border infrastructure neg.docx

7/27/2019 Border Infrastructure Neg.docx

1/63

Border Infrastructure Neg


2/63


3/63

***NAFTA/Trade***


4/63

NAFTA Sucks

NAFTA hurts Mexico

LAHT 9(Latin American Herald Tribune, NAFTA Hurts Mexico More Than Spaniards Did, Farmers Say, 2009,http://www.laht.com/article.asp?ArticleId=366312&CategoryId=14091, AC)

MEXICO CITY The North American Free Trade Agreement has done more harm to Mexico than

Spain did during the colonial period, the influential CNC farmers confederation said.NAFTA has done in 16 years

what it took the Spanish Empire nearly five centuries to do, as the transnational firms that operate in Mexico

likewise control production, marketing, fertilizers and transportation of food in the country,the CNC said in a statement. The agreement linking the U.S., Mexican and Canadian economies took effect Jan. 1, 1994. On the

eve of the Sept. 15-16 bicentennial of independence from Spain, Mexico finds its food sovereignty diminished by

half, according to the CNC, a group with traditional ties to the main opposition Institutional Revolutionary Party, or PRI. Importsnow account for 33 percent of the corn the heart of the Mexican diet and 75 percent of the rice consumed in the country, while

beef imports have surged 440 percent in the last three years, the CNC says. CNC leader Cruz Lopez Aguilar, who is also a PRI

congressman, blames the ills of Mexican agriculture on NAFTA.The trade agreementis as bad as, or worse than, the presence ofthe Spanish monarchy 200 years ago and I accuse it (NAFTA) of the existence of nearly 3 million jobless, the

17 percent fall in remittances (from emigrants) and the increasing cost of food, he said. NAFTA was

negotiated and signed during the PRIs 1929 -2000 tenure in power, but some elements of the party have joined voices on the left incalling for a revision of the trade pact.

NAFTA kills natives

Landau 99 (Saul Landau, NAFTA Hurts Mexicos Poorest, 01/01/1999, http://articles.sun-sentinel.com/1999-01-01/news/9812310564_1_zapatista-army-chiapas-mexico-s-ruling-pri, AC)

Five years ago, on Jan. 1, 1994, the Zapatista Army of National Liberation announced its presence and demanded justice for Mayan

peasants -- the poorest inhabitants of Mexico. Subcomandante Marcos, the spokesman, said the Zapatistas chose Jan. 1 to launch

the uprising because it marked the beginning of the North American Free Trade Agreement among the United States, Canada and

Mexico. "For Indian people, NAFTA is a death sentence," Marcos said. The Zapatistas claimed the Chiapas uprising was anecessary response to the violence felt every day by indigenous and other poor people in Mexico. But above and beyond the daily

injustice that poor Mexicans experience,

NAFTA marked Mexico's official entry into the globalizationprocess. To prepare Mexico for the massive entrance of foreign capital, President Carlos Salinas de Gortari revised an article in

Mexico's constitution that protected communal lands from sale, rent or lease. This prevented Mayan and other

Indian nations from reproducing their families and cultures on their sacred land. The Zapatistasrevolted to alert people around the world to the threat that globalization posed to indigenous and peasant societies. The rebellion

burst the "happy Mexico" bubble spun by NAFTA's promoters. But it did not redress the income gap between the handful of very

rich and the 60 million very poor; nor did it lessen injustice in Chiapas.The Mexican government has not met the

basic demands of its people. Instead of responding to issues of land, education, medical care, justice and democracy, ithas stationed its occupation army in the pro-Zapatista areas. And the Mexican army has helped equip and train paramilitary gangs.

On Dec. 22, 1997, such a group entered the village of Acteal in the Chiapas highlands and systematically slaughtered 45 people,

mostly women and children. The Catholic diocese and other reputable organizations linked the killings to the highest levels of the

Chiapas state government. In turn, those ruling party officials had links to Mexico's ruling PRI party. Many of those implicated have

gone unpunished. By waging this counterinsurgency war and occupying part of its own territory, the Mexican

government is forcing Indians to flee their ancient lands, pushing them out of peasant life and

into the vast world labor force. This is NAFTA in action, just as Marcos warned. It's time to face facts. Neither

U.S. policy nor the much-heralded Mexican economic model have improved the lives of Mexico's poorest citizens. Congress

must examine our so-called free-trade policy with Mexico and our support for the Mexican

government. The costs to human life are too great.


5/63

NAFTA hurts jobs and causes income inequality

New York Times 3 (Celia W. Dugger, Report Finds Few Benefits for Mexico in NAFTA, 11/19/2003,http://www.nytimes.com/2003/11/19/world/report-finds-few-benefits-for-mexico-in-nafta.html, AC)

As the North American Free Trade Agreement nears its 10th anniversary, a study from the Carnegie Endowment for

International Peace concludes that the pact failed to generate substantial job growth in

Mexico, hurt hundreds of thousands of subsistence farmers there and had ''minuscule'' neteffects on jobs in the United States. The Carnegie Endowment, an independent, Washington-based research institute,issued its report on Tuesday to coincide with new trade negotiations aimed at the adoption of a Nafta-like pact for the entire

Western Hemisphere. Trade ministers from 34 countries in the Americas are gathering now in Miami. The report seeks to debunk

both the fears of American labor that Nafta would lure large numbers of jobs to low-wage Mexico, as well as the hopes of the trade

deal's proponents that it would lead to rising wages, as well as declines in income inequality and illegal immigration. Though sorting

out the exact causes is complicated, trends are clear. Real wages in Mexico are lower now than they were

when the agreement was adopted despite higher productivity, income inequality is greater there and

immigration has continued to soar. ''On balance, Nafta's been rough for rural Mexicans,'' said John J.Audley, who edited the report. ''For the country, it's probably a wash. It takes more than just trade liberalization to improve the

quality of life for poor people around the world.'' The Carnegie findings strike a much more pessimistic note than those of a World

Bank team that concluded in a draft report this year that the trade accord ''has brought significant economic and social benefits to

the Mexican economy.'' The bank's economists argue that Mexico would have been worse off without the agreement as the

country struggled to recover from a deep financial crisis in the mid-1990's and that the income gap between Mexico and the United

States is smaller than it would have been otherwise. Luis Servn, research manager for Latin America at the bank, said in aninterview that he disagreed with the Carnegie report's contention that the trade agreement had hurt small subsistence farmers. He

also said that the higher productivity Mexico had achieved in the Nafta years was ultimately the only route to higher wages there.

The intensity of the debate about the agreement's consequences is likely to grow with the approach of the pact's 10th anniversary in

January as pro- and antiglobalization forces marshal arguments to influence negotiations for a Free Trade Area of the Americas and

for a new bilateral trade deal between the United States and Central America. Carnegie's policy experts stop short of contending

that Mexico would have been better off without the agreement. ''Mexico would have been better off with a

better Nafta,'' said Sandra Polaski, a senior associate at Carnegie who was director of economic research at the Nafta labor

secretariat from 1996 to 1999. The authors of the report say developing countries have much to learn from

Mexico's mistakes in the Nafta deal . Trade negotiators for Central and South American countries, they said, shouldbargain for more gradual tariff reductions on corn, rice and beans -- the staples of subsistence farming -- to give peasants time to

adjust to tough competition from large, highly efficient and heavily subsidized American farmers. Carnegie's researchers also say

developing countries should push international donors and rich countries to finance transitional assistance for the retraining of

workers and farmers displaced by global competition. Developing countries should also seek greater leeway to promote the use of

domestic suppliers in manufacturing over imported components -- a step that would increase job creation, the authors say.

NAFTA eliminates job opportunities and undermines growth

Fletcher 11 (Ian, Senior Economist of the Coalition for a Prosperous America and research fellow at the U.S. Business andIndustry Council, More Free Trade Agreements? When NAFTA Failed? Huffington Post The Blog, 03/11/2011,

http://www.huffingtonpost.com/ian-fletcher/more-free-trade-agreement_b_838196.html, AC)

With the Republicans and the Obama administration attempting to rush headlong into a new trade agreement with Korea, and

possibly also with Panama and Colombia as well, it is incumbent on Americans to apply a bit of empiricism. How have our past trade

agreements worked at all, how's the grand-daddy of them all, NAFTA, doing? Unfortunately, NAFTA is a veritable case

study in failure. This is all the more damning because this treaty was created, and is administered, by the very Washingtonelite that is loudest in proclaiming free trade's virtues. So there is no room for excuses about incompetent implementation, the

standard alibi for free trade's failures in the developing world. So if free trade was going to work anywhere, it should have beenhere. Instead, what happened? NAFTA was sold as a policy that would reduce America's trade deficit. But our trade balance

actually worsened against both Canada and Mexico. For the four years prior to NAFTA's implementation in 1994,

