Mexico fights graft at border

It's an old joke in Mexico that anything small enough to cross a bridge - that rules out perhaps a Boeing 747 - can get past Mexican Customs inspectors and into the country, especially for the right price.

Benny the stowaway elephant proves the joke apt.

Mexican authorities are still trying to figure out how the three-ton pachyderm was able to slip into the country across the US-Mexico border last April 1 while hidden in an 18-wheeler. Temporarily at home in a Mexico City circus and now a TV star, the undocumented Benny is weighty evidence of the rampant inefficiency and corruption in Mexican Customs.

It's a problem that President Vicente Fox has vowed to battle.

In the first two months of the Fox government, 45 of Mexico's 47 district Customs chiefs have been fired.

And last Wednesday, 2,000 federal police swept into Mexico City's Tepito neighborhood - notorious for its contraband warehouses and markets - and seized tons of TVs, VCRs, and other goods that came into the country without proper documentation or payment of duty. A similar operation followed in Guadalajara.

Mexican presidents have announced dramatic overhauls of Customs before - with great fanfare and little substance. But this campaign is different, analysts say. The new president is making Customs reform a top priority within a "national crusade" against corruption. And he's specifying Customs reform as key to a broader effort to help Mexican businesses create more jobs and stoke economic growth.

"One way to strengthen the domestic economy is to fight contraband," says Adolfo Aguilar Zinser, Fox's national security adviser.

The economic connection is evident in the armies of Mexican street vendors. Contraband products - everything from shoes and toys to small appliances, computer programs, and CDs - seem like sensible bargains to shoppers. A pair of Nikes that cost over $100 in a legitimate store can be had for half the price in a Tepito market.

But the contraband - cheap knockoffs, stolen goods, or genuine products that enter the country without payment of taxes or tariffs - hurts national manufacturers and legitimate stores that pay taxes and create jobs in the mainstream economy.

Fighting contraband won't be easy, Mr. Aguilar Zinser acknowledges. Customs agents augment their poor salaries by cooperating with "contrabandistas." Entire neighborhoods, like Mexico City's Tepito, live off the contraband trade.

When Tepito exploded into riots last November over a police raid similar to last week's, Fox - then still president-elect - said the root of the problem was on Mexico's northern border. He pledged then to stop the truck-trailers bringing in undocumented or falsely documented goods that become contraband.

Fox's new Customs general administrator, Jose Guzman Montalvo, says 150 trucks were impounded at border Customs checkpoints in January for carrying in contraband - compared to 38 for all of last year.

With a million crossings a day, the US-Mexico border is the busiest in the world. Since 1994, when the North American Free Trade Agreement took effect, trade in truck-shipped goods between the US and Mexico has jumped from $74 billion to $143 billion.

Within that context, new Customs district chiefs in the northern border cities of Ciudad Juarez and Tijuana say their job requires a delicate balance between tighter controls and greater efficiency.

"We can't continue letting in merchandise that damages the national economy, but at the same time we have to make the border work for the businesses that are the engines fueling our growth," says Jorge Pasaret, Customs administrator for the Ciudad Juarez district. The Mexican border's humming assembly and manufacturing plants depend on parts shipped in daily from the US.

Formerly a private businessman, Mr. Pasaret says two weeks on the job have taught him two things: First, government workers need better pay if corruption is to be rooted out. And Customs requires more sophisticated equipment and better trained agents to stop contraband.

Legitimate-looking false documents are a big problem, Mr. Guzman says. Tons of products made in China arrive at the border with papers claiming NAFTA origin.

In Juarez, only 10 percent of trucks and 5 percent of cars are selected for inspection, randomly. The same is true in Tijuana, where some 2,200 trucks cross the border daily. Tijuana's new Customs administrator, Jaime Avelar, says increasing inspections would mean a big rise personnel and bureaucratic costs.

Mr. Avelar, who moved up to his current post within Customs, says that for every 100 trucks inspected, an average of three present some serious violation in documentation or valuation. Even with a "secondary revision" checkpoint that results in inspections of another 2 percent of trucks, that still means a large number of trucks a day with serious violations are slipping into the country.

One option would be to require more inspections on trucks carrying goods that hurt the national economy most, Avelar says: shoes, textiles, and toys.

Undervaluation of merchandise is a major problem. Picking up a sheaf of papers on his desk, Pasaret says, "Here's a case where a truckload of roofing paper tried to come across at $1.50 a roll. The intent is obvious," he adds: to avoid paying legitimate import fees.

Pasaret says Customs must combat a public perception that dealing in contraband is a victimless crime. He will work to inform the public, he says, and set up an 800 number so that citizens can report suspicious shipments into the country.

(c) Copyright 2001. The Christian Science Publishing Society