International Business

MP900433132

Dear M & M:

Can you give me any information about the potential of doing business with Mexico?

–Tom

Dear Tom:

Cochise County shares an 82 mile border with Mexico. Naco and Douglas are two ports of entry that people can travel throughout the county to do business in our stores. The city of Douglas has great opportunities to do business with Mexico. A study done in 2008 by the University of Arizona indicated 81.6 percent of all Mexican residents that crossed the border in Douglas did for the purpose of shopping. Agua Prieta, Sonora, Mexico shares a border with the city of Douglas and has a population of 80,000 according to the Mexican authorities. The town of Naco, Sonora, Mexico 30 minutes from Sierra Vista and 15 minutes from Bisbee has a population of 6,400. In 2011, a total of 236,330 vehicles with 194,776 passengers and 79,115 pedestrians crossed at the Naco port of entry into the US (source US customs and border protection). According to the same study in 2008 by the University of Arizona 5.3 percent of county-wide taxable sales came from Mexican visitors.  In 2008 Mexican visitors spent $186.4 million in Cochise County. 55 percent was spent in retail stores, 24 percent in grocery stores, and 7 percent in restaurants and the remainder on other products and services. In Douglas each party spent an average of $253 dollars while in Arizona. In Naco, direct expenditures state-wide totaled $98.4 million, with each visitor spending $277 dollars while in Arizona. In addition more than 2 million visitors cross the borders from the US traveling through Arizona to cross at the Naco or Douglas port of entry.

-M&M

Dear M & M:

Can you explain Free Zone when dealing with international trade?

–William

Dear William:

A Free Zone is an area within a country (seaport, airport, warehouse or any designated area) regarded as being outside its customs territory. Importers may bring goods of foreign origin into such areas without paying custom duties or taxes. Free zones can also be known as “free ports,” “free warehouses,” “free trade zones,” and “foreign trade zones.”  Free, foreign, and export processing zones all fall under the umbrella of being free trade zones. Because these terms are confusingly similar, they are often used interchangeably. The distinction between each term often depends on where a particular zone is located. Generally speaking: * Foreign Trade Zone is the term used in the United States. For more information on U.S. foreign trade zones, visit their overseeing body’, the U.S. Foreign-Trade Zones Board. *Free Trade Zone is the term used in other developed countries, such as those included in the European Union. *Export Processing Zone is commonly used in developing nations. Because the principals and regulations of each free trade zone differ from country to country, you must check the governing authority of the country in which you wish to operate for specific benefits of their programs. Visit Export.gov for free trade zone guides of specific countries –SBA. In summary, whether it is called a free trade zone (FTZ), export processing zone (EPZ), foreign-trade zone, or free port generally speaking it is the designation of an area within which goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of the customs authorities. Remember, only when the goods are moved to consumers within the country in which the zone is located do they become subject to the prevailing customs duties. Free-trade zones are organized around major seaports, international airports, border towns and national frontiers—areas with many geographic advantages for trade. It is a region where a group of countries has agreed to reduce or eliminate trade barriers to facilitate trade between countries.

 -M&M

To ask your questions: Call the Small Business Development Center(SBDC) at Cochise College (520)-515-5478 or email schmittm@cochise.edu or contact the Sierra Vista Economic Development Foundation(EDF) at 520-458-6948 or email  hollism@svedf.org .

 

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