MEXICAN CUSTOMS FORMS RETAIN $50 RETAIL LIMIT

MEXICAN CUSTOMS FORMS RETAIN $50 RETAIL LIMIT

The Secretaria de Hacienda y Credito Publico, Mexico's Finance Ministry, has published new customs forms that keep in place a $50 duty-free, per-crossing limit on goods purchased in U.S. border cities.

U.S. retailers and border trade advocates have been pressing Mexico for more than two years to scrap its $50 per-crossing limit. They are upset that a passenger arriving in Mexico City from New York or Los Angeles has a $300 duty-free limit, while border-area goods are subjected to the $50 threshold.The Finance Ministry published Monday in the Diario Oficial, the federal register, copies of the new customs declarations for foreign visitors. On the declaration form, the two differing limits are again spelled out.

"We're not trying to be overly critical of the Mexican government or Mexican Customs, but we have all been working very hard on Nafta implementation. This flies in the face of implementation of Nafta," said William Stephenson, chairman of the Border Trade Alliance, representing business interests from across the 2,000-mile U.S.-Mexico border. He is referring to the North American Free Trade Agreement.

In a telephone interview from BTA headquarters in Phoenix, Mr. Stephenson said his group had proposed to Mexican finance officials that a distinction be made between goods of Nafta origin and non-Nafta origin.

"The BTA believes there should not be any tariffs or any limits, period," he said of Nafta-origin retail goods. "If it is a non-Nafta product, then the amount allowed in duty free ought to be $400 per month."

The $400 figure for non-Nafta origin goods would be close to U.S. requirements. Foreign nationals or U.S. citizens entering the United States are entitled to bring in retail goods valued up to $400 per month.

There is an actual distinction made in Mexico currently between Nafta and non-Nafta retail goods. When goods brought from a land-border city exceed the $50 limit, they are subject to a 32.8 percent duty, if the products are of non-Nafta origin and a 20.8 percent duty if they are from a Nafta-country manufacturer.

Mexico has said its limit is designed to discourage contraband operators and a limit like that of the United States would make matters worse for its citizens in border cities. Although they have a $50 duty-free limit, it is per crossing. That means if they so desired, they could cross the border eight times in a day and bring back $50 worth of merchandise to equal the U.S. limit in a single day.

When Mexico began enforcing the long-ignored $50 limit during the Christmas shopping season in late November of 1992, riots ensued in the border city of Nuevo Laredo and a customs building was gutted by a fire. Residents of cities like Monterrey and Torreon were accustomed to driving four or five hours to shop at border malls that house most big-name U.S. retailers.

Mr. Stephenson said he was not surprised by the latest Mexican action, given the current economic crisis.

"If you're looking at revenue streams, which they have to be looking at, that has to be a major revenue stream for them," said the BTA chairman. "I know it will be an additional hardship yet they've got to bite the bullet."