Imports of cheap products and smuggling are major factors in the stagnation of the footwear industry.
According to Irma de Aceituno, an executive at the factory Genesis S.A., another factor that has affected the sector is competition from the informal market, which has led to staff reductions at the plant.
"In order to stop the fall in production, we have created a line of shoes with synthetic materials at a lower price.
Central American Business Chambers call for stopping unfair trade in both directions between the two countries.
"We must, as soon as possible, stop the illegal movement of goods from Guatemala to the southern border of Chiapas, in order to be able to aspire to making progress on all our objectives in this new era of trade between Mexico and Central America," said Jose Mejia, president of the Central American Binational Union of Chambers of Commerce, Industry and Investment.
As of July 9 full legislation comes into full effect which seeks to prevent the entry of weapons or contraband into the United States.
From an article by the Costa Rican Foreign Trade Promotion Office (PROCOMER):
On November 25, 2008, the Customs and Border Protection (CBP) published the regulations for Importer Security Filing (ISF 10 +2) which requires importers and carriers to submit additional cargo information to the CBP before the goods are shipped to the U.S.
The high cost of medicines in Costa Rica has generated increased smuggling in unsafe conditions.
According to the Minister of Public Security of Costa Rica, Mario Zamora, "unfortunately the price of medicines in Costa Rica is much higher than the rest of Central America and this is creating a situation where smuggled goods are coming into the country."
Central American industry is calling for strengthening of customs controls in the region, in order to contain the constant border crossings made with smuggled goods.
According to Carlos Enrique Rivera, secretary general of the Federation of Chambers and Industrial Associations of Central America and the Dominican Republic (FECAICA), at the border located in Melchor de Mencos, Peten, which borders Belize, there is no control to prevent the entry of illegal goods, which apparently heads toward Mexico, but 15% remains in Guatemala, without having made tax declarations.
The National Association of Poultry Farmers in Guatemala states that avian influenza detected in Mexico could spread to the country due to the high volume of egg smuggling.
From an article in Revistaindustria.com:
In Guanajuato, Mexico, there have been outbreaks of avian influenza and poultry production is at risk due to the smuggling of eggs from this country.
The activities of well-established smuggling networks have distorted the normal functioning of trade, having become an everyday part of life for a sector of the population.
The closure of Central Tabacalera SA (Tacasa), which may have been caused by increased cigarette smuggling, mainly in Panama, can be seen as one of the many consequences of the phenomenon of illegal entry of goods.
Anti smuggling operations are working, resulting in tax collections by Customs grow by 3%.
From a publication in Diario de Centro América:
Working together to reduce smuggling
The first quarterly report of the National Commission Against Contraband (CONACON) contains encouraging news: From June to September smuggling has been reduced and customs revenue increased 3%.
The sector reported that it will close 2012 with growth of 17%, despite a 50% increase in the price of inputs and the effects of the sale of eggs smuggled from Honduras.
As reported in elnuevodiario.com.ni, production of eggs per day reached 46.000 boxes, while per capita consumption is 92 eggs a year, when in 2008 was 63.
"Despite the good figures, industry representatives are concerned about the rising cost of raw materials, such as yellow corn, sorghum and soybeans, and reported that the number of boxes of eggs entering from Hondoras per week is around 20.000, they say that these are poor quality because they ‘are in the last days of their shelf life’ ".
The companies engaged in importing and distributing fine liquors have indicate that the high tariffs on these products are encouraging smuggling.
An article in Siglo21.com.gt quotes the president of Distribuidora Alcazarén, Mariano Vadillo Portabella, who said: "the problem is so severe, that there are smugglers do not even need to use front companies to break the law, but go from person to person making individual visits to offer their products at very low costs, although with risks to consumer health, as the products do not meet the relevant standards and may have been tampered with".
Guatemalan retailers and suppliers are demanding that the government tighten controls to prevent smuggling of meat into Mexico.
These illegal transportations have, according to retailers, influenced the increase in the price of a pound of meat which this week was trading at $3.3.
In the meeting with officials from the Ministries of Economy, Agriculture and Interior, Julio Rivera Claveria, Vice Minister of Security at the Ministry of Interior said that they would increase controls "in the blind spots where meat is passed on to the neighboring country."
Businesses in Guatemala have suggested creating an anti-smuggling unit made up of the Public Ministry and the National Civil Police Force.
The members of the Chamber of Industry of Guatemala (CIG) proposed to the Vice President Roxana Baldetti that a series of measures be taken to combat smuggling, which is affecting trade.
An important proposal is to create anti-smuggling unit made up of the Public Ministry and the National Civil Police.
Rising prices of meat caused by cattle smuggling from Guatemala to Mexico could be solved by imports from Nicaragua or Honduras.
The president of Guatemala, Otto Perez Molina, admitted the possibility of importing meat from Nicaragua and Honduras as a final solution to the rising price of meat, which has been fueled by cattle smuggling to Mexico, given the high prices in the northern nation.
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