April 23, 1999

Border Business Officials Take Tariff Complaints to Washington

By Michelle Mittelstadt

WASHINGTON - Mexico may have increased its cross-border duty-free allowances to meet U.S. levels but the gains are on paper only, Texas border business leaders complained Monday to congressional and Mexican officals and the Clinton administration.

The border merchants, long vexed by the nagging trade dispute, contend they are being unfairly penalized in a NAFTA era when commerce is supposed to flow unfettered. Representing chambers of commerce and other business alliances from El Paso to Brownsville, the Texans traveled to Washington to air their grievances.

``By no means should any punches be pulled,'' Rep. Silvestre Reyes, D-Texas, told the delegation over breakfast. ``This is your opportunity to express the frustrations you have been feeling for over a year.''

U.S. policymakers and border retailers have spent much of the 1990s at loggerheads with Mexico's government over the duty-free limits on U.S. goods purchased by Mexicans on their trips north.

Americans traveling abroad are allowed up to $400 monthly in duty-free allowances. Mexican residents have a similar $400 allotment. But U.S. retailers complain that Mexican Customs officials enforce the country's $50 per trip ceiling instead - leading to a lack of parity between the two countries.

``We're not looking for an advantage. We're looking not to be disadvantaged,'' said Tanny Berg, the president of the El Paso Central Business Association.

When Mexico began enforcing its so-called $50 rule in 1992, commerce in American border towns plunged. Three years later, Mexico relaxed its limits by adding a monthly $400 allotment per person in food, medicines, personal and household hygiene products, apparel and shoes.

But Americans complain Mexican restrictions prevent the full use of that $400 exemption for most Mexicans.

Under pressure from U.S. congressional officials, Mexico agreed last year to initiate a publicity campaign to ensure its citizens and Customs personnel know the full extent of their cross-border shopping rights. The government also agreed to develop a magnetic scanning system to keep track of individual border crossers' monthly duty-free purchases.

Sen. Kay Bailey Hutchison, R-Texas, and others contend Mexico has not lived up to its commitments.

``Nothing that they have said has happened,'' Mrs. Hutchison said in an interview Monday.

Mexican Embassy spokesman Jose Antonio Zabalgoitia acknowledged fewer Mexicans have applied for the magnetic card program than anticipated. Mexican Customs officials have agreed to step up their publicity campaign, he said.

But Zabalgoitia rejected charges that Mexico's rules are any more restrictive than the United States' or that U.S. retailers are operating at a disadvantage.

``We really don't think that in any way we can be portrayed as obstructing free trade or local commerce on the border,'' he said.

Rep. Henry Bonilla, R-Texas, and other House members representing border areas have introduced a resolution that calls on the Treasury Department to reopen talks with Mexico and Canada to achieve duty-free parity. Absent a solution within a year, the resolution calls on Treasury to investigate whether the United States should reduce its duty-free exemptions.

``If they're going to enforce it against us, we would enforce it against their tourists,'' Mrs. Hutchison said.

Reyes, who is a cosponsor of the House resolution, hopes the trade irritant can be defused.

Asked about a possible U.S. lowering of its duty-free allowance, he said, ``We're certainly hopeful that it won't get to that point. And I'm confident it will not.''

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