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Jim Landers

Green shoots in Texas and Mexico still easily trampled

07:33 AM CDT on Tuesday, May 5, 2009

WASHINGTON – For a global recession and a global flu scare, green shoots are poking above the gloom. Stock markets are rising. Mexico announced Monday that nonessential businesses, cafes, restaurants and museums will be allowed to reopen later this week.

Fears of calamities concerning major banks, auto manufacturers and another wave of housing foreclosures are easing. A disease that looked alarmingly dangerous as it struck down young Mexican adults is proving not as deadly as believed.

Green shoots are vulnerable, and the experts are way too cautious to sound the all-clear. It's already apparent, however, that the twining of meltdown and malady will have a chastening effect on the economies of Texas and Mexico.

Travel and tourism are huge pieces of both economies. In Dallas alone, the flu scare cost the city at least 15,000 planned convention visitors. Most will reschedule, but lost was an opportunity to impress. The city will have to work harder to woo conventions.

Mexican tourism faces huge new difficulties on top of a war against narcotics trafficking and widespread retrenchment in U.S. consumer spending. Tourism Minister Rodolfo Elizondo said in a radio interview Saturday that flu fears could drop revenue 43 percent this year to $7.58 billion.

Airlines already on the ropes took extra blows from the flu scare. It wasn't just the traffic lost between Texas airports and Mexico. Many Americans had the same abundance-of-caution instinct of Vice President Joe Biden, who angered the travel industry by saying he was advising his family to avoid travel on planes, trains and rapid transit.

Cuba, Argentina and Peru banned Mexico flights. China has quarantined 71 Mexicans in hospitals and hotels.

These restraints on trade are easily lifted, but their impact will linger.

Only a month ago, the biggest economic powers of the world gathered in London at the G-20 Summit and promised they'd avoid compounding the global recession by resorting to protectionism.

The flu pushed the pledges aside.

Although there's no evidence that eating pigs can transmit this flu, 20 countries banned pork imports, and some banned poultry, feed and animal semen. Russia, China and Switzerland were among the banning countries. Most of the bans target imports from Mexico, the United States and Canada.

Those countries could try to overcome the bans at the World Trade Organization, but that process takes a minimum of several months, said Indiana University law professor David P. Fidler, who has studied international law and disease matters.

More damaging would be disease-prompted border closings that upend commerce.

"The virus is in the United States, and you don't want other countries doing the same thing in a behavior that replicates almost like a virus, causing excess economic damage," Fidler said.

There were plenty of economic troubles shared across the Mexico-Texas border before this flu strain appeared. The oil sector is down in both countries. Money wired to families back home by Mexicans working in Texas and other parts of the United States was down last year and could fall even more this year.

Exports of manufactured goods, vital centers of pre-recession growth in Texas and Mexico, are way down. Investors looking for places to build plants are shelving their plans until better times.

When disease sweeps in on top of these issues, there's no silver lining. If there are green shoots starting to appear, hopefully they can stave off some of the more severe steps that involve shutting down commerce across the Texas-Mexico border.