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The “Corozal Free Zone”
(Actually, CFZ, which was on all the license plates, stood for “Commercial Free Zone”, but it’s so close to Corozal…)
The Basic Idea. The basic idea behind a free zone is that businesses locate there, and can import goods duty free for manufacturing and resale. In the case of this free zone, retail sales are not permitted to Belizeans or local gringos. Mexicans make up the principal customers for shops here, but tourist gringos will also find some items at remarkably good prices. These include tools, liquor, shoes, and quality white goods.
Big Shops. The Nike logo labels a shoe store, full of “brand name” shoes. Prices are unbelievably low. (When something is unbelievable, perhaps you shouldn’t believe it, eh?) Cars park everywhere, anywhere. The building on the left is new, built after the price of land skyrocketed. The VW is the favorite vehicle of Mexicans, who manufacture them for the world.
Small Shops are lined up along the newer streets like you see here. There are literally hundreds of these shops going in — and going out. The zone is crying for manufacturing; instead they get more retailers.
The cars you see indicate that the Mexicans visiting the zone are among the affluent few.
Traffic Jam. It’s late in the afternoon, and cars are backed up for a mile, from Mexico, across the bridge and well into the zone. The free zone is hurting Chetumal’s economy; to make the zone harder to use, the Mexican officios are searching every car.
The Old West. In the US, developers would have laid out the free zone, put in streets, landscaping and services, and then the businesses would have come in and begin to build and trade. Here, the developers didn’t have much money, so the businesses started up and now they are putting in streets and services. Landscaping isn’t very important to Belizeans, so who knows when that will happen. Until it does, the place is really a mess. My friend Harold likened the place to a boom town in the old West. He finds it exciting and so do I. I just wish I could shop there!
Gambling. They just broke ground for the Free Zone’s first Casino. This will certainly change the complexion of the zone. Some suggest that people might drive all the way from Cancún to gamble. Of course, Sr. Ric y Sus Amigos hope that it will be a venue for live country music!!
“A Bird Nest on the Ground.” It costs 5000 dollah, plus a 1000 dollah annual fee to register as a merchant in the zone. This makes the zone a “rich boy’s club” Zone businessmen can buy a duty-free vehicle to use in the zone, and of course, since no one lives in the zone, to commute to and from the zone. Since the duty on a new Ford pickup is 38.5% (see here), this is incentive enough to attract investors to the zone. In the past, a Belizean retailer could have a shop in the zone and sell merchandise wholesale to his business in Belize. This activity lowered prices significantly in Corozal. UPDATE: In fact, the wholesale prices were so low that the GOB decided that they were being done out of some honest duty revenue, so, effective May 2001, there are no wholesales to Belizean businesses. UPDATE: Effective June 2001, wholesales of over $5000 are permitted. <grin>
The Fly in the Ointment. The free zone is booming, primarily because of gasoline sales. The price of gas is a critical success factor in taxi cab operation, and for now, gas is selling tax-free in the zone at US prices. As the price of gas has gone up in the US, the price in the zone has gone up. This could seriously impact the zone, if a) Mexican gas gets cheaper or b) US prices go up enough. NEW: (Jul 2002) Oh, my gosh!! Pemex (Mexican gas company) just cut their prices in Chetumal to 3 cents below the price in the free zone. Stay tuned for latest developments.
Another Fly (or maybe a scorpion). Gringo tourists should be able to shop in the zone. After all, they are paying $50 dollah a month to stay here as a tourist. However, petty officios at the gate to the free zone will try to keep you out. (Why I don’t know.) I discuss this attitude elsewhere on this website, and it is well described here. Lately, they have been telling gringos that it is illegal to take pictures in the zone. It isn’t. Belize is a free country, and the zone is a part of it.
New: (Sep 2001) Holy Smoke — Yet Another Fly!! Wal-Mart has stores in Merida, Cancun, and Villa Hermosa. They’re closing in on Chetumal! I tried to get official word from the Corp, but they’re not talking! Unofficially, we know that they bought property in “Chet” and they plan to use local Gringos as employees, especially if they worked for Wal-Mart before in the states. A Wal-Mart in Chetumal would do amazing things to the Free Zone. Belizeans can’t shop in the Free Zone, but they could shop at Wal-Mart. Stay tuned for further developments!!
The Bottom Line. Mexicans bring pesos into the zone. Those pesos flow into Belize, especially since 900 Belizeans work here, and hundreds more support the zone from Belize City. This has significantly improved the economy of Northern Belize in the past two years.
NEW: Links: Here is the brand new web site for the Free Zone, done by my friends Jan and Judy Wilson. On another site, KMPG did a nice analysis of the theoretical basis for the free zone but it’s gone now. Another (very funny) description can be found here, along with pictures. NEWER: Oops. That description was too funny for public consumption and doesn’t seem to be available anymore. Tooooo bad. Also, the KMPG site has disappeared. <hee, hee>
OOPS: (2004) The CFCMA never paid Jan & Judy Wilson for the work they did, so they took the site down! A very sanitized presentation can be found here. There are so many shinanigans going on in the CFZ, they can’t stand too much publicity! Oh — by the way, Wal-Mex (Mexican Wal-Mart) did come into Chetumal, along with a big snazzy mall. Of course, you can’t get the same cheap Chinese goods in Mexico so there’s still a fan club for the CFZ.
CONOCE PLAN DE AFILIADO
DESCRIPCIÓN DEL PROGRAMA
EL PROGRAMA DE AFILIADO A SZLB, TE PERMITE ESTAR EN CONTACTO CON TODAS LAS TIENDAS DE CFZ (COROZAL ZONA LIBRE), ASÍ COMO LA POSIBILIDAD DE REALIZAR DEPÓSITOS Y COORDINACIÓN DE FLETE/ENVÍO DE MANERA SEGURA DE SUS COMPRAS.
EN COORDINACIÓN CON LAS TIENDAS HEMOS REALIZADO UN GRAN ESFUERZO PARA PONER A SU DISPOSICIÓN PRESTADORES DE SERVICIOS REGISTRADOS ANTE EL DEPARTAMENTO DE MERCADOTECNIA EN CFZ, QUE LE GARANTIZA UNA EXPERIENCIA DE COMPRA POSITIVA.