Profitable borders. The strategic revival of special economic zones in Mexico and the U.S.
- Editorial
- May 26
- 3 min read
In 2025, the conversation surrounding regional competitiveness and development along the Mexico–United States border is increasingly centered on a concept that is making a strong comeback: Special Economic Zones (SEZs). After years of fragmented efforts and unsuccessful programs, border municipalities are once again positioning SEZs as a key strategy to attract investment, generate high-quality jobs, and bridge the structural gaps that still affect northern Mexico and the southern U.S. Today, SEZs are no longer just a theoretical model—they are becoming hybrid platforms for innovation, trade, and logistics, particularly appealing to emerging industries such as electromobility, semiconductors, and advanced manufacturing.
In 2024, the Mexican states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo León, and Tamaulipas saw a combined 14.6% increase in foreign direct investment compared to 2023, according to Mexico’s Ministry of Economy. This surge is largely attributed to nearshoring trends and the first fiscal incentives applied in industrial parks certified as strategic economic development zones. In Reynosa, for instance, the public-private initiative "Frontera 360" attracted over $320 million in tech-related investments from the United States, Taiwan, and Germany. Meanwhile, in Ciudad Juárez, the number of companies joining smart manufacturing clusters grew by 12% last year, largely due to local and state-level tax breaks.
On the U.S. side, cities like Laredo, El Paso, and McAllen are also strengthening their role as logistical and technological hubs. According to a joint report by the University of Texas and the Brookings Institution, 68% of local governments in Texas border counties now prioritize attracting resilient supply chains through SEZ-like policies, including tax credits, customs duty reductions, and support for university-based technology parks. This binational vision is further reinforced by new agreements between Arizona State University and the state of Sonora, aimed at establishing technology transfer zones in San Luis Río Colorado and Nogales.
Nevertheless, the challenges of consolidating this model in 2025 remain significant. First, Mexico still lacks a modern federal legal framework, as the national SEZ program was suspended in 2019 and has yet to be redefined in the context of nearshoring. While several states have taken the lead, the absence of a national regulatory umbrella limits investor confidence. Second, many border municipalities still face serious infrastructure shortfalls: 40% of northern Mexican municipalities have critical deficiencies in digital connectivity, according to the CIDE think tank, hindering the establishment of tech-based industries. Finally, binational coordination is uneven. While regions like Cali-Baja and El Paso–Ciudad Juárez show progress, others such as Piedras Negras–Eagle Pass or San Luis–Yuma lack solid institutional frameworks for joint development.
It is imperative that 2025 becomes the year when SEZs are reimagined under a vision of binational integration, technological resilience, and social sustainability. This means designing a new institutional framework in Mexico through a modern SEZ law, along with intermunicipal cooperation models with U.S. counterparts. SEZs should also adopt criteria that prioritize social inclusion, technical education, and green transitions. Attracting capital is not enough; we must ensure that such capital creates shared prosperity on both sides of the border.
In an era where geopolitics is reshaping supply chains and the border is becoming a strategic economic corridor, SEZs must not be limited to industrial parks with tax breaks. They must become binational laboratories for public policy innovation, technological development, and equitable growth. If local, state, and federal governments can articulate a unified vision, SEZs can transform the border into one of the most dynamic regions in the Western Hemisphere.
Written by: Editorial
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