ORGANISATION MONDIALE
DU COMMERCEWT/TPR/M/97/Add.1
11 juin 2002
(02-3227)
Organe d'examen des politiques commerciales
15 et 16 avril 2002
EXAMEN DES POLITIQUES COMMERCIALES
MEXIQUE
Compte rendu de la réunion
Addendum
Page
ANNEXE I QUESTIONS ÉCRITES COMMUNIQUÉES À L'AVANCE
PAR LES MEMBRES1 3
ANNEXE II RÉPONSES ÉCRITES FOURNIES PAR LA DÉLÉGATION
DU MEXIQUE135
                                                     
1 En anglais et en espagnol seulement.WT/TPR/M/97/Add.1
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ANNEX I
ADVANCE WRITTEN QUESTIONS BY MEMBERS
CANADA
Secretariat Report (WT/TPR/S/97 )
II(2)(i) para. 7Paragraph 7 states that sanctions have been established for civil servants who circumvent
transparency requirements in developing or changing regulations.  What process does Mexico have in
place to deal with such a circumstance?  Also, please advise if there has been any case(s) to date in
which a civil servant has been charged with circumvention and, if so, please provide the disposition of
the case(s).
II(4)(ii) para. 54
Paragraph 54 states that Mexico started negotiat ions with respect to government procurement and
financial services with Chile in 2000.  Have agreements been reached in these areas?  f no, please
provide a state of play of the negotiations.
II(4)(ii) para. 55
Paragraph 55 states that the G-3 Agreement came into force in 1995 and that its aim is to consolidate
an FTA between Mexico-Colombia-Venezuela, thro ugh a three-stage tariff reduction programme.
(a) Please elaborate on the tariff reduction mechanism of the G-3 Agreement.
(b) Please clarify why a negotiation was needed for the second round of tariff reductions with
Venezuela, if a schedule was already in place.
(c) Please clarify why tariff reductions with Colombia are only at the first stage.
II(4)(ii) para. 63
Paragraph 63 states that Mexico participates in the Global System of Trade Preferences (GSTP) and
Mexico provides tariff preferences under the GSTP, although these are not being requested.
(a) Please provide your views on why tariff preferences are not requested.
(b) Please elaborate on the tariff preferences provided under the GSTP
(c) What is the current margin of preference and product-coverage under the GSTP?
III(2)(ii) para. 19
Paragraph 19 states that a price reference mechanism is in place for 308 tariff items, as a means to
combat customs under-invoicing and, conseque ntly, underpayment of customs duties.
(a) For items that are not subject to this mechanism, please describe the basis for determining 
whether a given product is priced correctly for the purposes of the payment of customs duties.WT/TPR/M/97/Add.1
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(b) Please provide an estimate of lost revenue due to under-invoicing.
(c) Can a decision be made by Customs officials on-site as to whether a product is being under-
invoiced?  If so, please elaborate on the consequences if they determine that a product is 
being under-invoiced.
(d) If the customs value is found to have been under-invoiced, what are the next steps that 
Customs would take to arrive at the correct value?
(e) Is there a mechanism for formally exempting products imported from specific countries once 
the tariff is eliminated under a Free Trade Agreement?
(f) Please confirm if the sole purpose of the Reference Price System is to deal with the problem
of under-invoicing and underpayment of customs duties, or to determine whether a product isbeing dumped on the Mexican market.
(g) Please provide the formula used to calculate the reference prices.
(h) Could Mexico please provide more timely, advance notification of new reference prices?
(i) Of the 308 tariff items subject to the Refe rence Price System introduced in 1994, please
provide historical statistical data on the following:
- specific tariff items that have been identified for further review;
- value of the goods by tariff item where the price has been found to be under-invoiced;
- value and number of items reviewed that have been correctly invoiced; and
- number of items deleted from the Reference Price System since it has been in effect.
III(2)(ii) para. 19
Paragraph 19 states that a deposit of guarantee is required when the declared price is inferior to the
reference price and that the deposit should be equivalent to the amount of duties that would be
collected if the value of the imported goods was equal to the reference price established by theauthorities.  Please indicate what percentage of the deposits of guarantee is actually collected.
III(2)(ix) para. 72Paragraph 72 states that a cost-benefit analysis is required for a preliminary draft regulation when
regulations may have a broad impact on the economy or a substantial effect on a specific sector.Please provide the criteria used to determine when a regulation may have a "broad impact on the
economy" or a "substantial impact on a specific sector ".  Also, please indicate who establishes these
criteria.
III(2)(ix) para. 72
Paragraph 72 states that there is a 60-day pe riod for receiving comments on draft regulations,
following publication in the Official Journal, but Mexico has previously notified the WTO that it
allowed 90 days (see annotation 1 to paragraph 72).
