New Decree to Eliminate Border Tariffs

By Adina Moloman

Source: SEDECO

January 20, 2012 was signed in Tijuana by president Calderon the Decree for the Competitivity and the Reduction of Tariffs of the Border Economic Zone.

The border Economic Zone includes the states of Baja California, Baja California Sur and a part of the state of Sonora. The initiative belonged to political and local business leaders from these regions which are arguing that border regions are living a different kind of reality comparing to those in central Mexico. Anti reactions started to rise from business groups in central Mexico.

Under this decree tariffs on 200 imported products were eliminated, a month before the Mexican federal government reduced tariffs on 204 Chinese products.

This is considered the first stage of the Border Economic Zone act, which will eliminate Mexican tariffs on imported products such as: clothing, shoes, canned foods, personal care items, wines, liquors, electronics etc.

This measure has the purpose to increase the competitiveness of the Baja California region, elevating the local consumption, considering that a large amount of consumers are crossing the border to shop into the United States.

I believe this could reduce the demand from Mexican consumers located at border towns, but it can’t be a big percentage, because United States stores will still be attractive to them, for their greater variety, even thou the prices could be comparable.

Future actions for the same zone would include federal and state funds for businesses that bring new technologies to Baja California, as well tax breaks for key sectors such as aerospace and biotech, two sectors that Baja California, Sonora governments and Mexico Manufacturers are strategically interested to promote.