Local firms face quandary over Far East goods going to Mexico.

Many Southland companies that export to Mexico goods made in the Far East are reeling over new rules that make it nearly impossible at times for the goods to enter the Mexican market.

But the new rules may also encourage some companies to shift their manufacturing from the Far East to the U.S.A., sources say.

On Aug. 30 Mexican officials began requiring that all apparel, footwear, toys, bicycles and textiles made in either 18 Pacific Rim countries or Cyprus and exported into Mexico be accompanied by an original certificate of origin. Japan is excluded from the list.

Also, many of the certificates must be signed by a designated Mexican official in the country where the goods were made, or the goods must be examined by a certified inspector in that country. A certificate of origin is a document that tells where a product was manufactured.

Up until Aug. 30, Mexican officials accepted copies of certificates of origin and did not require a Mexican official's signature on them or an inspection of the goods being sent to Mexico.

Mexican officials imposed the new rules because they suspected many of the goods being imported into Mexico actually originated in China, but that their certificates of origin were being falsified to state the goods were made in other countries instead, said Michael Doram, an international trade attorney with the Mid Wilshire-based law firm Potis, Pollack & Doram.

They suspected companies were falsifying documents to avoid paying duties of up to 1,105 percent that Mexico had assessed beginning in spring 1993 on apparel, textiles, toys, bicycles and footwear made in China and exported to Mexico, he said.

Mexican officials assessed these duties because they believed companies were trying to export goods made in China to Mexico at prices below what it took to produce them or below the products' fair market value. This would have presented Mexican-made goods with an unfair competitive disadvantage.

After they imposed these duties, Mexican officials suspected companies, including those in the Southland, were trying to circumvent the duties yet still export Chinese products into the country by falsifying certificates of origin.

Goods that are exported to Mexico from the U.S. but made in other countries are not covered under the North American Free Trade Agreement, Doram said.

The new rules are locking many exporters out of the Mexican market altogether because getting all the original certificates of origin needed and getting the proper signatures and inspections is sometimes nearly impossible to do, sources say.

To begin with, until mid-October, neither the various Mexican officials needed to sign the certificates nor the required inspectors were in place, Doram said. Thus, many shipments of merchandise arrived in Mexico between Aug. 30 and that time without the required paperwork.

Mexican officials automatically assumed merchandise not accompanied by the correct paperwork was from China and assessed the higher import duties, Doram said.

Thus the Mexican buyers of the goods, who were required to pay the exorbitant duties, turned back the shipments instead. They also began canceling future orders from American companies, including those in the Southland, that planned to sell goods to them that were made in the Far East, Doram said.

Mexican buyers "haven't got the confidence that the new procedure is going to be capable of working out," Doram said.

Hence, there is now a shortage of Christmas merchandise available in Mexico, he said.

Now that the necessary Mexican officials and inspectors are in place, the new requirements are hurting smaller Southland companies more than the larger ones, sources said.

Large companies that import goods made in the Far East and export them to Mexico often have control over the manufacturing process in the Far East, Doram said. This makes it easier for them to get the necessary certificates of origin and required signatures, he said.

But it is harder for smaller companies to get those original certificates, he said, because they don't control the manufacturing of their products. Thus, it is harder for them to track down the correct paperwork, he said.

Dennis Donsker, vice president of Ed Garber Associates, an export trading company, said he has recently helped "hundreds" of companies, the bulk of which are in the Southland, try to export goods made in the Far East into Mexico. Los Angeles-based Ed Garber finances exporters and facilitates their transactions.

Some companies, for instance, now need perhaps 100 original certificates of origin because they want to ship goods to 100 different stores. Before they only needed one certificate and 99 copies, he said.

Most are unable to get the documents and he can't make the transaction for them, he said.

As far as getting goods made in the Far East into Mexico in general, "we're having some success but it's limited," Donsker said.

However, since goods made in the Far East are having a hard time getting into Mexico, Mexicans are buying more goods made in the U.S. instead, Donsker said.

Also, some companies that are accustomed to importing goods made in the Far East and exporting them to Mexico are considering other alternatives, he said. They are looking for other countries to make their goods in or considering shifting some of their manufacturing to the United States, he said.

Their third alternative is to stop exporting goods to Mexico altogether, Donsker added.