(a) Please provide a rationale for this change.  Please indicate whether Mexico intends to restore
the 90-day period.
(b) Please indicate whether you accept comments on draft regulations from foreign parties.  Also,
please describe the process you follow when receiving and considering comments.
(c) Does Mexico simultaneously notify its Inquiry Point at the time of publication of a draft
regulation in the Official Journal in order to ensure that foreign parties are given a minimum60-day period for comments?WT/TPR/M/97/Add.1
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(d) Does Mexico have a similar provision for comments on draft legislation that may have trade
policy implications?  If so, please provide a description of the provision.
III(2)(ix) para. 73
Paragraph 73 states that regulatory agencies are authorized to issue emergency technical regulations
when they conclude that there is imminent risk of damage to a legitimate objective.
(a) After adoption of emergency regulations, what is the timeframe for receiving comments from
foreign parties?
(b) Please advise if regulatory agencies are required to follow a specific process in issuing
emergency technical regulations.  If so, please elaborate on this process.
(c) Please clarify if Mexico has measures in place to inform its trading partners of the
application of emergency regulations per WTO TBT Article 2.10.1?  If so, does Mexico
provide for immediate notification of these measures as required under WTO TBT Article
2.10.1?
III(2)(ix) para. 73
Paragraph 73 states that only one of fifteen emergency technical regulations, which were in place in
August 2001, was based on international standards.
(a) Please advise if a relevant international standard(s) existed or was to be completed
imminently in any of the fourteen other cases.  If so, why was the standard not used either in
whole or in part in each case as required under WTO TBT Article 2.4?
(b) Also, please clarify if there is a requirement for emergency technical regulations to be based
on international standards, where relevant international standards exist or whose completion
is imminent, per WTO TBT Article 2.4.  If so, where is this requirement found in Mexican
law?
(c) Is a regulatory agency able to obtain a dispensation from this requirement and if so, from
which body?
III(2)(ix) para. 78
Paragraph 78 states that imports of products subject to verification at the border must be
accompanied by a NOM certificate or a copy of the certificate.  To obtain an NOM certificate, the
importer must send samples to a Mexican-based test laboratory accredited by the Mexican
accreditation entity and approved by the concerned government agency.  Please provide a list ofMexican-based foreign laboratories that are accredited by Mexico.
III(2)(ix) para. 86Paragraph 86 states that there are 26 technical regulations and three draft regulations that refer to
labelling requirements which includes the two ma in technical regulations (NOM-050 and NOM-051).
Please provide a list of these regulations (including their titles and reference numbers).WT/TPR/M/97/Add.1
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III(2)(ix) para. 90
Paragraph 90 states that the entry of specific products is confined to given entry points.  For example,
from 29 June 2001 the list of entry points for apples from the US has been reduced to five.  Please
provide a list of the entry points for specific products originating from specific countries.
III(2)(ix) para. 91
Paragraph 91 states that in addition to the provisions contained in different FTAs, Mexico maintains
sanitary and phytosanitary cooperation agreements with various countries.  Please elaborate on the
purpose, scope, and content of these agreements.
III(2)(x) para. 104
Paragraph 97 and 104 state that the UPCI, which ha s authority to conduct and deal with AD and CV
investigations and to determine any duties that migh t arise, also provides support to Mexican firms
subject to AD or CV measures in third markets, through direct advice, and other support to exporters
under investigation.  Please describe any mechanisms that are in place to address possible conflict-
of-interest between UPCI's role in conducting investigations and its role in assisting Mexican
companies.
III(4)(iii) para. 174 and,
IV(4)(iii) para. 98
Paragraph 174 and 98 state that PROSEC applies to firms that produce finished goods covered in a
specific sectoral promotion programme and imported inputs listed under this specific programme.  Its
benefits consist of reduced import duties on specified inputs.  Given that they provide for lowercustoms duties for inputs for specific export sectors, when does Mexico intend to officially notify the
WTO of PROSEC?
IV(2)(i) para. 9
Paragraph 9 notes the establishment in January 2002 of an excise tax of 20% on soft drinks that are
not sweetened with sugar cane, in a move to try to discourage substitution of sugar cane by other
sweeteners.  We welcome President Fox’s Marc h 5, 2002 announcement of a seven month suspension
of the tax.  Can the Government of Mexico provide assurances that this or a similar tax will not be
reactivated?
IV(5)(ii), Telecommunications
We understand that there will soon be a new telecommunications law in Mexico.  Please provide a
broad outline of the changes proposed that are related to Mexico's commitments in the Reference
Paper on Regulatory Principles, i.e. regulatory authority, universal service, interconnection.WT/TPR/M/97/Add.1
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GUATEMALA
Secretariat Report (WT/TPR/S/97)II(1) para. 2
Mexico has come to consider the multilateral trading system as the main instrument for the
liberalization of world trade.
