Assembly Standing Committee on Economic Development, Growth, and Household Impact

Are you guys ready? All right. Good afternoon, everybody. Thank you very much for being here. It's great to call this meeting to order. This is the Assembly Select Committee on California Mexico Binational affairs joint hearing with the Assembly Economic Development, Growth and Household Impact Committee.

The hearing today is on the USMCA United States, Mexico Canada Agreement Trade Agreement. And we will be discussing the topic of will California's economy survive or thrive under a strong trade agreement with Mexico? It's really a pleasure to be here. I want to first start off by thanking the city of Chula Vista for hosting us today.

I particularly want to thank Council Member Carolina Chavez, who is with us here this afternoon. Thank you, Council Member Chavez, for joining us and to your city for hosting us here today and for all the staff at the city and the staff from the Assembly for helping to facilitate this hearing today. So, again, good afternoon.

This joint hearing of our committees will be focusing on the issue of the USMCA. I want to thank the Committee Members who are here, some who are, I know, on their way in the vehicles and also on planes, so that have been delayed, but we will have more Members joining us.

The hearing will be focused on the issue that is vital to our economy, to our workers, to our families, to our communities at large, and how we can continue to be globally competitive as a state.

Our existing trade relationship between Mexico and Canada through the United States Mexico Canada Agreement, or USMCA, or TEMEC, as known in Mexico, is very important. Our committees are interested in learning how we can support efforts not only to continue to benefit us, but wherever possible, to improve on this agreement.

In 2024, California exported more than $183 billion in goods worldwide. Nearly a third of those exports, close to about 30%, went to just two partners, Mexico and Canada. That's approximately $33.5 billion to Mexico and another 20 billion to Canada. Those export flows aren't just numbers. They represent something better.

They mean real jobs for Californians, an economy that thrives for our communities, and obviously a state that benefits from both of these, from manufacturing to logistics, agriculture and technology. And we'll be hearing from these industries today when we consider all export activity combined. The number of jobs that is created goes to 582,000.

Over half a million jobs in California as a result of this trade. California is the second largest exporting state in the entire nation, and much of that is based on the ability not to be burdened with tariffs and with trade agreements that don't work.

The USMCA ensures that California companies can move components, materials and finished products to Mexico and Canada efficiently. Most importantly to everybody, affordably. Tariffs can jeopardize that and would make California products less competitive, meaning job creation would suffer. The benefits of the USMCA reach every corner of California. We feel it obviously very closely here in this region.

But in Southern California at large, including our border communities here in San Diego, Tijuana companies depend on the cross border production in medical devices, electronics and other specialty manufacturing. But in the ports of Los Angeles and Long Beach, the largest in the state, two of the most important gateways in the world.

Actually more move larger volumes of UMCA related goods supporting tens of thousands of longshore, warehouse, trucking, logistic jobs. The list goes on and on. Then there's the Inland Empire. We'll have someone here who represents that area and Mr. Carrillo.

They also have a logistics sector that's one of the largest in the country that relies on the freight and the trade of the usmca. Then we have the Central Valley. Our farmers and our food producers contribute significantly to trade. Almonds, pistachios, dairy, fruits, vegetables and wine as well. They all count Mexico as a key customer.

The USMCA reduces volatility. It helps maintain stable prices and supports the agricultural industry. In addition, it brings additional benefits associated with agriculture. Cold storage facilities, packaging and irrigation equipment manufacturers, just to mention a few. Our technology, semiconductor and machinery companies in the Bay Area. We're traveling the state, you're traveling the state with me.

We're now in the Bay Area. They relied on the trade with USMCA partners to stay globally competitive. The Port of Oakland in the Bay Area depends on steady flows of agricultural and manufactured goods moving north and south under the rules established in the usmca.

There is also great benefit for our Central Coast because agriculture again is a key component. From lettuce to berries, from Oxford to wine. Mexico is a key purchaser of all of these goods that are produced in California, sold by California and create jobs in California. California's economy, regardless of where a Californian lives, is deeply intertwined with Mexico.

With more than 40% of all containerized cargo entering the United States comes through our ports. And nearly 30% of our US exports flow through our ports. The strength of our logistics network and the jobs that it supports in all the sectors that we just mentioned is tied directly to stable and predictable trade.

The USMCA isn't just a trade agreement. It's an economic stabilizer for California to protect jobs, support small and medium sized businesses and and strengthen manufacturing and making sure that Our companies can compete fairly in the world's most important regional market.

Destabilizing the USMCA would hit not just the United States, but particularly California, harder than almost any other state. It would raise the cost to do business. It would reduce competitiveness, it would threaten thousands of jobs, and it would cost Californians more in an affordability crisis that we're already dealing with today.

But maintaining and strengthening the USMCA keeps California growing. It ensures that workers, communities, manufacturers, and our goods movement industries can continue to thrive and grow. We all look forward to hearing from our panelists which we thank for coming.

We have what I believe, a great list of panelists from different sectors with different perspectives that will give their testimony to the importance of California's role in the USMCA and why it's important that we have this conversation today.

So I want to thank my colleague from the Los Angeles area, Chair of the Committee on Education on Economic Development, for joining us here today and for the work that's been done from his level throughout this year in that Committee to share a few words, opening remarks.

Mr. Salache, thank you, David. First and foremost, it's always good to be in other neighborhoods. That's not your current district. As a Chair of Economic Development Growth and Housing Impact, we've been taking our pocket tour through the whole state of California.

We actually started in San Diego at the beginning of the year and we're happy to be back in Chula Vista. On that note, I join you thanking our District 1 representative, Carolina Chavez, for hosting us here today.

As a former mayor, myself and council member of my city, it's always good to be in the dais where you get to be in front with people of your community and represent their interest.

So thank you, Ms. Chavez, for having us here today with that, California and Mexico share one of the most dynamic interdependent economic relationships in the world. Our supply chains, our workforce and our regional industries, from agriculture and manufacturing to technology, logistics and clean energy, are deeply connected across the border.

As we approach the upcoming review of the USMCA trade agreement, this moment presents opportunity. We are here not only to explore questions, but to build a shared vision for California's economic prosperity in the years ahead. I want to thank our speakers, partners and attendees for contributing to expertise.

I look forward to this vital discussion and If I may, Mr. Chair, on a personal level, as a former student leader, I got to advocate and lobby many legislators when I was a student leader myself visiting the Capitol.

So it's beautiful to be here in the backyard of former Senator Denise Moreno Duchene, who I lobbied as a student leader 20 something years ago, higher education. So just a personal touch that she's here in her backyard as well and just, you know, there's a full connection to the work that we do.

So remember this morning you as you're an active member of your district, we were having a conversation on higher education. And again, as a former higher education student, lobbying your former Senator that's here today is just a personal touch to today's conversation. So look forward to today's conversation and, and can't wait to hear the other panelists today.

Gracias.

Thank you so much. And again, please help me in welcoming and thanking Assembly for his leadership here. He's not only a leader in his Committee, he is a member of our California Mexico Select Committee. Not just a member. Sometimes people just add their name to the list.

He is an active Member participating in delegation visits to Mexico City, to the state of Jalisco, to the state of Baja California Sur.

And just like we took you on a tour in my comments of California, we are doing the work in Mexico so that our partners and allies realize that California is open for business with Mexico and that will continue and I know that he will be a part of that as we continue our work into the year.

And you'll see some of our other very active Members that are coming to join us today. Just a few housekeeping rules before we get to our first panel. We want to ensure that Members of the media and the public have access to our proceedings today.

So this is a public meeting which is being televised streamed on the Assembly website and members of the public can provide their testimony in person here at Chula Vista City Hall.

As we have publicly noticed this meeting and to preserve the safety of everyone here and to ensure the public's access to the discussion, we ask you that please follow the directions of the, the sergeants who are here to help us keep us all safe in case we need to follow some direction from them.

So now we can turn it on. Just I think we are a little bit delayed, but not too much. So we're going to turn into our first panel. We're going to start with setting sort of the big picture. That's what we asked these two panelists to give us their perspective on the big picture of the usmca.

We'll hear from two academic leaders who have specialized in California, Mexico by National Relationship Research and both have contributed to coordination and partnership.

It is important to understand the existing USMCA and its impact to California and where perhaps we find ourselves today, given how much has happened in the last year in our international affairs and our binational bilateral affairs with Mexico and with Canada.

So first we'll hear from Dr. Rafael Fernandez de Castro, Director at the Center for US Mexico Studies at UC San Diego. And then we'll hear from Dr. Ismael Placencia, professor from CETYS University. I'll start with Dr. Fernandez de Castro. Welcome.

Thank you.

It is an honor for me to testify at this hearing. Thank you Assembly Members David Alvarez and Jose Luis Solache for this opportunity. I believe that it's clear that a successful revision of the USMCA is essential for the continued well being of Canadians, Americans and Mexicans.

The USMCA, the successor of NAFTA, made Mexico the number one traded partner of the U.S. put it simple, this has benefited the lives of both Mexicans and Americans. I will dedicate my brief remarks to addressing three perspectives on the common review of the usmca. One, national security. Second, affordability. Third, the Kalibaja subregion.

The National Security Perspective Farid Zakaria began his latest book the Age of Revolutions with a quote that captures the accelerated times we're living in. This is the quote. There are decades in which nothing happens and there are weeks in which decades happen. I think it is clear that we're living in a transformational moment.

The Pax Americana and its framework of institutions such as the Un, wto, World bank and NATO have been erode and diminished, yielding to a more transactional and Uncertain world and probably even a more divided and violent world. We are returning to a bipolar world with the US and China as the two poles.

But it is different than the Cold War period because there's multipolarity. There's countries like Brazil, India, Turkey, South Africa, among few others that they don't align with the poles. So the current geopolitical scenario clearly calls for a stronger North American alliance. I will echo here Eduardo Guerrero's idea that North America requires a security perimeter.

This is a notion that emerged after the terrorist attacks of 911. Second, affordability. We need a successful revision of the continued frame for the continued well being of all North Americans. Politically speaking, the most salient issue at the time in the United States is affordability.

Put it simple, Mexico is essential for Americans to continue to afford and consume world class vegetables and fruits as Mexico supplies 51% of US fruit imports and and nearly 70% of US vegetable imports in terms of value. Furthermore, the US consumer has been somewhat protected from the rise of tariffs thanks to the USMCA.

Last year, only 94% of the US imports from Mexico were exempt from tariffs under the USMCA. Now, 11 months into the Trump Administration, the US has exempted about 84 of Mexican imports and over 90% of Canadian imports due to USMCA compliance. Thus, we need a stronger usmca, not a weaker one.

We need to renew it for the next 16 years, not only for a year, since this will continue to cause uncertainty. Lastly, the Kalibajasur region is composed of more than 7 million people. It is currently thriving thanks to the USMCA. There's no other sub region on the US Mexico border that is more complementarity, that shows more complementarity.

In Calibaja, thanks to the USMCA, we are entering into an integration 2.0 where more than $2.3 billion in goods cross the border each day. On top of maquiladoras, Mexican talent is becoming central for San Diego's through thriving biotech, aerospace and clean energy industries.

Let me close by sharing with you that this morning we have David Alvarez and as well Jose Luis Solace in this launch of the Kalibaja Consortium of Higher Education. Yes.

Universities and community colleges on both sides of the border are ready to prepare the young talent that will unleash, that will unleash the full potential of these dynamics of region. Kalibaja. I want to thank.

I want to close by thanking you, David Alvarez, for your leadership and for being the leader in the Kalibaja strengthening opportunities for education for both sides of the border. Thank you, David. And thank you, Jose Luis Solache.

Thank you. We'll do questions after we have the testimony from Dr. Pacencia. Welcome.

Thank you very much. Assembly Members David Alvarez and Jose Luis Solache.

I'll bring your microphone a little closer to you, please. Thank you.

Well, I'm going to read the USMCA Trade park the view from Mexico. It is an honor to be here representing CETIS Universidad to discuss not only whether California will survive under the renegotiated USMCA, but how we can ensure it thrives throughout a deeper strategic integration with Mexico.

The question is not whether we will maintain our $100 billion annual trade relationship, but how we will transform it into a platform of global competitiveness. The answer lies in three fundamental Number one, integrated value chains, number two, strategic near shoring and three, joint development of future sectors. The current reality is co production.

Let me be clear from the beginning. California and Mexico don't simply trade products, we co produce value. Look for example at Taylor Gitters with headquarters in El Cajon and a sister factory just a few miles away in Tecate. They operate as a single binational entity.

Aguilar might start in California and finish in Baja, sharing Wood, craftsmanship and sole across the border. In the automotive industry, a component crosses the border up to eight times before becoming a final product. With the USMCA's 75% regional content rule, we have a unique competitive advantage over Asia in medical devices.

The California Baja California Corridor is the second largest cluster in North America. For example, ResMed, headquartered in San Diego, manufactures millions of sleep apnea devices in Tijuana. Intuitive Surgical base in Santa Clara builds the critical arms for their Da Vinci robots in Mexicali. Our Response time is 48 hours compared to 6 weeks from Asia during the pandemic.

