Members of Congress have a lot on their plate. If they can come to a deal in the next few days, then topping their list of priorities will be the new United States-Mexico-Canada free trade agreement.
This new deal, a NAFTA 2.0, is poised to redefine North American trade, updating the rules that govern hundreds of billions of dollars in trade every year. The sweeping implications of the agreement determine the future of a plethora of other significant regional issues, including the North American Development Bank.
The NADB was created 25 years ago as a component of NAFTA’s labor and environmental side agreements. At the time, the bank’s aim was to push environmental policy forward in the U.S.-Mexico border region, while enhancing bilateral trade relations. As someone who grew up along the border, I welcomed the initiative and influx of attention to the region, especially considering the amount of work needed to be done in the long-overlooked area.
Over the past two and a half decades, the bank has followed through on its mission. It has steadily invested in the region, financing more than 250 projects and supporting $8.6 billion in infrastructure investment. These projects have cleaned up polluted water, addressed public health challenges, and promoted clean energy. For example, the NADB financing eventually boosted wastewater treatment from well below to well above the national average. More recently, the Bank has created 14 commercial wind projects, 17 solar projects, and 3 biofuel projects.
By financing projects on both sides of the border and having a binational team, the bank has also steadily strengthened the United States and Mexico’s bilateral relationship. Beyond clean water and energy, the Mexican government has also used NADB as a tool for financing infrastructure projects. And the bank has quite literally helped create cross-border projects, including a wind farm in Tecate, Baja California, which delivers electricity to San Diego County, California. These projects and benefits can grow even further as the bank leverages private capital to expand its operations.
NADB’s future will be bright, if given the opportunity to expand its mission and funding streams under the USMCA. The USMCA remains in Congress, as House Democrats talk with the U.S. Office of the Trade Representative to seek changes to environmental, pharmaceutical, and labor provisions.
While the NADB’s existence isn’t directly tied to the deal’s outcome, its role in the region could be affected. Now more than ever, leaders across the world are recognizing the ramifications of environmental issues. Now is the chance to think big, reimagine the role of financial institutions, and provide the capital to make a meaningful impact.
The NADB’s work over last two decades has demonstrated the value of financing projects in the United States and Mexico shared border region. With an expanded role, it could do even more. The USMCA is an opportunity to re-think and expand the bank, and determine how to best improve environmental conditions in Mexico and the United States, support border communities, and the region-at-large.
The time is now, so let’s hope the vision is there, too.
Editor’s Note: The above guest column by former U.S. Ambassador to Mexico Tony Garza first appeared in the op-ed pages of The Washington Examiner. Click here to read the original posting. Garza served as U.S. ambassador to Mexico from 2002 to 2009. He is a past chairman of the Texas Railroad Commission, Texas’ 99th secretary of state, and a former Cameron County judge. Follow him on Twitter @aogarza.