Crossing the Border - North American Free Trade Agreement

The North American Free Trade Agreement (NAFTA) had just passed. For Katie Dunhill it was good news because, she hoped, the paperwork would be reduced. Katie was the import/export coordinator for Tokisan America Inc. (TAI). She managed the process of obtaining and sending raw materials and finished goods to and from the Mexican maquiladora. The maquiladora was a Mexican company that processed and assembled labor-intensive parts. Companies from all over the world, including TAI, arranged for maquiladoras to do assembly work because of the low-cost labor.

Tokisan was a Japanese company with headquarters in Tokyo and subsidiary production facilities in the United States and Mexico. The U.S. subsidiary, TAI, was essentially autonomous, while the Mexican maquiladora was not. The maquiladora was managed entirely by TAI. For the last week there had been ominous rumors of a future trucking strike in Mexico. Any trucking strike would slow or stop cross-border traffic since the truckers would most likely block major roads.

Katie knew the import/export process well. She was aware that the export paperwork at TAI took at least eight hours to process (Katie was sure it could be done faster). It took at least four hours for the trucks to be loaded and four hours for the trucks to reach the border. At the border, the trucks could clear in a minimum of five minutes, but sometimes the Mexican Customs officials would review the shipping documents with agonizing slowness. Sometimes the tactic was used to extract minor bribes, which TAI refused to pay, preferring up to one day of delay. Customs officials were slowly learning that TAI did not pay, and were resorting to tougher tactics such as questioning the shipping documents and refusing entry of material. Once across the border, it would take an additional six hours for the truck to reach the plant and get unloaded. Only then was the raw material available for the assembly work.