On June 10, 2026, the Mexico Program at the Inter-American Dialogue, together with the Border Trade Alliance, hosted the Twelfth Annual Building a Competitive U.S.-Mexico Border Conference in Washington, DC. The high-level event convened decision-makers, industry leaders, private sector representatives, and policy experts to discuss the evolving dynamics of the U.S.-Mexico border. Through five panels, participants explored how the evolving political landscape, trade, migration, critical infrastructure, energy, and emerging technologies are reshaping cross-border cooperation. The discussions emphasized the need for institutionalized coordination, digital modernization, and inclusive policy frameworks to strengthen regional competitiveness and address shared challenges.
FIRESIDE CHAT: U.S.-MEXICO AT A STRATEGIC CROSSROADS
The opening fireside chat set the strategic tone for the conference, offering a comprehensive reflection on the U.S.-Mexico relationship, its deep historical roots, its present tensions, and the path forward. The conversation was moderated by Lila Abed, director of the Mexico Program at the Inter-American Dialogue, and featured Diana Alarcón, alternate executive director for Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, and Spain at the World Bank, and member of Mexico’s United States-Mexico-Canada Agreement (USMCA) 2026 review negotiating team.
Alarcón opened with a historical note: when the negotiations for the North American Free Trade Agreement (NAFTA) began in the early 1990s, the border region was actually opposed to the agreement. The border already functioned as a free trade zone, and NAFTA’s tax harmonization would have raised costs for a decade. This serves as a reminder that policy designed without understanding border realities tends to miss the mark. That lesson, she argued, is as relevant today as ever.
On the increasingly inseparable link between trade, security, and migration, Alarcón was clear that these issues have always been intertwined, and there is no durable solution to any of them without addressing all of them together with both parties equally involved in the process. The border, she stressed, is one integrated region artificially divided by a line; as its rivers, energy basins, and communities remain deeply connected across the boundary.
On security, she pushed back against Washington’s perception that Mexico isn’t delivering. President Sheinbaum’s four-pillar strategy which consists on addressing root causes through youth opportunity programs, professionalizing police forces, advancing intelligence-driven interventions, and ensuring daily cross-agency coordination, has produced a 40% reduction in high-impact criminal activity. U.S.-Mexico security cooperation, she noted, is at its highest point ever.
On USMCA, her bottom line remains clear, integration in the region is too deep, and the interdependence too real. Renewal itself is not in question; what remains uncertain are the terms, details, and direction it will take.
PANEL 1: THE FUTURE OF USMCA AND ITS IMPACT ON THE BORDER
The first panel brought together voices from industry, economics, and international affairs to assess what the USMCA review means for the border region and for North American competitiveness more broadly. The panel was moderated by Héctor J. Cerna, president and CEO of IBC Bank in Eagle Pass, who opened by underscoring the depth of economic integration between the two countries, noting that the U.S. and Mexico together would rank among the world’s top five economies if measured as one.
A central theme was the importance of private sector participation in the review process. Skip Hulett, chief legal officer of NatureSweet, described the real-world stakes facing companies like his own: a U.S. firm that absorbs the direct cost of tariff uncertainty as the party legally responsible for bringing goods across the border, while simultaneously facing pressure from retailers to keep consumer prices stable.
His takeaway was straightforward: policymakers need to hear from the industries they are regulating, and companies must make that case persistently and clearly. Gilberto García-Vazquez reinforced this point, stressing that the most consequential parts of the negotiation are deeply technical and sector-specific, making company-level expertise indispensable. He emphasized that tier two and tier three suppliers, those hit hardest by changes to trade rules, are often the least represented in these conversations. Panelists were candid that the private sector is not currently at the negotiating table and, while that remains a genuine challenge, the consensus was clear: companies must continue pushing through trade associations, congressional engagement, and direct advocacy to ensure their knowledge and experience take part in the conversation.
On making the case for USMCA renewal, the panel was united. Hulett argued that a strong and well-functioning agreement is itself an expression of national strength, one that keeps supply chains stable, food affordable, and consumers protected year-round. Cerna framed regional integration as the most effective strategy for competing in a global economy, stating that it is not a competition between Texas and Chihuahua, rather with China.
Panelists also raised a longer-horizon concern. The fertility rate in the U.S. is around 1.6 [2]. Moreover, Mexico’s fertility rate is also decreasing around 1.6 and its window of peak productive-age population will be closing around 2030. Thus, the workforce pressures the region faces today will only intensify in the years ahead, making deep economic cooperation not just beneficial but essential.
PANEL 2: THE TRIANGULAR DILEMMA: TRADE, MIGRATION, AND BORDER SECURITY
The second panel tackled one of the most consequential shifts in the U.S.-Mexico relationship: the collapse of the boundaries between trade, security, and migration as separate policy domains. Moderated by Dr. William Walters, CEO of Salus Worldwide Solutions, the discussion brought together experts on security analysis, organized crime research, migration policy, and strategic advisory to examine a relationship that has grown too intertwined to address in silos.
A central insight framed the entire conversation: the distinct policy buckets that once defined U.S.-Mexico relations—trade, security, education, migration—have effectively been poured into one. Organized crime has adapted accordingly, exploiting the same efficiencies that make legal trade work. Eighty-four percent of individuals sentenced for fentanyl trafficking in the United States are U.S. citizens, and synthetic drugs, like manufactured goods, cross the border multiple times before reaching their final form. Nogales, the main port of entry for produce, is also a primary entry point for fentanyl, precisely because pressure to process agricultural shipments quickly creates vulnerabilities that criminal networks exploit strategically.