America's annual deficit with Canada averaged a modest $8.1 billion. Twelve years later, it was up to $71 billion.Our trade

with Mexico showed a $1.6 billion surplus in 1993 but by 2010, our deficit had reached $61.6

billion. Eccentric billionaire and 1992 presidential candidate H. Ross Perot was roundly mocked for predicting a "giant sucking

sound" of jobs going to Mexico if NAFTA passed. But he has been vindicated. The Department of Labor has estimated

that NAFTA cost America 525,000 jobs between 1994 and 2002. According to the more aggressive


6/63

Economic Policy Institute:NAFTA has eliminated some 766,000 job opportunities--primarily for non-college-

educated workers in manufacturing. Contrary to what the American promoters of NAFTA promised U.S. workers, the

agreement did not result in an increased trade surplus with Mexico, but the reverse. Asmanufacturing jobs disappeared, workers were down-scaled to lower-paying, less-secure services jobs. Within manufacturing, the

threat of employers to move production to Mexico proved a powerful weapon for undercutting workers' bargaining power. The

idea of Mexico as a vast export market for American products is a sad joke; Mexicans are simply too poor. In the 1997 words of

Business Mexico, a pro-NAFTA publication of the American Chamber of Commerce of Mexico: The reality is that only between10 and 20 percent of the population are really considered consumers. The extreme unequal

distribution of wealth has created a distorted market, the economy is hamstrung by a work

force with a poor level of education, and a sizable chunk of the gross domestic product in

devoted to exports rather than production for home consumption. According to official figures that year,fewer than 18 million Mexicans made more than 5,000 pesos a month. And even that was only about $625: roughly half the U.S.

poverty line for a family of four. This has not improved much since, so, as Paul Krugman has pointed out, "Mexico's economy is so

small--its GDP is less than four percent that of the United States--that for the foreseeable future it will be neither a major supplier

nor a major market." But if NAFTA wasn't a plausible economic bonanza for the U.S. and America's establishment knew it, then

what was going on? Krugman again supplies an answer, writing in Foreign Affairs that, "For the United States, NAFTA is essentially a

foreign policy rather than an economic issue." The real agenda was to keep people like President Carlos Salinas,

friendly with powerful interests in the U.S., in power in Mexico City. Bottom line? Free trade was pushed notbecause of any sincerely anticipated economic benefits, but to serve an extraneous foreign policy agenda. To his credit, Krugman

later admitted the utter chicanery of it all, writing in The New Democrat in 1996 that: The agreement was sold under false

pretences. Over the protests of most economists, the Clinton Administration chose to promote NAFTA as a jobs-creation program.

Based on little more than guesswork, a few economists argued that NAFTA would boost our trade surplus with Mexico, and thus

produce a net gain in jobs. With utterly spurious precision, the administration settled on a figure of 200,000 jobs created--and this

became the core of the NAFTA sales pitch. NAFTA was sold in Mexico as Mexico's ticket to the big time. Mexicans were told they

were choosing between gradually converging with America's advanced economy and regressing to the status of a backwater like

neighboring Guatemala. What actually happened? In reality, the income gap between the United States and Mexico grew (by over

10 percent) in the first decade of the agreement. This doesn't mean America boomed; we didn't. But Mexico slumped terribly. In

NAFTA's first decade, the Mexican economy averaged 1.8 percent real growth per capita. By contrast, under the protectionist

economic policies of 1948-73, Mexico had averaged 3.2 percent growth. Because Mexico's labor force grows by a million people a

year, job creation must get ahead of this curve in order to raise wages; this is simply not happening. Mexican workers can often be

hired for less than the taxes on American workers; the average maquiladora wage is $1.82/hr. The maquiladora sector is deliberately

isolated from the rest of the Mexican economy and contributes little to it. Workers' rights, wages, and benefits are deliberately

suppressed. Environmental laws are frequently just ignored. Mexican agriculture hasn't benefited either: NAFTA turned

Mexico from a food exporter to a food importer overnightand over a million farm jobs were wiped

out by cheap American food exports, massively subsidized by our various farm programs. Promoters of NAFTA havetried to cover up its problems by using inappropriate yardsticks of success. For example, they have claimed that the expansion

of total trade among the three nations vindicates the pact. But this expansion has been due to a growing

American deficit. Because a growing deficit means, by definition, that our imports have been growing

faster than our exports, there is no way that economic growth per se will ever solve the

problem. Congress was right to reject NAFTA initially, which never enjoyed sincere majority support in either the House or theSenate and was bought with sheer patronage by Bill Clinton. To be fair, NAFTA is not the only thing that has been wrong with the

Mexican economy in recent decades. But NAFTA was the capstone to a series of dubious free-market economic experiments carried

out there since the early 1980s. Between 1990 and 1999, Mexican manufacturing wages fell 21 percent. It gets worse. Despite the

fact that, compared to the U.S., Mexico is a cheap-labor economy, there are plenty of nations with even lower average wages. For

example, Mexico is now losing manufacturing jobs to China in such areas as computer parts, electrical components, toys, textiles,

sporting goods, and shoes: 200,000 in the first two years of the millennium alone. Mexico's trade deficit against the rest of the

world has actually worsened since NAFTA was signed. In the words of liberal commentator William Greider, "The Mexican

maquiladora cities thought they were going to become the next South Korea, but instead they may be the next Detroit." NAFTA is

not America's only free trade agreement, of course. But our other agreements tell similar tales. We have signed 11 s ince 2000: withAustralia, Bahrain, Chile, Colombia, Jordan, Korea, Oman, Morocco, Singapore, Panama, and Peru. (El Salvador, Nicaragua, Honduras,

Guatemala, and the Dominican Republic were lumped together in the Central America Free Trade Agreement or CAFTA.) Every

agreement but one has coincided with greater American deficits. The only exception is Singapore, where our existing surplus

increased somewhat. But Singapore is tiny, a mere city-state. Nevertheless, our government pushes for more. As of 2011, country

agreements with Colombia, South Korea, Oman and Panama were pending ratification, and the U.S. was in stalled negotiations with

Malaysia, Thailand and the United Arab Emirates. Next on the list are reportedly Algeria, Egypt, Tunisia, Saudi Arabia and Qatar. In

December 2009, the Obama administration announced its intention to eventually join the existing Trans-Pacific Partnership and

elevate it into a full-blown free trade area comprising the U.S. plus Singapore, Chile, New Zealand, Brunei, Australia, Peru, and

Vietnam. In December 2010, the administration reached a slightly-improved deal with South Korea and announced it would push for

Congressional ratification. When will we ever learn?


7/63

Imports under NAFTA displace domestic goods and kill jobs

Scott 3 (Robert E., international economist at the Economic Policy Institute, The High Price of Free Trade: NAFTAs Failure HasCost The United States Jobs Across The Nation, 11/17/2003, http://www.epi.org/publication/briefingpapers_bp147/, AC)

Since the North American Free Trade Agreement (NAFTA) was signed in 1993, the rise in the U.S. trade deficit with Canada andMexico through 2002 has caused the displacement of production that supported 879,280 U.S. jobs.

Most of those lost jobs were high-wage positions in manufacturing industries. The loss of these jobs

is just the most visible tip of NAFTAs impact on the U.S. economy. In fact, NAFTA has also contributed to rising

income inequality,suppressed real wages for production workers, weakened workers

collective bargaining powers and ability to organize unions, and reduced fringe benefits. NAFTAis a free trade and investment agreement that provided investors with a unique set of guarantees designed to stimulate foreign

direct investment and the movement of factories within the hemisphere, especially from the United States to Canada and Mexico.

Furthermore, no protections were contained in the core of the agreement to maintain labor or environmental standards. As a result,

NAFTA tilted the economic playing field in favor of investors, and against workers and the

environment, resulting in a hemispheric race to the bottom in wages and environmental quality. False promises

Proponents of new trade agreements that build on NAFTA, such as the proposed Free Trade Agreement of the Americas (FTAA),

have frequently claimed that such deals create jobs and raise incomes in the United States.When the Senate recently approved President Bushs request for fast-track trade negotiating authority1 for an FTAA, Bush called thebills passage a historic moment that would lead to the creation of more jobs and more sales of U.S. products abroad. Two weeks

later at his economic forum in Texas, the president argued, (i)t is essential that we move aggressively *to negotiate new trade

pacts+, because trade means jobs. More trade means higher incomes for American workers. The problem with these statements is

that they misrepresent the real effects of trade on the U.S. economy: trade both creates and destroys jobs. Increases in U.S.

exports tend to create jobs in this country, but increases in imports tend to reduce jobs

because the imports displace goods that otherwise would have been made in the United

States by domestic workers. President Bushs statementsand similar remarks from others in his administration andfrom members of both major parties in Congressare based only on the positive effects of exports, ignoring the negative effects of

imports. Such arguments are an attempt to hide the costs of new trade deals, in order to boost the reported benefits. These are

effectively the same tactics that led to the bankruptcies of Enron, WorldCom, and several other major corporations. The impact on

employment of any change in trade is determined by its effect on the trade balance, the difference between exports and imports.

