Editor’s note: John Tato graduated from Coronado High School in 1965. He retired from the U.S. Department of State in 2005. Tato invited The Coronado News to publish the letter he sent to United States Trade Representative Jamieson Greer.
Dear Ambassador Greer:
For decades, sewage and industrial wastewater from Tijuana have crossed the international boundary, contaminating the Tijuana River Valley and coastal waters from Imperial Beach to Coronado. The resulting beach closures, health risks and environmental damage are borne principally by residents and taxpayers in San Diego County, even though a substantial share of Tijuana’s growth is associated with industries producing goods for the American market.
San Diego County is considering a half-cent increase in its sales tax to help address regional needs that may include the sewage crisis. That is not an appropriate or equitable way to finance an international pollution problem. It would require San Diego residents, including those far from the affected coastline, to pay higher taxes because Mexico has not provided adequate wastewater infrastructure for a rapidly expanding industrial city. Local consumers did not create this failure and should not be assigned its continuing cost.
Nor is it realistic to assume that annual appropriations from the United States and Mexican governments will reliably finance all the construction, operation, maintenance and future expansion required. The present system has already demonstrated the weakness of that approach. Projects are announced, funding is delayed or incomplete, maintenance is deferred, population and industrial activity continue to grow, and wastewater capacity again falls behind demand.
A more durable solution would be an industrial environmental-impact fee imposed on goods produced in the Tijuana region and exported to the United States. More than 600 export-oriented companies, employing more than 200,000 workers, operate in Tijuana. These businesses benefit from access to the American market, lower Mexican production costs and the infrastructure and legal protections that support cross-border commerce. Their operations also contribute directly through industrial wastewater and indirectly through employment, housing and population growth to the demand placed on Tijuana’s inadequate sewage system.
The fee need not be large. A charge of approximately one-quarter of 1% — 25 cents for every $100 of covered imports — would be modest in relation to the value of the goods entering the United States. If applied to roughly $35 billion in annual exports, it could produce approximately $87.5 million each year. The precise rate and covered geographic area should be determined through economic and legal analysis, but the governing principle should be clear: commerce that contributes to the environmental burden should help finance its remedy.
Revenue should be deposited in a dedicated binational wastewater fund and restricted to:
- Completing and expanding sewage collection and treatment facilities serving Tijuana.
- Operating and maintaining the South Bay International Wastewater Treatment Plant and related infrastructure.
- Repairing failed pipes, pumps and collectors before sewage reaches the river.
- Controlling industrial discharges containing chemicals, heavy metals and other contaminants.
- Providing independent monitoring, public reporting and financial auditing.
- Building reserve capacity sufficient to accommodate foreseeable industrial and population growth.
The fee should not become general revenue for either government. Disbursements should be tied to enforceable project schedules, operating standards and measurable reductions in cross-border pollution. Mexico should remain responsible for its share of the problem, but the financing mechanism should recognize the economic relationship between Tijuana’s export economy and the United States.
USTR is the appropriate federal office to lead an evaluation of this proposal because the mechanism would involve cross-border commerce and would need to be structured consistently with the United States-Mexico-Canada Agreement and other applicable trade obligations. Options could include a negotiated USMCA environmental measure, a customs user fee, an assessment incorporated into a binational agreement, or mandatory contributions from participating exporters as a condition of receiving particular trade benefits. Congress may ultimately need to authorize the collection and dedication of the revenue.
This proposal is not intended to punish Mexican businesses or impede legitimate trade. Reliable wastewater infrastructure would benefit the companies themselves by supporting workforce health, reducing service interruptions and making Tijuana’s industrial growth more sustainable. The comparatively small cost would be distributed across the commercial activity connected to the problem instead of being concentrated on San Diego County residents.
The choice should not be between contaminated beaches and a higher local sales tax. Nor should the region remain dependent on irregular appropriations that change with political priorities in Washington and Mexico City. A dedicated industrial environmental-impact fee would apply the familiar polluter-pays principle, provide a continuing revenue source and connect the benefits of cross-border production with responsibility for its environmental consequences.
I respectfully request that USTR, in cooperation with the Environmental Protection Agency, Department of the Treasury, Department of State, International Boundary and Water Commission and appropriate Mexican authorities, undertake a formal legal and economic assessment of this proposal.