This capacity was critical for saving lives. The human impact California jobs Let's talk about what this means for the people of California. As you, the Assembly Member says, we often hear about trade deficits, but we rarely discuss the employment surplus. Based on data from the Wilson center, trade with Mexico sustains approximately 1 million jobs in California.

Mexico is the California largest export market. Overall, the California exported about 33.5 billion in goods to Mexico in 2024. In manufacturing, there is a critical radio we must understand. For every four jobs created in the Mexican maquiladora, one job is created in the United States. In design, logistics and engineering. In investment, this flows both ways.

549 Mexican companies currently operating California generating $1.5 billion in local salaries. In San Diego alone, 95,000 jobs depends directly on this trade. This is not just a commercial relationship. It is an integrated labor ecosystem where the success of one side is tied to the success of the other. The near shoring opportunity.

Near shoring is not a future trend. It's happening right now in California. Mexico must lead it. 87% of US companies are reconsidering their supply chains. Post Covid Mattel, headquartered in El Segundo, expanded its plan in Monterrey to become its largest facility in the world. Qualcomm in San Diego relies on engineering talent in Tijuana to stay competitive globally.

Our value proposition is unique. 24 to 48 hours of transport time versus 15 to 30 days from Asia. Nearshoring without Mexico is impossible for California. With Mexico, it will be unstoppable. Five strategic sectors Let me speak about the five sectors where collaboration is existential. Number one, semiconductors. Mexico is critical for design and validation.

While Intel leads in Guadalajara, we must leverage the Chips act to expand testing and packaging in Mexico. For Arizona and California Fabs Our goal to 2030 is to double semiconductor exports to $3 billion. Aerospace and defense. California managed $70 billion in defense contracts. Tijuana already manufactures components for the Falcon 9.

We must create a binational aerospace center to become the tier global aerospace hub. 3. Biotechnology. The bination biotechnology corridor between UCSD, CETIS and CSECE can generate a $50 billion industry by 2034. Intelligent logistics. We process 200,000 daily borders. Crossing the lane cost us $1.5 million per hour. We need total digitalization and joint Pre clearance. Number 5.

Advanced Manufacturing 4.0. We cannot compete with low Asian wages, but we can lead in smart manufacturing. Companies like Poly HP operate advanced factories in Tijuana. The required investment is $10 billion, but the return will be 150 billion. The proposal for 2026 distinguished legislators for USMCA 2026, I propose five concrete actions. Number one, an 18.

9 plus visa for specialized technicians. Number two, ITR simplification to facilitate technology transfer. Three. Cross border innovation zones, four binational certification standards and five, a USMCA Technology Fund of $5 billion annually. Without this, we lost semiconductor to Asia and aerospace to Europe. With integration we create 2 million high value jobs.

Conclusion Economic history teaches us that the great powers emerge from deep regional integration today. San Diego, Los Angeles, Tijuana, Mexicali, Guadalajara corridor can define the global future. The Qualcomm engineers in Tijuana, the Mattel toys made in Monterrey. The 1 million California jobs supported by this partnership. This is not a vision of the future, it's our current reality.

USMCA 2026 is not simply a trade negotiation. It's our declaration of intent to the world. California and Mexico together will lead the economy to the future. The moment is now. The opportunity is unique. The future is binational. Thank you very much.

Thank you. Thank you both. Excellent introductory remarks to set the stage. I have some follow up questions and I ask that we try to keep the responses as brief as possible and also the questions as brief as possible. Maybe I'll start with you, Rafael.

I heard you mention a couple of things that I had read about, but I am uncertain as to the status. One, you mentioned a one year potential extension and I just want to see if you have any further to add about that and whether that's the direction that perhaps you're hearing this may be going as opposed to.

We all know that certainty is what is most important in business development and in this investment. And so certainly a shorter term agreement creates uncertainty. And so I want to Hear if you, if you know more about that.

And I would, I would then say if, if that is even on the table as a serious consideration how we. The end goal, I should have started by saying this.

The end goal of today will be a report where we will be going forward to the California Legislature and requesting through official communication, probably via a resolution from the state on the renegotiation. The terms at California see as most important to the renegotiated agreement. And so that's why we're doing this hearing, to get the feedback.

So the question is one, on the term and two, Rafael, right before you mentioned that there was. I'm actually blanking up. Can you answer that and see if I can remember the other question I was going to ask you?

Happy to do so. Assemblymember, to be honest, nobody knows what this sunset clothes truly means. This is the first time around that we're going to use it. And basically it says that after the review we can go for a period of 16 years without reviewing it.

If the three parts agree or otherwise we will just continue to use the usmca, but every year will be a revision. So it's hard to tell.

I believe that the Mexican government, in the person of Marcelo Grad, I mean they literally, they have been camping in Washington, they've been trying to talk to every single official there and to Congress because it is for us to interpret the sunset closed as the best it could be for Mexico, for the US and for Canada.

There's a lot of uncertainty. Nobody knows. But I believe we should go for the best. We should be very ambitious and make sure that hopefully we will not go to this yearly revision. Let's face it, the investment in Mexico, for example, is stagnant now.

Not only we have a new President, but also because we all know that this coming year is going to be the revision of the usmca. So this is mayor for Mexico, this is mayor for the U.S. this is Mayor for Canada. So we should really shoot to try to.

It's your belief that some people are maybe sitting on the sidelines a little bit until this gets settled. It is. That is what it's happening. Dr. Placentia, I really appreciate and I'm going to ask that you submit the testimony that you have prepared. Very much appreciate the five concrete points of what we should be looking to strengthen.

And I was. You went through it rather quickly, so I wasn't able to take them down. But the visa issue, the binational certification were the two that I was able to write down. You had a few others. So thank you for that.

I want to ask you because part of the goal of this Committee as well, and I want to thank my colleague, Chair Solace, for acknowledging my former boss.

I don't know if you knew that Senator Denise Ducheney, my former boss, who we often refer to as our godmother of my national work here in San Diego, has been working on this for a while. But she knows a struggle that I am dealing with.

But to partnerships like yours and the others that are here are becoming better. We have to tell this story to the rest of California.

That's why in my introductory remarks, you heard me talk about the different regions and you gave a very specific example of something happening in it sounded like Silicon Valley area and where there's a direct tie.

I guess I'd ask you to maybe if there are other examples, for you to maybe share some of them now, and if you don't have them available to you now, but make them available through your testimony to us so that we can include that in the report of examples of what we're seeing integrating between the state and the country of Mexico.

And then if you have those, share them. But the second thing, can you go through again the five specific examples that you shared and maybe talk to us about from an implementation standpoint, what that would look like?

Here's a breakdown of what each item likely means. A T and A plus visa for specialized technicians. It's the standard TN visa allowed qualified professionals like engineers and scientists from Canada and Mexico to work temporarily in the US Without a cap on number.

ITR AR simplification to facilitate technology transfer is a US law that strictly controls the export of defense related technology and data to prevent them from falling into the wrong hands. Simplifying it will relax rules for sharing tech with trusted partners like Canada and Mexico. The cross border innovation zones. Number three.

These will be designed areas along the U.S. Mexico or U.S. canada borders with special rules to promote joint innovations like economic export zones in in China that they copied from Tijuana and Ciudad Juarez and Mexicali in the years 1915, for example.

Number four, by national certification standards, this refers to harmonized standards for certifying product services or professionals that aren't recognized by the two countries. And number five, the USMCA Technology Fund, a $5 billion annually, a dedicated fund under the USMCA framework funded by the three countries or maybe two, providing $5 billion per year for tech initiatives.

We're entering to a space economy with all this that is happening with.

We both didn't hear if that was an M for millions or a B for billions. Big difference.

Oh, billions, Billions. In US. This could support R and D infrastructure startups or workforce training in areas like artificial Intel, Intelligence, renewables, semiconductors, aiming to make North America a global tech powerhouse.

And I would say as someone who's learning a lot, Data center, you said AI, but data centers I assume are included. Okay, thank you. Appreciate that. Mr. Solache.

Thank you. Mr. Alvarez. I'm happy you highlight those five things. I also was intrigued by the, the list and specifically technology. I think we live in a world where AI and other, you know, and AI is a big conversation in the state of California now.

What do we do as, as legislators to come, you know, to deal with it in healthcare and you know, and other jobs, education. And so I'm happy you highlighted that. And I would be more interested in learning the kind of like the idea of the $5 billion because that's a high number, right?

Especially as California specifically is dealing with a budget crisis that we have to, you know, continue to be very mindful of. So I would be very intrigued to just learn more about that. But I do want to add this question from the angle of Len specifically as a new legislator.

I just finished my first year for the record, David's older than me by three years of the Legislature. So He's a little more seasoned, if I could say it that way. And so that being said, you know, I'm a first year legislator, but also the new chair of this Economic Development Committee.

So I make a lot of connections to understanding the USMCA and how that's being renegotiated. Right. Specifically, I'm just wondering from, from that kind of more 101 perspective, what is that? What are the current strengths and weaknesses of the USMCA and how it stands today?

So we could just highlight some of those more bigger pictures so that we could, for someone that's newer to the space, we can highlight that in for the general public as well. And I know we have public not only today in the audience, but we have people watching as well.

So we could just highlight some of those strengths and weaknesses.

Go ahead.

Perfecto. I will say, I say so. Thanks to the USMCA, Mexico has become the number one US Traded partner. We basically have replaced China. China has diminish about 7 points. They trade with the US and there's five or six countries that have taken advantage of that.

The number one is Mexico, then it's Vietnam and Canada is number four. So this is central to keep an orderly relationship between the US And Mexico. And I will underline again, since tariffs were so low, only half of Mexican trade with the US Was under the USMCA in the last eight months.

Every single exporter is using the USMCA because it's allowing the US Consumer not to pay tariffs on Mexican exports. So that's, I believe that flexibility of the USMCA is key. What are the lessons of the negotiation of the usmca? I will say Mexico had a very important technical team, but also it had a very important political team.

We had in Washington what is called a back channel. And the then Foreign Minister, Luis Videgaray, he had a very close relationship with Jared Kushner, who was in the White House. That really helped to do the political negotiations.

And so that is why I believe Mexico and Canada should be thinking about, I mean, who's going to be there in Washington to help. That is important and to finish Assemblymen Members.

I believe this coming negotiation might be different because it might not only be about trade, but, but we might have some security issues and we might have some immigration issues. That is the nature of the Trump 2.0 Administration. They talk about fentanyl and they use tariffs to pressure.

So I will say that we have to be very careful on that.

And perhaps the next door room, which is usually these businesspersons from Canada, Mexico and the US Helping the negotiators this time around they might need to have some immigration experts, security experts, because that idea of only talk about trade is not happening on this current White House.

So this is going to be fascinating and I believe we have to be ready for everything because this is central for the well being and the future of our three nations.

Thank you. And I really appreciate you both highlighting that information because I think one of the reasons why I was excited to co host this with our Assembly Member here is that, you know, the California Mexico relations has a direct impact for economic development. Right. Of the state.

And so I'm just happy that between this morning's conversation and this, we're seeing the direct impact and to that, you know, to that economy that we are so proud to call the fourth in large, as I said earlier in my comments. So thank you for that.

And yeah, and so with that, thank you to these panelists, we're going to say thank you. Gracias. We're going to now we're going to transition into our next panel and with that we're going to call up and first we have someone virtually joining us today and that's Diana Dominguez.

She's a Trade and Investment representative for the Americas California Governor's Office of Business Economic Development GO-Biz. And secondly, as he's walking up, he's a rock star here of our California Hispanic Chamber of Commerce, Julian Canetti, President and CEO.

And I personally excited that he's here because I'm a former President of my local Chamber of Commerce where I worked before coming to the Legislature. So with that we're going to have those two representatives today as we deal with the second panel called California Overview of the USMCA Implications.

So with that I think we're going to go virtually first. I think if she's there, Diana Dominguez.

Can you hear me?

Perfectly and clearly. And you know, and we love your view in the background too. So thank you for that.

You know, the hybrid environment keeps giving. What can we say?

And we totally engage. Appreciate it. So thank you for being with us.

Awesome. Thank you. Well, thank you Professor Nandez de Castro and Professor Plasencia for setting the stage for us. And good afternoon everyone. As Chair Solace mentioned, my name is Diana Dominguez and I serve as a Trade and Investment representative. I cover the Americas and Oceana. I sit here in Sacramento. So appreciate the opportunity to patch in virtually.

It's difficult to compete with germs and kids school holiday commitments these days. So appreciate that. So, just a quick recap. GO-Biz is California's Lead Economic Development Office. We work to support business growth, trade, investment and job creation across the state.

I recently had the honor to join partners from the U.S. mexico and Canada at the 4th USMCA SME Dialogue in Phoenix, Arizona just a couple weeks ago. And you know, it was really an important space for our three countries to voice the strength and importance of trilateral and bilateral trade and investment relations.