Ignoring imports and counting only exports is like balancing a checkbook by counting only deposits but not withdrawals. The many

officials, policy analysts, and business leaders who ignore the negative effects of imports and talk only about the benefits of exports

are engaging in false accounting. NAFTA supporters frequently tout the benefits of exports while

remaining silent on the effects of rapid import growth (Scott 2000). Former President George H.W. Bush,whose administration negotiated NAFTA, recently claimed that two million NAFTA-related jobs have been created in the United

States since 1993 (Bush 2002). But any evaluation of the impact of trade on the domestic economy must include the impact of both

imports and exports. If the United States exports 1,000 cars to Mexico, many American workers are employed in their production. If,

however, the United States imports 1,000 cars from Mexico rather than building them domestically, then a similar number of

Americans who would have otherwise been employed in the auto industry will have to find other work. Another critically important

promise made by the promoters of NAFTA was that the United States would benefit because of increased exports to a large and

growing consumer market in Mexico. This market, in turn, was to be based on an expansion of the middle class that, it was claimed,

would grow rapidly due to the wealth created in Mexico by NAFTA. Thus, most U.S. exports were predicted to be consumer products

destined for consumption in Mexico. In fact, most U.S. exports to Mexico are parts and components that are shipped to Mexico and

assembled into final products that are then returned to the United States. The number of products that Mexico assembles and

exportssuch as refrigerators, TVs, automobiles, and computershas mushroomed under the NAFTA agreement. Many of these

products are produced in the Maquiladora export processing zones in Mexico, where parts enter duty free and are re-exported to

the United States in assembled products, with duties paid only on the value added in Mexico. The share of total U.S. exports toMexico that is represented by Maquiladora imports has risen from 39% of U.S. exports in 1993 to 61% in 2002.2 The number of such

plants increased from 2,114 in 1993 to 3,251 in 2002 (INEGI 2003a, 2003b).

NAFTA devastates the manufacturing sector

Scott 3(Robert E., international economist at the Economic Policy Institute, The High Price ofFree Trade: NAFTAs Failure Has Cost The United States Jobs Across The Nation, 11/17/2003,

http://www.epi.org/publication/briefingpapers_bp147/, RLA)


8/63

NAFTAs impact in the United States, however, has been often obscured by the boom-and-bust cycle that drove domestic

consumption, investment, and speculation in the mid- and late 1990s. Between 1994 (when NAFTA was

implemented) and 2000, total employment rose rapidly in the United States, causing overall

unemployment to fall to record low levels. But unemployment began to rise early in 2001, and 2.4 million jobs

were lost in the domestic economy between March 2001 and October 2003 (BLS 2003). These job

losses have been primarily concentrated in the manufacturing sector, which has experienced a total decline

of 2.4 million jobs since March 2001. As job growth has dried up in the economy, the underlying problems caused by

U.S. trade deficits have become much more apparent, especially in manufacturing.

NAFTA increases the trade deficit, resulting in unemployment

Scott 3(Robert E., international economist at the Economic Policy Institute, The High Price ofFree Trade: NAFTAs Failure Has Cost The United States Jobs Across The Nation, 11/17/2003,

http://www.epi.org/publication/briefingpapers_bp147/, RLA)

Research by Monge-Naranjo (2002) shows that the passage of NAFTA immediately translated into significant

increases in FDI into Mexico, in large part because NAFTA made Mexico an attractive exportplatform for labor-intensive manufacturing. A recent report from the World Bank reaches a similar conclusion: Inparticular, a conservative estimate of NAFTAs influence would suggest that it is responsible for increasing FDI in Mexico by about

70% (Cuevas, Messmacher, and Werner 2002). NAFTA has resulted in a huge surge of foreign direct investment into Canada and

Mexico, as shown in Figure 2. This figure measures changes in the stock of FDI over 10-year periods, before and after NAFTA took

effect (IMF 2003).4 Between 1983 and 1992, before NAFTA, the stock of FDI in Mexico increased by $23 billion U.S. dollars. In the

decade after NAFTA, between 1993 and 2002, the stock of FDI increased $124 billion, an increase of 435% over the decade before

NAFTA. In Canada, the story is much the same. Between 1983 and 1992, before NAFTA, the stock of FDI in Canada increased by $44

billion U.S. dollars. In the decade after NAFTA, between 1993 and 2002, the stock of FDI increased $202 billion, an increase of 354%

over the decade before NAFTA.Inflows of FDI, along with bank loans and other types of foreign financing, have funded

the construction of thousands of Mexican and Canadian factories that produce goods for

export to the United States. Canada and Mexico have absorbed $326 billion in FDI from all

sources since 1993.One result is that the United States absorbed 84% of Mexicos total exportsin 2002, up from 77% in

1993.5 The growth of U.S. imports from these factories has contributed substantially to thegrowing U.S. trade deficit and the related job losses. The growth of foreign production capacity in thesefactories has played a major role in the rapid growth in exports to the United States.


9/63


10/63

***NADBank Adv***


11/63

NADBank Fails

NADBank is inefficient

Taylor 2 (Steve Taylor, Ag commissioner disappointed with NADBank funding decisions, 12/09/2012,http://intrabecc.cocef.org/programs/intranetnotasperiodico/uploadedFiles/Decisions.pdf, AC)

AUSTIN Agriculture Commissioner Susan Combs has joined Rio Grande Valley farmers in protesting an apparent U-turn by the

U.S. Treasury on the criteria to be used for funding water conservation projects. At the annual meeting of the North

American Development Bank on Thursday, Treasury official William Schuerch shocked a delegation of

Valley farmers leaders when he claimed that a potential $40 million in grant funding was not tied to

Mexicos growing water debt to the United States. Combs and Valley farmers were under the impression thatthe Water Conservation Infrastructure Fund came about as a result of a "financial side agreement" to Minute 308, an international

accord signed by the United States and Mexico last June. Minute 308 was triggered by Mexicos 1.5 million acre-feet water debt

to the United States and its failure to meet the terms of a 1944 water treaty. "Clearly Minute 308 of June 28, 2002, expected

significant funds to be spent on both sides of the border to solve the water crisis between the United States and Mexico by funding

conservation projects," Combs said. "I am amazed that the Treasury Department does not have the same understanding." Combs

said she was also "extremely disappointed and dismayed" with NADBanks apparent "indecision" on allocating the

potential $40 million to South Texas projects.

NADBank fails cost inefficiencies, sovereignty

Vanderpool 6 (Tim Vanderpool, NADBank Blues: Will Border Cleanup Efforts Be Abandoned, 04/13/2006,http://www.tucsonweekly.com/tucson/nadbank-blues/Content?oid=1083801, AC)

Still, the NADBank has been no stranger to criticism. Environmentalists condemn its secretive operating style,

while others have chastised the bank's inability to offer lower-interest loans to desperately

poor communities. Congress liberalized the finance rate structure in 2001, allowing the bank more loan flexibility. But the

criticism has nonetheless grown among U.S. Treasury Department officials, who target the bank's

administrative costs totaling about $80 million over the past dozen years. There are also NADBankcritics south of the line. According to Hugh Holub, they include officials at Mexico's treasury department, Hacienda. "We were

getting info that the attack (on NADBank) was coming from Hacienda," Holub says. "The EPA reaches throughthe NADBank to (provide grants). So you have the EPA setting all these terms and conditions for spending that money. The

Mexicans didn't particularly like having conditions imposed on them--conditions that were

impinging on theirsovereignty." Attempts to contact Hacienda officials for comment were unsuccessful. Nancy Woo isassociate director of the EPA's Region 9 Water Division. She denies that the agency is heavy-handed in Mexico. "I don't think that's

an issue," she says from her San Francisco office. For example, "We have a very good working relationship with (Mexico's) federal

water authority." This conflict hit a fever pitch last year, when word leaked out that NADBank's future was under discussion

between U.S. Treasury and Hacienda negotiators. Those murky bull sessions reportedly included

disbanding the NADBank altogether. Such claims are denied by Brookly McLaughlin, a Treasury Departmentspokeswoman. "There has probably been some confusion," she says. "There were all these reports that we were talking about

closing the bank, and we never said that. We had no intention to close the bank." Not true, says NADBank spokesman Juan Antonio

Flores. "We learned in late January that there were discussions among some representatives at the U.S. Treasury and Hacienda," he

says. "They were looking at the role of the bank and what its future may be. Among options being considered was

possible closure of the bank." Still, Treasury Department officials have been more honest about their ongoing complaints."Our concern is with the functioning of the bank," says McLaughlin. "We think the administrative costs are pretty

high.

