International Trade

Last verified on Monday 21st August 2017

Mexico

Fernando Holguín Casas and Felipe Mendoza Vidal
EC Legal Rubio Villegas
  1. 1.

    Is your country a member of the WTO or is it currently negotiating its accession?

  2. Mexico, a member of the WTO, has mainly developed its trade and investment regime through the negotiation of bilateral investment agreements. However, Mexico strongly believes that multilateral trading system is the main instrument for liberalisation of world trade. 

  3. 2.

    If your country is a member of the WTO, what are the main changes in your country’s domestic legislation that have been triggered by your country’s WTO membership? What have been the practical implications of these legislative changes for businesses from your country? Are there any aspects of your country’s domestic law that you believe should be reformed in light of your country’s WTO membership?

  4. There have been several modifications in the past 25 years as a result of Mexico’s incorporation to the GATT and subsequently the WTO.

    Some highlights of these amendments are the enactment of the Foreign Trade Law in 1993 and its regulations, adopting all the WTO law related to trade of goods (the regulations were amended in May 2014); the modernisation of the foreign investment policies opening up most of the sectors to foreign investment; the different updates and restructures to the antitrust regulation in Mexico and; the modernisation of the customs procedures that are being updated and improved yearly, resulting in world class simplification of import and export procedures.

    The energy and telecommunications reforms were also proposed by WTO as hot topics, and Mexico already has new legislation on these areas.

    As a result of the energy reform, private investment already has access to the energy strategic area in Mexico, has the purpose among others to reduce the energy tariffs and take the oil industry to a new level of sophistication and efficiency.

    To this point, the significant legal reforms have passed and it’s more a matter of proper implementation and execution than lack of legal background. 

    Reforms in the electronic commerce could be an area of opportunity, to foster high digital infrastructure, increase consumer trust and develop financial and payment systems. 

  5. 3.

    Is your country a participant of the WTO’s Information Technology Agreement (ITA) or seeking to adhere to it? If your country is a participant of the ITA, is your country among those members that concluded an expansion of the ITA at the December 2015 Nairobi Ministerial Conference? 

  6. Mexico is not currently a participant of the WTO’s ITA and there is no strong evidence suggesting that it is seeking to adhere. This is a particular situation, since Mexico is the only non-ITA member in the top 30 ITA exporters (ranking within the top 10 in recent years).

    Notwithstanding the foregoing, since Mexico is a WTO member, it exporters benefit from the MFN nature of the agreement.

    On the import side, Mexico has eliminated duties on a wide variety of inputs providing a competitive price advantage to Mexico exporters and producers.

  7. 4.

    Is your country a participant of the WTO’s Government Procurement Agreement (GPA) or does it have the formal status of observer of the GPA, seeking to adhere to it? 

  8. Mexico is not currently a participant or an observer of the WTO’s GPA and there is no evidence suggesting that it is seeking to adhere.

  9. 5.

    Has your country already ratified the Trade Facilitation Agreement? What are the benefits that you expect to flow from the entry into force of that new agreement for businesses from your country?

  10. Mexico accepted the Agreement on 26 July 2016. Historically, Mexico has been very respectful of its International Trade compromises, so we would expect a complete implementation on the substantive commitments of the TFA, specially for purposes of expediting the movement, release and clearance of goods including goods in transit; effective cooperation between customs and other authorities involved in this process and; technical assistance. We also expect a reduction in trade costs as a result of the implementation of such commitments and consequently a boost on trade.

    Ideally, for Mexico it would also represent reduction in the administrative constratints, transparency of laws, rules and procedures, as well as fairness in border agency decisions which represent a significant area of opportunity for this country.

  11. 6.

    Please provide a brief description of the customs duty structure maintained by your country. To what extent is it similar to, or has it been influenced by, that of your main trading partners?

  12. The duty tariffs applied by Mexico are contained in the General Import and Export Duty Act (LIGIE), which is based on the Harmonised Commodity Description and Coding System (HS) and has been amended more than 15 times. These tariffs contain more than 12,000 eight-digit headings.

    More than 99 per cent of all the tariff headings applied by Mexico in its tariff are ad valorem, the rest of the tariffs are specific or compound.

    There is a unilateral tariff reduction programme of five years ending on 2013, significantly reducing the duties on most of the headings.

    The duty rates range from zero per cent to 254 per cent, and the highest average duty rates are imposed on confectionery and sugar, followed by animals and animal products, coffee tea, clothing, fish and fish products.

    In general the customs system has a very significant influence from its main trading partner, the US, and of course the WTO, however, many of its main features were originally developed by Mexico, including different regimes to import goods on temporary basis for production of export finished goods.

