SAN DIEGO — A border-region exhibition buzzed with discussions of faster industrial growth in the Tijuana area, possible double taxation for maquiladoras and Mexico's new duties on imported products.
Toshiba Machine Co. America's plastic machinery division, one of the exhibitors at the Mexport trade show, said it sees growing demand in Mexico. Corporations are placing sister divisions there, and existing Mexican injection molding firms want sophisticated statistical-process-control systems with their presses, said Bob Pett, the firm's area sales manager in Ontario, Calif.
Pett forecasts that Toshiba's 1999 sales in Baja California will increase 15 percent over 1998, which was a good year for the company. Toshiba also is seeing sales increases in northeastern Mexico.
``We are looking at putting in a service representative in the Monterrey area,'' Pett added.
Toshiba service engineer Brian Petersen noted that Mexican firms ``want a machine with quality-control capabilities'' and not just the least-expensive press. Fluent in Spanish, Petersen conducts training at customer plants and is treading deeper into Mexico at Chiapas, Yucatan and Mexico City sites where, previously, ``most were looking for cheaper machines.''
Petersen termed the Feb. 9-12 Plastimagen '99 trade show in Mexico City a ``huge success'' for Toshiba.
Maquila operators have concerns about taxes and trade relating both to the November 2000 enactment of some North American Free Trade Agreement provisions and new United States-Mexico treaty arrangements.
``Quite possibly the maquiladora degree will fade away shortly,'' with some locations becoming export facilities, said Carlos De Orduna, executive adviser in San Diego for Sanyo North America Corp.
``We have to be sure that we avoid double taxation based on the treaty between the U.S. and Mexico,'' De Orduna said.
``Both sides say they don't want double taxation,'' said Doug Allday, president of the Western Maquiladora Trade Association and vice president of administrative services for Kyocera America Inc. in San Diego.
``We are the ones who will get caught unless changes are made either with Mexico or the United States. We don't care which one,'' he said. ``Our discussions are with the Mexican government now.''
The Mexico City-based National Council of the Maquiladora Industry is a key player in the protracted negotiations.
Mexico's revenue department seeks to tax each maquiladora as a ``permanent establishment,'' and the collection would be legal under a U.S.-Mexico agreement.
``We are negotiating how the maquiladoras can pay more in Mexico and get credit in the U.S.,'' said council President Humberto Inzunza. ``We are not going to be subject to double taxation or an asset tax.''
He noted that maquiladoras pay taxes ``all the time on Mexico rules.''
``Now they want a bigger piece of the cake,'' Inzunza said. ``We will pay as long as we can take credit in any other country for the parent company.''
Duties on imported products also attracted attention at the conference.
NAFTA countries are preparing to implement duties on components and materials that companies bring from Asia, Europe or elsewhere.
So far, Mexico has published electronic and electrical duties ranging from nothing to more than 5 percent.
Mexico has not set a duty on plastics — that probably will come after July, following those for automotive and textiles.
Inzunza noted that some products cross sector lines. For example, plastic television cabinets can be taxed as electronics components, he said. Mexico has established a process to appeal the duties with strict reporting criteria.
In addition to his volunteer council duties, Inzunza is administrative manager for Mexican operations of Dublin, Ireland-based Smurfit Stone Container Corp. The council's 1,200 business-members represent about 80 percent of the employment in maquiladoras.
About 1.1 million people work at more than 3,100 maquiladoras.
Mexport, held April 15 in San Diego's Otay Mesa area, was organized by the Otay Mesa Chamber of Commerce and the San Diego Economic Development Corp.