How does Mexico reconcile this paragraph with its high degree of trade dependence under the
numerous FTAs governing its international trade?
II(3)(i) para. 18
In principle, Mexico does not grant direct in centives for foreign investment, although it maintains
several programmes that favour national and foreign investors, such as export promotion schemes
and special tax incentives;  some Mexican States also grant tax incentives for new industries.
How does Mexico consider these incentives to be consistent with the Agreement on Subsidies and
Countervailing Measures?
III(2)(vii) para. 58
Mexico does not apply minimum import prices.
Could Mexico explain what are its reference prices and how they work?
III(3)(vii) para. 121
The principal schemes are:  the maquila programme and the Programme of Temporary Imports to
Produce Export Goods (PITEX);  other programmes include the High-Volume Exporting Companies
Programme (ALTEX), the Foreign Trading Compan ies Programme (ECEX) and the duty drawback
scheme.
Could Mexico explain when these programmes will end and if so, whether there is a timetable for
their dismantlement?
Table III.9
Fiscal incentives to promote economic activities
Could Mexico explain the content of the programmes put in place by the Department of the Treasury
and Public Credit (SHCP) regarding exemption from income tax?  In particular, we would be grateful
for a description of the products that benefit unde r those programmes, as well as their objectives and
time-frames.
IV(2)(i) para. 10
Border protection has helped maintain domestic sugar prices well above their international levels….
What does this border protection consist of?WT/TPR/M/97/Add.1
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Para. 10
In September 2001, the Mexican Government expropriated 27 sugar mills in an effort to address their
financial problems, and to allow an efficient functioning of the industry.
What were the criteria and mechanisms used to carry out the expropriation?
Para. 10
A State trust was created in December 2001 to run the mills, with a view to reprivatization.
Could you describe in greater detail the Decree pu blished in the Official Journal on 3 September
2001 or provide a copy of it?  Will foreign companies also be able to participate in the purchase ofthese mills?
HONG KONG, CHINA
Secretariat Report (WT/TPR/S/97)P. 49, paras. 94-95
We note that Mexico's main anti-dumping and countervailing duty provisions are based on its
Foreign Trade Act (LCE) of 1993 and its Regulati ons, the WTO Agreement on the Implementation of
Article VI of the GATT 1994 (the AD Agreement), and the WTO Agreement on Subsidies and
Countervailing Measures (the SCM Agreement), and that the issue relating to Mexico's AD and CV
statues has been extensively discussed by the Committee on Anti-dumping Practices and the
Committee on Subsidies and Countervailing Measures.  In response to the concerns raised by WTO
Members in the two Committees, Mexico has confirmed that in the event of inconsistencies between
the WTO Agreements and the LCE, or omissions in the latter, the provisions of the WTO Agreements
would prevail.  In view of the above, we would be grateful to know whether it is still Mexico's plan to
amend the LCE so as to bring it into complete conformity with the AD Agreements.  If yes, what is the
progress of the relevant legislative exercise so far?
P. 57, para. 120
It is noted that certain subsidy programs mainta ined in Mexico, including the maquila programme,
the High-volume Exporting Companies progra mme (ALTEX), The Foreign Trading Companies
Programme (ECEX) and the duty drawback scheme, have not been notified to the WTO.  Mexico may
not meet in full the notification requirements of Article 25 of the Agreement on Subsidies and
Countervailing Measures.  We would like to know more about these programs (for example the target
recipients, eligibility and benefits given to them, et c.) and the difficulties in submitting the appropriate
notifications to the WTO.
Pp. 80-81, para. 230
We note that Mexico has adopted a multi-agency arrangement for copyright enforcement through the
Mexican Institute of Industrial Property (IMPI) and National Copyright Institute (INDAUTOR).  This
arrangement has been described as "burdensome" in the Secretariat's report.  We would like to know
if the Mexican authorities have any plans to streamline the arrangement and entrust the enforcement
responsibility to one single agency.WT/TPR/M/97/Add.1
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P. 81, para. 231
We note that the right-holder representatives in Mexico considered that Intellectual Property Right
(IPR) enforcement action in IPR protection was weak and that piracy rate and financial losses for
software and the recording industry, for example, remained high.  Piracy has also deprived the fiscal
authorities considerable loss in tax revenue.  We would like to know what further enforcement action
is being contemplated by the Mexican authorities to combat the reported level of IPR piracy.