  13. 7.

    Does your country maintain an import licensing regime?

  14. Mexico publishes in the Federal Official Gazette, a list of goods subject to previous import permits. Also, these permits may apply to certain goods listed under particular Trade Agreements executed by Mexico.

    The Mexican Foreign Trade Law and its Regulation, which have been amended from time to time, to be in compliance with WTO principles and agreements governs the application of import restrictions and prohibitions. The President is the competent authority to determine the non-tariff measures required to restrict or regulate the export, import or transit of goods in Mexico. Usually these resolutions are sent for prior revision to the Foreign Trade Commission in Mexico, and subsequently issued by the Ministry of Economy or the relevant Secretariat and published in the Federal Official Gazette.

    Justified reasons for imposing this type of measures (which are WTO compliant) consist of: (i) imbalances in the balance of payments; (ii) maintain control on used goods or wastes; (iii) answer to restrictions on Mexican exports; (iv) provisions of FTAs; (v) national security, public health or environmental reasons and; (vi) avoid the inflow of goods subject to unfair trade practices.

    The non-tariff restrictions may be imposed in the form of permits, countervailing duties, limited quotas, among others.

    Some group of products subject to previous import permits consist of used tires and clothing, petroleum products, vehicles, diamonds, and some specialised equipment.

    Any individual or entity intending to import goods into Mexico, shall obtain a National Importers Registry, and a tax identification number from the internal revenue authorities of Mexico.

    Finally, with the objective of modernising the customs procedures in Mexico, the Mexican government has launched a new tool known as the Foreign Trade Single Counter, which will allow companies to comply with all their Foreign Trade obligations, by transferring electronic information to a single website. The main purpose of the Foreign Trade Sole Counter is to simplify, standardise and automate all customs procedures in one.

    As a result thereof, the flow of information between private entities and the government will be significantly more expeditious and simple, and the duration of the customs formalities will be considerably reduced.

    In addition to simplifying all the import and export submissions, this Foreign Trade Single Counter shall also serve to comply with non-tariff restrictions, carry out notifications related to the submissions of the company and, to carry out electronic payment of duties and taxes.

  15. 8.

    Please explain the export control regime in place in your jurisdiction.

  16. The export requirements in Mexico may be summarised as follows: all exporters shall file export pedimentos or manifests by using an in-house or customs broker. The exporter of record shall attach to its declaration the commercial invoice of goods, evidence of compliance with non-tariff restrictions on exports (which are significantly less compared to import requirements).

    Certain listed products shall also be recorded before the Specific Exporters Registry (alcoholic beverages, tobacco, cigars among others). Most of these products are also subject to the Special Tax on Production and Services.

    An export prior permit is only required to specific products such as petroleum goods and rough diamonds.

    Only fewer than 30 tariff classifications are subject to the payment of duties.

    Many foreign investors benefit from the IMMEX programme, whose purpose is to allow the temporary importation of raw materials and assets into Mexico, to repair or transform goods that are subsequently exported. The importation of raw materials and assets is exempted from the payment of VAT, and the raw materials are exempted from the payment of duties. This mechanism allows foreign investors to manufacture their products in Mexico by benefiting from the excellent and low-cost labour, and the expanded network of free trade agreements (FTAs) executed by Mexico.

  17. 9.

    Has your country ever renegotiated its scheduled concessions under GATT article XXVIII? If so, could you please provide details?

  18. Indeed, specifically under article XXVIII: 5. The products subject to this renegotiation were newsprint and the approximate yearly value of trade involved was US$17 million.

  19. 10.

    Has your country been involved in any WTO disputes either as a complainant, defendant or third party? Please highlight the most prominent instances of such participation.

  20. Mexico has been involved in 23 cases as claimant and 14 as respondent. Also, it has been involved in 63 cases as third party.

  21. 11.

    How would you evaluate the compliance record of your country with WTO dispute settlement reports? To the extent that you identify a track record of delayed or incomplete implementation, what are the main factors explaining this feature?

  22. Mexico has a very acceptable compliance record with WTO dispute settlement reports.

    An isolated example of a claim against Mexico on its WTO settlement reports was where members noted the persistence of some non-tariff barriers to trade and encouraged Mexico to remove reference prices and simplify its system of SPS measures. Mexico replied that these references were only applied to used cars and were compatible with WTO rules.

  23. 12.

    Please explain the main procedural steps, under your domestic law, on anti-dumping, countervailing and safeguard duty investigations? Which are the competent investigating authorities? Are there any appeals and review procedures in place?