I certainly walked away, reaffirmed that strong trade ties with Mexico and Canada are essential to California's economy and in particular to our small businesses. It's important for fueling growth, innovation and really enabling a more resilient regional economy. So thank you Assembly Member Alvarez and Assemblymember Solace for bringing us together for this very timely conversation.

So when we look at California's role in North America, California, as mentioned by many already today, we are uniquely positioned to benefit from the USMCA agreement. As Professor Blasencia highlighted at the top, two way trade with Canada and Mexico support millions of jobs and exports of goods and services alone to these partners accounted for US$51.8 billion.

So the USMCA matters. It also matters because as many know here, and as we've heard, California is the fourth largest economy in the world. But what many don't often recognize is that we are a top exporter in 26 industry categories and Mexico and Canada, as we all know, are our top two export destinations.

And you know, with that, it's very important to note that small and medium sized businesses are central to that success. For California companies, USMCA provides something incredibly important and that is predictability. It establishes a stable framework that allows businesses, especially SMEs to invest, expand and build long term cross border relationships.

At GO-Biz, our role is very practical and company focused. When we look at USMCA, we ask three things. How does this agreement create mutually benefiting trade and investment opportunities for our economies? How does this agreement help California businesses export scale and integrate into regional supply chains?

Then finally, how do we ensure that those benefits extend beyond large corporations to small and mid sized firms? So that lens really shapes how we engage with Mexico and Canada and our partners across North America. So to continue, you know, what does this, what does USMCA mean for California businesses?

There are three key ways that we see USMCA impacting California businesses. First, it's market certainty and access. USMCA reduces tariff uncertainty and it strengthens intellectual property and digital trade provisions. This is especially important for California's economy where sectors like technology, semiconductors, medical devices, clean energy and creative industries are major growth drivers.

The second are deeper supply chain integration. We're seeing this play out clearly on the ground. California and Mexico are deeply connected through advanced manufacturing, electronics, medical devices and meanwhile, California and Canada continue to expand collaboration in clean energy, life sciences, AI and wildfire technologies, for example.

So USMCA really does support the reality that North America's competitiveness depends on strong integrated regional supply chains. And then the third is competitive alignment. We've had discussions around labor and environmental chapters and this really matters to California.

Our standards are already high and these provisions help create a more level playing field while supporting long term resilience and competitiveness across the region.

Now, at the same time, we're realistic about some of the challenges that SMEs face and how GO-Biz can support so particularly like Even with strong trade frameworks in place, companies still face barriers such as navigating regulations, accessing financing to scale exports and identifying trusted partners in new markets.

So this is where GO-Biz has focused quite a bit of our efforts. And the bottom line is, you know, we're here to help shoulder some of the risks of exporting so that our companies can benefit from the advantages that we know successful exporting can provide. So we provide export accelerator training and cohort based programs.

We support California pavilions and trade show participation in Mexico and Canada and we work with partners to strengthen supply chain resilience. We've facilitated multiple trade missions across Mexico to support California businesses and priority sectors.

And I'll just highlight some examples for the sake of time, but in Baja California our engagements have focused on helping with the goals of the Governor to modernize water infrastructure and advance innovative water technologies to expand water access.

We've also led trade missions to Queretaro with California companies offering aerospace and automotive solutions and business delegations to Leon, Guanajuato and Monterrey, Nuevo Leon to support advanced manufacturing opportunities. Additionally, we brought clean technology companies to Mexico City to pursue market entry and partnership opportunities.

And briefly in Canada recently we led a climate tech business delegation to the Global Energy show in Calgary, connecting California companies with industry leaders, investors and partners to advance clean energy decarbonization and support this energy transition.

Shifting back to Mexico, we've also worked closely with UC Alianza and our Casa De California Mexico Desk in Mexico City to identify potential areas for collaboration, drawing on expertise across government, academia and private sector to address gaps and advance various shared objectives in parallel and Chair Alvarez has has participated been a witness to this.

We've partnered with The US Commercial service located at embassies in market by maintaining a presence at their select USA Mexico Investment Conference and then also the Canada teams. And these engagements have enabled our team to connect with hundreds of foreign visitors across North America that are evaluating expansion and investment opportunities in the United States.

So these efforts are reinforced by California state level MOUs with government partners in Mexico and Canada which provide a framework to deepen cooperation and convert policy alignment into practical opportunities for two way trade, investment and collaboration. We actively leverage these agreements to identify strategic sectors, convene partners and unlock pathways for companies on both sides of the border.

All of this work is also aligned with our California Jobs first blueprint, ensuring that trade supports good paying jobs and inclusive economic growth. Looking ahead and looking forward California sees USMCA as more than a trade agreement. We view it as a platform for trilateral collaboration and shared problem solving.

The next chapter of North American competitiveness will be shaped by our ability to to build resilient low carbon supply chains and ensure that SMEs can fully participate. So in closing, GO-Biz will continue to leverage the promise of USMCA into real outcomes for businesses, workers and communities.

Strong regional trade is essential to North America's global leadership and California remains deeply committed to working alongside partners in Mexico and Canada to advance these shared priorities.

So just want to take this opportunity and looking at the agenda, I just want to acknowledge Ms. Miroslava Perez Lopez, Director General for North America within the Office of Mexico Secretary of Economy and thank her for her leadership and partnership.

As we look ahead, we welcome the opportunity to reengage with the New Administration to continue to strengthening California's and Mexico's cooperation, including through refresh mechanisms for collaboration that really reflect today's two way trade and investment priorities. So I'll stop there and thank you for your time.

Thank you so much Diana. You know, I will definitely have to acknowledge that our chair here, Mr. Alvarez has been such a big advocate and to have those contacts within Mexico directly. As we've been to a couple delegation trips and making sure that we have that strong partnership.

And before we go to our next speaker, I just want to also thank you for always highlighting our small businesses throughout California. Before getting here, I went to support a small local business here and had some good food here in Chula Vista. So we have to always be prom.

We have to put our money where our mouth is at. And then as a former Chamber Director, I always talk to people about leaving their local taxes in local communities. So on that note, we want to next to Our, our next rock star, California Hispanic Chamber of Commerce. Julian.

Thank you Chairman Solache and thank you Chairman Alvarez for the opportunity to address you this morning, this afternoon, again, Julian Canetti, President and CEO of the California Hispanic Chambers of Commerce.

And first, let me thank also Diana and GO-Biz for the work that they do with our small businesses here in California in really, you know, navigating USMCA and trade opportunities and even the complexities of USMCA that they face.

And I thought today that my comments would center around some of the positive impacts that USMCA has had on our small business, but also some of the negative and I wouldn't, I mean negative might be too strong, but some of the barriers that they may face as they're trying to navigate through the USMCA and some of the concerns that they've had.

And we've compiled this from our meetings with small businesses and the work that we do with many of the small businesses in the international trade sector. As you know, Mexico has been California's largest trading partner and one of the largest markets for California made goods and services.

And USMCA stability ensures the continued vitality of the state's most important export relationship. You know, of all the California exporters and small businesses that do business across the border, it's estimated that 95% are small businesses. The USMCA's dedicated small business Enterprise chapter is critical to the state small business exporting community.

USMCA offers unprecedented opportunities for California small business SME community, particularly for service, Ecommerce and collaborative areas. USMCA provides for enhanced trade facilitation and lower costs, streamlined customs procedures, new market access and modernization.

This includes opportunities in digital trade as well as the ability for California's small businesses in technology, software and financial services to offer their services expertise to Mexico without having to establish a foreign office. It also encourages small SME enterprise cooperation.

USMC establishes as an established SME dialogue cooperative mechanism to share best practices and promote SME participation in trade and enhance access to to capital and credit and as well as supply chain resiliency and near shoring.

The USMCA enables California based small businesses to become specialized suppliers to larger firms in industries such as electronics, automotive and aerospace which have relocated or expanded operations in Mexico to take advantage of the USMCA benefits. Along with the benefits I have mentioned above, and there are many more that help expand trade opportunities for SMEs.

We need to remember that USMCA is a trade off between opportunity and complexity. As we say, while the USMCA offers broad Benefits, Certain provisions and implementation details can create challenges for our small business community. These challenges and barriers for California small businesses are in the area's rules of origin.

The USMCA has significantly tightened the rules of origin, particularly requiring a higher percentage of North American content for key sectors. For small manufacturers or parts suppliers here in California compliant with a new more complex rules for certifying origin can create a heavy additional administrative burden upon them. Potential trade diversion costs.

The tighter rules of origin while encouraging North American production often lead to higher prices for certain components. If the small business is having to shift from an efficient non USMCA qualified supplier is required, potentially raising the cost to the manufacturer. Of course we also are faced one of the trade offs is we see increased imports from Mexico.

The USMCA facilitates trade flows and. Nearshoring trend has led to a surge in imports from Mexico. This can lead to increased competition for California's small producers in certain sectors, notably in the ag industry and some manufacturing subsectors, putting downward pressure on domestic pricing and profitability. Another area is compliance with labor standards.

Now the USMCA includes a strong enforceable labor chapter to ensure compliance with Mexican labor reform, labor reform, including workers rights and free association for collective bargaining. We feel this is a positive step for workers in Mexico.

But California businesses with supplier manufacturing partners in Mexico must now ensure their partners are fully compliant with these standards, adding a layer of due diligence, auditing and potential risk if a supplier is found to be in violation.

So what I was speaking about, we have some very positive things that come out of it but also complexities that go along with it. And that's one of the complexities that small businesses face in making sure that their partners are compliant with that. Even with rules of instructional processes, bottlenecks remain severe and can have costly negative impact.

Especially for small business relying on just in time shipping via key border crossings. The USMCA has called for modernization, but oftentimes progress is not as fast as our small business would like to see it in being able to get their products across the border. And then one final issue that has been coming up.

As I said, you know, it's created for a stable environment for our small business. But currently under the current Administration out of D.C. there's uncertainty about the trade policy.

While USMCA provides a framework and current and potential provides a framework, the current and potential future unilateral actions by the Administration and tariff actions as well as uncertainty surrounding the upcoming six year joint review can dampen the confidence of small businesses in making long term investment decisions regarding Mexico trade strategy.

And I think that's an important one that we'd like to see eliminated. So our businesses have that continued confidence in usmca. In closing, as I said, USMCA is a trade off between opportunity and complexity.

We need to support and ensure that California small businesses can take advantage of USMCA's benefits through funding of trade assistance centers and educational programs focused specifically on requirements of the UMCA. And not just the benefits, but also the opportunities that it can create for our small businesses.

Thank you for the opportunity to share our comments with you this afternoon.

Thank you, Julian. And again, Diana. We'll now go on back to our chair so we could ask any questions.

Thank you. Thank you both. I think for the purpose of time, just want to reiterate, we're interested in hearing some of the specifics.

I appreciate, Julian, the specific point you raised on ensuring that we respect and embrace the labor standards, but how to do that in a way that doesn't jeopardize, I think what I'm hearing from your perspective, smaller or medium sized businesses and wanting to not have repercussions if something is not along the line, is done incorrectly and they be penalized.

So I'm interested in following up with you on what specifically could be done about that. But let me ask my question to Diana. It's great to see you. Thank you for being such a. She's a great ambassador of California to certainly to Mexico and other parts. And I personally have witnessed her doing that work.

And I want to thank you for what you do on behalf of the state. My first question is have you been consulted yet by anyone working on the US Side on the renegotiation of.

Not you personally, but GO-Biz and the state of California on the renegotiation and any thoughts that we can form that we have formally submitted to the renegotiation of the USMCA.

There has been outreach to our office agency Director, but I am happy to check with them on that and circle back with some comments. Yeah, I don't have those details now.

But yes, I just asked that because obviously this hearing and the work that we want to produce, the work product we want to produce should be aligned between the legislative intent and certainly what is working or not working with your experience as the implementers of all of this work.

And so we definitely want to hear from you as we move forward with our own communications to our federal representatives.

But it must be inclusive and it must be additive to what you're doing, not in conflict with and so is there anything, as we've asked every panel, if you could, just one or two things that stand out as very obvious that we should be focusing our attention to as we highlight what should be done better or differently in a renegotiated USMC that you'd like to bring to our attention.

Yeah, certainly. So maybe additional comment to your initial question. We do frequently survey companies in terms of challenges that they're facing and where they required support. So happy to circle back with some of the feedback that we've collected over the years and maybe as some takeaways.

I think, you know, we really need to view the USMCA as a strategic economic tool. One that sets a clear frameworks to deliver real measurable outcomes for businesses, workers and communities and one that is addressing today's realities. Right.

One of a couple of things that stuck out with me, stuck out for me following the USMCA SME dialogue in Phoenix were revisiting topics like AI and safety concerns within each of the chapters where relevant, how businesses are adopting these types of tools. Right.

And so really looking to the agreement as a strategic economic tool that will ensure real measurable outcomes and address those fast evolving concerns.

In the light of new technologies. It sounds like is what you're saying.