P. 106, para. 105
It is noted that access to the financial services market provided for in domestic laws is in practice
more favourable than Mexico’s GATS commitments.  Full foreign investment in commercial banks,
financial groups, securities brokerage firms, and secu rities market specialists is allowed.  We would
like to know whether the Mexican authorities would consider extending such favourable terms in the
existing regime to its Schedule of Commitments?
P. 107, paras. 106-107
We note that unrestricted foreign ownership is possible only through the legal figure of subsidiaries of
foreign financial institutions based in countries with which Mexico has concluded agreements
covering financial services providing for such es tablishments as well as those from all OECD
countries.  We are interested to know whether Mexico would consider waiving such limit on foreign
ownership of financial institutions on a multilateral basis.
KOREA
P. 29, para. 11
Since July 1998, Mexico has required that the price of certain products imported from Asia and
Eastern Europe be reported in advance of custom procedures to the Mexican authorities.  The aim ofthis requirement is explained to  be to detect fraudulent activities, illegal trans-shipment and
undervaluation of shipments.
This requirement appears to be a violation of GATT 1994 Article I (MFN Treatment).  Does Mexico
have any plan to eliminate the requirement?
P. 31, para. 24
Mexico also maintains more burdensome origin certification requirements for textiles, clothing and
footwear imported from 15 Asian countries including Korea than it does for the same products fromother WTO members.  It was explained that these requirements were designed to prevent
circumvention of products subject to anti-dumping measures.
The Korean Government is of the opinion that those requirements are also a violation of GATT 1994
Article I (MFN treatment) and they have been main tained for an excessive duration (since 1994).
Therefore, in our view the requirements should be abolished as soon as possible.  What is the
Mexican view on this matter?
Pp. 49-54, paras. 94-107
We appreciate that the number of anti-dumping cases initiated by the Mexican Government has
dropped significantly since 2001.  However, as stated in paragraph 101 of page 51 of theWT/TPR/M/97/Add.1
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Secretariat’s report, there were still 90 AD duties in force as of March 2001.  Especially, high rates of
AD duties have been imposed on several Korean products without proper preliminary affirmative
determinations according to the Article 7.1 of AD Agreement.  Finally it was found that there was no
dumping or injury in those cases.
It is our belief that in order to prevent those AD measures from being misused as trade barriers, the
Mexican government needs to be more careful when  initiating anti-dumping measures.  What is the
Mexican view on this matter?
Pp. 54-56, paras. 108-114
On 16 March this year, the Mexican government has raised the tariff rates on 38 steel items from 25%
to 35%.
It is our deep concern that the recent imposition by some Members of high tariffs on steel products for
the purpose of protecting their domestic industries would disrupt the development of the WTO
multilateral system.
Bearing this in mind, does Mexico have any intention to cut back the tariff rates of those steel items?
Pp. 71-72, paras. 196-202
According to the “Auto Decree”, Korean automobi le manufacturers who have no assembly line in
Mexico cannot export their assembled vehicles to Mexico.
Although the requirement is to be abolished by the end of 2003, does Mexico have any plan to
eliminate the requirement early considering that it is a clear violation of GATT 1994 Article I (MFN
treatment)?
Pp. 114-116, paras. 131-141
The Korean Government appreciates the introduction of competition in domestic long-distance and
international services in January 1997.
However, it is our understanding that the high interconnection rate of TELMEX effectively acts as a
barrier to market access in the value-added telecommunications sectors.  What is the Mexican view
on this matter?
Pp. 120-121, paras. 160, 163
As paragraph 160 of page 120 of the Secretariat's Report shows, foreign shipping companies and
vessels may participate in international maritime transport activities only if their country of origin
provides reciprocal treatment to Mexico.  Mexico made no specific commitments under the GATS on
this sector.  Will the Mexican Government continue the current policy related to maritime transport
services in the future?
NORWAY
Energy sector
Mexico is a major player in the field of energy and the sixth largest producer of crude oil.WT/TPR/M/97/Add.1
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Could you briefly outline the initiatives that Mexican authorities have taken to increase private
participation in the energy sector and indicate which parts of the energy sector where you see most
benefits from increased private participation?
Public procurement
Mexico has not signed the Plurilateral Agreement on Government Procurement.  Is the Mexican
Government considering joining this agreement?
Maritime transport - insurance
Maritime vessels flying Mexican flag must be insured in the domestic market (Hull and Machinery
insurance).  This also applies in practice to Mexican owned vessels flying a foreign flag, if suchvessels are to be employed in certain trades, i.e. for Pemex or the Port Authorities.  Can you explain
why Mexican ships are restricted from being insured abroad?