NADBank empirically fails high interest rates, poor management

AP 1 (Associated Press, NADBank Admits Poor Lending Record,Lubbock Avalanche-Journal,http://lubbockonline.com/stories/081401/upd_075-5743.shtml, AC)


12/63

BROWNSVILLE, Texas {AP}Officials of the North American Development Bank, a U.S.-Mexico

development bank set up under the North American Free Trade Agreement, admit they have

failed to meet their goalof funding key environmental projects near the border. "We are the

first to admit ourlending record is very, very, poor. Yes, in a sense we have failed miserably but

that's because of the interest-rate situation. It has been that way since we were set up," Jorge

Garcs, deputy-managing director at the San Antonio-based NADBank, told the Brownsville

Herald in Tuesday's editions.NADBank has loaned only $11 million out of an authorized $3

billion in its five years in existence. "We are well aware of our constraints and are hoping to

see some modifications to make more loans available." The funding is used to help

communities within 100 kilometers on either side of the border with water and wastewater

projects. Critics blame a combination of high interest rates, poor management and federal

bureaucracy for the banks performance. They are urging Presidents Bush and Fox to overhaul

the institution when they discuss the issue in Washington in September. Officials from

NADBank and its sister organization, the Border Environmental Cooperation Commission, met in

Washington last week to hammer out new loan guidelines in advance of the Bush-Fox summit

but could not reach agreement. Officials from the bank say they have only $350 million in cash

to lend right now, not the $3 billion in capitalization pledged by the U.S. and Mexico, but admit

they are not meeting the challenge presented by border communities. "It's clear there's been afatal flaw in the execution of their mandate," said Raul Hinojosa-Ojeda, a UCLA professor who,

as an adviser to President Clinton, helped draft the rules of the banks lending process."The

Treasury Department has insisted the bank sets interest rates above the market rate and that

is completely inappropriate for the border's infrastructure needs. It's been a wretched

performance," Hinojosa-Ojeda said. NADBank, comprising U.S. and Mexico state department,

treasury and environmental agency officials, was formed through legislation parallel to NAFTA in

1996. The role of the Border Environmental Cooperation Commission is to identify and certify

projects for NADBank to fund. While only loaning $11 million during the last five years, NADBank

has helped distribute grants totaling almost $1 billion to the border region, most of the funds

coming from the U.S. Environmental Protection Agency. The Mexican government has to

match EPA grants when the water and wastewater projects are for Mexican bordercommunities.

NadBank is ineffective

LCLAA, 04(Labor Council for Latin American Advancement, Public Citizen, a nonprofit organization based in Washington, D.C.,dedicated to advancing consumer rights, through lobbying, litigation, research, publications and information services, Another

Americas is Possible: The Impact of NAFTA on the U.S. Latino Community and Lessons for Future Trade Agreements, A Joint Report

by Labor Council for Latin American Advancement and Public Citizens Global Trade Watch

http://www.citizen.org/documents/LatinosReportFINAL.pdf)//YS,accessed 7/02/13The institutions created to fund environmental cleanup efforts and public health infrastructure development the Border

Environment Cooperation Commission (BECC) and the North American Development Bank (NADBank) have been

ineffective at best, hamstrung by cumbersome procedures and unreasonable criteria (such as

requiring impoverished communities to come up with matching funds in order to gain a loanfor assistance). During the NAFTA debate in 1993, NADBank was promoted to a skeptical Congress and public as offering an

expected lending capacity of $2 billion.38 However, by March 2004, it had still only disbursed $186 million in

financing for U.S. and Mexico projects combined.39 To put this in perspective, the cost of the U.S.-

Mexico border environmental cleanup was estimated by the Sierra Club in 1993 to be $20.7 billion.40

Since then, the problems have only worsened the Mexican government estimated the cost of NAFTA-relatedenvironmental damage at $47 billion in 1999 alone.
http://www.citizen.org/documents/LatinosReportFINAL.pdf)/YShttp://www.citizen.org/documents/LatinosReportFINAL.pdf)/YS


13/63

NADB Has no money

NAD bank funds Environment Infrastructure and its total budget is less than 400 million, and

individual loans rarely exceded 15 million

Reuters 12(Dude, you cant indict Reuters, youll look bad TEXT-S&P revises North American Development Bank outlookhttp://www.reuters.com/article/2012/07/23/idUSWNA177320120723 Jul 23, 2012)

The negative outlook reflects rising embedded risks in NADB's loan portfolio . Rating Action On July 23,2012, Standard & Poor's Ratings Services affirmed its 'AA+/A-1+' foreign currency issuer credit ratings on the North American

Development Bank (NADB). At the same time, we revised the outlook to negative from stable. Rationale The ratings on NADB reflect

its strong capital ratios and ample balance sheet liquidity. Its business profile, however, is weaker than other

multilateral lending institutions. The outlook revision to negative reflects our expectation that

NADB's narrow lending mandate will continue to pose embedded risks to NADB's loan portfolio

as it expands in the next few years. NADB was established by an intergovernmental agreement between the U.S.(AA+/Negative/A-1+; foreign currency sovereign ratings) and the United Mexican States (BBB/Stable/A-2; foreign currency sovereign

ratings) in 1993, as an outcrop of the North American Free Trade Agreement. Its mission is to finance environmental

infrastructure projects within 100 kilometers north and 300 kilometers south of the border

between the two countries. These include the U.S. states ofArizona (AA-/Stable; global scale ratings),

California (A-/Positive), New Mexico (AA+/Stable), and Texas (AA+/Stable). The Mexican states, which we rate

according to the Mexican national (CaVal) rating scale, include Baja California (mxAA-/Stable), Chihuahua (not rated),

Coahuila (mxBBB-/Negative),Nuevo Leon (mxA/Stable), Sonora (mxA/Negative),and Tamaulipas (mxAA/Negative).

The majority of NADB's loans are typically less than $15 million, and although its loan portfolio is growing,

the bank retains a small market share relative to its sub-federal government borrowers' total

debt financing. As of year-end Dec. 31, 2011, just under two-thirds of its $396 million

international program loan exposure (net of foreign exchange adjustments) was to Mexican borrowers,

principally public sector loans collateralized by federal government transfers and denominated in pesos. Standard & Poor's

views the risks from the geographic proximity of NADB's obligors (a feature of its narrow lending mandate)

and the use of Mexican federal government transfers to collateralize a significant share of the

bank's loans to public-sector borrowers as highly correlated. We expect that NADB's loan portfolio will remainhighly concentrated and this characteristic will continue to constrain our ratings on NADB. In addition, NADB's non-accrual loansrose to 5% of total international loans at the end of 2011 from 2% the previous year, and the allowance for loan losses covered 40%

of non-accrual international program loans at the end of 2011. NADB has a strong level of capitalization. As of Dec. 31, 2011, NADB's

narrow risk-bearing capacity (shareholders' equity plus allowance for loan losses) covered 127% of its development-related exposure

(DRE), which is comprised solely of loans. Although this ratio has steadily declined and we expect it to decline further--as NADB

mobilizes its resources in order to execute its mandate--we believe that capitalization will remain a supporting factor of NADB's

credit. The bank also has callable capital from its shareholders, but we place less weight on this feature of NADB's capital structure,

particularly in light of the appropriation risk in the U.S. should a call be made. Given NADB's relatively small size (total

assets of $828 million as of Dec. 31, 2011) and its strong capitalization, NADB is an infrequent issuer in

the bond markets. Its balance sheet liquidity is strong, with liquid assets representing 43% of total assets at the end of 2011.These liquid assets are invested in securities of its two shareholders, as well as corporate and structured assets rated 'AA' or higher.

NADB uses currency interest-rate swaps to transform its dollar-denominated debt and equity

capital to peso-denominated loans for its Mexican borrowers. These swaps create some

volatility in NADB's comprehensive income. Outlook The outlook on the ratings is negative. Further increases in theembedded risk of NADB's portfolio or the deterioration of its loan portfolio performance could result in a downgrade. The bank's

plan to increase its leverage will likely preclude an upgrade. Additionally, our revised multilateral lending institutions criteria, which

we expect to have in place by the end of this year, could affect the ratings. Related Criteria And Research

It funds water infrastructure and road maintenance not new investment and it can only

fund the plan if it is environmentally beneficial
http://www.reuters.com/article/2012/07/23/idUSWNA177320120723http://www.reuters.com/article/2012/07/23/idUSWNA177320120723http://www.reuters.com/financehttp://www.reuters.com/article/2012/07/23/idUSWNA177320120723http://www.reuters.com/article/2012/07/23/idUSWNA177320120723http://www.reuters.com/financehttp://www.reuters.com/article/2012/07/23/idUSWNA177320120723http://www.reuters.com/article/2012/07/23/idUSWNA177320120723


14/63

Balido8/29/2011 Nelson Balido is the president of the Border Trade Alliance http://www.thebta.org/btanews/bill-to-expand-nadbank-projects-holds-potential-to-make-big-impact-for-border.htmlBill to expand NADBank projects holds potential to make big

impact for border

Over the past sixteen years of operation, the NADBank has been vitally important to improving basic services

in the border region by financing numerous water, wastewater, solid waste and street paving

projects, among others. To date, NADBank has provided approximately $1.24 billion in loans and grantsto support 149 infrastructure projects in the border region, which represents a total investment

of $3.26 billion and will benefit more than 12.8 million residents of the region. One particularly notableaccomplishment is the significant improvement in wastewater treatment coverage on the Mexican side of the border. In 1995, it was

estimated that 27 percent of wastewater generated in border communities was being treated. According to Mexicos National