In the light of new technologies in particular. Yeah. And tariffs and impacts on small businesses and their abilities to pivot. So considering maybe SME chapters, SME provisions in each of the chapters to help address some of their individual and unique challenges.

Thank you for saying that. Not to put any words into Julian's but I think you'd second that probably. Yeah, definitely. Thank you both. Thank you Mr. Chair.

Again, thank you both for joining us.

Thank you and look forward to your testimony and then anything you can add to us so we can add to the report. We would appreciate that. We're moving on to our third panel. This is now overview from Mexico. We have virtual presentations in this case but two extraordinary individuals to share with us.

We are really, really honored and I would say lucky to have both of these. We're really excited to hear from the implications from the TEMEC as Mexico refers to this agreement.

Thank you to Secretary Marcelo Abrad for his continued service and leadership in his role in the negotiations that you heard earlier are happening almost more than a full time basis job for him. But Mexico is our important partner as you've heard from the testimony already to this work continuing.

So we'll hear from Miroslava Perez Lopez, the Director General for North America in the Office of the Secretary of the Economy. And someone who I've come to rely on a regular basis now.

And you are, I think, going to be blown away by this presentation, Mr. Pedro Casas Alatriste, who is the Executive vice President and CEO of the American Chamber of Commerce, on some really valuable data that they've collected over very, very recently, research that they've done. Thank you both for taking this time.

I know it's an important day in Mexico, Dia De La Virgen de Guadalupe. And we appreciate you because it's also two hours later, so it's after five. Thank you both for being here. We're going to start with Director General Miroslava Perez Lopez. Welcome. Bienvenida.

Hi. Good afternoon all. Thank you very much for extending the invitation to the Ministry of Economy to participate in this very important hearing. And on behalf of the Secretary of Economy, Marcelo Brad, as well as the Under Secretary for Foreign Trade, Luis Rosendo Gutierrez. Well, I have the honor and privilege to participate in this panel.

And also I have the honor and the pleasure to share this panel with Pedro Casas. And again, thank you very much for this initiative. Well, I would like to contribute to this dialogue from the government perspective, from the Mexican government perspective and, and the Mexico's overview regarding the USMCA implications.

We believe that we need to start this conversation by emphasizing the importance of this treaty to the region, to North America. And particularly I would like to start by first the recognition of of this agreement, the USMCA to be the continuation of a model of economic and trade integration chosen 30 years ago with NAFTA.

And this agreement created one of the biggest and most important free trade areas in the world. And the USMCA not only maintained this free train zone, but also it is an evolved version. So since it modernized and updated trade rules, this agreement introduced new provisions, particularly 10 new chapters were introduced.

And among those new provisions are the Trade Facilitation chapter, the Digital Trade, the Labor Chapter, the SMEs Chapter, the Competitiveness Good Regulatory Practices. Currently, the USMCA provides for two chapters that relates to cooperation, excluding that is the competitiveness chapter and the SMEs.

And very importantly is that we have created regional production chains that are fundamental for the current competitiveness of North America in in the manufacturing sector, but also in the agri food sectors and also in the services sector.

So it's important that we can start by recognizing that this treaty has produced positive balances for the three partners even during these 20 years in force of the NAFTA agreement. Well, this treaty introduced minor adjustments. In some other cases, the NAFTA introduced major adjustments mainly focus on rules of origin. During NAFTA's life.

During NAFTA's time or time were enforced, four packages of modifications of rules of origin were agreed by the three countries. And these modifications relates mainly to the need to obey these rules in light of technological advancements and also to changes in the supply chain.

So this is important to acknowledge given that under the USMCA this area can be part of the discussions during the following USMCA review.

It's important to highlight that during the modernization of NAFTA that resulted in the usmca, the USMCA strengthening the regional integration in North America trade and introduced Updated and higher standards, particularly as was previously mentioned on rules of origin by requiring a higher level of integration, but also through modernized digital and IP rules, labor and environment higher standards as well.

So that is the initial starting point from the USMCA implications and I would like also to highlight that after five years of entry to force of this agreement, where we stand currently, first the General overview is that the USMCA is in General terms largely functioning well.

The USMCA is without any doubt the cornerstone of North American trade And for Mexico, 85% of Mexico's export enter duty free to the US market. And it's very important to highlight that the USMCA has an institutional governance through nearly 30 committees and working groups in charge of supervising and following up the operation of the agreement.

So improvements could be addressed through this institutional governance precisely created to this purpose. So where we stand currently from the bilateral side, it's important to share with you that Mexico and the US has been conducted high level and also technical conversations. We have been maintaining ongoing and very close constructive dialogue with the U.S. government.

And very importantly in terms of trade, recently these dialogues have been focused on discussions regarding removing trade barriers. And this is a very important element in our bilateral in our trilateral relation in the region because removing trade barriers will allow to create and promote a better business environment.

And through this we are enhancing opportunities to promote the development of a more integrated supply chain in North America, boosting competitiveness, innovation and strengthening the regional market.

So I think this is a very important point and also where we stand currently from the trilateral side, we are in the process of the assessment of the comments received under each country public consultation process.

The three countries, the U.S. mexico and Canada we conducted our own public consultation process and I would like to share with you some information regarding this. Mexico's PUBLIC consultation PROCESS these consultations were launched on September 17 with the publication of a notice in our Official Gazette. In the case of Mexico, the consultation process lasted 60 days.

It was concluded just in November 18th. The notice that we published stated the opportunity to submit comments, information and recommendations regarding the operation of the USMCA. And also the Ministry of Economy conducted 30 sectorial consultation forums and also 32 regional forums to collect comments.

And in this sense it's important to share with you that among the key conclusions or the stakeholders comments are to maintaining or to extending the usmca. I think it's the overall evaluation of the comments received that the USMCA remain as the primary framework for regional integration and cooperation.

Nearly 800 submissions were received through the Mexico's public consultation process. And these submissions can be broken down into nearly 2,000 specific comments by USMCA chapters. So you can imagine the amount of work that we are having currently in order to assess all the comments at the same time. We are.

Yes, thank you. I think we're gonna have some questions about that. So if I can ask you to make a concluding remark so we can move on to Pedro, but please stick around cause we have some questions for you. Please.

Okay, thank you. I think we are very pleased that there has been a lot of stakeholders participation in this USMCA public consultation because it demonstrates the importance of the agreement and more importantly the importance of the future of the region. So thank you. That is our main comment regarding this. Thank you.

If you can stick around, we'll have some questions. Hopefully you can help. Yes, thank you. We will go on to our next panelist. Pedro, welcome. It's great to have you here.

Thank you. Thank you. Chair Members of the Committee, everyone, thank you so much for this opportunity to speak with you today.

It's also my pleasure and a true honor to share this space with a friend and an ally from different battles across years like Miroslava Perez and also other good friends from other sectors such as Dr. Rafael Fernandez de Castro, Joaquin Lukin and any more. I'll start with a simple message.

If the United States wants to remain economically competitive and and if California wants to continue creating good jobs, then our partnership with Mexico, grounded in the USMCA, is not optional. It's strategic. Everyone asks me quite frequently about the future of tariffs, the usmca, what comes next or what policy might emerge from Washington.

The truth is I don't know and nobody knows. But what we do know are the structural forces shaping U.S. economic policy for the next decade. And these forces make one thing unmistakably clear. And Mexico is essential to the future of the American prosperity. And I have six arguments that I'll try to present very briefly.

The first, the world has changed and North America must compete as a region. Twenty years ago, the United States share of global manufacturing was nearly triple China's. Today, China's manufacturing output is double that of the United States. Likewise, 20 years ago, 80% of countries traded more with the United States than than with China.

Today, 70% trade more with China. This is a wake up call. The question is not whether the US can outcompete China alone. It's how North America competes together. And that brings me to your and our closest economic partner, Mexico. Second, Mexico is California's number one Export market and America's best consumer.

And I'll let the numbers speak for themselves. California trades nearly $100 billion a year with Mexico. Mexico is California's number one export destination. As the chair previously mentioned, over half a million California jobs depends directly on on the trade with Mexico. Nearly 18% of all California trade is with Mexico.

And in 2024, California exported more than $33 billion in goods to Mexico ranging from electronic equipment to medical devices and advanced machinery. And here's a fact that changes every conversation. Mexico buys more from the United States than any other country in the world. More than $335 billion.

That is more than 2.3 times what China buys from the United States. But not just that. Mexico is the largest buyer of US Small businesses. Exports more than China, Japan, China, South Korea, Germany, India and Switzerland combined. If we care about American workers and American small businesses, then we most care about America's best customer, which is Mexico.

Third, the US Mexico co production system creates jobs in both countries. There is a misconception that trade with Mexico takes jobs away. The data shows the opposite. Every new factory job created in Mexico actually creates another job in the United States. And that's even more since the pandemic. Our economies don't just trade, we build things together.

California's trade profile proves this. The top export sectors to Mexico, electronics, machinery, plastics and medical devices are the same categories that California imports from Mexico. Components cross the border several times before becoming a finished product. This is not outsourcing. This is co production. A single North American factory floor. And here's another powerful fact.

Mexican components in US exports are 10 times more significant than those from China. And US components in Mexican exports are also 10 times more significant than those from China.

When you buy something made in Mexico, you're still buying American value added tariffs on Mexico therefore are tariffs on California, tariffs on U.S. content and tariffs on various supply chains that make American industry competitive. Fourth, the re industrialization in the United States requires Mexico not because it is easy, but because it's necessary.

America is shifting from a consumer driven model to a producer driven model. This means rebuilding supply chains, reshoring manufacturing and restoring dignity through good jobs. That is great, but the United States cannot re industrialize alone.

To compete with China's scale and speed, we need a partner that is reliable, close, integrated, demographically complementary and aligned with your strategic interest. That partner is Mexico. Mexico's younger workforce balances America's aging population. Our societies are deeply intertwined. California alone is home to more people of Mexican origin than any Other state in the union even more so.

Los Angeles is the second city in the world with more Mexicans or Mexican descendants outside of Mexico City. The US is also the country with the largest number of Mexicans abroad. And guess what? Mexico is the country with the largest number of Americans abroad as well. This is not a foreign relationship, it is a binational community.

Fifth, national security and economic security are now the same conversation. Today economic policy is national security policy depending on distant suppliers for critical minerals, medical inputs, electronics or energy infrastructure is a vulnerability depending on Mexico. A USMCA partner with aligned rules, labor standards and dispute mechanisms is a strategic advantage.

The U S Mexico co production system protects American workers from intellectual property theft, dumping practices, forced technology transfers and economic coercion. When the goal is to build resilient supply chains, Mexico isn't a challenge is the solution. And finally what this means for California. California cannot compete globally without a strong North America.

I said already more than half a million jobs here depend on this partnership. Key industries, electronics, vehicles, medical devices, agriculture rely on Mexico as both a supplier and and a buyer. Mexican companies invest in California, create California jobs and strengthen California industrial ecosystem. Undermining USMCA is imposing broad tariffs on Mexico will not hurt Mexico first.

It will hurt California first, American workers first and US competitive first. It is if the goal is to win long term economic race, especially against China. The path is clear. More North America, more USMCA and more partnership with Mexico. To conclude, Chairs dear Members of the Committee Assembly. To compete globally, the United States must think regionally.

To strengthen American manufacturing, we must strengthen the North American supply chain. And to defend our economic future we must reinforce the partnership with a country that buys more more American goods than any other Mexico. Mexico is not a rival to the American prosperity. Mexico is an enabler of American prosperity.

If we want American workers to win, California to grow and North America to lead, then the US Mexico relationship anchored in USMCA is one of the most valuable tools we have. I am deeply grateful for your time and for the invitation to participate in in this extraordinary and relevant hearing on the usmca.

Thank you again and looking forward to your questions and comments.

Thank you very much, Pedro. Thank you to both of you. I think I could probably take the testimony from both of you and put that in our final report. And I think our work is done, but thank you. We want to ask you both questions because again you are already.

It's after five where you are actually after six now, Right. And so want to thank you.

Let me start with Director Miroslava Lopez on the question I have for you, I don't know if you captured our opening panel from one of our academic institutions here in our binational region and there were five specific items that were raised as things that we should explore in strengthening or creating if they don't exist in the agreement.

It included specialized technician visas, cross border innovation zones, binational certification standards, a fund for the region. I'm curious in all of the consultations that you did with all of your that you explained to us over the last 60 days in the period, did any of these come up?

Obviously we're interested you are looking at this from a federal national perspective. We are the California Legislature. We're interested in this in California's perspective. So maybe his testimony is more aligned to us. But are any of those anything that raised was raised to a level of significance in your consultation? Do you know that?

Have you been able to do that analysis.

Okay, thank you very much for sharing these questions. And we are in the process of assessing all the comments received, because at the end are nearly 2,000 specific comments by chapter. But yes, I think definitely with regard to the chapter on temporary entry, we received some comments that relates. To these specific areas of interest to explore.