  24. The International Trade Practices Unit of the Ministry of Economy (Unidad de Practicas Comerciales Internacionales or UPCI), is the administrative unit responsible for carrying out the investigation procedure against unfair trade practices in their mode of price discrimination or dumping. This procedure is regulated by the Agreement on Implementation of srticle VI of the General Agreement on Tariffs and Trade 1994 (ADA or AAD), the Foreign Trade Law (FTL) and its Regulations (RCFT).

    The UPCI determines in a single investigating both dumping and subsidy determinations and material injury determinations.

    Safeguards procedure

    • Safeguard measures temporarily regulate or restrict imports of goods identical or alike to or directly competitive with products of the domestic industry and are intended to prevent or remedy serious injury and facilitate adjustment by the domestic producers. Safeguard measures may consist of specific or ad valorem duties, licences or maximum quotas.
    • The safeguard measures shall be determined by the UPCI, within a period of 260 days from the day following the publication of the initiating resolution in the DOfficial Federal Gazette, subject to the provisions of the international treaties and conventions to which Mexico is a party.
    • The Federal Executive may determine provisional safeguard measures within a period of 20 days from the day following the publication of the initiation of an investigation in the Official Federal Gazette, whenever: (i) critical circumstances have arisen and any delay would result in damage which it would be difficult to repair; and (ii) there is evidence that increased imports have caused or are threatening to cause serious injury. The duration of the provisional measures shall not exceed six months.
    • To determine whether a safeguard measure is appropriate, the Ministry shall investigate pursuant to the administrative procedures described in the FT its regulations and, in the international treaties and conventions to which Mexico is a signatory.
    • In order to determine severe injury or threat of severe injury, the Ministry shall evaluate the impact of the imports under investigation on the total domestic production of identical, like or directly competitive goods or on those domestic producers whose collective output constitutes a major proportion of the total domestic production of such goods. As a result of 2014 amendments, there should be objective evidence on the relation between the increase on the imports of the good subject matter to investigation and the severe injury or threat of severe injury.
    • The Ministry shall consult with the representatives of the productive sectors concerning the application of the compensation measures that must be adopted under the international treaties and conventions to which Mexico is a party.
    • The safeguard measures shall be applied only for such period of time as may be necessary to prevent or remedy serious injury and to facilitate adjustment.

    Dumping and countervailing investigations

    • Petitions may be filed by either entities, or individuals who are producers of merchandise identical or similar to that which is imported under conditions of unfair competition.
    • With publication of the initiation notices, interested parties are sent copies of the petition.
    • Notifications required under the FTL may be sent to an interested party or his or her legal representative through personal service to his or her domicile, by certified mail with return receipt, or by any other direct means.
    • Access to confidential information is only granted to accredited legal representatives of the interested parties and to any persons who, under international treaties, are accorded such access.
    • Interested parties include the petitioning producers, importers and exporters of the merchandise under investigation, as well as foreign individuals who have a direct interest in the investigation or are defined as interested parties under international agreements.
    • All information and documents must be submitted in Spanish.
    • A preliminary determination must be issued within 90 days from the initiation of an investigation.
    • The Secretary has three choices: (i) set a preliminary compensatory duty after a minimum of 45 days following publication of the notice in the Official Gazette, based on the results of the preliminary determination; (ii) refrain from imposing duties but continue the investigation; or (iii) terminate the investigation on the grounds of insufficient evidence of dumping or subsidisation, or of injury or threat of injury, or a causal relationship between them.
    • When the investigation has been concluded by the Secretary, the draft final determination is submitted to Foreign Trade Commission (COCEX) for its opinion. This resolution must be issued within 210 days of the initiation of the investigation; the Secretary may (i) impose a final compensatory duty, (ii) revoke the provisional duty earlier imposed, or (iii) declare the investigation concluded without the imposition of a countervailing duty.
    • Compensatory duties may be reviewed and revised annually at the request of any party or at any time at the Secretary’s discretion. This review may take place regardless of whether the determination is subject to alternative dispute resolution or to an administrative or judicial proceeding.
    • Interested parties may ask Economía to convene a conciliation meeting, at which proposals may be made to resolve the case and terminate the investigation.
    • An interested party that wishes to challenge one of Ministry of Economy determinations (or the first collection of a compensatory duty) has different options:
      • If it and other interested parties concur, or if the party is not from a NAFTA country, the challenge may be pursued administratively within Economía and then before the Federal Tax Court. The determination of TFJFA may subsequently be subject to review under Mexico’s amparo jurisdiction. Alternatively, it may be possible to challenge Economía’s final determination or assessment of duties directly in amparo, bypassing TFJFA. Alternatively, if the party is a national of the United States or Canada, he or she may seek review under Chapter 19 of NAFTA.
  25. 13.

