Weslaco City Manager Mike Perez

WESLACO, RGV – Weslaco City Manager Mike Perez says his city plans to expand its foreign trade zone to include other entities that wish to foster international commerce.

Perez spoke about developing a regional approach to logistics in an exclusive interview with the Rio Grande Guardian. He had just spoken at a luncheon hosted by the Society of Marketing Professional Services-Rio Grande Valley. The event was held at the Weslaco Business & Event Center and also featured two other city managers, Charlie Cabler of Brownsville and Roy Rodriguez of McAllen.

“This regional approach to foreign trade zone activity involves ourselves, Donna, Pharr, Edinburg and Hidalgo County,” Perez explained. “Currently, there are two foreign trade zones in Hidalgo County – the one in McAllen and the one in Weslaco. We are looking at transferring our foreign trade zone to a regional partnership involving those entities.”

Asked why the City of Weslaco wants to do this, Perez said:

“We are a small community and the cost of operating a foreign trade zone is very complicated and a little expensive. For us to do it on our own is a little difficult. But if we partner with Donna, who has a bridge, Pharr, who has a bridge, and Edinburg, who has some people who want to use a foreign trade zone, and the County, then, I think there is a much better chance of spreading the cost over multiple entities and doing a better job.”

Perez was quick to point he is not looking to take business away from McAllen’s foreign trade zone. “We are not competing with McAllen. We are just offering an alternate. You can go to A or B and pick what you want,” Perez said.

Asked how a foreign trade zone operates, Perez said: “You are able to get products in and you do not have to pay a tariff. If you are producing a product in Mexico and bringing it to the United States, you can bring it to the foreign trade zone, do what you need to do and not pay a tariff.”

Asked where the various municipalities are in the process, Perez said: “We have got all the entities to approve the FTZ to be created. We are now going to be submitting the paperwork to the Foreign Trade Zone board in Washington. So, we are very close.”

Perez said expanding Weslaco’s foreign trade zone to include neighboring communities would “greatly help” economic development in the whole region.

“Pharr wants to have some control over its own destiny. They have got a very active port. They would like to be able to sit at the table. Donna does also. And so, we think it will probably be more beneficial to those communities than it will to Weslaco or Edinburg. But, Edinburg does have some prospects in the pipeline that are interested in using it. It will be beneficial for all of us.”

Asked who came up with the idea of expanding the Weslaco FTZ, Perez said: “It came from Ernesto Silva from Donna and Juan Guerra from Pharr. That is how it started.”

Perez added: “The more we do regionally the better it will be for everybody. Nobody just lives in the community they work. Everybody travels. If you do not believe that, drive along the expressway and you will find out.”

Edinburg EDC executive director Gus Garcia

The Rio Grande Guardian reached out to city leaders in Pharr, Donna and Edinburg, for comment.

Gus Garcia, executive director of Edinburg Economic Development Corporation, said he strongly supported expanding Weslaco’s foreign trade zone.

“It goes without saying how important FTZ’s are to a manufacturer that uses imported materials for final production and distribution into the U.S. This is what the RGV has been known for. Hidalgo County along with Edinburg, Weslaco, Donna, and Pharr is now forming a regional and operating FTZ. This will undoubtedly enhance the business climate of the region.

“It also sends a message to the global manufacturing community that our region is working together to assist with their efforts. I can’t emphasize enough the importance of regional partnerships that add real value to the market. The Hidalgo County FTZ will do just that.” Garcia said.

“We welcome the opportunity to work with all our sister cities in growing our business assets and attracting more advanced manufacturing, logistics and distribution partners moving forward.  A regional FTZ has been a long time coming and it’s finally here. I congratulate the leaders of our community for embracing it. Good job!”

Pharr Mayor Ambrosio Hernandez, M.D., is also a big supporter of a regional foreign trade zone.

Ambrosio Hernandez

“The Pharr International Bridge continues to be the number one bridge in commercial crossings in the Rio Grande Valley with 70 percent of trade crossings related to manufacturing. With over 30 billion dollars of trade being crossed from Mexico, it is only logical that the city needed to evaluate the future needs of our port of entry,” Hernandez said.

“We know our population will continue to grow and the demands from the domestic consumer for products of retail will increase rapidly over time.”

Hernandez said Pharr believes in working with neighboring communities that have the same priorities and needs as his city.

“During our exploration phase of a Foreign Trade Zone designation, it made sense to gather all the cities that had an actual market for a FTZ designation and create a Regional Foreign Trade Zone under the supervision of the county.  We must all have a level playing field and if there is an opportunity for everyone to have success within their own communities then we want be a part of that success and pave the way for regionalism at its best.”

Ernesto Silva, Donna’s interim city manager, echoed the comments of Perez, Garcia and Hernandez.

“The regional Foreign Trade Zone is long overdue and is necessary for the Valley to be competitive in the global economy we are now in,” Silva said. “For many years the Hidalgo County had three areas designated as foreign trade zones or sub-zones. They were in McAllen, Edinburg and Weslaco and in order to get receive a designation businesses had to locate in these areas or apply for a status of a trade zone project with one of the three Foreign Trade Zones.”

Ernesto Silva

Edinburg lost its own Foreign Trade Zone status a few years ago.

Silva said having a regional FTZ will improve the Valley’s chances of attracting major investment.

“This will simplify that process and allow for businesses to work directly with one zone and U.S. Customs to have their businesses designated as a trade zone projects. It makes it better for businesses and will be a tool for all of us as a region to utilize when recruiting new industries to our area.”

Silva said he would like to thank all the other city managers, mayors, city council members and county cfficials for thinking as region.

“Working together as a region will bring tremendous benefits to all of communities and more specifically our residents,” Silva said. “As I often say to people from out of the Valley when they ask where are you from, I respond the Rio Grande Valley. I seldom mention a specific city.”

Editor’s Note: Rio Grande Guardian reporter Patricia Martinez contributed to this story from Weslaco, Texas.