ARGENTINA
IV(2)
In paragraphs 14 to 16, the Secretariat states that agricultural products benefit, on average, from
higher MFN tariff protection than non-agricultura l products.  Tariff protection for non-MFN
originating goods is, however, relatively low (e.g. 4.9 per cent for imports from the United States) and
that such protection is being reduced progressively.  Moreover, in its WTO Schedule of Concessions
Mexico included tariff quotas for several agricultural products and in some cases the Mexicanauthorities have allowed imports in excess of the quota at the in-quota rate.
Argentina would like to know what is the out-of-quota tariff level applied and whether preferences
have been accorded on the following products:
- Pig fat free of lean meat and poultry fat (not melted out), fresh, chilled, frozen, salted,
in brine, dried or smoked (02090001);
- animal fats and oils and their fractions (15161001);
- poultry, not cut in pieces, fresh or chilled (02071001);
- maté (21012001);- beans, other than for sowing (0713302).
COLOMBIA
Paragraph 18 of document WT/TPR/S/97 mentions that the basis for customs valuation varies
according to the origin of imports.
We would like to know what legal bases in the multil ateral rules would in Mexico's opinion justify the
existence of this differential treatment in customs valuation.
Paragraph 36 of the same document states that Mexico has applied rates above the bound tariff level
for several agricultural products.  What type of measures will the Government of Mexico apply in
order to guarantee strict compliance with WTO bound levels?WT/TPR/M/97/Add.1
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Page 66 of the Report by the Secretariat mentions that some of the fiscal advantages accorded in
support of domestic industry are contingent on meeting national-content requirements.  Apart from
vehicles, for what other products is a national-content requirement stipulated?
EUROPEAN UNION
Government Report (WT/TPR/G/97)IV(h), para, 49
Mexico has concluded eight free trade agreements wi th 27 countries, of which 22 are members of the
agreement on government procurement (GPA).  A ll eight FTA include chapters on government
procurement  with market access and provisions guaranteeing transparency and fair rules on the
tendering process.  Considering that the Mexican legal framework sufficiently developed to complywith the GPA requirements and the openness of its procurement to most of the GPA parties, is Mexico
considering now to accede the WTO plurilateral agreement on government procurement?
Para. 50
The electronic procurement sy stem COMPRANET represents an important effort in terms of
transparency of procurement opportunities.  The sy stem is currently limited  to the procurement of
federal entities.  Are there any plans to extend the system to all the other public entities, including the
states, municipalities and state-owned enterprises?
Secretariat Report (WT/TPR/S/97)
II(2)(i), General legal and institutional framework
Certain authorities of the Mexican administration seem not to be fully aware of Mexico’s
international obligations on trade matters.  As an example, in October 2001 and again in December
of the same year the Mexican Ministry of Finance decided to suspend the distribution to importers ofthe fiscal stamps that are required to allow commercialization of alcoholic drinks into Mexico, while
continuing their distribution to local producers.  This measure, that effectively blocked the imports of
alcohol for over a month during the pre-Christmas sales season, has caused a considerable damage
to EU exporters.  Can Mexico ensure that all dependencies act consistently with its international
obligations avoiding that additional trade barriers are raised by those means?
(3)(ii), para. 29, Restrictions to foreign investment
Foreigners may hold higher percentages in the capital of Mexican companies in restricted areas
through the concept of "neutral investment".
What are the reasons behind such restriction?Is this restriction applied on a MFN basis?  Is this restriction also applied to investments from
NAFTA countries?
Which service sectors are included in these "restricted areas"?In which service sectors "neutral investment" has been authorised in the past?WT/TPR/M/97/Add.1
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The decision to authorise "neutral investment" is granted "on a case-by-case basis" What are the
elements taken into consideration?
Para. 30
There is a "restricted zone" (100 kilometres wide from the borders and 50 kilometres wide from the
coast) in which direct foreign ownership of land is prohibited.
What are the reasons behind such restriction?
Is this restriction applied on a MFN basis?  Is this restriction also applied to investments from
NAFTA countries?
Notwithstanding the restriction, it is possible to invest in a Mexican company owning real
estate within the restricted zone for non-residential purposes.  Is there any limitation in the level of
foreign investment in this respect?  Are there any  requirements or restrictions to invest in such
companies?
III(1), para. 2
The report states that the procedures to apply Non Preferential rules of origin to products subject to
Anti-Dumping and Countervailing duties vary by product and by originating country.  Can Mexico
explain in greater detail what these procedures are and how they are applied?
III(2)
Customs practices in Mexico have been improved in  the recent years.  However, importers complain
over inconsistent and discretional interpretati on of import formalitie s and requirements among
customs offices, as well differences in the way controls of compliance with Mexican standards and
technical regulations, labelling rules and sanitary and phytosanitary standards are carried out.Irregularities and corruption are also mentioned.  Could Mexico please further elaborate on these
issues; are there any concrete steps foreseen in order to take these complaints into account?