Water Commission (CONAGUA), wastewater treatment coverage has now reached approximately 85 percent. This dramatic

improvement is in large part due to the work of NADBank. The bank remains limited, however, in the projects it can

finance. Its charter permits the bank only to get involved in projects deemed to have a

significant positive environmental impact.There have been cases where the NADBank has taken

interest in projects involving international ports of entry that would benefit an areas economy

and create new jobs. Yet the bank has been unable to deliver financing to such projects, over the

objections of its board of directors, for not demonstrating a sufficient environmental benefit to

merit NADBank financing.
http://www.thebta.org/btanews/bill-to-expand-nadbank-projects-holds-potential-to-make-big-impact-for-border.htmlhttp://www.thebta.org/btanews/bill-to-expand-nadbank-projects-holds-potential-to-make-big-impact-for-border.htmlhttp://www.thebta.org/btanews/bill-to-expand-nadbank-projects-holds-potential-to-make-big-impact-for-border.htmlhttp://www.thebta.org/btanews/bill-to-expand-nadbank-projects-holds-potential-to-make-big-impact-for-border.html


15/63

NADBank cant solve relationsNADBank fails only works for environmental problemsdoesnt spillover into other parts of

the relationship

- Uncertainty kills the environmental benefit also means perception is key

Kevin P. Gallagher 2009 Associate Professor of International Relations. (BA, Northeastern University; MA, PhD, TuftsUniversity) Specialization: Economic Development, Trade and Investment Policy, International Environmental Policy, Latin America.NAFTA and the Environment:

Lessons from Mexico and Beyondhttp://www.ase.tufts.edu/gdae/Pubs/rp/PardeeNAFTACh6GallagherEnvtNov09.pdf

Renewed Institutions for Environment and Development In order for the expanded role of environmental issues under NAFTA to

work and be accepted, the existing mechanisms for financing environmental initiatives in the region will need to be strengthened. As

it stands, funding for environmental improvements in Mexico has been on the decline since NAFTA. If the environmental

provisions of NAFTA are seen as an unfunded mandate there will be great reluctance or ability

on the part of the Mexican government to carry those provisions out. Indeed, there is some

evidence that such perceptions persisted when NAFTA was signed, partly explaining why the

environmental record under NAFTA has been poor in Mexico. 14 The NADBANK was originally

proposed by prominent economists Albert Fishlow, Sherman Robinson, and Raul Hinojosa-Ojeda. 15 The idea was that

the institution would serve as a regional development and adjustment assistance bank to helpharmonize development in North America. The NADBANK was indeed established under NAFTA, but in

the end only to address environmental problems in the U.S.-Mexico border. The organization was long

plagued by difficulties and reformed by the Bush and Fox administrations in 2001, but only to

strengthen its mandate to U.S.-Mexico border environmental issues. A revitalized NADBANK would go backto its originally proposed idea of being a development bank and adjustment assistance facilitator, modeled after the structural funds

under European economic integration and Brazils national development bank, (BNDES). To that end, the NADBANK would

have to be recapitalized by NAFTA governments and be able to sell bonds and take equity stakes

in order to raise more funds when needed as well. In relation to the environment in all three NAFTA countries, a

revitalized NADBANK would have to:

Support small scale, sustainable agriculture initiatives

provide loans for small- and medium sized enterprises (SMEs) for innovation and to comply withenvironmental regulations.

provide loans and financing support for public infrastructure renewable energy development,

and environmental cleanup projects.

Support public-private partnerships for environmental related research and development

activities.

develop and maintain and active research team that examines the environment and

development aspects of the NAFTA countries and bank activities.
http://www.ase.tufts.edu/gdae/Pubs/rp/PardeeNAFTACh6GallagherEnvtNov09.pdfhttp://www.ase.tufts.edu/gdae/Pubs/rp/PardeeNAFTACh6GallagherEnvtNov09.pdfhttp://www.ase.tufts.edu/gdae/Pubs/rp/PardeeNAFTACh6GallagherEnvtNov09.pdf


16/63

Agency Overstretch

Expanding the NADBank mandate to include transportation infrastructure crushes

environment-based projects overstretches the institution

George Kourous (directs the IRC's BIOC program, Writer, Editor & Senior Program Associate at International Relations Center (IRC)) October2000The Great NADBank Debate ProQuestThe charter that created BECC and NADBank requires the institutions to support projects that

address "water pollution, wastewater treatment, municipal solid waste management, and

related matters." Now, NADBank management is recommending that this list be expanded to

include seven new areas, including: general air quality projects; air quality projects related to street paving; housing improvements and mortgages;

industrial and hazardous wastes; municipal urban roads and public transportation; water and wastewater home

installations; and water transfers (agricultural to municipal). The recommendation has gotten mixed reviews. Municipalgovernment officials working to provide their communities with potable water, wastewater treatment, and solid waste disposal facilities are the most

skeptical. Hector Gonzalez, Strategic Business Manager at the El Paso Water Utilities Board, thinks that these are still the priority areas for border

infrastructure development and that BECC and NADBank should stick to their original mission. "Our concern is that by expanding the

scope of the kinds of projects they fund, they might limit funding for water and wastewater

projects," Gonzalez explains. "There's still lots of work to be done in those areas, and the focus shouldbe there first." Mariano Martinez, Director of Public Works for the border town of Calexico, California, is also wary. "I don't agree with it," he

says. "They're going to lose sight of the original intent, which was to address these

environmental infrastructure needs, especially in small border communities." Border environment expert Mark Spalding, whilenot 100% opposed to all the proposed additions , has similar concerns. "I would like to search for more and better ways to make NADBank's capital

affordable," he says, "rather than to quickly over-expand the mandate. After all, the original mandate was selected for a

reason." In addition to these concerns, other aspects of the bank's proposal have raised red flags for

border environmentalists. For example, Mark Spalding and others have pointed out that aside from diverting

resources from the border's still-pressing needs related to clean water, wastewater

treatment, and solid waste disposal, some of the new areas proposed by NADBank--such as

transportation infrastructure and water transfers--could easily exacerbate environmental problems on

the border rather than ameliorate them. "Water transfers," notes Spalding, "are not

environmentally sound. They often foster further population growth and neglect the needs ofnatural ecosystems, including in-stream flows." Another concern is that many of the new

projects proposed by NADBank are more likely to benefit private industry than border

communities. A proposed railway to connect the port of San Diego to Arizona and the rest of the U.S., for instance, is highlighted in the bank'sreport as a way of reducing traffic congestion and air pollution. These are difficult goals to find fault with, say environmentalists, but ultimately will

benefit the private sector most--at the possible expense of the border's poor households, many of whom still lack basic services like running water and

sewage disposal.

NADBank expansion crushes the BECC

George Kourous (directs the IRC's BIOC program, Writer, Editor & Senior Program Associate at International Relations Center (IRC)) October

2000The Great NADBank Debate ProQuestSmothering BECC

Because this debate started as a discussion focused solely on NADBank, little attention waspaid to the impact that mandate expansion would have on BECC. Most observers agree, however, that

because NADBank is required to work with BECC and can only fund BECC-certified projects,

any expansion at the bank would have to be mirrored at BECC. Indeed, a favorite phrase of NADBank GeneralManager Victor Miramontes used to be that BECC and NADBank were "joined at the hip." Aside from the possib le side-effect of diverting attention

and resources away from the border's pressing water, waste-water, and solid waste infrastructure needs, expanding NADBank's

mandate and requiring BECC to match that expansion would place an additional financial

burden on the already strapped-for-cash institution. "Currently, BECC is too under-funded to

do more than a cursory review of water, wastewater, and solid waste projects, where it does have


17/63

considerable expertise," says Cyrus Reed. "Any expansion of the types of projects considered would

necessitate creating some kind of financial mechanism to assure an adequate BECC review ,administration of that review, and the required public participation component." Each year, BECC's budget must depend upon a ppropriations from

both Mexico and the United States. BECC appropriations debates have become annual battles, and have led

to an actual drop in BECC's budget even as the institution has taken on more projects and

responsibilities. If the expansion of NADBank's mandate were tied to increased funds, it might

actually help put BECC on more solid ground. On the other hand, if that expansion comeswithout additional funding for BECC, border environmentalists warn that BECC will find itself

severely overstrained and could buckle. Organizations like the Texas Center for Policy Studies caution that, even with

additional funding, this could still be a danger. Despite the fact the BECC and NADBank are

required to work together as sister institutions, the bank has done little to bring BECC into the

process of examining mandate expansion. When BECC first caught wind that the bank was considering the matter, itsuggested that a bi-institution working committee be formed, but NADBank did not bite. BECC also suggested a joi ntly conducted series of public

consultations, again with no bank follow up. BECC also asked to make a public presentation on the topic at NADBank's last public board of director's

meeting in July, but the bank declined BECC's offer. "We're not particularly happy about the manner in which the

NADBank set out to do this, and that has mainly to do with the fact that NADBank and the

BECC are sister institutions that are supposed to work like two arms on the same body," says

Lynda Taylor, "and they sort of launched this initiative without any real discussion with the BECC. They just sort of told us, `we're

doing this, and we'll take your comments when we take all the other public comments.'" MarkSpalding says NADBank's failure to consult with BECC when developing its proposal was a serious

mistake. "It appears that the draft document was prepared without direct and meaningful advance consultation with the BECC," he notes. "That

omission alone makes the draft fatally flawed. Mandate expansion is too important an issue to go without such

consultation, and the NADBank board should take no action until such full consultation is

undertaken."


