6 Basic Steps for Tapping into
the Mexican Maquiladora Industry

Selling and exporting industrial products internationally for the first time can be a challenge, but Baja California's maquiladora industry is a great place to start: nearly one-third of Mexico's maquiladoras (over 1,000 manufacturing firms!) are located there.

But, how do you start? The Otay Mesa Chamber of Commerce (www.otaymesa.org, 619-661-6111) is here to help with a few basic steps to keep in mind for your cross-border success!

Step 1: Basic Legal Requirements
Every business, small or large, has some legal requirements. In this case, first decide the legal structure of your company - most exporters in California are organized as a Corporation, a Limited Liability Company, or as a Partnership. Check California's Secretary of State website (www.ss.ca.gov/business/resources.htm, 619-525-4113) for a basic guide, and contact the City of San Diego's Office of Small Business (619-685-1390). You can also review the Business Assistance area of the City of San Diego's Economic Development website (www.sandiego.gov/economic-development, 619-533-4233).

Once your company is formed, you'll want to visit Baja California. Make sure you're in compliance with Mexico's immigration laws - that means obtaining a temporary business visitors visa (FM-VC, $21, good for up to 30 days), or getting the longer-lasting FM-3 business visitors visa($172, good for one year, usually takes 2-3 days to obtain through the Mexican Consulate in downtown San Diego [portal.sre.gob.mx/sandiego/, 619-231-8414]).

Step 2: Get Local Help
Start your crossborder export venture with the help of local organizations and government offices. In addition to the Otay Mesa Chamber of Commerce (619-661-6111), it's also a good idea to contact regional maquiladora and industrial organizations. These include: the Western Maquiladora Trade Association (www.wmtaonline.com, 619-234-9682), the Asociación del la Industria Maquiladora (www.aim.org.mx, 011-52-664-686-1487), and the Cámara Nacional de la Industria de Transformación (www.canacintra.net, 011-52-664-681-6644). The U.S. Department of Commerce also has a wealth of resources for selling into Mexico's maquiladora industry - contact their local office (619-557-2963), and visit their website (www.usatrade.gov) for more details.

Step 3: Selling Your Product
Critical to selling your product across borders is knowing your market - where your potential customers are, what quality and quantities they demand, who your competition is, and the overall strategies for marketing your products. In addition to private firms that specialize in Mexican market research, non-profit organizations like the San Diego World Trade Center (www.sdwtc.org/mexico, 619-615-0868) can also assist your company's initial market efforts.

Planning on bringing samples of your product into Baja California? Keep in mind that, under NAFTA, product samples that are torn, perforated, marked, or otherwise unsuitable for eventual sale, can be imported duty free in the NAFTA region - see the U.S. Customs website (www.cbp.gov/xp/cgov/trade/trade_programs/international_agreements/free_trade/nafta/, 619-661-3305) for more information, or check with a Customs Broker (more about them in Step 4). Also, for those that use the ATA Carnet (www.uscib.org/index.asp?documentID=1843, 562-495-9273) to facilitate temporarily importing commercial samples and professional equipment, note that Mexican Customs may begin to accept the ATA Carnet in 2003.

Another critical issue is how you plan to sell your product - from the U.S. with periodic visits to Baja California, directly with an office in Baja California, or through an independent sales representative? Each choice has legal and tax implications on one or both sides of the border. Contact the Otay Mesa Chamber of Commerce for members with expertise in legal and accounting fields.

Step 4: At The Border
Exporting your products into Mexico requires complying with both U.S. Customs (www.customs.gov) as well as Mexico's Customs (Aduanas , www.aduanas.sat.gob.mx, 011-52-664-624-2230). For your export product to be processed through U.S. Customs, the only requirement is an accurate Shippers Export Declaration (www.census.gov/foreign-trade/www/correct.way.html) - however, it's often best to use the services of a U.S. customs broker to ensure full compliance. A customs broker is a licensed individual that facilitates the legal clearance of goods across borders with services including documentation, classification of products, and transportation options.

Mexico's Aduanas requires the use of a Mexican customs broker to process all imports coming into Mexico. They can help with all of the necessary documentation to ship products to maquiladoras (including the Pedimento de Importación [Mexico's import document], a commercial invoice in Spanish, a NAFTA certificate of origin [if applicable], the bill of lading, and other appropriate documents). It's also important to make sure that your product meets any Mexican labeling or testing requirements (NOMs). To find a customs broker, check some of the Otay Mesa Chamber of Commerce's members (www.otaymesa.org/memb_dir/13_Custom.html). You may also contact the Asociación de Agentes Aduanales de Tijuana y Tecate (011-52-664-682-8555) for more information.

Step 5: Logistics
Getting your product "just-in-time" to your maquiladora customers is typically done by truck. The Otay Mesa Port of Entry is, in fact, the third-busiest commercial crossing between the U.S. and Mexico, with more than $1.5 billion worth of product crossing each month! To locate an experienced and secure trucking company, or to find a warehousing company that can store your product nearby to your maquildora customers, you have at least two great options: choosing the Otay Mesa Chamber of Commerce's members involved with trucking (www.otaymesa.org/memb_dir/59_Trucking.html) or those members involved with warehousing and customs brokerages (www.otaymesa.org/memb_dir/13_Custom.html); or, check with your own customs broker.

Step 6: Finances
Exporting products across borders typically means additional financial risks. In the case of the maquiladora industry, some of these financial risks can be reduced by arranging payments with their U.S. parent company or representative office (when applicable). In addition, consider a variety of government-based export assistance programs (such as the SBA's International Trade loan programs [www.sba.gov/financing/frinternational.html, 619-557-7250]), that can assist prospective exporters obtain recommendations on letters of credit, working capital, and suggestions on helping to finance your exports.

Step 7: Additional Contacts & Websites

• Mexico's National Chamber for Information, Telecommunications & Electronics Industry (CANIETI): 011-52-646-686-2227 / www.canieti.org
• U.S. Department of Commerce Commercial Service - Export Site: www.trade.gov/cs/
• U.S. Customs - Importing-Exporting Information: 619-661-3305 / www.cbp.gov/xp/cgov/trade/basic_trade/
• Southwestern College's Small Business Development & International Trade Center (SBDITC): 619-482-6391 / www.sbditc.org

This information was compiled by Crossborder Business Associates (www.crossborderbusiness.com), specialists in US-Mexico market research and strategy.