Some of these comments were received through the competitiveness chapter. We are in the process of assessing whether those specific areas of opportunity could be addressed through specific chapters under the USMCA or, or whether the working groups have specific mandates regarding to these areas.

In other cases, we are analyzing whether there is another institutional bilateral mechanism that we can make use in order to address these comments, or whether we can create mechanisms that can booster this area. So I will say that partially until the review that we have from the comments, we have received some comments, similar comments.

Thank you.

I would just ask you, as you complete that review over the course of the next several weeks, I assume we would appreciate, from California's perspective, anything stands out from industries that are stronger in the California economy, any information that you can provide to us so that as we make our own, perhaps uninvited consultation to our federal representatives about what is most important to California, that we can also communicate that and be reflective of that with the industry sectors that perhaps we may not have before us today in their testimony in the later panels, but with other sectors that also, you know, we might be missing and that are critical to the success of implementing a USMCA that strengthens the relationship between California and Mexico.

And thank you. My next question would be for Pedro. You said an awakening or an eye opening.

I certainly, you know, when I first met you and you presented us with the data on China and I specifically remember the maps, and you cannot erase those maps from your head as you describe us over the last 20 years, going from being in position of leadership to now being secondary to China.

And visually in your maps, you represented it with the color red of China taking over, becoming number one partner with more countries in the US that for me stands out. It was definitely a wake up call as to why we needed to engage in this work.

I guess I would ask you, Pedro, what from a California specific perspective, and you mentioned some of the sectors, but is there anything that in your research you've identified where perhaps that same phenomenon has taken place, where maybe California was leading at some point as an export, or California companies were leading as leading export into some countries where we now no longer are that leading exporter because China has taken over.

Do you have anything to add that is California specific.

Absolutely. Chair, thank you so much. And I mean I share this with you. Look, the clear example of all of this is everything that is related to technology.

And as we look to the future and we start thinking about what will be, if it's not already the engine of every economy in the world, everything is based now on or will be based on semiconductors, AI and a lot of energy intensive goods and services.

And so we saw in the past few decades how these technological transfers were sent to China and many other Asian countries and how those are now now leading the commercial agenda over the United States by far.

And now looking ahead, what we need, as I mentioned in my intervention, is to make strong partnerships with countries such as Mexico so that we can compete against now the advantage that China has over the region on semiconductors, AI and all of those things related.

We need code critical infrastructure, we need energy and we need complementary goods and services that can actually make us kind of speed our way or leapfrog into a competition that could actually yield positive results both for Mexico and the United States.

And there's no doubt that at least on that sector, and I could go for ages talking about different others, but at least in this one, the United States and California particularly need to see Mexico as an enabler to compete and lead in the global stage.

Thank you. You used some phrases that I'm probably going to borrow. An enabler, but also a co producer. Right. That you. I remember when we first met almost a year ago, you really highlighted that.

So I wanted, I would like to ask you to end your testimony almost where you began with the statistics, because I don't think you can underscore enough what has happened in the world.

If you could repeat your two specific statistics on where the United States stood, United States stood as a world economic power versus China 20 years ago and where it stands today.

Yeah, basically. So comparing how we started 20 years ago up to today, first in terms of market share of manufacturing output, 20 years ago, the United States had three times the market share that China had just 20 years ago. Today, China has double that of the United States in terms of market share in manufacturing output.

And the second data point is about the participation in the trade ecosystem in the world. And those are the data points related to the map that I showed you back in the day, which is 20 years ago, 80% more or less, 80% of the countries around the world traded more with the United States than China.

Fast forward till today and now you see that 70% of the globe is trading more with China than with the United States.

Thank you, Pedro. It's always a pleasure to hear you and to what you share. And I want to thank you Chair, for opportunity to ask some questions and turn it back over to you.

Great. Thank you, Senator Alvarez. Before we go on again, thank you both for the panel. We're going to go on to our next panel, which is our fourth panel on economic integration. And before we do that, I want to acknowledge that we have another Assembly woman that has joined us.

Anamarie Ávila Farías is a Member of the represents Contra Costa area. So you want some just quick remarks, Assemblywoman, and then we'll go to our next panel. Go here.

Thank you so much. Anamarie Ávila Farías representing the Bay Area Contra Costa County Assembly District 15. I'm honored and humbled to be here with you all today to hear this very important testimony on economic development. So thank you for having me.

Thank you, Chair Kolega. As we now are going into our fourth panel again, economic integration. First, I want to just introduce the folks. Here we have Kenya Samaripa, VP of International and Public Affairs, San Diego Regional Chamber of Commerce.

Next we have Lucas Komen, Director, World Trade Center San Diego, Joaquin Lukin, Executive Director, Smarter Border Coalition and and Alejandra Mir Yteran, Executive Director of the Otay Mesa Chamber of Commerce. We love our Chamber of Commerce friends. So with that we could have Kenya start, please.

Yes. Good afternoon and thank you Chair Alvarez and Solache and Assemblymember Avila for having us on this important matter, not only for San Diego, but to the entire nation.

At the San Diego Regional Chamber of Commerce, we remain firmly committed to championing business by advancing policy priorities that strengthen precisely our binational economy, promote innovation and enhance our region's global competitiveness.

And from day one, USMCA which previously NAFTA has been a driving force behind the development and resilience of the California and Baja California economy, supporting jobs, investment and cross border trade. And from day one as well, the Chamber has been consistently advocating in support for the agreement and trade policies that deliver that economic growth to our community.

And these efforts, of course, as you may know, include our annual delegations to Mexico city and Washington D.C. as we meet with the Department of State, the Department of Commerce, Secretary Economia Congress and US Mexican Embassies.

And most recently the Chamber submitted four letters for the US Trade Representative through the US Chamber Board of Trade Alliance, the Border Mayors Association and independently as well as Secretary Economia, elevating a list of specific provisions and recommendations that would further facilitate trade and Strengthen integrated supply chains.

And we can share those letters for your review as well. And as you already heard during the previous panels, our border region is home to a 2.5 billion integrated supply chain, an economic engine that drives prosperity on both sides of the border.

However, this year, ongoing threats and the imposition of tariffs have created an unstable trade landscape which has paused investments intended for our region or divetted them elsewhere. For example, in Tecate, we visited an aluminum manufacturing service servicing US clients planning to expand their investment.

And they have 1 million worth of inventory on hold due to this ongoing trade uncertainty. And that pause means less investment. It means less jobs, less promotions and increased costs cost for manufacturers that need that space to continue their production. And small businesses, which represent over 90% of the US economy, are feeling the greatest impact.

They often don't have that expertise in house. They don't have policy experts to explain to them what's going on. For example, earlier this year, coffee beans importing from Brazil struggled with a 50% tariff, forcing coffee shops, many of which are small businesses, to raise prices simply to absorb those higher import costs.

But even after tariffs were lifted, those business owners were experiencing increased pricing due to that increased demand. So again, what we hear from the small business community is increasingly they're conveying a lack of trust on the Federal Government and also afraid of voicing out their struggles or even speaking up.

And they're working twice as hard, twice as long, facing other economic challenges such as the increased cost of doing business, labor shortages, and asking themselves very often, is this even worth it?

So the US Chamber estimates that small businesses across the US would face a 202 billion in annual tariff taxes with the uncertainty that we continue to experience.

So this example that I mentioned among many underscore that real and immediate consequences that our businesses face and the urgent need for clarity, for stability and commitment to a North American partnership.

So, just to name a few of the provisions that we included in the letters, through the Customs chapter, the Chamber is requesting dedicated funding and resources to increase border efficiency through continued investment in infrastructure and technology, as well as proper staffing at ports of entry to maximize operations.

In addition, we urge ongoing training of customs agents, increased data sharing and integrated customs processes to cross border commerce efficiency.

Through the environmental chapter, it remains vital to continue to prioritize funding and maintenance for the border environmental infrastructure that will reduce northbound polluted flows from Mexico into the U.S. this very chapter enabled our region to secure 300 million for the design, planning and engineering construction of wastewater infrastructure under minute 328.

And we'll continue urging the federal administrations on both sides of the border to to address pollution crisis that has impacted our communities for decades. Additional requests, just to name a few, call for strengthening trilateral cooperation in the energy and clean tech sectors to promote sustainability and advance shared climate goals.

And these points, again represent just a portion of the policy priorities that we can share, were included in each of those letters that will elevate our region and boost our binational region's economic growth. So again, our shared prosperity depends on a modern, stable and efficient trade framework.

One that supports small businesses, protects integrated supply chains and unlocks the opportunities for innovation and investment. So just reiterating that the Chamber remains committed to advancing these goals and we look forward to continuing our work with the Legislature and leaders such as yourselves, so that we ensure that USMC remains a powerful driver for the region. Thank you.

Thank you, Kenya. Lucas.

Thank you. Chair Solache, Chair Alvarez and Assemblymember Avila Farias. It's a pleasure to be here today. My name is Lucas Coleman. I'm Director of World Trade Center San Diego. It's the international economic development arm of the regional EDC.

And my team's priorities are to grow exports out of the San Diego region, to maximize foreign investment opportunities into San Diego and to enhance San Diego's global brand and identity.

And one of the important parts of that third work stream is really ensuring that through our research and data collection that we're able to equip business and government leaders with good information and actionable intelligence for sound decision making that affects trade and investment.

So I'm here to share some of the findings from our binational trade and competitiveness study that we recently launched. Just last month this was an update to a study that we conducted back in 2018. If we can go to the next slide, please. With a series of regional partners. With.

A series of regional partners from academia, institutionally and with the private sector to really understand the nature of the binational economy and the co production supply chain here on both sides of the border. So in the first iteration of the study back in 2018, we were really looking at the impact of NAFTA.

Of course, this had formalized a relationship that had really been building for several decades with the IMAX Maquiladora program. It had allowed for specialization on both sides of the border and allowed companies to engage in long term planning and this had resulted in a $2.5 billion CO production supply chain.

However, by the time we get to the late 2010s, the nature of trade had changed. And so USMCA was meant to modernize and really update this framework. And what we saw was the first digital trade chapter of any free trade agreement. Intellectual property protection strengthened, environmental and labor concerns addressed.

And also it tackled regional content value which had become politically charged in the political environment as well. And so it's now been several decades since that had been implemented in July of 2020. So we have some data to go off of.

And that's what we wanted to do is take a look at that and really equip regional leaders like yourselves with good information. And so we really came away with some key takeaways that touch on the significant growth in cross border trade and also that talk about the changing composition of this trade.

Ultimately, we're Talking about nearly 100,000 jobs in a diversified set of industries that really drive the regional economy here in Cali Baja. We're also talking about a relationship that allows us to offset vulnerabilities to adversaries like China and to also boost our region's prospects in the global war for talent.

And so in all, it's an increasingly complex relationship that serves a variety of San Diego and U.S. interests. And so first things first here, North America really wins when we make things together. All right. USMCA was signed by all three of the North American partners in 2018.

And since 2020 when it was implemented, we've seen trade within this block grow by nearly one third. And daily trade between the U.S. and its North American partners surpasses $4.4 billion each day. It's grown such that as we've heard today, Mexico has passed China to become the US's number one trading partner as far back as 2022.

And it's so, you know, significant growth in the trading relationship is something that we see. But furthermore, through its USMCA partners, the US can actually diversify away from China. And so these charts illustrate the type of goods being traded back and forth.

You see on the left, intermediate goods and capital goods like heavy machinery and equipment on the right there. So one interesting finding regards the growth in capital goods trade with Mexico. So in the past, Mexico through its maquiladora program had been an Assembly line manufacturing powerhouse with significant low skilled labor.

And this workforce in Mexico's output, we've seen it evolve now to sell significant heavy equipment and machinery to US firms, particularly since the passage of USMCA and the onset of of US China trade tensions back in 2019.

Now, although China remains the largest import source of capital goods, as of 22, its share has stagnated, it's only grown 3%. And in that same time we've seen that Mexico's share has surged, rising 43%. So beyond its sheer economic impact, we see that USMCA has become an essential tool for reducing US reliance on China.

On the export side, Mexico has also surpassed China as the top destination for US capital goods. Now if we narrow the aperture here and we see that binational trade really fuels jobs and economic growth here in Cali Baja as well.

The first point really the global trade story in terms of exports and imports for San Diego, it's all about Mexico. 82% of San Diego and Imperial's imports come from Mexico. But that number jumps to actually 97% when talking about the goods exported out of San Diego and Imperial counties.

So almost all the goods we export are really destined for Mexico. And this interdependence also leads to jobs. So 95,000 jobs in our two counties here in Cali Baja are tied to global exports. 95,000 jobs. Now in comparison, life sciences, which is a major driver for our economy, that's 60,000 jobs.

So you know, and we rightfully see that as an important part of the economy too. And so trade's a driver of growth and something that our organization at World Trade center, we really want to ensure that we protect and grow it. Second, you'll see in this chart significant growth in truck crossings.

So the orange bar is fully loaded containers while the Navy is empty containers. And so what we're seeing here is a doubling of freight volumes since 2017. Next up, supply chains really drive US competitiveness in critical industries.