18/63

EXT UniqunessNADB currently funds only environmental infrastructure

BECC 142 [Border Environment Cooperation Commission, AN INDEPENDENT, BINAT IONAL ORGANIZATION CREATED TOSUPPORT THE DEVELOPMENT OF ENVIRONMENTAL INFRASTRUCTURE PROJECTS IN THE 100 KM REGION ON EITHER SIDE OF THE

U.S.-MEXICO BORDER. http://www.calepa.ca.gov/border/Documents/becc.pdf]

The Border Environment Cooperation Commission (BECC) is an independent, binationalorganization created to support the development of environmental infrastructure projects in

the 100 km region on either side of the U.S.-Mexico border. The Governments of the United States

and Mexico created the BECC, and its sister organization, the North American Development Bank

(NADBank), pursuant to an Agreement between the two Governments, in November of 1993.The

two organizations provide a new, bilateral approach for the development and financing of

environmental infrastructure projects (water supply, wastewater treatment, and municipal solid waste). The BECC

identifies, assists, evaluates, and certifies projects for financing consideration from the NADBank, or other funding sources. The

BECC and NADBank work hand-in-hand to develop and finance projects in the border region.When the NADBank is fully capitalized, it will have the lending capacity of $3 billion dollars, with contributions made equally by the

United States and Mexico, to leverage the financing needed by border communities. NADBank has additional resources to

supplement its loan funding. The Border Environment Infrastructure Fund (BEIF), a $170 million grant program initially funded by

EPA, was created to provide grants for construction and transition funds to BECC-certified projects. Furthermore, the investmentof private capital or equity capital and additional sources of funding is critical to complement NADBanks resources.
http://www.calepa.ca.gov/border/Documents/becc.pdfhttp://www.calepa.ca.gov/border/Documents/becc.pdf


19/63

EXT - Link

NADB funds are limited- expanding projects hurts environmental infrastructure

GAO 2kUS General Accounting Office, Report to Congressional Requesters, (US Mexico Border- Despite Some Progress,Environmental Infrastructure challenge remain March 2000,http://www.gao.gov/assets/230/228734.pdf)

The Border Environment Cooperation Commissions primary function is to certify that proposals submitted by border communities

for environmental infrastructure projects meet criteria for technical and financial feasibility and that the projects are

environmentally sound, self-sustaining, and supported by the public. The Border Commission also assists states and localities in the

preparation, development, implementation, and oversight of environmental projects in the border region. Based on guidance in

the Border Commissions charter, theboard of directors has limited its area of consideration to

water, wastewater, and solid waste disposal. The Border Commission emphasizes the importance of project

sustainability in its certification process because, in the past, projects have been built in poor communities with

grants and other assistance that could not be properly maintaineed due to the communities limited

institutional capacity and financial resources. The Border Commission also provides technical assistance to bordercommunities with project development activities, including devising plans, creating project designs, and performing environmental

assessments. According to Border Commission officials, the process to develop and certify a project generally takes between 3 and 5

years, depending on (1) the complexity of the project, (2) the level of development a project is at when submitted, (3) the

institutional capacity of the community, and (4) the amount of technical assistance the Border Commission needs to provide to the

community. (Table 3 in app. I provides further details on the Border Commissions project identification and development process.)As of September 1999, the Border Commission had certified 31 projects 12 in Mexico and 19 in the

United States. Twenty-eight projects are for water and wastewater treatment systems, and 3 are for solid waste disposafacilities. The total estimated construction cost of these projects is $680.2 million, and, when completed, they are expected to

benefit a total of 6.7 million people. (See table 4 in app. I for more details on the 31 Border Commission-certified projects.) The

United States and Mexico provide annual appropriations to the Border Environment Cooperation

Commission to cover operational expenses. In addition, most of the Environmental Protection Agencys technical assistance fundingto U.S. and Mexican communities for water or wastewater treatment projects is provided through the Border Commission. (See

table 6 in app. I for more details on Border Commission funding.) Only projects certified by the Border

Environment Cooperation Commission qualify for construction financial assistance from the

North American Development Bank.The Banks primary purpose is to facilitate financing for the

development, execution, and operation of environmental infrastructure projects. The Bank may make

loans and/or loan guarantees, and it also administers Environmental Protection Agency grant funds through the BorderEnvironmental Infrastructure Fund. Established in 1997, the Border Environmental Infrastructure Fund provides grants to

communities to reduce the total cost of needed projects. These grant funds may be applied to water and

wastewater projects on the U.S. side of the border and on the Mexican side, if the infrastructure deficiency affects both sidesof the border. If grant funds are used on the Mexican side of the border, Mexico must provide an equal border investment. The Bank

also provides technical assistance to communities to help them develop the financial and administrative capacities of utility

managers and their staffs. The United States and Mexico agreed to contribute equally to the capitalization of the bank. The

agreement called for a total of $3 billion $450 million in paid-in capital and an additional $2.55 billion in callable capital. 8 Ten

percent of the paid-in capital was earmarked to community adjustment and investment activities in both countries. To date, each

country has contributed $174.4 million, or 78 percent, of the Banks paid-in capital, with the remaining paid-in capital to be paid by

September 2004. As of September 1999, the Bank had obligated a total of $154.5 million in loans and grants to fund construction for

20 Border Commission-certified projects. Of the total, $11.2 million was provided through direct loans. These loans represent only

3.2 percent of the Banks total paid-in capital contributed to date. The biggest source of the Banks assistance has been through

Border Environmental Infrastructure Fund grants, which had an initial funding of $170 million. All but 4 of the 20 Bank-financed

projects had such grant funding. Since the creation of the Border Environmental Infrastructure Fund, $143.4 million have been

obligatedrepresenting 93 percent of the total funds provided through the Bank. Applications for $34.4 million werepending certification by December 1999, which will deplete the initial funding. However, as of December 1999, theEnvironmental Protection Agency allocated an additional $41 million to the Border Environmental Infrastructure Fund. According to

North American Development Bank officials, without continued funding for Border Environmental Infrastructure Fund

grants, environmental infrastructure development along the border will be jeopardized. Figure 2shows the breakdown of all funding sources for the 20 projects. The Bank provided $85.2 million, or 21 percent, of U.S. project costs,

and $69.3 million, or 50 percent, of Mexican project costs through loans or Environmental Protection Agency grants. The grants,

however, amounted to 96 percent and 88 percent of the Banks funds provided to U.S. and Mexican projects,respectively. (See table 7 in app. I for more details on the 20 Bank-financed projects.)
http://www.gao.gov/assets/230/228734.pdfhttp://www.gao.gov/assets/230/228734.pdfhttp://www.gao.gov/assets/230/228734.pdf


20/63


21/63

Impact I/L Renewables

Environmental funding key to alternative energy development

BusinessWire 1/14/13- (North American Development Bank and Soriana Move Forward on Wind Energy January 14,2013, http://www.businesswire.com/news/home/20130114006289/en/North-American-Development-Bank-Soriana-Move-Wind)

Organizacin Soriana, who with the Mexican company GEMEX and Swiss investor Grupo ECOS have formed the company Compaa

Elica de Tamaulipas S.A. de C.V. (CETSA), announce the closing of financing for the construction of its first wind energy project on

the farm cooperative known as Ejido El Porvenir in Reynosa, Tamaulipas. The North American Development Bank (NADB) and the

Mexican commercial bank Grupo Financiero Banorte (BANORTE) are providing financing to CETSA for the project. The

project consists of the installation of 30 wind turbines, each with a nominal capacity of 1.8 MW, which will beprovided by the Danish company VESTAS, a worldwide supplier of wind turbines, as announced by Vestas Mediterranean on

December 28, 2012. The Mexican retailer Organizacin Soriana will purchase the electricity produced by the wind

farm through a long-term power purchase agreement, in order to actively contribute to the development of

renewable and sustainable energy, while at the same time reducing its energy costs by

purchasing the electricity generated by CETSA through a self-supply structure. This electricity will be used by

Soriana to supply 163 stores throughout Mexico, which represents the displacement of 100,00 tons

of carbon dioxide a year, equivalent to taking 29,000 cars a year out of circulation, stated Aurelio Adn Hernndez, SorianaChief Financial Officer. Construction is scheduled to begin during the first quarter of this year and is estimated to cost more than

US$130 million. With respect to the financing, NADB and BANORTE through a bank consortium are providing a loan to CETSA

through a project finance mechanism for the construction of what will be the first wind farm in the state of Tamaulipas. This is

the first wind energy project in Mexico to be funded by NADB, stated NADB Managing Director Gernimo

Gutirrez, referring to the US$51 million loan provided by the bilateral financial institution for the project. Its an example of

the joint efforts of the public and private sectors to implement clean energy projects , as well assupports the efforts of the State of Tamaulipas and the Mexican Government to combat climate change. Tamaulipas Governor

Egidio Torre Cant indicated that El Porvenir reflects the potential for developing wind energy projects in Tamaulipas, as well as his

Administrations commitment to promoting investment in the state, to the environment and to the development of sustainable

infrastructure. For his part, Adrian Katzew Corenstein, Vice President and General Manager of Vestas Mexico & Caribbean, said,

This project demonstrates our dedication to Mexico and Vestas commitment to continue

playing a leading role in the diversification and sustainability of thecountrys energy mix."

