Mexico's NAFTA shoppers

NY Times:

Mexican shoppers with fists full of cash and long Christmas lists are pouring across the border into hotels, restaurants and shopping malls here, providing an economic boost in a downward spiraling economy.

The families, mostly middle- and upper-income, are traveling hundreds of miles to take advantage of a much wider selection of products at substantially lower prices than can be found in their hometowns in the Mexican states of Sonora and Sinaloa — even after the recent 30 percent devaluation of the Mexican peso against the dollar.

For many, it is a long journey by car that includes multiple searches at Mexican police roadblocks, followed by a huge traffic jam at the border crossing in Nogales, where delays of two hours or longer to enter the United States are common. But even with the exasperation, Mexican shoppers said it was still worth making the trip.

“We can find everything we want and it’s much cheaper,” said Aurelia Peralta, a 38-year-old homemaker from Hermosillo, a city of 700,000 about 200 miles south of Tucson. Pointing to the Guitar Hero World Tour display model her teenage son was playing, she said popular Christmas gifts cost twice as much in Hermosillo.

When she was a girl, Ms. Peralta’s family made the pilgrimage to Tucson each year, she said, and she and her husband, Obed Romero, have continued the ritual for the last 15. Mr. Romero said there are still plenty of bargains, even with the peso’s devaluation. And with Spanish widely spoken and Hispanics of Mexican descent making up 30 percent of the population, “We feel very comfortable.”

That is not by chance. Making Mexican shoppers feel welcome is an increasingly high priority for businesses in Tucson.

“It’s extremely vital to make sure we do everything we can do to accommodate them at this time,” said George Bon, national sales manager for the Radisson Suites Tucson. “The bottom line is, we can’t afford to lose them.”

Mexican visitors spend more than $300 million a year in the Tucson metropolitan area, according to a study in 2002 by the Economic and Business Research Program at the University of Arizona.

Mr. Bon said small gestures go a long way in establishing personal relationships with Mexican tourists, which is vital to generating return business. The Radisson, for example, started providing large trash bags to Mexican guests so they could discard wrapping materials for shoes, clothes and other items before they head back to Mexico. Many Mexican shoppers, Mr. Bon said, throw away packaging and place their items in suitcases to avoid high duties on new purchases when they re-enter Mexico.

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Texas also has a thriving retail business with Mexican customers. There are huge malls in the Lower Rio Grande border area that cater to the Mexican customers. Further inland, there are many upscale Mexican customers who fly into Houston and get a room at one of the Galleria area hotels and shop in the upscale mall. Mexicans were also big purchasers of the condos built on Padre Island. Commerce with Mexico has been beneficial for US business and Obama and the Unions will be running into a real buzz saw if they try to rewrite NAFTA.