And so these chart, these charts show the largest categories of goods exported out of San Diego on the left and goods imported into San Diego on the right. We've called out the industries that we see as both top export and import goods industries.

And across the board we're seeing alignment motor vehicles and parts are across the top there as the first. And we see electrical equipment and components, navigational instruments, medical equipment and supplies to follow that. So these are shared as the top for imports and exports, really showing that we have a co production economy.

Like I said earlier in the medical device industry, we see companies putting their R and D functions on one side of the border and being able to manufacture and iterate close by.

Now when we look at something like semiconductors for a mega region that has no fabs, not a significant number of fabs, it's interesting to see semiconductor and related devices showing up in our data and the proximity to semiconductor R and D in manufacturing capabilities can lead to greater opportunities down the road for a binational region.

Next, Baja's manufacturing sector is diversifying and it's moving up the value chain. So in Baja, 98% of its exports are in manufacturing. And within that 95% of product coming out of Baja maquilas are destined for the us. So we're talking about the vast majority of Baja's exports here.

Just 15 years ago, 70% of it was solely in electronics. But that story's really changed and today we see a lot more specialization, a lot more highly skilled talent in diversification into industries like medical device, aerospace and transportation equipment. And you'll notice, you know, many of those logos on the screen are recognizable.

Interestingly, the number of maquiladora firms, immex firms, has declined. But we see the continued growth in their size, their value add and their output in the chart on the right there, which is signaling a clear shift towards a higher value, technologically advanced production, which is a draw for talent and for foreign investment.

And then finally, the last of the key findings. Trade and services is expanding rapidly. By now we've established that the lion's share of trade is in goods. But services is the most rapidly growing area of the trading relationship. It's really the new frontier of cross border trade.

And industries like medical device that I've touched on are keen to keep capitalize on that in order to stay competitive. And part of the advantage of USMCA has been the intellectual property protections.

This has improved trust and allowed us to expand the pool of talent here in the binational region, while a national and global war for talent really rages on. So this signals a shift towards knowledge intensive digital integration that will complement traditional manufacturing trademark. So based on this research and these findings, we'll make a few recommendations.

And one is around modernizing border and civil infrastructure. As we know that's important. Trade flows continue to grow rapidly and it's an engine for our binational region. It's also something that really sets us apart from other metropolitan regions that we compete with. So we have specialized capabilities, different price levels for labor across the border.

And it opens the door for greater vertical integration. Looking ahead at some of the industries that the United States really needs to compete in globally. And so we need to ensure that we invest in our ports of entry, ensure reliability of the energy grid and access to key resources, and support predictable supply chains.

Second is that we ought to incentivize near shoring in key industries. And one way to do that is, is to coordinate with state and local leaders and with partners on both sides of the border to identify opportunities to align tax and trade incentives.

And I think you can all be a great partner for that and we'd love to work with you there. Medical device has been a great story, but for other industries of the future, like semiconductors, that's still very much up in the air. And we need to act if we want to capitalize on that opportunity.

At the very least, we recognize that North America, this trading bloc, is a key component in reducing vulnerability to some of our adversaries. Third, we all know that a joint review period is coming up, the recertification of usmca. And we want to ensure that we safeguard the progress that's been made.

And I'd also like to see how topics like AI are addressed in that as well. You know, San Diego's employment is much more skewed towards small business employment than some of our peer metros. It's actually double the small business employment of many metros that we list as our main competitors.

And so those are the companies that are most vulnerable to shocks in rapidly changing tariffs and a lot of changing policy. And so we'd like to see a smooth joint review process moving forward and then finally investing in talent, whether that be in manufacturing or in services.

What the economy demands is really changing and supply chains continue to become increasingly regionalized. And Baja gives San Diego this unique advantage and ought to be part of a larger solution. As you all know, when we talk about home shoring some of the world's most critical industries.

And so with that, I will kind of leave the QR code up there. I have hard copies and I know you have the materials virtually as well. But we have a lot of work to do, but also a lot to celebrate.

And we believe that the relationship here in Cali Baja is something that can and should serve as a model for not just our two countries, but for the world. Thank you.

Thank you, Lucas. And we'll get to questions soon, as soon as we finish the panel. So Joaquin, next.

Thank you very much. And Assemblymember Avila Farias. Thank you. Assemblymember Solace. And Assemblymember Alvarez. It's great to have spent most of our day together today and glad to be participating in the testimony this afternoon.

I serve as the Executive Director of the Smart Border Coalition, a binational organization that is dedicated to improving cross border mobility, infrastructure and economic competitiveness in the Cali Baja region. Now let me begin just by clarifying what makes our region unique among all our U.S. mexico border corridors.

Cali Baja is not simply a point of entry or a line in a map. We operate as a truly integrated by national economic ecosystem with a co production model. We'll keep hearing this term co production but it's important where components and ideas cross the border multiple times before becoming finished products.

Highly integrated supply chains that connect California's innovation economy with Baja California's advanced manufacturing backbone. A bilingual bicultural workforce that is unmatched anywhere in North America. And we were witness to that this morning. A thriving tourism, healthcare and services economy where millions move back and forth for commerce, medical care, education and daily life.

USMCA isn't just policy, it's California's economic lifeline. California moves over $100 billion in annual trade with Mexico. A term we've heard many times this morning. This afternoon. Mexico is California's number one export market. And more than 500,000 California jobs depend directly on cross border commerce.

And according inciting Lucas recent binational training competitiveness study In San Diego alone, 95% 95,000 jobs are supported by Mexico trade. Another stat that Lucas just mentioned. It's that nearly 97% of San Diego and Imperial counties 34.5 billion in 2024 exports were sent to Mexico.

And in our region where 200,000 people cross our border every day and 80% of those are either US citizens or lawful permanent residents whose daily mobility helps offset California's high cost of living. Why California will thrive Under a strengthened USMCA North American competitiveness depends on Mexico. USMCA's content rules keep production in region and Mexico's cost competitive.

Manufacturing allows California to specialize in innovation, design and high volume research and development. California and Baja California form a unified binational innovation hub. Tijuana's medical device cluster, the largest in North America relies on San Diego's design and engineering. USMCA is essential for US national security.

A strong North America reduces dependence on China, supports semiconductor investments and protects critical supply chains. But today we are seeing warning signs. Fiscal year 2025 saw a decrease in both truck volumes and total trade volumes in our borders compared to 2024. Also in Mexico, industrial park vacancy rates historically around 1 or 3%.

We're at a historic 10 or 12%. These are indicators of our region reacting to risk. I just want to highlight one of California's most important economic assets. The border itself. OTA Mesa East is finally under construction and will be one of the most advanced and possibly one of the largest land ports of entry in the world.

But when infrastructure only works well, if properly staffed. When ports are understaffed, we see longer wait times, higher logistics cost and reduced competitiveness for California companies.

In a recent study from the Atlantic Council, is that reducing commercial wait times at the US Mexico border by just 10 minutes results in 532 additional loaded trucks entering the US every month. This is border wide, generating approximately 26 million in additional cargo value per month or more than 300 million in new annual trade.

These small gains in efficiency produce massive economic returns. In closing, Cali Baja is proof that when the United States and Mexico work together, recreate one of the most competitive economic regions in the world, a strength in USMCA is not just good trade policy. It's an economic necessity for California and a strategic asset for the United States.

Thank you. Thank you, Joaquin. Alejandra.

Thank you, Assemblymember Solache. And it's good to know you're a Chamber colleague. That makes a big difference. Thank you all and welcome again. My name is Alejandra Miriterana. I'm the Executive Director of the Otay Mesa Chamber of Commerce. We are California's largest exporting corridor and we have the largest land port of entry in California.

So we have the SMEs that everyone's been talking about, from customs brokers to third and fourth logistics provider, third party and fourth party logistics provider, trucking companies and warehousing, and all kinds of small businesses supporting this very important activity. I won't repeat a lot of the things that have been sent, but I will tell you a story.

When the tariffs started, the world changed. And basically what happened is we have in our Cali Baja region many companies that were complying with the USMCA rules of origin but were not part of the USMCA formal program because they didn't want to do the documentation and the compliance documents.

So when USMCA, basically the Administration said, USMCA products will not be paying tariffs. Obviously all these companies are now enrolled in USMCA. They did that legwork. And we have learned that approximately 70 to 80% of our Cali Baja companies are engaged in that process. And what that means is that the other smaller percentage did not make it.

And I'll give you an example, a golf manufacturer in Tijuana contacted us and said, you know what? We just because of our model, we will never comply with usmca. And we want to learn in Otay Mesa what are the costs for manufacturing. Unfortunately, after we share those costs, they obviously threw that option out the window.

So the one takeaway I think I have, I actually have and I want to skip to the takeaways that I have for this report. Is at all costs protect the rules of origin. Because if they increase or if we are required to, for example, have more US Content, that could be very detrimental for our Cali Baja businesses.

So number one thing on your list should really be protect the rules of origin. Number two, the one thing that you're doing and that you've done and you can continue to do and it's been mentioned, support border infrastructure because that will help us in the USMCA implementation and continuing process.

A lot has been said about the digital trade chapter. Even though Otay Mesa is a trade community, we want to support that effort, protect the digital trade chapter. And if there's anything you could do to maybe enhance that.

And talking to a colleague today earlier in that consortium event, the one thing that apparently is happening is that Baja manufacturers are using a lot of US Technology that is not incorporated in the rules of origin.

So meaning there could be a way to basically state here in Tijuana or Mexicali, we are actually transferring US Technology that could be incorporated as a US Component, technology wise, that has not been developed. And there is an opportunity right now to negotiate that. So that could basically because we're already doing it, it's just documenting it.

So developing that process, I think could be extremely beneficial. And I was going to say try to make California a more friendlier place for manufacturing, but I don't know, that may be a long shot, so maybe I'll skip that one. So, I mean, those are really my recommendations. I'm not going to repeat everything that's been said.

Thank you very much. And obviously. Well, there's one more thing we really, the Cali Baja region, and I know the Chamber has said this, and we really need to be represented in the negotiations.

The people that know that represent the medical device sector, the aerospace, the technology sectors, the people who can start negotiating that, how to include that US contact and how to protect the industries that we have. We need those people representing Kalibaja in the negotiations.

Thank you, Alejandra. And to the entire panel. We're going to go into some questions and if I may just dive into one real quick one before we get to our other panelists here. I think it was very clear for my fellow, my fellow colleague, Chamber. I did run the Chamber of Commerce in my district, actually.

So very, very happy to always have our Chamber of friends here. I know you mentioned the infrastructure part of the border. I think one of the questions that I want to just kind of dig into more is how can the region ensure efficient cross border movement of goods while also modernizing security protocols.

So is there more of a security aspect of it than just the infrastructure that we should address as Californians?

So I think something, if I may. Is this to all of you, by.

The way, just taking this notion away that facilitating trade doesn't ensure national security like in terms of fish and mortar is having that infrastructure in place that is continuously modern as which we have been successful at fully staffing it, so we can maximize those operations. We've talked about that throughout today as well.

And then continued investment in technology so that again we can facilitate trade and travel. Travel being an important piece of the workforce, students and tourism as another economic engine for the region. And then finally that it succeeds in also ensuring and elevating national security.

Again, an efficient border is one that facilitates trade and travel while ensuring and prioritizing national security. So that should be part of the talking points that we elevate.

Thank you for highlighting that.

You know, if I could just add in as well. So World Trade Center San Diego is home of the Export Specialty Small Business Development center or the SBDCs, if you're familiar with that. It's the lowest, it's the largest no cost technical assistance program that the SBA and GO-biz partner on.

And as the export center, we're providing resources to help small businesses across San Diego and Imperial Counties. And we provide them consultants that are paid for with taxpayer dollars to help those companies.

And what we tend to hear a lot of from small businesses and from our customs brokerage partners is that programs like FAST and ctpat that really allow for seamless flow of goods, expanding those programs could be helpful as well as having more digitization in the certification of trade so that it's not so much paperwork and working off of PDFs, PDFs, but really digital certification, those types of things.

Thank you. Alejandra.

But have a very specific project that I'd like to propose that I think would really help would be a reservation system for the Otay Mesa cargo facility. Everyone wins first. The environment wins because we will, I mean, 3,000 trucks will not be queuing right on the border. Basically, wait times would be reduced to 510 minutes.

And security wise, you, you don't have trucks idling on the. Mexican side, which is when they are threatened by potential. Let me just. Partners that are obviously engaged in illegal activity.

Got it. No, no. Thank you all for the feedback. I was asking just because as we have challenging budget situations right now in the state, how do we prioritize potential infrastructure dollars but the priority of security component to it? So that's why I was kind of wanting to dig into more into that.

But with that, I'll let my colleagues, if they have any other questions.

To the last point on the idling of the trucks that are idling and creating greenhouse gas emissions, as we invest more in sustainability measures and environmental measures, that certainly seems to be one where maybe the state can play a role in a reservation system, certainly at the land port of entry, but even at.

