July 4, 2022

Trade with Mexico Slows Dramatically Following New Inspection Orders in Texas

Businesses are already losing millions of dollars a day.

On April 6, Texas Gov. Greg Abbott instructed the Texas Department of Public Safety to begin conducting “enhanced safety inspections” of vehicles crossing international ports of entry into Texas. The inspections were introduced to combat human trafficking and the flow of drugs, which are serious problems to be sure. The ensuing backlogs, however, are quickly turning into a problem of their own.

“Up to 20,000 truckers cross the border on a normal day,” said Texas Department of Agriculture Commissioner Sid Miller, a Republican, who called the move a “catastrophic policy.” “My reports are that each inspection is taking an hour and has created a backlog of thousands of trucks clogging the border. Refrigerated produce is being ruined as trucks run out of fuel after being in line for over a day.”

The situation is being exacerbated by a blockade set up by Mexican truckers at the Pharr-Reynosa International Bridge, which is being done in protest of the inspections.

“I do describe it as a crisis,” said Hidalgo County Judge Richard Cortez, whose county includes the bridge in Pharr. “You’re talking about billions of dollars.”

According to the Mexican government, cross-border traffic has plummeted to a third of normal levels as a result of the inspections. Business owners and experts are warning that the move is already costing businesses millions of dollars a day, and that shortages and higher prices could appear within the next week. These impacts will be especially noticeable in Texas grocery stores, since Mexico supplies about two-thirds of the produce sold in Texas.

But it’s not just the Texas food market that will feel the pinch. “It’s going to affect all of us, all of us in the United States,” said Jerry Pacheco, executive director of the International Business Accelerator and president of the Border Industrial Association. “Your car parts are going to be delivered late, your computer…a Dell or HP tablet, those are going to be disrupted.”

On Wednesday, Abbott announced that he would be stopping the inspections at one bridge, but the inspections remain in force everywhere else.

Now, in a sense, these supply chain disruptions can be thought of as unintended consequences. As Bastiat and Hazlitt have famously pointed out, policies often have unseen secondary effects which are overlooked by their proponents.

But in this case, calling these consequences “unforeseen” is too generous. Abbott may not have predicted the exact scope of the disruptions, but he absolutely knew they were coming.

“I know in advance this is going to dramatically slow traffic from Mexico into Texas,” he said when he announced the measure. “It is a byproduct of cartels crossing the border from Mexico into Texas.”

It reminds me of the famous line from Lord Farquaad in Shrek. “Some of you may die, but that is a sacrifice I am willing to make.”

The implicit justification, which Abbott hints at when he mentions the cartels, is that this is being done for the greater good. “Yes, this will cause problems,” he is saying, “but stopping these smugglers is more important.”

What Abbott is doing, fundamentally, is imposing his vision of the greater good, overriding all others. “My plan takes precedence over yours,” he is effectively saying, “and if you have to suffer because of that, so be it.”

So what’s the alternative? Well, there are plenty of people who have other plans they’d rather impose, but this only replaces one central plan with another. What we really need is a system that empowers individuals to pursue their own idea of the good.

Fortunately, such a system already exists in the form of the market economy. Through this vast network of voluntary exchange, people from all walks of life are able to coordinate their plans and pursue what they value without harming others in the process.

One of the main ways we pursue our values is through exchange. As consumers, our idea of “the good” manifests partly in our economic values. Our purchasing decisions aggregate into price signals that act like a beacon, drawing goods and services, often across borders whenever that makes the most sense in light of our preferences. Thus, when Abbott imposed his border restrictions, he effectively overrode the wishes and values of millions of consumers, replacing them with his own. The result will be mass frustration, relative impoverishment, even hunger.

Yes, stopping human traffickers at the border is a good thing to do, as is stopping terrorists and any other violent criminal. But by any means necessary and at any cost to innocent truckers, producers, and consumers? Who is Gov. Abbott—or any single individual—to make that trade-off for millions?

The economist Ludwig von Mises aptly summarizes this attitude in his book Socialism: An Economic and Sociological Analysis.

“What those calling themselves planners advocate is not the substitution of planned action for letting things go. It is the substitution of the planner’s own plan for the plans of his fellow-men. The planner is a potential dictator who wants to deprive all other people of the power to plan and act according to their own plans. He aims at one thing only: the exclusive absolute pre-eminence of his own plan.”

This crisis at the border is only the latest in a long series of squeezes on the misleadingly named “supply chain,” including the COVID lockdowns and the war in Ukraine. The supply chain saboteurs responsible—people like Gov. Abbott, Joe Biden, and Vladimir Putin—may be enemies to each other. But they are all in effect collaborating to strangle the world economy by substituting their own central plans for the individual plans of us all.

This article was adapted from an issue of the FEE Daily email newsletter. Click here to sign up and get free-market news and analysis like this in your inbox every weekday.

This article, Trade with Mexico Slows Dramatically Following New Inspection Orders in Texas, was originally published by the Foundation for Economic Education and appears here with permission.  Please support their mission.