    Are you aware of any ongoing or planned revisions of the rules on anti-dumping, countervailing and safeguard duty investigations in your jurisdiction?

  26. We do not expect a revision in the short term. Some proposals have been made, however, no serious considerations have been given by the Federal Congress.

  27. 14.

    What are the main agricultural subsidies maintained by your country? Are they in the process of being phased out?

  28. In recent years, the main agricultural subsidies maintained by Mexico are:

    • Direct Payments or Support: PROCAMPO and Alianza para el Campo and;
    • Payments based on volume produced: PACE (Programa de Apoyo a la Comercialización Ejidal) and; ASERCA Apoyos y Servicios a la Comercialización Agropecuaria).

    Contrary to the general belief in Mexico, the subsidies granted by its main commercial partners are similar to those granted by Mexico in this case, the United States and Canada. The levels of agricultural subsidies are just inferior to countries such as Japan and the European Union.

    As a condition to phase out its agricultural subsidies, Mexico has requested to developed countries to reduce theirs to avoid market distortions. A clear claim on this sense took place in the Fifth Ministerial Meeting of WTO that took place in Cancún, Quintana Roo, in September 2003. In this meeting, Brazil also supported Mexico’s claim.

  29. 15.

    Has your country ever been involved in a WTO dispute on one or more of the three types of trade remedies? Do you anticipate any forthcoming legal action before the WTO involving your country either as a defendant or complainant?

  30. Mexico has been involved in 23 cases as claimant and 14 as respondent. Also, it has been involved in 63 cases as third party.

    We do not expect any respective legal action anytime soon; however, there is still an important case in Mexico. This hot topic is the settlement dispute requested to the WTO by Mexico, after bilateral discussions failed to reach a deal last year. This dispute settlement is recorded under number DS451 and related to measures regarding to the production and exportation of apparel and textile products by China.

    Mexico has claimed that China maintains different measures (tax exemptions, duty and VAT reduction on the purchase of equipment contingent to export, cash payments among others) to support producers and exporters of apparel and textile products and suppliers in the cotton and chemical fibres industries.

    Mexico is supporting this case on inconsistencies to the Agreement on Agriculture, SCM agreement, China’s Accession Protocol and different articles of GATT.

    This case is at the consultation stage.

  31. 16.

    Which are the bilateral trade agreements your country is currently a party to or which it is in the process of negotiating?

  32. NAFTA (US and Canada); Costa Rica; Colombia; Bolivia (was recently terminated); Nicaragua; Chile; European Union; Israel; North Triangle (Salvador, Guatemala Honduras); European Association (Norway, Iceland, Switzerland, Liechtenstein); Uruguay; Japan; Peru.

    Recently the Mexican government has expressed that it feels comfortable with the number of trade agreements signed by Mexico. Consequently, the government has decided to suspend negotiations with other countries such as Argentina, Panama, Korea, New Zealand, Singapore and Australia, to focus instead on the development of those agreements already signed.

    Still, since 8 October 2012, Mexico is formally participating in the ambitious multilateral negotiation of the Trans-Pacific Partnership Agreement (TPP), whose main objectives are to improve the progressive liberalisation of the trade of goods and services, accelerate supply chains, reduce cost of doing business and reinforce regulatory cooperation. The main advantage of the TPP for Mexico would be access to the Asian market.

    Also, in 2011 Mexico reached an agreement with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua to integrate into one instrument the three agreements entered between the parties, to facilitate the commercial integration of the region.

  33. 17.

    Can you see any conflicting rights or obligations between the bilateral or regional trade agreements your country is a member to and its rights and obligations under WTO law? If yes, what is your assessment of how such conflicts are or should be resolved?

  34. The main conflict relates to the resolution of disputes mechanisms. Some of the main bilateral or regional trade agreements of which Mexico is a member, contain a mechanism of dispute resolution that may be in conflict with the mechanisms established by WTO law. We can get to a point where contradictory resolutions are issued, generating uncertainty on the parties. In my opinion, a provision of forum exclusion should be included in all the bilateral/regional agreements to avoid contradictions and weakening of the multilateral system.

  35. 18.

    Is your country party to any regional trade agreements or in the process of negotiating its accession to one?

  36. Indeed, Mexico is part of the North America Free Trade Agreement (NAFTA) along with Canada and the US. It also has regional agreements with the Central America region.