The Resolución Miscelanea de Comercio Exterior para 2000 and its Annex 21, establishes that
specific goods may enter into Mexico only through customs offices specified in the said annex.Changes in annex 21 may take place at any time and without previous public notification,
substantially affecting the trade patterns for the products concerned.  This indeed happened in July
2001, when importation of textile and clothing products was limited to a few ports of entry, and again
in November of the same year.  Is Mexico aware that these restrictions, understandable in a limited
number of cases (i.e. goods whose importation requi res special inspections or technical expertise),
and even more their sudden and frequent modification, can create considerable disruption to trade in
the goods concerned?
(2)(ii), para. 16
The report states that “Mexico has invoked various provisions available to developing countries for
the delayed application of, and reservations und er the [Customs Valuation] Agreement”.  Can
Mexico confirm this?WT/TPR/M/97/Add.1
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Para. 18
Article 18 of Decision No 2/2000 of the EC-Mexico Joint Council of 23 March 2000 provides that
from 1 January 2003 the EC will receive NAFTA par ity treatment, i.e. f.o.b. value of imports.
Para. 19
Mexico has introduced in 1994 a price reference mechanism (system of estimated prices) with the
objective of fighting fraud and under-invoicing of customs value.  The system has become more
burdensome over the last years: goods subject to the requirement have progressively increased to
over 300 items and the guarantee mechanism has become even more onerous, as the previous
requirement to post a guarantee bond to cover the difference in customs duties has been substituted
by the requirement to make an actual guarantee depo sit of the same amount.  Is Mexico aware that
this system may discriminate exporters a nd deter them from the Mexican market?
(2)(v), para. 28
Since 1997, Mexico’s average MFN tariff has increased considerably, as stated in the report.  As an
FTA partner, the EU is excluded from the creation of new duties or tariff increases since the entry
into force of the agreement in July 2000.  However, in October 2001 Mexico decided to increase
tariffs on certain diary preparations with a content of milk solids exceeding 50% by means of dividing
the existing tariff code and imposing a duty rate of 109% on the newly created code.  This operation
has been compensated by the opening of a duty fr ee quota; however, EU firm s have been complaining
over the allocation rules and administration of this quota.  As a result exports of the concerned
product from the EU have practically stopped since October 2001.  Could Mexico please elaboratefurther on this issue?
(4)(vi), Government procurement
Domestic price preference and local-content requ irements in government procurement are a usual
way to promote local industry and set-aside some sectors from foreign competition.  Will Mexico
re-consider this policy and the cost in terms of budg et expenditure (better value for money) as well as
the need to introduce healthy competition between Mexican and foreign bidders?
(2)(ix)(a), para. 69, Chart III.2
It is stated that technical regulations aim to establish specifications for goods, services or processes
to ensure safety, protection of human life, animals, plants or the environment, or prevent deceptive
practices.  Can Mexico explain why close to 100% of textiles, footwear and headgear is subject to
technical regulations whereas only 16% of machinery and 34,5% of arms and ammunition are subjectto technical regulations?
Para. 69
Article 2.8. of the TBT Agreement states that "Whenever appropriate, members shall specify technical
regulations based on product requirements in terms of performance rather than design or descriptive
characteristics."  Can Mexico gives us an estimate of how many of the existing technical regulations
are based on performance?WT/TPR/M/97/Add.1
Page 15
Para. 69
It is stated that referential standards (NRs) are used to establish specifications for goods and services
subject to government procurement and are as such outside the scope of the TBT Agreement.  Can
Mexico please elaborate whether these standards are used for other purposes as well?
Para. 71
The Mexican Federal Law on Metrology and Standardization, art. 44, provides that international
standards be taken into account in the establishment of technical norms and that the degree of
concordance with international norms be indicated.   Furthermore, in case there is no concordance,
justification is requested (art. 41 of the MFLM) However, as stated report, Mexican Authorities
recognize at least 40% of technical regulations and standards have not even partial concordance withinternational standards.  What actions is Mexico undertaking to ensure a more substantial alignment
of national regulations to international standards?   Could Mexico inform about what are the most
common reasons for not using existing international standards?
Para. 73
It is stated that emergency regulations can be used if there is imminent risk of damage to a legitimate
objective.  Can Mexico elaborate what it defines to be a legitimate objective in such cases?
Furthermore, emergency regulations can be made  permanent.  Can Mexico gives us an estimate how
many of such emergency have been made permanent.
Para. 78
Article 2.7 of the TBT Agreement states that “Members shall give positive consideration to accepting
as equivalent technical regulations of other Members, even if these regulations differ from their own,
provided they are satisfied that these regulations adequately fulfil the objectives of their own
regulations.”  Can Mexico elaborate whether it ac cepts technical regulations of other Members that
fulfil the same policy objectives even if through different means?  Does Mexico accept conformity
assessment results of other countries?