And we'll hear from the Port of Long beach in the next panel, but maybe even our seaports.

And I don't know if there's any other similar technology or similar approach, but that seems to be one where maybe from a statewide perspective, because as you all know, this is not just about talking to ourselves about what is happening in our region, but making sure colleagues up and down the state also buy into the significance of this relationship and the investments that need to be made.

So maybe this is one where there's some environmental benefits. So I appreciate you raising that question. I think what I like to do for the purpose of respecting time is going to be here the next panel, and then questions for everybody. If you can all stick around, that'd be great. Does that work for you?

Okay, so if we can bring the next panel up so we can hear from them and then we will have questions because that will be our final panel. And I want to thank this next panel for coming.

It's good to hear from academics, from government officials, from implementers of programs, but it's really vital to hear from those who are actually producing the goods and who are the industries, some of the industries that we mentioned that are really important to the success of this agreement.

And so we have with us today three of the industries that really matter to this conversation. We have Nicolina Hernandez, who's state government affairs for Toyota Motors of North America. We have Chris Shimoda, who is with the California Trucking Association. And we have Darren Monteiro with the California Dairies Inc. Which we will hear from those three.

And then our panel will conclude with Adrian Granda, who does government relations with the Port of Long Beach. So we'll go in that order. Welcome and thank you so much for being here to provide your perspective.

Good afternoon. Thank you, Mr. Chairs. My name is Nicolina, Regional Director of State Government affairs for Toyota Motor North America. Thank you for inviting me here today to talk about manufacturing and USMCA. The auto industry has benefited a lot from job growth and more stable supply chains. But the there are new trade realities that we must face.

So this is good timing to reflect on what is going well, what needs work, and where we can continue building on our progress. I'd like to start with a snapshot of Toyota's impact. We have deep roots across all of North America, and California plays an important part of our history.

Just up the road in Long Beach, we have TABC Toyota Auto Body California, our very first US Manufacturing operation that has been producing parts and sub assemblies for more than 50 years to support our truck and SUV production. Just south of the border, we have Toyota Motor Manufacturing De Baja California in Tijuana.

And they build vehicles and components that directly supply the US Market. So together, these facilities are just one example of how deeply integrated and interdependent the auto industry has become in North America.

We also have major logistics and supply chains operations throughout California and Southern California, specifically including processing all of our vehicles at the Port of Long Beach Logistics Services and our Toyota North American Parts center in Ontario and our Toyota Parts and Distribution center in Torrance.

In terms of R and D and design, which are very exciting operations, Toyota's North American Hydrogen headquarters is located in Gardena, Toyota Racing Development in Costa Mesa and Kelty Design Research in Newport Beach. In total, Toyota's total California footprint across all of our businesses means that we support over 7,000 jobs in California.

That also represents over $6.95 billion in cumulative investment. And because we believe in serving communities where we're located, also over $6.9 million in philanthropic contributions. Beyond our direct presence, Toyota has 20 supplier facilities in California and they employ over 14,000 workers, about 1,062 of whom are primarily focused on Toyota business.

And I also want to Highlight that in 2023, Toyota's purchasing from these suppliers totaled nearly $390 million. And that represents a 35% increase from just one year prior. In 2022. We're also very proud of our partnership with our dealers. 134 Toyota and 39 Lexus dealers serve communities across California.

So if there's one message that you would to take away from me here today is that Toyota fully complies with the USMCA's rigorous standards. So from our perspective, continuity is key. You've heard that message already here today. The North American auto industry operates on long planning and development cycles, typically five years or more.

So implementing the current USMCA rules of origin already required major adjustments to supply chains across the North American region. These changes are now settling in and the system is stabilizing. So as policymakers and stakeholders consider whether refinements are needed, we have two requests.

The first is respectfully and strongly urge that any updates maintain predictability and include sufficient transition time. Abrupt changes to the regional value content or tariff treatment could have the unintended consequence of disrupting investment decisions and jeopardizing the very jobs that USMCA was designed to protect.

Our second, and I want to build off some of the comments from the earlier panelists, is we strongly encourage engagement with suppliers of all sizes. For many of them, especially medium and small size firms, complying with USMCA remains very complex and very, very resource intensive.

So we need to bring them to the table and support that because their insights are critical to making sure that the policies reflect real world conditions. So to conclude, we remain a strong supporter of the U. S Mexico Canada Agreement.

It has strengthened regional competitiveness, strengthened manufacturing jobs, strengthened California's economy, and also enhanced North America's position in the global auto market as we know it is rapidly changing.

I want to thank you for your leadership in taking on this issue as well as thank you for ensuring that the agreement supports workers and families in the region as well as manufacturing. Thank you for your time.

Thank you. And as the next speakers, we are running out of time in the building, so be as concise as possible so we can have a little bit of an exchange of some questions. Thank you.

Thank you, Chair Alvarez and Chair Solache and Assemblymember Avila Farias. Chris Shimoda, appearing today on behalf of my client, the California Trucking Association, thank you for the opportunity to testify today on the economic benefits of California Mexico trade to the trucking supply chain and logistics industries.

Since the enactment of NAFTA, now under USMCA, truck borne trade between the U.S. mexico and Canada has surged nearly 300%, reaching over $1 trillion annually.

In 2024 alone, trucks moved $609 billion in goods between the U.S. and Mexico, with a staggering 500 and 52 percent increase in exports by truck to Mexico since NAFTA was enacted in 1995.

Trucks now carry 85% of all surface trade with Mexico, with the Bureau of Transportation statistics estimating a 14% market share for California's inland ports of Calexico and Otay Mesa. Trade with Mexico directly supports more than 57,000 U.S. trucking jobs and more than $5 billion in wages to drivers moving freight to and from Mexico and Canada.

The USMCA has been a clear success for trucking and logistics by both stabilizing volatile supply chains, positioning North America to compete globally and creating solid middle class jobs.

As the parties to the USMCA undertake their joint review, the trucking industry, led by CTA's federation partners at the American Trucking Association's, are recommending several ways to improve upon the current system. First, continued investment in border infrastructure such as is happening with the Otay Mesa East Project.

Long wait times at ports of entry, often caused by staffing shortages, which you have heard from other stakeholders today, and outdated inspection technology, drive up costs, increase emissions and expose drivers to crime while idling in unsecured areas. Expanded use of non intrusive inspection technology and additional staffing can improve both security and efficiency.

Second, improvements in increasingly fragmented custom processes could reduce unnecessary clearance delays which can hold up freight movement for hours and even days at a time. Third, coordinate efforts with our trade partners to address cargo theft.

According to the National Insurance Crime Bureau, organized criminal networks now steal an estimated 1515 to $35 billion in cargo annually, driving up costs and worsening affordability as the supply chain and logistics industry, retailers and law enforcement are urging Congress to mount a coordinated federal response via a proposed bipartisan Combating Organized Retail Crime act, also known as corka.

USMCA could similarly serve as a platform to strategize and coordinate efforts to combat cargo theft with our North American trade partners. Fourth, process enhancements to improve enforcement of existing American laws and this is not for USMCA but actually Comments from ATA to the US Trade Rep.

Existing American laws prohibiting a practice known as cabotage, which is the illegal use of drivers outside of designated commercial zones to perform point to point domestic deliveries within the United States. This practice allows companies to underpay drivers, evade payroll taxes and gain unfair competitive advantage over compliant California and American businesses.

Exit tracking through export manifests would immediately improve domestic compliance with cabotage laws.

Finally, ATA is encouraging the Administration the US Administration to move discussions of issues related to proposed section 232, 25% heavy duty truck tariffs, which threatened to increase the cost of new trucks by nearly $30,000 per truck into the USMCA review process, given that Mexico is the only country importing finished heavy duty trucks into the United States.

In conclusion, the USMCA has strengthened the trade relationship between California and Mexico, created jobs and improved supply chain resilience.

We thank the Chairs and the committees for holding today's informational hearing and encourage the California Legislature to continue to engage in and adopt supply supportive policies to enhance trade and goods movement and combat emerging affordability issues such as cargo theft. Thank you.

Thank you. Next, Darren, representing California dairies, but also agriculture, which is still a significant part of California's economy.

Yes, thank you for the invitation, Assembly Members. Darren Montero, the Chief Member Relations officer for California Dairies Incorporated. And hopefully just give you a little glimpse of not only the magnitude of agriculture, but the importance of Mexico to agriculture, which all three of you already are firmly aware of. California Dairies Incorporated is a farmer owned company.

We have little less than 300 farmers that have invested over $500 million in our production facilities to be vertically integrated. We have six production facilities spread out across the Central Valley. And we have dairies that spread out from San Diego up to Stockton.

And those dairies all service our six manufacturing facilities, but also supply over 50 other dairy processors throughout the state of California. Collectively, those farmers represent about 40% of the state's milk supply. We manufacture over 400 million pounds of butter and over 800 million pounds of non fat dry milk and powder.

Collectively, we're the largest skim milk powder exporter in the world and the largest butter manufacturer in the United States. The full effect of California's dairy impacts on the economy are just over $69 billion, 152,000 jobs. As far as our relationship with Mexico as a company, it's absolutely critical. About 29% of California's dairy products are exported to Mexico.

And as a company, just over half of our powder is exported in Mexico. That totals about 140,000 tons of powder to Mexico, 310 million pounds. As an understanding, that's 7,000 trucks a year that equate down to Mexico. They either go to Mexico directly through the El Paso border crossing or or through the port of Long Beach.

That product is used in Mexico to fortify cheese production and it's used in our label as dairy. America is the primary label of source and it's widely known as a high quality. And that product of value within California and then down into Mexico.

We recently started exporting two to three truckloads a month of our newly branded ESL milk out of our Bakersfield facility. It gets exported through our Challenge label and is currently being used and consumed through H E B in Mexico.

We're also in conversations with some large retailers in Mexico to export up to 25 million liters of milk each year to Mexico for consumption extended shelf life milk, which we hope will take off and utilize our Bakersfield facility in a much larger capacity. With that, I'll just wrap it up to save some time here.

The relationship is abundantly important between California and Mexico. We encourage continuation and continuity as this review process opens up and open to any questions. Thank you.

Thank you, Darren. I think we have virtually from the Port of Long Beach, Adrian Granda. Adrian, thank you. It's good to see you again here and if you could give us a couple minutes summary of your prepared remarks.

Assembly Member, of course we're efficient here at the Port of Long Beach, so happy to do it quickly. Peter, we had some slides. I can run through them extremely quickly. I'll do a 90 second version here, so if we can move on to the next slide.

I just want to thank Assemblymember Solache, Alvarez and Avila Farias for this opportunity. We're a internationally significant port. We manage your state tidelines here. A lot of the perspectives I'm going to be sharing here are related to sea trade. So different perspective than the land border crossing in your mega region, but still very significant.

Can we move on to the next slide please? This is our impact. We moved nearly 10 million containers last year. Louisiana did the same. So 20 million would be the sixth largest port in the entire world. Together over 300 billion in trade. We support over 2.7 million jobs. Move cargo in out of every congressional district.

But over a million of those jobs is just here in California. 84.4 billion in state, local and federal tax revenue generated. Next slide please. We're the quickest way to get your goods from the Asian Pacific into the major rail hubs in Columbus. Next slide please.

So you'll see our connectivity goes to Columbus, which is the major US Rail hub, but also Chicago, Kansas City, Memphis, Dallas, Atlanta. Next slide please. This is the kind of cargo we move. It's mostly containers, but we do do a fair amount of liquid bulk cars, Roro lumber. Next slide. And these are our major partners.

You'll see Mexico and Canada aren't on there, but again I note that this is all ski trade. Next slide please. And lastly, these are the impacts. A lot of the issues were already highlighted.

I will say we support Corka on the cargo theft issue as well and would support additional CBP staffing as that helps us with our foreign trade zones. Obviously, any impact to the supply chain impacts, all the others. We saw this during the Covid crisis.

So the Port of Long beach is a full fledged partner here, supports free trade and the work you're all doing. And thank you on behalf of our mayor, Rex Richardson and our CEO Mario Cordero, and incoming CEO Noel Hasegava. Thank you. We're here for any questions.

Thank you, Adrian. Appreciate you making time for us today. So at the moment, I think I'd like to turn it over to our colleagues who what I'm going to do, given time, is I'm going to probably not ask questions because this will not be the final word.

Everybody who was here, I think at some point or another, we've had communications and will continue to.

You should all know that again, the goal of today's hearing is to produce a report that the staff will be working on, on the input that we received, not only via your testimony or questions, but but also feel free to submit that testimony and obviously any public comments that we received today to try and formalize a position from the state of California as it relates to this issue.

Clearly, I think it's clear to me, and I assume this, but I think as a result of the different testimony today, California's perspective is perhaps not necessarily properly being communicated.

And I think in a time where sometimes you have California and the Federal Government at odds on different things, this is certainly not a place where we want to jeopardize what we've got going. And it's certainly not the intent of this conversation to do that. In fact, quite the opposite.