    Since 8 October 2012, Mexico is formally participating in the ambitious multilateral negotiation of the Trans-Pacific Partnership Agreement (TPP), which main objectives are to improve the progressive liberalisation of the trade of goods and services, accelerate the supply chains, reduce cost of doing business and reinforce the regulatory cooperation. The main advantage of the TPP for Mexico, would be the access to the Asian Market.

  37. 19.

    In case your country is among the signatories of the Trans-Pacific Partnership (TPP), by when do you expect your country to have completed its ratification process?

  38. It is still difficult to anticipate; however, a ratification by the US may accelerate the process.  

  39. 20.

    What are the benefits and disadvantages that you expect to flow from the future entry into force of the TPP for businesses from your country? How have your expectations been affected by the United States’ decision to withdraw from the TPP?

  40. Mexico has a very good competitive perspective as the second-largest economy in Latin America and an established manufacturing centre. Mexico is already the world’s biggest producer of flat-screen televisions and a major car producer with a fast-growing aerospace industry. The expectation that Mexico would become even more attractive as an investment destination as a result of the TPP is now reduced, since the platform for exports will not improve as a result of the implementation of the aforesaid Agreement, however, a fair renegotiation of NAFTA could boost Mexico´s potential. On the other hand, the automotive parts industry had expressed concerns in relation to a possible change in the current growing trend it has been enjoying in Mexico as a result of the enactment of the TPP, however, this is no longer as a result of the new status of the TPP. On different occasions, this industry expressed that different analysis made by this industry showed that Mexico had to be careful and continue to be more competitive every year to avoid a negative impact in the near future.

    Another downside of the TPP was that multinational companies with global supply chains were expected to benefit more than medium and small domestic companies, unless the latter significantly increased their competitiveness, which implied new investments for these companies and production of more value-added goods to be able to compete and benefit from the TPP. 

  41. 21.

    If your country is not a member of the TPP, do you expect any trade currently enjoyed by your industries to be negatively impacted by increased trade in those products among members of the TPP?

  42. As described above, Mexico executed the TPP on 4 February 2016.

  43. 22.

    Does your jurisdiction benefit from the General System of Preferences maintained by the European Union and the United States? Does your jurisdiction maintain a similar system with respect to third countries?

  44. While Mexico does not maintain a similar system with respect to third countries, to promote economic growth in the developing world by providing preferential duty-free entry to certain products, it has received very limited benefits from the GSP maintained by the EU and the US. Just as a reference, it is important to mention that Mexico is not among the top 20 countries receiving benefits from the GSP.

  45. 23.

    Has the bilateral trading relationship between your country and the United States been affected in any way by the change in administration in the United States? If so, which sectors have been particularly affected and why?

  46. So far there has been no real harm, however, acknowledging that this assessment could change from one day to another, most of the main industries in Mexico are carefully following the NAFTA renegotiation process, so it is important to analyse in detail this crucial situation that may significantly reshape the trade relation between both nations.

    Mexico’s position

    In a nutshell, Mexico wants and needs NAFTA to continue in effect. While the country is beginning to turn its head to other countries and regions to supplement the possible loss of NAFTA, focusing on other strategic areas of economic development like tourism and the creation of domestic technology, and modernising its education system, it will still take some years to reduce the significant impact that a sudden termination of NAFTA would create for the country.

    In this era of technology and automated processes which is generating a reduction in the need for labour, sooner or later Mexico will have to learn to be less dependent on foreign investment focused on manufacturing, since the location of these high-tech premises will become geographically irrelevant.

    The stronger position that Mexico is taking for the renegotiation of NAFTA is not based on the lack of convincement on the importance of NAFTA to this country, but on the political pressure from all actors in Mexico, including congress, political parties, the people and media, which are all consensually demanding that the country should be treated with dignity and fairness during the renegotiation process, otherwise NAFTA should be terminated.

    What could go wrong?

    Although we expect that NAFTA will be renegotiated, we have to explore the possibility of termination, in which case, a six-month prior notice to the other parties would be required. Below we analyse some factors that could generate the termination of NAFTA:

    • Political pressure. (Addressed above).
    • Border tax. Statements from the Mexican government, specially the Minister of Economy Ildefonso Guajardo and the Minister of Foreign Affairs Luis Videgaray, have made it clear that if a Border Tax (either in the form of a border adjustment tax adversely impacting the income tax of companies importing from Mexico, or a border tax imposing additional duties on the import of Mexican goods into the US) is implemented by the US, Mexico would be ready to retire from the NAFTA negotiations.
    • Long negotiations. Mexico will be involved in a presidential election process in the middle of 2018, and unless negotiations of NAFTA are completed within 2017 or the first quarter of 2018, the political scenario may complicate the renegotiation by Mexico, since a negative perspective of NAFTA may become a political flag for one or more presidential candidates in this country. The latest statements from both governments indicate that negotiations should be completed by the end of 2017, although there is some scepticism on the aggressiveness of this target.

