NATIVE CHANGES VIEWS ON MEXICO

MEXICO CITY - One of the issues often raised whenever there is a discussion on merits of the North American Free Trade Agreement, is a perception that Mexico is a backwards, impoverished nation. Many seem to think the country lacks the resources to take advantage of any flow of American goods free that trade would provide.

Roger Minson admits that was his general perception of the country when he moved there two and a half years ago as associate director for maintenance operations with the international arm of Southwestern Bell Telephone Co.

The Cape Girardeau native was sent to Mexico City to oversee the modernization of the country's communications network, which until then had been government controlled and now is being privatized as part of a massive move toward modernization.

"I came from the Midwest and had my perceptions of Mexico. But they have been changed," said Minson. "This is not a slow moving, lazy country. It is fast moving, bustling, with a huge appetite for U.S. products."

Minson is part of an operation that he says is taking communications in Mexico and "leapfrogging across generations of technology." The telephone system in place under government control was developed in the late 30s and early 40s, and has not been updated. When Minson arrived in Mexico, people were using cord boards to send calls.

"At least three or four generations of telecommunications equipment has come and gone; constant technological improvements have taken place," said Minson. "Under the government's concessions agreement, whoever purchased the network was obligated to go into the most modern technology possible. When this is finished, no city in the world, including any in the United States, will have a more modern telecommunications network than Mexico City."

The Mexico City area has about 22 million people, making it the world's largest city. But the move toward improved communications technology is going on across the country; not only is there a move toward change in the communications industry, but also in other areas as well such as finance and banking.

As part of the effort to convince members of Congress to support NAFTA, Minson and other employees from Southwestern Bell have assisted in giving tours to members on visits to Mexico City. Among the people Minson has shown around are U.S. Reps. Bill Emerson of Cape Girardeau and Mel Hancock of Springfield.

In visiting with members of Congress, Minson explained the effort has been focused on showing that Mexico is committed to a massive modernization of its infrastructure to spurn economic growth, and tries to demonstrate the tremendous size of the market for foreign products in the country.

"If NAFTA is successful -- whether it is or not -- Mexico has a major effort under way to build all of the necessary infrastructures for business and commercial growth to occur," said Minson. "Growth is not something being promised in the future; it is being done today."

He is involved with the privitazation of the phone system, which was taken over from the government Jan. 1, 1991 by a group known as Telmex. The company is a joint venture of Southwestern Bell, Groupo Carso, and France Telecom.

"The Mexican government's interest in privatizing the phone industry was to modernize and grow at a much more rapid rate than it would under government control," said Minson. "They wanted to get the communications structure of the country to develop at a rapid enough rate to have a sophisticated enough system in place to support the business growth.

"This has all been started in advance of NAFTA. It speaks well of the Mexican government's interest in recognizing what is going to be important, and getting progress started on that in advance of NAFTA, so if successful, the necessary support structure is there. If not, it still leaves Mexico ready to compete in the international markets."

As an indication of the size of the market for American products in Mexico, Minson points out that for the next five years, the capital investment planned in Mexico for the Telmex program alone is $2 billion a year. For the entire communications industry, the investment is estimated at $6 billion a year over the next five years.

Many of those products are coming from the United States and Canada. Minson said that is evidence of the opportunities available for American companies, especially considering that if NAFTA takes effect, the 11 percent tariff Mexico applies to foreign goods would be phased out on products made in the U.S. and Canada.

On high cost items like high tech equipment, Minson said: "If you take away the 11 percent added tariff on products, it is almost an unovercomable advantage."

On Jan. 1, 1996, when the telephone modernization is complete, there will be long distance competition in Mexico, just as in the United States, providing an opportunity for companies like AT&T, Sprint and MCI to come in.

Minson said there are concerns about labor moving south to Mexico, but he noted already companies are sending piece parts to Mexico for assembly because there is a much smaller tariff on parts. By phasing out the 11 percent tariff on finished goods, Minson said the incentive to have assembly plants in Mexico would be greatly reduced.

Minson said from his perspective, the opportunities in Mexico appear to be endless. And, after 25 years with Southwestern Bell, Minson says he does not ever expect to see such an opportunity to spread new technology as he sees now.

"This has been an extremely interesting situation. The drive to improve and expand service has been the key issue," said Minson. "In many cases the deciding factor is what you can effectively manage, not financial constraints. For all of us who have worked in the effort to modernize and expand electronics during our careers, it it truly a unique experience. It is something we've never seen in our careers and don't expect to see again."

Since the move toward privitization in Mexico three years ago, the company has added 1.7 million new customers and installed 64,000 new coin phones in Mexico.

"We're putting them in as fast as installers can do the work," observed Minson.

He points out that Mexicans have a tremendous desire for American made products, which they view as being high quality. A number of U.S. chain stores are opening in the country and having overwhelming success.

Said Minson: "To most Mexicans there is a very common feeling that U.S. products spells quality. They are very quality oriented in what they purchase and are willing to pay a premium for a product with quality. Even today with the necessity of paying the tariffs and the cost of getting that material across the border and distributed in Mexico, U.S. manufactured products have the perception and quality edge ahead of Mexican products."

Minson admits there is some concern that U.S. companies will move to Mexico, and that could happen in some instances. However, he says "there will be a tremendous number of companies that would not be a viable economic option for and what they will see is a greatly expanded market for their products."

One example of success in Mexico is Wal Mart, which opened its largest store in the world in Mexico City. The store has 78 check out lanes, the parking lot is always full, and shoppers are waiting in long lines with full carts, Minson said.

A Home Mart store has also opened in the city, with a variety of products and 95 percent of them American made. He said that store is also packed.

Minson points out that because of internal problems in Mexico, American made products are often cheaper than the same products made in Mexico, and of better quality.

"From the people who are here and seeing what is happening, there seems to be a tremendous market for products coming here from the states," said Minson. "From my vantage point, with all of these issues weighed in balance, it certainly appears to all U.S. national expatriots I am familiar with, we all see this as a tremendous opportunity for the United States and U.S. suppliers.

"There is a large group of United States companies viewing this as a huge marketplace."