WASHINGTON — U.S. retailers who do business in Mexico or plan ventures there have turned up the volume in their campaign to get Mexican officials to reconsider strict certificate-of-origin rules for goods entering the country from outside North America.
A delegation of senior executives from five retailers — concerned that the new rules, which went into effect Sept. 1, would stymie their march south of the border — flew to Tampa, Fla., Wednesday and squeezed into a top Mexican trade official’s schedule to air their grievances. It was the first volley in industry’s offensive to get the rules changed.
Although U.S. trade officials continue to broach the issue through diplomatic channels, they have told businesses to make their case directly to Mexico. As reported, importers and retailers complain the rules are burdensome because they require all non-North American imports to Mexico to carry certificates naming the manufacturer of origin and the importer of record. On goods from non-GATT countries, the certificates must also carry the signature of a Mexican Embassy official in the country of origin.
Critics say the certificates prevent companies from servicing Mexico through central distribution systems, thus limiting their ability to sell in the country. Last week’s delegation was led by the National Retail Federation and comprised representatives from Dillard Department Stores, J.C. Penney Co., Woolworth Corp., Kmart Corp. and Edison Bros. Stores. They met with Herminio Blanco Mendoza, Undersecretary of International Trade Negotiations, for one hour, said Rob Hall, NRF vice president and government affairs counsel.
Blanco was in Tampa attending a trade symposium.
“We expressed our concern,” Hall said, declining to name the executives in attendance. “They talked about the impact.”
Hall said Blanco explained the reasoning behind Mexican officials’ demand for certificates: to prevent transshipped goods, primarily footwear and apparel, from entering Mexico. The country’s domestic apparel industry has long complained of goods illegally entering Mexico and being dumped at less-than-fair-market value. In response, the government last year slapped punitive tariffs of up to 1,000 percent on Chinese textiles.
Although Blanco did not say he favored changing the certificate requirements, he expressed interest in hearing about alternative procedures and agreed to more meetings between retailers and his staff, Hall said.
“He asked us for ways to combat circumvention,” Hall said.
Blanco was unavailable for comment, as were trade officials at the Mexican Embassy here.
U.S. government efforts to find alternatives to the rules could result in cooperation between the two countries’ Customs services, a U.S. trade official said.
To the consternation of U.S. importers, Mexico has refused to honor the paperwork required by U.S. Customs to bring goods into the U.S. as proof of country of origin. This is an indication of how acute Mexico believes its transshipping problem is, said Jim Clawson, executive vice president of International Business Government Counselors Inc., a trade consulting firm here.
“We just have to figure out a better system that will satisfy the enforcement requirements of the country,” Clawson said, adding he understood Mexico’s right to propose the certificates as a sovereign nation. “We don’t want a bunch of Japanese cars going into Mexico and then coming into the U.S. without safety certificates.”
Laura Jones, executive director of the U.S. Association of Importers of Textiles and Apparel, said her members will continue to meet with U.S. officials on the issue, but haven’t considered directly lobbying Mexico. She views Mexico’s new certificate rules as contrary to the spirit of the North American Free Trade Agreement. She said importers at least should have been given more time to comply. The regulations went into effect a day after the final version of the rules was published.
“They are acting irresponsibly in the trade field,” Jones said. “It’s anti-GATT.”
“Millions and millions of dollars in orders have been canceled already because of this,” Jones added, declining to name vendors.
Importers are particularly concerned about orders already filled and shipped to the U.S. and are waiting for sales to be made in Mexico. Securing country-of-origin certificates from manufacturers of these garments is impossible, they say.
“What does a company do if they are selling to 20 different accounts in Mexico and they are buying small units?” asks one official in a brand-name women’s apparel company, who asked not to be named. The official said vendors who sell to Mexico typically make sales on apparel that has already been produced months in advance, shipped to the U.S., then sold from a warehouse. “Are you now going to send each unit separately to Mexico from the manufacturer?”
“The [demand for] certificates really calls into question whether you can really establish a North American distribution network,” said Robin Lanier, vice president of international trade and environment, International Mass Retail Association. Lanier said IMRA’s strategy is to pump up public concern in Mexico about potential shortages of imported goods caused by the system.
“That stirs the pot,” Lanier said.
— Fairchild News Service