    Response by Mexico in case of NAFTA termination

    The Mexican government, specifically through the Minister of Treasury Jose Antonio Meade, and Ildefonso Guajardo, has been very vocal in the sense that ideally NAFTA will be successfully renegotiated, however, in case the agreement is terminated, the response by Mexico would consist, among other measures, of a tax reform and the adjustment of duties.

    What could we expect from a tax perspective? On the one hand, we would expect Mexico to adopt a tax reform that might absorb to some degree the impact of the termination of NAFTA on foreign investors with a legal presence in Mexico. This tax reform may include among other measures, granting tax incentives to Maquiladora companies, allowing most of the profits of said companies to be allocated on the US side; on the other hand, we would expect the Mexican government to take reciprocal measures to those potentially adopted by it US counterparty (ie, border tax).

    From a customs and trade perspective, the duty system would be then governed by the rules of the World Trade Organization, specially the most favoured nation clause, which would result in duties ranging from approximately 7 per cent to 15 per cent for US goods entering Mexico, and 2.5 per cent to 2.8 per centfor Mexican goods imported into the US. Additionally, it is important to note that Mexican goods entering into the US, will no longer be subjected to the provisions of article 303 of NAFTA, stating that it is mandatory to pay duties in Mexico for those materials originating outside the NAFTA region if they are incorporated into finished goods whose ultimate destination is one of the NAFTA parties. Consequently, to reduce the impact of the measures adopted by the US, Mexico could additionally foster its internal programmes such as the Sectorial Promotion Program, which allows many materials entering into Mexico tobe duty exempted (or by paying duties ranging from 1 per cent to 5 per cent) regardless of the origin.

    Other consequences in case of termination of NAFTA

    In case of termination of NAFTA, most probably there would a significant relocation of manufacturing companies from Mexico to the United States, notwithstanding the foregoing, the aforesaid adjustments, the response by Mexico to NAFTA's termination, and the historical background of Maquiladoras, whose existence goes far beyond the enactment of NAFTA, leads us to believe that many companies will continue manufacturing and having a presence in Mexico, specially the labour-intensive industries and those less sensitive to the termination of NAFTA.

    We would also expect, of course, a more hostile commercial relationship between both countries, and possibly continual obstacles to the import of goods from Mexico or the United States, depending on the case.

    Finally, in case of Termination of NAFTA, from the foreign investors standpoint, it is important to recall that aside from domestic law, Chapter 11 of NAFTA is the only effective mechanism between the two countries to protect investors from arbitrary or discriminatory actions, or illegal expropriations.

    Most signs indicate renegotiation

    As indicated below, most of recent signs from governments of Mexico and the United States indicate renegotiation:

    • Statements by main actors. Most recent statements from the main officers of both countries indicate in connection to NAFTA that the best-case scenario is a fair renegotiation.
    • Reference to specific aspects of renegotiation. There is coincidence from both countries indicating that NAFTA requires modernisation, increase in the percentage of Regional Value Content stated in the rules of origin and some additional chapters addressing new subjects like e-commerce.
    • Informal meetings. Although formal negotiations have not yet initiated, the chief Secretaries of both countries have been meeting periodically, and based on their statements, the outcome of such reunions is currently very positive.
    • Silence by Presidents of both countries on unconformable subjects. In recent weeks, both Presidents have moderated their comments on difficult topics (ie, who is or who isn’t going to pay for the wall.
    • Inconvenience for both countries to become hostile neighbuors. As expressly stated by both countries, NAFTA is just a piece of the complete renegotiation of the bilateral relation between the United States and Mexico. Security, immigration, energy, are only some of the subjects that will be revisited by these nations, and the last thing each of them wishes for is to end up with a hostile neighbour.
    • Global Support to International Trade. China, Germany and may other relevant nations in the trade scenario have step up to defend trade, and to express their intent to file the necessary legal remedies before the WTO, against a potential border tax that may directly or indirectly affect their investments and exports to the United States.
    • New announced investments in Mexico. One of the most revealing indications on the continuity of NAFTA, are some of the announcements and comments by the main US automakers after their meeting with the President of the United States on January 2017. Although Ford cancelled the project for a new facility in San Luis Potosi Mexico, it also announced the transfer of new production lines to Mexico which are related to the manufacture of compact cars.
    • Postponement of actions by US government against Mexico. As a sign of good faith for the NAFTA negotiations, the United States decided to postpone its dumping claim to Mexico on the subject of sugar exports.