(2)(ix)(b),  Marking, labelling and packaging
Labelling and marking requirements are frequently indicated by importers as burdensome and
excessive, requiring over-detailed information and strict modalities of compliance.  Controls
conducted by customs are reported to be excess ive and discriminatory compared to controls on
domestic products, particularly for sensitive ones.  Moreover, penalties charged for mislabeling are
very high and small inconsistencies with requirements may trigger penalties.  Is Mexico considering
simplifying these requirements so to eliminate undue obstacles to trade while still meeting the
legitimate purposes pursued by labeling?
Para. 93
The EU is concerned that the adoption by Mexi co of Sanitary and Phytosanitary standards creates
barriers to trade of agricultural products beyond the legitimate objective of protecting Mexican
human and animal health and do not to reflect the recommendations of relevant international bodies.
This is the case of foot-and-mouth disease related preventive measures adopted in April 2000 that
established a total ban for products considered at risk -including those that had undergone
processing considered by the OIE (Organisation Internationale des Epizooties) as sufficient to
inactivate the virus.  Mexico lifted these measures well after the OIE had recognized FMD free statusWT/TPR/M/97/Add.1
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for the countries concerned and almost all other countries had lifted the restrictions.  Could Mexico
please further explain this?
(2)(x), Contingency measures
It appears that Mexico has not submitted the New and Full Notification on Subsidies due in 2001.
Could Mexico please indicate when it intends to submit such notification.
Para. 95
Mexico indicated that, in the event of inconsis tencies between the WTO Agreement and the Foreign
Trade Act (LCE), the WTO Agreement would prevail.  Does Mexico intend to amend the LCE to fully
incorporate the WTO provisions with a view to ensuring legal certainty and transparency?
Para. 96
Can Mexico please indicate to which countries the new art. 48 of the LCE Regulations concerning
Centrally Planned Economies apply?
III(4)(xi), para. 205
What legislative change (if any) does Mexico foresee in order to implement the obligations stemming
from its accession to the Stockholm revision of the Lisbon Agreement for the Protection of
Appellations of Origin and their International Registration?  What would the applicable timeframe
be?
Para. 206
Since January 2000, the WTO Agreement on Trade-Related aspects of Intellectual Property applies in
Mexico and the country has adopted the necessary measures to grant an adequate legal protection ofIntellectual Property rights.  Nonetheless, the enforcement of this legislation is unsatisfactory.  For
example, according to information of the International Federation of Phonographic Industries on an
estimated 181 million recordings sold in Mexico in 2000, three in every five was a pirate copy.
Piracy losses for the Mexican and international recording industry are estimated at $300 dollars
annually, and piracy rates have increased in recent years to 63% in 2000 up from 45% the previousyear.  Does Mexico intend to undertake specific measures in order to insure an adequate and effective
protection of property rights in the country?
Para. 210
The report states that “protection has been broad ened since Mexico’s previous Review” and refers to
various amendments to the legislation.  What am endments, if any, have been made to Mexican IPR
legislation since the last TRIPS review?
Trade Facilitation
We would  welcome information on any measures taken recently by Mexico to further reduce and
simplify its import and export procedures.
What measures does Mexico have in place to consult the trading community – including importers
and exporters, shippers, freight forwarders and agents, SMEs – on customs and trade facilitation
rules and procedures and ways of improving them?WT/TPR/M/97/Add.1
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IV(5)(ii), para. 126
As described in the report, Mexico has engaged since the early 1990s in a major programme to
liberalise the telecommunications market.  However, the traditional operator TELMEX still maintains
a dominant position and is engaged in anti-competitive practices.  The telecommunication sector’s
regulatory agency, COFETEL, appears not to have the necessary degree of independence.  Does
Mexico intend to take measures to ensure further progress in the regulatory reform of the
telecommunication sector and real competition in it?
Para. 127
How are the obligations imposed on TELMEX pursuant to the concession (obligations with respect to
infrastructure expansion, in particular in rural area s;  improvement of the quality of the services;
and infrastructure interconnection) funded?
Para. 130
Is there any restriction on the number of concessions?
Para. 133
Why is a concession imposed in cases other than when there is a scarce resource?  Why not simply a
license or an authorization?
Para. 134
Why is there a restriction on foreign ownership?
Para. 138
How many entities has the Federal Competition Commission (CFC) identified to have substantial
power in a given market?
(5)(iii)(a), para. 146
The report mentions that foreign investment is unrestricted up to 49% for companies opting for
concessions in airport services, but that a permit-procedure can allow a higher foreign share.  Has
this option been used?