It's to strengthen that and we will approach it with that way, with that sensitivity in communicating what we think works best and what we think could work better from what's within the usmca. And some of the things that I just jotted down, some quick notes on that I want to acknowledge. But again, it's not all of it.

It's certainly the points brought forward. But even on the environment, which we did not today fully acknowledge, included, and the Chamber of Commerce mentioned this was the $300 million for the Tijuana River Valley, which is such an important thing for us locally.

There are others that haven't been mentioned, but I will leave it at that because now we want to take public comment unless anybody needs to ask any questions and Then after public comment, maybe make some final closing remarks so you can all listen to our takeaways and then provide more input going forward.

So, again, thank you to all the panelists and we will now give public opportunity to make some comments. You can just step right up to the microphone.

If there's anyone who'd like to share anything about what you heard today, what you did not hear today, anything else related to a topic on the USMCA, this would be the time to come forward and you will have a minute to do so. Please state your name and state your comments on the topic before us. Today.

I got a timer. My name is Truth. So one minute. This is fun. Hard to talk about a lot of history. One minute. A lot of economic issues. So I'm going to come with a unique status quo disrupting perspective. And that's the perspective of the people of Imperial beach in Coronado.

So when a lot of people here, they have great businesses. I love the cheese and the butter. Okay. I love milk as well. But they suffer from a lack of tourism because of the effects of free trade fascism. While other people are making a lot of money, their tourism has been negatively affected. And I'll give you stats.

This is from the county. San Diego County did a study. Imperial Beach, 30% have laid off staff, 50% have lost more than $100,000 in revenue. Imperial beach experienced 1 to 1.5 million in property tax damage. Tourism lost $500,000 annually. And so what I want is solutions. I want an enforcement mechanism on Mexico. Permanent, permanent. We need commitments.

We can't just have you get all this money and you get all the rewards without any of the responsibilities. Both of our countries need to step up and commit to that because it's a very serious issue. So I thank you for listening to that.

Thank you. Appreciate that testimony. Anyone else feel compelled to say anything on any of the subjects that we discussed today, please come forward and provide your additional testimony. Welcome.

All right, Good to see you. Assemblymember, thank you so much for the hearing. Appreciate you all being here. I'm the Director of Education, Environmental Advocacy for Unmar de Colores. We're an outdoor equity organization, nonprofit.

All of our programs are free and we work with our underserved communities and we work closely with the, with the community that's working on the issues that are facing the Tijuana River Valley. I want to share a brief story, if I may.

For the last two years in a row, me and a group of environmentalists have taken flight over the watershed that we both that we share with Mexico. And so in the span of a year, we've seen the expansion of the business community in Tijuana.

Now, I know that some of our presenters here talked a little bit about how growth is slowing down in terms of manufacturing and some of these industrial zones. But that's not what you see from the air.

What you see from the air is more manufacturing spaces, industrial spaces opening, which I assume is good for business and the city itself growing exponentially. And I imagine that that's going to continue.

And so I think the concerns for us are about the little emphasis on the ecological and environmental impacts that are affecting our watershed and our communities. We don't have to rehash everything that's happening with public health, with our beaches being closed, but there is no green space in Tijuana whatsoever.

And air pollution is a serious issue there as well. And that community cannot access their oceans either. And so this is a huge thing.

And so I hope, our hope is that USMCA gets renegotiated in a way where ecological and environmental impacts of good business and all this money being exchanged, this ridiculous amount of money that's being exchanged between both countries can be invested in making sure that we don't have to worry about going into our beaches and getting sick and that our kids and our future, the future of our kids have something to look forward to in terms of natural spaces.

Thank you.

Thank you. Appreciate you being here and providing that testimony, seeing no other. Yes, please welcome.

Hi. Thank you. Yes, I'm also here because of Tijuana River Valley pollution. My name is Melissa Corona. I work for the San Diego Regional Water Quality Control Board. I am a program manager for a unit that issues water quality permits. So I also want to emphasize the importance of the sewage crisis along the border.

Not only sewage, but other pollutants like trash and through the umca. You know, there are projects, proposed projects that have come out of that. And so it's very important that those aren't compromised and that we not just maintain momentum, but actually build momentum on advancing those projects.

And I just also wanted to add that from our perspective, as the. As the permitting agency, we are already collaborating with the Federal Government on the expansion of the International Wastewater Treatment Plant.

We're actually in the process of developing an amendment to their permit to allow them to take more flow so there's less going through the river valley. And we, despite our being kind of under resourced, like a lot of state agencies, we are aligning our priorities to streamline that permitting process as those projects come forward.

So we're not going to be the bottleneck. And we so we're prepared to, you know, collaborating with the Federal Government and the Mexican government and move forward on seeing some real progress on these projects.

Thank you. Thank you for your testimony. Okay, last opportunity. Are you going to speak? Oh, great. Thank you. Please come forward.

Good afternoon. Thank you Assembly Members for joining us. Here in San Diego County. I appreciate you guys making the trip. And I encourage you guys to continue to bring your colleagues down here to. See some of the struggles and some. Of the benefits in our economic growth. But just to piggyback on the previous.

Two speakers, I'd like to really just emphasize the need for binational collaboration and cooperation, especially addressing source based solutions in. Mexico and really utilizing our growth in. Our private sector to be able to create some innovative pathways, whether it's through green bonds or environmentally impact bonds, and really push some opportunities at the state.

Legal council to really investigate pathways that. May not have been done yet, but. May not possibly, but can be done. If we put our will to it. Thank you.

Thank you. Okay, final call on any others? All right. Well, thank you all. I think that was a great example of a good public comment that's additive to the conversation given that although it was mentioned, I appreciate Kenya from the Chamber of Commerce mentioning the significant investment. We can't forget about it because it's still significant and important.

So thank you for all that public comment. And my final comment is I take that away for sure. Again, we were asking for specific feedback on what we should be advocating for and making sure that it's part of this renegotiated agreement that that was just added by the public certainly should be a part of it.

The testimony that you already heard me exchange with some of the are witnesses on that I won't rehash rules of origin stands out certainly. I will also just note a personal takeaway.

Not sure about my colleagues but the risk of the volatility for small and medium businesses that perhaps I personally had not really acknowledged how significant that is and how the trade agreement has real implications and how there still needs to be some kinks to be worked out for that to be as successful as we want it to be.

So that is something that was also additive for me that I want to make sure gets captured in our as we voice from the legislature's perspective how we see the future of the usmca. So really thank you all.

A lot of the information that was presented, maybe we have heard, but there was tremendously added value in all of your testimony that we've jotted down that we will produce a report on.

But even if it wasn't mentioned or you maybe didn't hear it, or you really want to reemphasize to us what you have to share, we are still available for you to do that by contacting our office, our committees to make sure that we capture that testimony.

And now I'd like to turn it over to the chair of the Economic Development Committee.

Thank you. Our culture today's panel. I think one thing that someone said earlier in the last comments of public comment is that they would want more people to come to the San Diego area and just really understand. Well, I'll tell you, I've been to San Diego. I went to Imperial Valley in the last interim.

We call it interim break. I will tell you it's not a break. It's an interim recess of the Legislature. But we've been actively engaged in this region and I know my colleague was very instrumental making sure we came physically here to this area and to really understand the other parts of the region.

I will tell you, understanding this part of the region. I've been to the Central Valley and understanding the ag community. You know, from someone that represents southeast Los Angeles, it's very different to have these border issues, the Central Valley.

So I want to echo that sentiment that we need to all get around and understand all parts of our state. I went to Contra Costa to my colleagues and to the left and understand her challenges in her district. So I think it's imperative as we make decision making in the Legislature and laws that really affect people.

At the end of the day, I think I can't voice enough the importance of, you know, the environmental justice importance. You know, I've always said as a chamber guy that it's very important to understand the environmental justice and the economic justice of our state. I think they're both equally important.

And there's so many dollars that go through this, through this process. You know, how do we reinvest in local communities?

So I want to just really echo that part that's really critical because, you know, the same people that use the nice coastal part of our ocean, other people have the same right to use and take advantage of the oceans throughout our other parts of our state. So I want to just echo those parts.

And to all the panelists, really say thank you for today's discussion. I think it really just adds to our work that we have to do to when we're looking at bills and legislation and working with our Counterparts. You know, I tell people I used to be one of five on the city council, now I'm one of 80.

So it really changes the dynamic of understanding not only some of the local issues in your district, but everywhere else. So I just want to thank the constant communication that we have and these shared situations.

I will also emphasize being in this region that I have nothing but understood that the San Diego delegation talks about the Tijuana river situation and those challenges.

I want to tell you that you have calm, not only the ones that are sitting here today, but I have other Members from San Diego that keep talking about Committee meetings and discussions, the importance of addressing that issue, and not only from the state perspective, but obviously there's a federal responsibility as well.

So you're going to have advocates that are going to continue listening to those issues and we're going to ensure that there's action, not just words, into those discussions. So looking forward to continue working with my colleague that has been a big voice for this region and apparently has learned very well from a former Senator in the audience.

So with that, I just want to be respectful of time, but thank you for having me in your backyard. Happy to continue being here and I'm happy that we're going to be working together. And thank you for hosting us today. Muchas gracias.

Thank you. I'd like to give Member Avila Farias, who I she did not do justice to her participation. She has been both of these Members, part of our California Mexico select Committee, have been leading the work in Mexico. You cannot, as he just stated, one of 80, you can't do this on your own.

You've got to have other allies. And these two, for those of all of you I know who spoke here are already allies of our California Mexico relationship.

We are adding to the team and these are two and Ms. Avila Farias, who led to a delegation visit to Zacatecas with the Governor there, but also attended the Jalisco visit, also was in Mexico City. Just thank you for you have fully embraced this and your presence to hear speaks speaks to that.

So thank you and I'd like for you to share some words.

Thank you. First of all, thank you all for having me here and I'm very grateful for both of my colleagues. They, they both, you know, as being chairs of two very important select committees, really embody what the spirit is of community development, not only just for their own districts, but for the whole state holistically.

And as someone who's practiced with the background in housing and community development, this is really Critical work. We are one of 80. But the thoughtfulness that each of them manifests for their districts of, you know, educating each of us of the various regions.

There's a lot of challenges in the state of California, and there's a lot of regions really struggling. And then there's some regions that have more than others. And trying to create that equitability in California is super challenging and difficult with AD members.

And these type of educational committees are critical to that thought process, to be a voice to amplify, to make sure that marginalized, vulnerable communities have a voice at the table in Sacramento. And so I'm very.

You all are very fortunate to have an Assembly Member such as Assemblymember Alvarez to be such a huge champion and to reach out to us and to want to educate us. And half the battle that I always tell people is showing up and caring about those communities.

And yes, we all have different issues in our regions, but it's when we get outside of our communities to see what's happening outside of our districts that we are elected to represent. I always tell people I'm here to represent all of California, not just my region.

And so I think that's what the three of us and other colleagues really embody, that understanding the mechanics and the economics of all of California and our plight and how we suffer differently in our communities and is really critical to the overall state policy.

And so I'm thankful for being here and getting to know this region a lot more than beyond my tourism, really learning it from an economic perspective of even the hardship that, you know, economically that is happening in this region and throughout California. And so I know this isn't the only stop. I know we are.

We are all committed as a freshman legislator, that, you know, this tour is happening throughout the state because just like we're interested in the California Mexico border issues, we are equally interested in Northern California, the Central Valley, and even our friends up in the Redding area, because it's all integral.

Different issues, but the same fundamental issues that, you know, our humanity struggles with here in California around jobs, housing, health care, childcare and environmental justice. So the better lens that we have, the better policy we're going to create in Sacramento. So thank you all for showing up and being here with us today.

Thank you. Once again, they both undersold how much they actually care about this issue. I am really lucky to have them two, Mr. Carrillo, who unfortunately couldn't make it but was going to be here, and the seven other six other Members of the Committee who have all been with us to Mexico on a couple of occasions.

So know that we are not alone. Sometimes it feels that way in this region, that. But we have people who, they really believe in this Mexico relationship at all the levels, environmental, ecological, certainly educational, as we had this morning with the agreements that we signed, economic. It's.

We have not just supporters, but like true believers, like all of us. And so we're really lucky. So I want to thank you all for showing up today to emphasize how much this means to us here, but also to the whole state of California and looking forward to, again, your continued input.

We do need to hear from you as soon as we can. We'd like to prepare this official position from the state, you know, early on because the negotiations are ongoing on the USMCA.

And so I would say if we can hear from you by the end of January and put the word out to others in other industries that may have not heard about this, that would be ideal. So we could also put our consensus together on our position from the state of California.

But with that, thank you all for being here. Thank you to all the staff who came from Sacramento to ensure that the people of California had access to this. They're always great work. Thank you to our sergeant. Thank you to the city of Chula Vista, once again, to Council Member Carolina Chavez. Appreciate you.

And to all of you. With that, our hearing is adjourned.