    Scenario in case of renegotiation of NAFTA

    In the event of renegotiation of NAFTA, and the expected increase in the requirements of regional value content for the rules of origin, NAFTA will bring opportunities for the NAFTA region suppliers which eventually would have to substitute part of the non-NAFTA region suppliers (especially from Asia) to be able to comply with such RVC requirements. The electronic industry is a clear example of these opportunities.

    The United States has also been firm on the need to reduce the deficit of the trade balance between it and Mexico, so eventually, as a result of the renegotiation we would expect an significant increase in the preferential access to US goods.

    Finally, we would also expect after a potential renegotiation of NAFTA, and the new policies by the US government, a moderate relocation of manufacturing projects from Mexico to the US. A good example for this situation could be the facilities devoted to the manufacturing of large vehicles (with a higher profit margin), and high-tech facilities which are less reliant on labour.

    Conclusion

    Our projection for the future of NAFTA is a fair renegotiation of NAFTA.

     

  47. 24.

    What is the position of your country as well as that of businesses from your country on the long-standing debate on currency manipulation? Are you aware of any legislative proposals in your country similar to those in the US to address the issue via unilateral trade remedies? Do you believe that this is an issue the WTO should become more actively engaged in?

  48. There is no current specific legislation; however, Mexico has made clear statements that the country is absolutely not joining the currency manipulation trend.

  49. 25.

    How are trademarks and geographical indications protected in your jurisdiction? What are the main steps for registration of trademarks and geographical indications? Has the protection of trademarks and geographical indications in your jurisdiction changed since the WTO came into being in 1995?

  50. The system was significantly improved as a result of WTO regulation.

    Trademarks

    Trademarks in Mexico must be registered before the Mexican Intellectual Property Institute to be protected against third parties. A registered trademark in Mexico has a term of ten years, which may be renewed an unlimited number of times for succeeding ten-year terms. Mexico is a signatory to the Paris Convention for the Protection of Industrial Property, which provides that a trademark application filed with a member country within six months after filing an application with another member country will have the priority date of the first application.

    On 25 April 2012, the Mexican Senate approved the accession to the Madrid Protocol.

    Geographical indications

    Mexico has been a party to the Lisbon Agreement since 25 September 1966. The definition of geographical indication in Mexican Industrial Property Law is based on the definition established in the Lisbon Agreement.

    The international protection of geographical indications has also been obtained in trade agreements such as the Agreement on the Trade-Related Aspects of Intellectual Property Rights of the World Trade Organization, which Mexico entered into force in Mexico on 1 January 2000. IMPI shall declare the protection of an appellation of origin ex officio or at the request of a party demonstrating legal interest.

    Once an application has been filed and complies with all requirements established by Law, the IMPI publishes an extract of the application in the Official Federation Gazette and a period of two months is granted, starting from the publication date, for any third party with legal interest to make observations or raise objections.

    The parties shall submit their means of evidence before the IMPI and the IMPI is bound to make its resolution. If the resolution in question grants protection the IMPI publishes it in the Official Federation Gazette. The validity of the declaration of protection is determined by the continuing existence of the conditions that gave rise to it. The terms of the declaration of protection for an appellation of origin may be amended at any time, ex officio or upon request of an interested party.

  51. 26.

    How are intellectual property rights enforced in your jurisdiction?

  52. There are administrative and judicial authorities with all legal capacity to effectively enforce property rights.

    Through the initiation of administrative procedures, the competent administrative authorities may impose all kind of sanctions and preventive measures such as fines, seizure and closure of business facilities, among others. Entities or individuals may set off the initiation of these procedures.

    Also the federal courts are involved in resolving claims on administrative procedures involving property rights or to solve disputes in this area of law.

  53. 27.

    Has your country ever imposed restrictions on trade in services or trade in goods due to balance-of-payments and external financial difficulties? Please explain the related provisions under domestic law.

  54. To this date these reasons have not been argued by Mexico to impose restrictions on trade of services or goods.

  55. 28.

    What is your country's position on the Asian Infrastructure Investment Bank, which has been open for business since January 2016? Are there any plans, promoted by your country or by businesses from your country, to participate in a similar initiative for Latin America?

  56. It does not seem as though Mexico is planning on joining the Asian Infrastructure Investment Bank proposed by China or a similar initiative for now. The main reason is the second component requiring countries to lend. Mexico may not be in the best position to lend at this point. 

