Mexicans flood Corozal Free Zone
If you still haven’t finished your Christmas shopping and plan to make a last minute trip to Chetumal you’re likely to be in for quite a surprise. News Five’s Stewart Krohn reports from Santa Elena, Corozal.
Stewart Krohn
“For years we’ve watched as busloads of Belizeans head across the Rio Hondo to shop in Chetumal. This Christmas, however, we are witnessing a strange sight, thousands of Mexicans crossing the border to shop in Belize”
But this is one part of Belize that few Belizeans ever see. It’s called the Commercial Free Zone and it encompasses a sliver of land along Belize’s northern border with Mexico. While the Free Zone is part of Belize, in many ways it resembles a sovereign nation. Goods enter and leave the zone without paying duty, VAT, or any other taxes. It is illegal for Belizeans to shop here, unless they have a VISA to drive into Mexico beyond Chetumal. But for Mexicans it’s another story. This Christmas season they have been entering in numbers reaching over two thousand vehicles a day — primarily to buy high quality tax free gasoline which sells for about half of what it costs at a Mexican Pemex Station. But according to Francis Gegg, Chief Executive Officer of the Free Zone Management Agency, gasoline is only the beginning.
Francis Gegg, CEO, Free Zone Management Agency
“It started with the sale of fuel, premium particularly and diesel being sold by Shell, Texaco and Esso. They not only buy fuel anymore but are now stopping to buy and shop at Jueta: they have perfumes and liquors. A & R: they have gifts, toys and other items on sale. Inside there they also have Numony selling footwear, over here we have D.L.P. whose selling Nike, Reebok, Fila and clothing at very, very cheap prices, very competitive prices. So on average, I would guess there is approximately three hundred thousand Belize dollars of trade, all sold to Mexicans”
And the sheer number of Mexicans shopping in the zone at times seems overwhelming.
Stewart Krohn
“Although the scene may look familiar it’s not Super San Fransisco or Iste in Chetumal. Instead these shoppers, all of them from Mexico are at a place called A & R in Belize in the Commercial Free Zone. It’s owned by the Urbina family in Orange Walk.”
This cash register at Urbina’s A & R did not stop ringing all day and while not every free zone merchant enjoys this kind of success and not every season’s Christmas, it seems unlikely that the Mexican’s thirst for cheap imports will be quenched anytime soon.
Customer #1
“Because it is more economical.”
Customer #2
“Very cheap.”
Customer #1
“I come here once a week.”
Q: Does your family buy here also?”
Customer #1
“Yes”
Q: “How about your friends?”
Customer #1
“Yes, my friends, all of Chetumal buys here.”
At times the situation at the border borders on the unreal. What with all of Belize shopping in Chetumal and all of Chetumal shopping in the free zone, the traffic jams, despite a newly paved road into the zone, are infuriating. And many Belizeans who do cross into Chetumal wind up buying the same Belizean duty free fuel that’s been smuggled into Mexico from the free zone.
Francis Gegg
“We do have some smuggling out of the zone but it’s very minimal. I think the zone has really been maligned; it got a real bad reputation right off the start. That’s one of the things that I’m trying to stop. We have a foot patrol at night; we’ve just made discussions with the B.D.F. who will be coming in and be very active in patrolling in the zone at night. Our leakage is not as much into Belize as it is into Mexico.”
But if Francis Gegg has his way the free zone will involve more than just buying and selling. Citing new ventures such as a plastic bottle factory, bakery and C.B. manufacturing plant he believes that the five hundred workers presently employed here will multiply dramatically.
Francis Gegg
“I think the zone has tremendous potential; I think you are only limited by your capacity to dream and create. We’re sixty seconds from NAFTA the largest trading block in the world. It’s a three trillion dollar market. The Mexicans are veracious consumers, they like good things and they are not afraid of spending money on quality items. So it’s just a matter of Belizeans being entrepreneurs and finding a niche that they can provide and selling to it and making good money.”
And money is ultimately what the free zone is all about. Stewart Krohn for News Five.
While the free zone does provide jobs for Belizean workers and profit for Belizean businesses, government officials have expressed several concerns. Since the goods and fuel in the zone are bought by Mexicans in pesos but originally purchased from abroad by Belizeans in U.S. dollars the net effect is to deplete the Central Bank’s scarce hard currency reserves. Government has informed the zone’s merchants that they must now find their own U.S. dollars on the Mexican market. In the long run they hope to establish a clearing facility with Mexico to directly exchange pesos and Belize dollars. There are also plans to clamp down on smuggling from the zone and to tighten security.