The United States urgently needs a sustained national conversation regarding how to realize greater value in our crossborder trade with Mexico, and the benefits of increasing efficiencies at our shared border. As the export sector assumes more importance and the U.S. economy struggles to create high-quality jobs, our nation needs to discover every dollar of value in our relationship with our nation’s number two export market: Mexico

North American competitiveness is jeopardized by the transactional costs of internal borders. The advantage of proximity for just-in-time supply chains cannot be overstated. Even though the two smart/secure border accords had a number of common objectives there was no scorecard to track progress. Part of realizing the value of trade and the value of our neighbors is to change the story about borders and cast off the stereotypes of Canada and Mexico in the United States.

Contains a dynamic programming algorithm for projecting policy parameters based on a storage model of international markets featuring uncertainty, forward-looking rational expectations and non-negative storage. This algorithm is motivated by the need for a non-analytical solution to the competitive equilibrium in a storage model of U.S. and foreign cotton policy regimes. Obtaining an analytical solution is difficult, except in a limited number of special cases. The numerical solution algorithm essentially consists of multiple nested numerical approximations that reach convergence simultaneously when the relationship between domestic storage and expected farm price achieves stationarity. Given the stationary relationship between storage and expected farm price, we then run the model forward in time (given a sequence of annual realized yield disturbances) under alternative policy regimes representing FACT and FAIR.