a 10 percent decline in northbound crossings due to US-VISIT would reduce retail sales in Texas border cities by $760 million, or 2.2 percent.
