EL PASO, Texas (Border Report) – El Paso merchants can expect the gradual return of shoppers from Northern Mexico in the second half of 2021 as border travel restrictions begin to be lifted, a local economist says.
Tom Fullerton, professor of economics and finance at the University of Texas at El Paso, says that will have a positive impact on El Paso’s $13 billion-a-year retail market.
“Loosening those restrictions (will occur) during the third quarter – potentially earlier, but I’m betting on the third quarter, though they may not be completely removed,” Fullerton said Thursday on Zoom.
Non-essential travel restrictions are in place since March 2020 to prevent cross-border spread of COVID-19. The absence of shoppers from Northern Mexico has devastated some El Paso businesses. Downtown El Paso merchants have told Border Report they’ve lost 70% to 90% of their customers since last March.
U.S., Mexican and Canadian officials have been extending the restrictions every month and there’s no word when the policy will be halted.
Fullerton says he expects pedestrian traffic to increase by 1 million people once restrictions are eased. Passenger vehicle traffic should see a similar hike. Likewise, he expects commercial traffic to rise by 10% as manufacturing plants in Juarez pick up activity. That, in turn, will benefit El Paso’s warehousing and transportation businesses.
But there’s a caveat to the rosy predictions.
A new mass arrival of international citizens seeking asylum in the United States could force U.S. Customs and Border Protection to, again, reassign officers from the international bridges to migrant holding facilities.
That’s what happened in early 2019 and brought about processing delays of several hours at border crossings in the region.
“Let’s see if that happens this year. I’m not sure that’s going to happen,” Fullerton said. However, if thousands of migrants again show up at the border seeking admission, CBP would have to deal with them.
Reports out of South Texas say U.S. authorities are again allowing refugee families with small children to stay on this side once they come across the border. News reports out of Washington, D.C., say President Biden is poised to reopen the border to those who were sent to wait the outcome of their cases in Mexico under the Trump administration’s Migrant Protection Protocols (MPP) policy.
The Department of Homeland Security on Wednesday reported an increase in encounters with unauthorized migrants in January.
“Let’s see if it happens to the extent that we have to divert personnel away from the bridges,” Fullerton said. “I think they are going to avoid diverting the personnel that manages the cargo flows coming across the border because those are categorized as essential travel.”
He doesn’t foresee a big impact on industry but says it might delay visitors from Northern Mexico coming to shop.
“What it might mean is the rebound that’s eventually going to materialize in terms of retail sales to visitors from Northern Mexico may take longer to materialize if this scenario actually transpires,” Fullerton said.
Mexican shoppers account for between 8% ad 14% of the El Paso retail economy, Fullerton said.
