By ELISABETH MALKIN

MANZANILLO, Mexico — Atop a concrete tower overlooking the customs service inspection area here at Mexico's main Pacific port, a half-dozen young
women in crisp uniforms sequestered behind drawn blinds peer at a bank of television monitors showing every move below.

They are looking for any irregularity, like an inspector who waves a truck through without checking documents.

The women — only women are hired to do this job because they are thought to be more honest than men — along with the new tower and its digital closed-circuit
technology from Israel are part of the customs service's continuing struggle against corruption.

Only by reining in corruption at customs can Mexico's government hope to make any headway against illegal imports. This contraband, mostly Chinese consumer
goods that have flooded the country for more than a decade, has all but destroyed some of Mexico's domestic industries.

Since President Vicente Fox took office in December 2000, no federal agency has undergone as thorough a housecleaning as the customs service. Some 80 percent
of the professional customs service employees have been replaced, including almost all of the 48 port directors, sometimes several times. Screening of top officials and inspectors now includes lie-detector tests.

The agency's annual budget has grown tenfold, to almost $150 million. That has permitted José Guzmán Montalvo, general administrator of Mexico's customs service since January 2001, to double or triple salaries and buy up-to-date gamma-ray scanners to view the contents of containers.

The agency has pursued corrupt customs brokers, canceling the licenses of more than 90 so far, out of 800 total. It has audited private port operators and forced
them to fire their corrupt employees.

One sign of success is that seizures of contraband increased fivefold from 2000 to 2002.

Despite all the cleanup efforts and progress on many fronts, however, contraband — any import that enters illegally — continues to cross the borders. While it is now more difficult to bribe an inspector to look the other way, smugglers are resorting to more elaborate schemes using falsified documents and phantom companies.

"We're like sweepers in Central Park in the fall," Mr. Guzmán said in a recent interview. "We sweep all day but by the end of the day, the leaves have piled up again
where we swept."

There are no reliable estimates for much the contraband costs the Mexican economy. Under free trade agreements with the United States, Canada, Europe and many Latin American countries, much of Mexico's $169 billion in imports in 2002 entered duty-free. That reduced the average tariff rate to just 1.3 percent.

It is not the lost revenue from the unpaid customs duty that concerns officials most but the tax loss that occurs when the contraband ends up in Mexico's vast informal
economy. For Finance Minister Francisco Gil Díaz, Mr. Guzmán's boss, the attack on contraband, then, is part of a larger mission to increase tax collection.

Mexico's textile, shoe and garment producers have been hit hardest by the customs infractions. They say they cannot compete with cheap Chinese imports. In an
effort to protect local industry a decade ago, the Mexican government placed punitive tariffs as high as 1,105 percent on Chinese fabric, clothing and shoes. But
Mexico's street markets are filled with plastic sandals and blouses from China.

The National Garment Industry Chamber, for example, estimates that 58 percent of clothing bought in Mexico enters the country illegally, with more than half of that
coming in with falsified documents.

Business groups generally praise Mr. Guzmán's efforts, and say he is honest and means well. Still, they would like to see tougher measures.

"There is a real intent to end corruption, but customs needs more resources," said Raúl García Tapia, director of the garment industry chamber. "The only solution that we see today is to put the smugglers in jail."

Others have called for army support.

Manzanillo shows how much Mr. Guzman has been able to do, as well as how much still needs to be done. The port handled $7.5 billion in imports in 2002,
three-quarters of them from Asia, and is the main entry point for imports from the Far East.

Mr. Guzmán, who has spent most of his career at the customs agency, said he found almost complete anarchy in Manzanillo when he took over the top post two and
a half years ago. Abandoned containers were stolen off the docks. Truck drivers could load containers and drive right out of the port, bribing the customs police to let them through without checking documents.

"It was a free port," Mr. Guzmán joked. "A container holding clothing could leave the port with a customs release document that said `rubber.' "

While working to put his own house in order — firing three successive port directors for corruption or ineptitude and repeatedly replacing inspectors — he also
forced the private port operators to tidy up theirs.

The largest private port operator in Manzanillo, Operadora Portuaria de Manzanillo, fired about 60 of its 150 employees after an audit by the customs service, said
the company's general manager, Harvey Bauer.

"We had have some corruption here on various levels," Mr. Bauer said. "We did a major housecleaning. We did polygraphs on everybody."

The company, which began in 1995 as a joint venture of SSA Marine, a cargo terminal operator based in Seattle, and Grupo TMM, a Mexican transportation
company, is being fully acquired by SSA Marine, a unit of Carrix. TMM is selling all its port assets — including terminals in the main cargo ports of Veracruz and
Progreso — to SSA Marine to pay off debts.

Many measures taken in Manzanillo and other ports involved basic common sense.

Mr. Guzmán reduced the number of documents needed to release cargo. He gave port operators access to the customs service's cargo data, so they could
cross-check information presented by customs brokers before permitting cargo out of the port.

To stop the theft of abandoned containers in Manzanillo, Mr. Bauer simply had them chained down and guarded.

The customs cleanup also meant a confrontation with the federal attorney general's office, whose agents roamed the docks of all Mexico's ports, ostensibly looking for drugs. But customs workers videotaped them stuffing merchandise into their jacket pockets, Mr. Gil Díaz, the finance minister, said. President Fox ordered the agents off the country's docks.

During a recent tour of Manzanillo, Mr. Gil Díaz displayed a mastery of customs arcana, a sign of how important he considers the cleanup. He asked for a wall to be
built to channel trucks directly from the container yard to the customs area and pressed port operators to complete their switch to electronic documents quickly.

The many big and little steps are beginning to show some results in Manzanillo and elsewhere.

For example, Mr. García of the garment industry chamber estimated that two years ago, 60 percent of contraband clothing passed through customs with a quick
bribe. Now only 30 percent gets through that way, he estimated, forcing smugglers to come up with new ruses. Such ruses include altering documents related to the
cargo's country of origin or presenting undervalued invoices.

Smugglers also use Mexico's maquiladora rules, which permit duty-free import of components that are to be assembled in Mexico for export. Somewhere along the
way, these goods, particularly industrial-size rolls of fabric, find their way into the domestic market.

A check conducted in 2001 by Mr. Guzmán and the Economy Ministry found that half the registered maquiladoras were fronts for illegal imports.

Checking phantom companies in the Far East is much more complicated. The customs service does not have the resources to send investigators to discover, for
example, whether a Hong Kong factory listed on an invoice is really a front for Chinese production, permitting the importer to pay just the 35 percent duty on clothing from Hong Kong instead of the 533 percent charged on Chinese clothing.

So the agency signed a two-year contract in April with the Swiss certification company Société Générale de Surveillance, whose offices around the world will be able to check the origin of suspicious merchandise.

For a relatively small cost, Mr. Guzmán said, "They can check whether a company exists, whether it billed properly."