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Questions

  1. 1.

    Is your country a member of the WTO or is it currently negotiating its accession?


  2. 2.

    If your country is a member of the WTO, what are the main changes in your country’s domestic legislation that have been triggered by your country’s WTO membership? What have been the practical implications of these legislative changes for businesses from your country? Are there any aspects of your country’s domestic law that you believe should be reformed in light of your country’s WTO membership?


  3. 3.

    Is your country a participant of the WTO’s Information Technology Agreement (ITA) or seeking to adhere to it? If your country is a participant of the ITA, is your country among those members that concluded an expansion of the ITA at the December 2015 Nairobi Ministerial Conference? 


  4. 4.

    Is your country a participant of the WTO’s Government Procurement Agreement (GPA) or does it have the formal status of observer of the GPA, seeking to adhere to it? 


  5. 5.

    Has your country already ratified the Trade Facilitation Agreement? What are the benefits that you expect to flow from the entry into force of that new agreement for businesses from your country?


  6. 6.

    Please provide a brief description of the customs duty structure maintained by your country. To what extent is it similar to, or has it been influenced by, that of your main trading partners?


  7. 7.

    Does your country maintain an import licensing regime?


  8. 8.

    Please explain the export control regime in place in your jurisdiction.


  9. 9.

    Has your country ever renegotiated its scheduled concessions under GATT article XXVIII? If so, could you please provide details?


  10. 10.

    Has your country been involved in any WTO disputes either as a complainant, defendant or third party? Please highlight the most prominent instances of such participation.


  11. 11.

    How would you evaluate the compliance record of your country with WTO dispute settlement reports? To the extent that you identify a track record of delayed or incomplete implementation, what are the main factors explaining this feature?


  12. 12.

    Please explain the main procedural steps, under your domestic law, on anti-dumping, countervailing and safeguard duty investigations? Which are the competent investigating authorities? Are there any appeals and review procedures in place?


  13. 13.

    Are you aware of any ongoing or planned revisions of the rules on anti-dumping, countervailing and safeguard duty investigations in your jurisdiction?


  14. 14.

    What are the main agricultural subsidies maintained by your country? Are they in the process of being phased out?


  15. 15.

    Has your country ever been involved in a WTO dispute on one or more of the three types of trade remedies? Do you anticipate any forthcoming legal action before the WTO involving your country either as a defendant or complainant?


  16. 16.

    Which are the bilateral trade agreements your country is currently a party to or which it is in the process of negotiating?


  17. 17.

    Can you see any conflicting rights or obligations between the bilateral or regional trade agreements your country is a member to and its rights and obligations under WTO law? If yes, what is your assessment of how such conflicts are or should be resolved?


  18. 18.

    Is your country party to any regional trade agreements or in the process of negotiating its accession to one?


  19. 19.

    In case your country is among the signatories of the Trans-Pacific Partnership (TPP), by when do you expect your country to have completed its ratification process?


  20. 20.

    What are the benefits and disadvantages that you expect to flow from the future entry into force of the TPP for businesses from your country? How have your expectations been affected by the United States’ decision to withdraw from the TPP?


  21. 21.

    If your country is not a member of the TPP, do you expect any trade currently enjoyed by your industries to be negatively impacted by increased trade in those products among members of the TPP?


  22. 22.

    Does your jurisdiction benefit from the General System of Preferences maintained by the European Union and the United States? Does your jurisdiction maintain a similar system with respect to third countries?


  23. 23.

    Has the bilateral trading relationship between your country and the United States been affected in any way by the change in administration in the United States? If so, which sectors have been particularly affected and why?


  24. 24.

    What is the position of your country as well as that of businesses from your country on the long-standing debate on currency manipulation? Are you aware of any legislative proposals in your country similar to those in the US to address the issue via unilateral trade remedies? Do you believe that this is an issue the WTO should become more actively engaged in?


  25. 25.

    How are trademarks and geographical indications protected in your jurisdiction? What are the main steps for registration of trademarks and geographical indications? Has the protection of trademarks and geographical indications in your jurisdiction changed since the WTO came into being in 1995?


  26. 26.

    How are intellectual property rights enforced in your jurisdiction?


  27. 27.

    Has your country ever imposed restrictions on trade in services or trade in goods due to balance-of-payments and external financial difficulties? Please explain the related provisions under domestic law.


  28. 28.

    What is your country's position on the Asian Infrastructure Investment Bank, which has been open for business since January 2016? Are there any plans, promoted by your country or by businesses from your country, to participate in a similar initiative for Latin America?


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