Environmental benefits related to this project include the displacement of over 90,976 metrictons of carbon dioxide (CO2), 1,442.4 metric tons of sulfur dioxide (SO2) and 189.7 metric tons of nitrogen oxides (NOx)per year. The project was certified by the Border Environment Cooperation Commission (BECC) in February 2012.
http://www.businesswire.com/news/home/20130114006289/en/North-American-Development-Bank-Soriana-Move-Windhttp://www.businesswire.com/news/home/20130114006289/en/North-American-Development-Bank-Soriana-Move-Wind


22/63

No Solvency - Bureaucracy

NADBank doesnt solve bureaucracy

Dallas Morning News April 2011Editorial: North American Development Bank needs streamlined bureaucracyhttp://www.dallasnews.com/opinion/editorials/20110415-editorial-north-american-development-bank-needs-streamlined-bureaucracy.ece

The bank hasnt had a stellar past. Because all loans require approval of agencies and officials

from both countries, all kinds of political jockeying can come into play. A simple loan

application can get mired in bureaucratic quicksand.There was a justified concern that the

bank wasnt performing as it should, said Gernimo Gutirrez, NADBanks managing director. Much has changed. The bank, whichonce relied on congressional funding, now is 100 percent self-financing, with $3 billion in capital. It holds upper-tier status from major ratings

agencies. The bank can perform even better if Mexico and the U.S. find ways to streamline the

binational governing structure and empower the banks leadership to make decisions more

quickly. Dont relax oversight, but dont allow bureaucracy to stifle NADBanks good work at the border.


23/63

EXT NADBank only environment

NAD Bank can only address environmental issues

Gallagher, 09(Kevin P., November, professor at Boston University IR Department and an expert on: EconomicDevelopment, Trade and Investment Policy, Boston Universitys The Frederick S. Pardee Center for the Study of the Longer-Range

Future, The Future of North American Trade Policy: Lessons from NAFTA,http://www.bu.edu/pardee/files/2009/11/Pardee-

Report-NAFTA.pdf)//YS, accessed 7/02/13

The NADBANK was originally proposed by prominent economists Albert Fishlow, Sherman Robinson, and Raul Hinojosa-Ojeda.15 The

idea was that the institution would serve as a regional development and adjustment assistance bank to help harmonize

development in North America. The NADBANK was indeed established under NAFTA, but in the end

only to address environmental problems in the U.S.-Mexico border. The organization was

long plagued by difficulties and reformed by the Bush and Fox administrations in 2001, but

only to strengthen its mandate to U.S.-Mexico border environmental issues. A revitalized NADBANK

would go back to its originally proposed idea of being a development bank and adjustment assistancefacilitator, modeled after the structural funds under European economic integration and Brazils national development bank,

(BNDES). To that end, the NADBANK would have to be recapitalized by NAFTA governments and be

able to sell bonds and take equity stakes in order to raise more funds when needed as well. In

relation to the environment in all three NAFTA countries, a revitalized NADBANK would have to: Support small scale, sustainableagriculture initiatives. Provide loans for small- and medium-sized enterprises (SMEs) for innovation and to comply with nvironmental

regulations. Provide loans and financing support for public infrastructure, renewable energy development, and environmental

cleanup projects. Support public-private partnerships for environment-related research and development activities. Develop and

maintain an active research team that examines the environment and development aspects of the NAFTA countries and bank

activities.

Bureaucracy issues, only $3 billion in capital, and projects have to be

environmental

Dallas News, 11(April 15, North American Development Bank needs streamlinedbureaucracyhttp://www.dallasnews.com/opinion/editorials/20110415-editorial-north-

american-development-bank-needs-streamlined-bureaucracy.ece)//YS, accessed 7/02/13

The North American Development Bank is one of those entities that 99 percent of Americans probably dont know exists. Thats

because they dont live along the border or understand the dire need for Mexico and the United States to cooperate on projects that

affect the quality of life on both sides. Take, for example, water treatment. Before NADBank existed, Mexican border cities tended to

dump their raw sewage into the closest waterway. For cities like Tijuana, that meant a daily output of 20.88 million gallons of

sewage heading right into the Pacific, and much found its way onto San Diegos beaches. The same was true for cities south of Texas

along the Rio Grande. Financing fixes to those problems is what NADBank is all about. Its not glamorous, headline-grabbing work,

but it affects millions of people. NADBank was created under the 1994 North American Free Trade Agreement to address what both

countries acknowledged to be the serious and growing population-related problems along the border. All of its projects

must somehow enhance environmental quality, recognizing that an unfixed problem on one side of the bordercan have serious consequences for residents on the other side. For example, a large part of the smoky haze that regularly settles

over Big Bend National Park is the result of air pollutants from dumps and coal-fired power plants in Mexico. The bank hasnt had a

stellar past. Because all loans require approval of agencies and officials from both countries, all

kinds of political jockeying can come into play. A simple loan application can get mired in

bureaucratic quicksand. There was a justified concern that the bank wasnt performing as it should, said Gernimo

Gutirrez, NADBanks managing director. Much has changed. The bank, which once relied on congressional funding, now is 100

percent self-financing, with $3 billion in capital. It holds upper-tier status from major ratings agencies. The bankcan perform even better if Mexico and the U.S. find ways to streamline the binational governing structure and empower the banks

leadership to make decisions more quickly. Dont relax oversight, but dont allow bureaucracy to stifle NADBanks

good work at the border.
http://www.bu.edu/pardee/files/2009/11/Pardee-Report-NAFTA.pdf)/YShttp://www.bu.edu/pardee/files/2009/11/Pardee-Report-NAFTA.pdf)/YShttp://www.bu.edu/pardee/files/2009/11/Pardee-Report-NAFTA.pdf)/YShttp://www.dallasnews.com/opinion/editorials/20110415-editorial-north-american-development-bank-needs-streamlined-bureaucracy.ece)/YShttp://www.dallasnews.com/opinion/editorials/20110415-editorial-north-american-development-bank-needs-streamlined-bureaucracy.ece)/YShttp://www.dallasnews.com/opinion/editorials/20110415-editorial-north-american-development-bank-needs-streamlined-bureaucracy.ece)/YShttp://www.dallasnews.com/opinion/editorials/20110415-editorial-north-american-development-bank-needs-streamlined-bureaucracy.ece)/YShttp://www.dallasnews.com/opinion/editorials/20110415-editorial-north-american-development-bank-needs-streamlined-bureaucracy.ece)/YShttp://www.bu.edu/pardee/files/2009/11/Pardee-Report-NAFTA.pdf)/YShttp://www.bu.edu/pardee/files/2009/11/Pardee-Report-NAFTA.pdf)/YS


24/63

Projects financed by the NadBank have to be environmentally friendly

NADBANK, 12 (December, Information Statement,http://www.nadbank.org/BondsAndInvestment/PDF/2012Information%20StatementDec10.pdf

)//YS, accessed 7/02/13

General. The North American Development Bank is a binational development financing institution established

by the United States of America (United States or U.S.) and the United Mexican States (UMS or Mexico) to financeenvironmental infrastructure projects in the U.S.-Mexico border region. The Banks financing activitieshistorically focused on creating and sustaining drinking water supplies and developing wastewater treatment and municipal solid

waste management facilities. In 2000, its mandate was expanded by the Banks Board of Directors (the

Board) to include other sectors that have environmental and/or health benefits for the

residents of the border region, including air quality, clean energy, energy efficiency, public transportation and watermanagement. As part of this expanded mandate, the Bank participated in its first loan to a solar energy project in 2011, followed in

the first three quarters of 2012 by two additional solar energy project loans and one wind energy project loan. Additionally, the Bank

is currently working on financing seven additional projects (three wind energy, two solar energy, one air quality, and one water).

The financing agreements for these projects are in various stages of development (some are in final negotiations while others are

executed and actively disbursing), and all are expected to be executed by the end of 2012. The technical feasibility and

environmental impact of, and public participation with respect to, all projects to be financed by the Bank

are required to be evaluated and certified by the Border Environment Cooperation

Commission (BECC).

