SAN DIEGO - Economic woes, including raw material pricing, were on the minds of plastics processors and suppliers at the Mexport 2001 trade show.
Since 1999, the U.S. economic slowdown, changes in taxation, border-crossing problems and wage pressures ``have created a very different operating environment for the maquilas,'' said Allan Riker, trade counselor with the San Diego World Trade Center.
Mexport was held June 28 in a San Diego industrial park near a Tijuana, Mexico, border crossing.
Mexico's pending implementation of the North American Free Trade Agreement's Article 303 will restrict the waiver or recovery of Mexican custom duties on goods incorporating components from non-NAFTA countries.
In particular, Japanese firms have used a temporary duty-deferral program to avoid the duties. Some Asian processors and suppliers have telegraphed intentions to withdraw from the Mexican market. Non-NAFTA raw materials will face tariffs averaging 3-5 percent, Riker said.
``Confusion regarding application of 303 provisions and lack of a mechanism to collect the tariffs causes implementation delays. Many companies, ranging from Goodyear to NEC, announced permanent closures,'' he said.
For the moment, ``everything is a bit slow in Tijuana,'' said Anton Gattiker, president of AGA Manufacturing Inc. and maquiladora AGAmex SA de CV.
AGAmex in Tijuana is operating at about 75-80 percent capacity, but ``I heard from other molders that they are running 30-40 percent of capacity,'' Gattiker said.
Very cheap pricing from Asian competitors remains a critical issue for many businesses in Mexico, Gattiker said. ``It is hard to compete with China,'' he said.
Further East, Ciudad Juarez and Chihuahua are busier manufacturing sites now than most other Mexico cities, said Brian Petersen, international sales manager with Toshiba Machine Co. America's plastic machinery division.
Automotive slowness has impacted Monterrey, but that city has a diverse base that is helpful in balancing loads, he said.
A reliance on technology makes Guadalajara ``pretty slow right now,'' Petersen said.
More than 200 exhibitors participated in Mexport, which was organized by the Otay Mesa Chamber of Commerce and San Diego Economic Development Corp. Mexport began in 1990.
A competing maquiladora-oriented show will expand into the San Diego-Tijuana region soon.
Borderland Network Productions LLC, operator of an El Paso, Texas, trade show since 1986, will present an event in downtown San Diego Aug. 28-29, just two months after this year's Mexport show.