The panel also examined the limits of current enforcement approaches. Despite significant policy attention, panelists argued that current strategies have yet to yield a measurable impact on the ground. With Laredo alone seeing nearly 3 million truck crossings annually, the scale of cross-border movement makes comprehensive screening a structural challenge. Panelists raised particular concern about placing the armed forces in charge of administering ports and customs offices, warning it creates institutional risks that outweigh any short-term security gains. Panelists also raised the issue of firearms trafficking from the United States into Mexico, describing it as an often overlooked variable in the security equation and one that the business community has both an interest in and a legitimate voice to address.
On migration, panelists noted that unauthorized immigration has dropped sharply and is no longer the central irritant it once was in the bilateral relationship . Rather than dwelling on the challenge, they called for redirecting the conversation toward legal migration pathways and the genuine workforce complementarities between the two countries. With Mexico producing more engineers per capita than the United States, and demographic pressures mounting on both sides of the border, finding ways to channel talent through legal channels is not just a migration question, it is an economic imperative.
PANEL 3: A SMARTER BORDER: DIGITAL TRADE, AI, AND TRUSTED DATA FLOWS
The third panel examined how artificial intelligence and digital technologies are reshaping cross-border trade, and why realizing their full potential requires as much institutional change as technological innovation. Moderated by Rubén Mancha, associate professor at Babson College, the discussion brought together practitioners from supply chain intelligence, producer finance, and customs enforcement to confront both the promise and the limits of a smarter border.
The central opportunity the panel identified was moving the border from a physical checkpoint into a network. Rather than inspecting goods at the crossing, AI-powered systems can map supply chains continuously, flag risks upstream, and allow trusted goods to move faster while concentrating enforcement where it matters most. The concept of federated learning—bringing the analytical model to the data, rather than centralizing sensitive information—emerged as a promising framework for allowing governments and private enterprises to share intelligence without surrendering proprietary or sovereign data. The analogy offered compared it to a “Google Maps” of global trade, where everyone benefits from shared visibility without knowing who contributed what.
The panel was equally clear about the obstacles. U.S. Customs and Border Protection is the largest law enforcement agency in the country, collecting more data than almost any federal agency, yet it has virtually no data scientists to analyze it. The agency’s core customs processing system was not built for the complexity of modern trade and is increasingly strained. AI applied to physical cargo scanning—identifying threats in containers, vehicles, or parcels—is more difficult than commonly assumed, prone to false positives, and requires significant time and patience before any government agency can rely on it with confidence. Currently, only around 2% of cargo crossing the border is physically examined, a figure that cannot meaningfully increase without technological solutions that are still maturing.
A recurring theme was the role of the private sector in bridging these gaps. Rather than waiting for governments to build interoperable systems, a process that would take years and cost billions, panelists argued for commercially built platforms that agencies can adopt and adapt. Open application programming interfaces, harmonized data standards, and shared ontologies between U.S. and Mexican customs were identified as near-term priorities that would yield immediate gains in both facilitation and enforcement. When asked what the border of 2030 should look like, panelists agreed it should be one where U.S. and Mexican customs agencies are operating off the same network, screening cargo at the speed trade demands.
PANEL 4: CRITICAL INFRASTRUCTURE: WATER, ENERGY, AND BORDER RESILIENCE
The fourth panel examined how the United States and Mexico manage their shared energy and water resources, and how the decisions made in this space shape everything from industrial investment to food security along the border. Moderated by Kenia Zamarripa, Vice President of International and Public Affairs at the San Diego Regional Chamber of Commerce, the discussion brought together experts from development finance, water security, and energy policy to examine infrastructure gaps that, if left unaddressed, will constrain everything from manufacturing to food security on both sides of the border.
The energy picture is striking in its depth and its fragility. Mexico imports roughly 75% of its natural gas from the United States through a network of several cross-border pipelines, and over 60% of Mexico’s power generation depends on that supply. The integration is real, but so is the asymmetry. When Winter Storm Uri hit Texas in February 2021, it froze pipeline infrastructure and triggered blackouts deep into Mexico. Five years later, there are still no clear protocols governing reliability, emergency response, or who bears the cost when supply fails. While one international arbitration battle between the Mexican Federal Electricity Commission (CFE) and power companies was won by CFE in June 2024, many have dragged on without resolution, and panelists warned that the conditions for a similar crisis remain in place.
A separate but equally urgent problem is Mexico’s deepening transmission crisis. Mexico’s grid is a constitutional monopoly under the Mexican Federal Electricity Commission, and transmission infrastructure grew at just 0.24% between 2023 and 2024, while power demand expanded at over 3%. The consequences are already visible. For instance, the Yucatan Peninsula remains connected to the national grid by a single transmission link, making it one technical failure away from a regional blackout. As one panelist put it, the country is paying the debt of decades of underinvestment, and things will likely get worse before they get better. Baja California presents a different but equally instructive case as the state is not connected to Mexico’s central grid at all, but to California’s, which creates both unique vulnerabilities and cross-border opportunities worth developing.
REFERENCES
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