The aff hurts the border environmenttherefore it cant be financed by

NADBank

Rosenblum, 12(Marc, January 6, Specialist in Immigration Policy, Congressional Research Service, Border Security:Immigration Enforcement Between Ports of Entry,http://fpc.state.gov/documents/organization/180681.pdf)//YS,accessed

7/02/13On the other hand, the deployment of border enforcement personnel and infrastructure also entails a

number of costs at the local level. First, the construction of fencing, roads, and other tactical

infrastructure may damage border-area ecosystems. These environmental considerations may be especially

important because much of the border runs through remote and environmentally sensitive

areas.146 For this reason, even when accounting for the possible environmental benefits of reduced illegal border flows, some

environmental groups have opposed border infrastructure projects because they threaten

rare and endangered species as well as other wildlife by damaging ecosystems and restricting

the movement of animals, and because surveillance towers and artificial night lighting have detrimental effects onmigrant birds.147
http://www.nadbank.org/BondsAndInvestment/PDF/2012Information%20StatementDec10.pdfhttp://www.nadbank.org/BondsAndInvestment/PDF/2012Information%20StatementDec10.pdfhttp://fpc.state.gov/documents/organization/180681.pdf)/YShttp://fpc.state.gov/documents/organization/180681.pdf)/YShttp://fpc.state.gov/documents/organization/180681.pdf)/YShttp://www.nadbank.org/BondsAndInvestment/PDF/2012Information%20StatementDec10.pdf


25/63


26/63

***Nieto Credibility***

Nieto cred high now structural reformsLomeln 13 (Gustavo, 4/8/13, Political journalist in Mexican media, Mexican Optimism

regarding the forthcoming Obama-Pea Nieto Talkshttp://mexidata.info/id3591.html) Mexico and the United States have an historic opportunity to strengthen their bilateral relationship. President Barack Obama will visit Mexico inearly May, and he has already shown his willingness to reduce the trade and trafficking of arms, and to push immigration reform that legalizes thestatus of 11 million undocumented immigrants, mostly Mexicans. While Obama's decision to reduce illegal arms trafficking seeks to avoid newtragedies in the United States, like the massacre in Newtown last December that killed 26 people, including 20 children, Mexico is interested in amore stringent and restrictive regulation, particularly for assault weapons that are sold illegally to Mexican drug cartels. Furthermore, according tostudies and experts, immigration reform will have a favorable impact on the economies of Mexico and the United States. According to severalstudies, millions of undocumented immigrants living in the shadows could obtain better wages, consume more and pay more taxes with a workpermit and residence. As well, they would send more money to our country as remittances, at a time when that foreign exchange flow has contracteddue to the economic crisis in the United States. These effects would strengthen economic growth and job creation, and there would be a Mexican

economy spillover. For his part, President Enrique Pea Nieto has gained credibility bothwithin and outside the country based on the recent structural reforms adoptedthrough the Pact for Mexico,with agreements reached between the federalgovernment and the major political parties(PRI, PAN, PRD and PVEM). Just [a week ago] the influential U.S.newspaper The Washington Post noted the adoption of structural reforms in Mexico, and, in particular, progress on a new framework to breakupmonopolies in the country. In its main editorial, The Washington Post noted that the ability to negotiate between the Pea Nieto government andCongress should be taken as an example in the United States. Moreover, legal modifications that were blocked for more than a decade, that thecountry urgently needed, [have been] solidified with the new administration in a matter of months. "Now, with the new administration, Mexicans are

showing that big political negotiations can happen, and that democracies can tackle their toughest problems," noted the U.S. newspaper. It isincreasingly evident that, little by little, the image of the country has been "de-narcotized" in order to prioritize positive issues on the national agenda,such as economic and migratory [matters]. In fact, the drug fighting policy of the Pea Nieto government is directed at the roots of the problems, likepoverty and unemployment. Besides, the current administration is attacking problems that have retarded the country for generations, during whichthe economy of misery empowered the drug cartels in Mexico. It is clear that Obama [and] Pea Nieto act with effective public policies in orderto profoundly change their respective countries, and this will undoubtedly result in a better relationship between the two nations that transcends the

bonds between theEmpire and the Colony that have a habit of prevailing
http://mexidata.info/id3591.htmlhttp://mexidata.info/id3591.htmlhttp://mexidata.info/id3591.html


27/63


28/63

***Border Insecurity***


29/63

Effective now

Border security is effective in the status quoReuters 13 (Reuters, "Mexico Concerned By U.S. Measure To Strengthen Border Security" June

25, 2013 http://www.huffingtonpost.com/2013/06/25/mexico-concerned-border-security_n_3498605.html, RLA)

On Monday, a border security amendment seen as crucial to the fate of an immigration bill backed by President

Barack Obama cleared a key procedural hurdle in the U.S. Senate, helping pave the way for the biggestchanges to U.S. immigration law since 1986.

The amendment would double the number of agents on the southern border to about 40,000

over the next 10 years and provide more high-tech surveillance equipment to stop illegal crossings at

the U.S.-Mexico border. The amendment also calls for finishing construction of 700 miles (1,120

km) of border fence. The bill would also grant legal status to millions of undocumented foreigners, who would be put on a13-year path to citizenship.

U.S. Mexico border has never been safer any threats are exaggeratedBall 2/22 (Molly Ball, journalist for The Atlantic and The Next America National Journal, Will

Immigration hawks ever think the border is secure enough?, 2/22/13,

http://www.nationaljournal.com/thenextamerica/immigration/will-immigration-hawks-ever-

think-the-border-is-secure-enough-20130222, 7/2/13)

Border security could be the issue that kills immigration reform. And yet, by most measures, the

U.S.-Mexico border has never been safer. The bipartisan group of U.S. senators seeking

comprehensive immigration reform have proposed a "trigger" mechanism, whereby a path to

citizenship would be contingent on increased border security. President Obama and liberals

have not endorsed the idea, although the president is "committed to increasing our bordersecurity further," according to White House Press Secretary Jay Carney. Disagreement over the

trigger is the largest current discrepancy between the Senate and White House versions of

immigration reform. It could cause the whole thing to fall apart. Yet the idea -- expressed by

both sides -- that the border needs more security may be the biggest myth of the immigration

debate, according to Rep. Beto O'Rourke. A newly elected Democrat, O'Rourke represents El

Paso, Texas, the border city that shares a street grid -- and 11 border inspection stations --

with the Mexican city ofJuarez. El Paso also has the lowest crime rate of any large U.S. city.

(The second-safest large city? It's on the border, too: San Diego.) The common assumption,

O'Rourke told me recently, "is that the border is not secure." In fact, by almost any measure --

crime, unauthorized border crossings, resources devoted to border patrol -- the U.S.-Mexico

border has never been more secure than it is now. The problem for the immigration debate is

that those who claim we need more border security are rarely called upon to prove it. No one

has proposed a set ofconcrete standards; rather, some are calling for a subjective evaluation to

be made by border-state governors, some of whom have political incentives to exaggerate the

threat -- and track records of doing so.
http://www.nationaljournal.com/thenextamerica/immigration/will-immigration-hawks-ever-think-the-border-is-secure-enough-20130222http://www.nationaljournal.com/thenextamerica/immigration/will-immigration-hawks-ever-think-the-border-is-secure-enough-20130222http://firstread.nbcnews.com/_news/2013/02/06/16869322-progressives-pressure-obama-on-immigration-reform-triggers?litehttp://firstread.nbcnews.com/_news/2013/02/06/16869322-progressives-pressure-obama-on-immigration-reform-triggers?litehttp://www.nationaljournal.com/thenextamerica/immigration/will-immigration-hawks-ever-think-the-border-is-secure-enough-20130222http://www.nationaljournal.com/thenextamerica/immigration/will-immigration-hawks-ever-think-the-border-is-secure-enough-20130222


30/63

At: Border Terror

Cant solve border terrorismtheyll use other means or adapt

Allen, 12Senior Fellow at CFR (Edward, CATO Journal, Immigration and Border

Control,http://www.cato.org/pubs/journal/cj32n1/cj32n1-8.pdfSW)

The third need is to reconsider our understanding of national security and border

control. The close link in the public mind is largely a result of the specific circumstances

of the 9/11 attacks, in which all the attackers entered the United States from overseas.

The result has been an intense focus on policies designed to prevent similar future

attacks, and border control has figured prominently. But if the attacks had been carried

out by individuals who had lived many years in the United Statessuch as the

perpetrators of the 2005 London subway bombing, who were all born or raised in the

United Kingdonthe response would have been quite different. Immigration policy

might still have figured prominently in the reaction, but the issue would have beenas

it has largely been in Europethe failure of integration rather than the failure of border

control. Border control is a very limited counterterrorism tool. While it can raise the

hurdles for entry, there are many other ways to carry out terrorist attacks successfully.

It is not coincidental that since 9/11 the majority of the terrorist conspiracies in the

United States have involved U.S. citizens or permanent immigrants rather than recent

arrivals. Terrorist groups have simply adapted to tougher border controls and recruited

accordingly (Alden 2010c).

Status quo measures solve all forms of terrorismDepartment of Homeland Security 13(The Department of Homeland Security ProtectingOur BordersThis is CBP 03/11/2013http://www.cbp.gov/xp/cgov/about/mission/cbp.xml,

RLA)

CBP assess all people and cargo entering the U.S. from abroad for terrorist risk. We are able tobetter identify people who may pose a risk through init