Para. 147
Activities in airports have been divided into three groups (airport services, auxiliary services, and
commercial services).  How do these correspond to the Mexican commitment (on “Airport and
helicopter administration services - CPC 746”)?  What other auxiliary services can be operated and
under what conditions (e.g. groundhandling)?
(5)(iii)(b), para. 159
The report recapitulates the privatisation process of the ports sector, and the restrictions of 49%
foreign investment for most activities.  What rules and restrictions would apply foreign engagement in
container terminal activities?WT/TPR/M/97/Add.1
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Para. 160
Inland and cabotage transport is reserved to Mexican shipping companies (max 49% foreign
investment).  If no such operator is available, permit may be given to foreign operators/vessels.  The
report estimate that 33% of freight is handled under such permit.  What is being done to streamline
this permit procedure and to facilitate efficient engagement of international providers?
(5)(iv), para. 165
Obligation "to complete a social service" as requirement to obtain a license:  Given that this
requirement is intended as a mechanism for Mexican students to pay back part of the social cost of
their education, why does this requirement also apply to foreigners who complete their studies abroad
without social cost for the State?
Mexico has signed GATS, which is not based on the reciprocity principle, and taken commitments for
accountancy, architecture, engineering, medical and dental services.  Why is it stated that
international treaties signed by Mexico are based on this principle?
Exercise of certain professions reserved to nationals in the State of Mexico:  Could these professions
be listed?
Para. 166
Ship's engineers must be Mexican nationals in all States, but such restriction is not listed in Mexico's
GATS commitment.  Can Mexico please comment on this issue?
JAPAN
Secretariat Report (WT/TPR/S/97)
III(2)(v), Tariffs
Mexico’s bound rates for industrial products are uniformly 35% with the exception of a few products.
Japan requests Mexico to reduce these bound rates during the current negotiations.  Please provide
Mexico’s view.
It seems that the applied tariff rate on some steel products, which used to be 25%, has recently been
raised to 35% through a Mexican ordinance.  This rate is now equal to the bound tariff rates.  We
note that the applied tariff rates on these products were raised in September 2001, too.  In order to
improve the predictability of tariffs, Japan requests Mexico to prudentially consider its policies if itraises its tariff rates.  Please provide Mexico’s comment on this.
P. ix, para. 2
Mexico’s liberalization strategy has opened a significant gap between treatment offered to FTA
partners and to other countries.  According to the page x, paragraph 8, of the Report, Mexico
considers the multilateral trading system as the main instrument for the liberalization of world trade.
In addition, the Report states in paragraph 9 that Mexico acknowledges that the advantages implicit
in FTAs are of a temporary nature.  Based on these descriptions, Japan considers that Mexico has the
intention to reduce its bound rates and to bring them in line with the rates applied to FTA countries.
Is our understanding correct?WT/TPR/M/97/Add.1
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P. 28, para. 1;  pp. 34-35, para. 36;  Table III.2
According to the Report, the current applied rates for certain agricultural products exceed their
bound rates.  Please explain the reason for this.
III(3), p. 56, para. 116;  p. 86, para. 21
According to the Report, the authorities in Mexico  noted that although revenue from export taxes was
negligible, these are maintained, mainly for domestic market supply reasons.  Does Mexico have the
intention to raise export taxes in the future?  Japan is particularly concerned about the export taxes
on agricultural products, not only because the export taxes were not bound in Uruguay Round, but
also because no commitments exist concerning their reduction.
III(4), p. 69, para. 184
Mexico has not signed the WTO Plurilateral Agreement on Government Procurement.  On the other
hand, as Mexico has already concluded FTAs with 25 GPA Member countries, this authorizes the
latter to participate in tendering in Mexico.  Do esn’t Mexico have the intention to accede to the GPA?
P. 76, para. 215
Japan commends Mexico’s efforts to improve its IPR protection, and hopes that it will continue such
improvement.  While the annual number of pate nt applications almost doubled between 1996 and
2000, the number of patents actually granted increased at a slower rate.  Please explain the reason
for this difference.
IV(5), pp. 106-107, paras. 105-106
According to the Report, unrestricted foreign investment is only possible through the legal figure of a
subsidiary of a foreign financial institution.  Furthermore, the total percentage of foreign investmentin some financial institutions remains limited to 49% of the paid-up capital.  In light of ensuring a
smooth provision of financial services, does Mexi co have the intention to relax the limitation on
foreign capital, as well as the limitation on the form of commercial presence?
According to the Report, limits on the foreign ownership of financial institutions do not apply to the
subsidiaries of foreign financial institutions that are based in countries with which Mexico has
concluded a free trade agreement covering financial services, namely the NAFTA Members,
Colombia, Venezuela, EFTA Members and EU Members.  Does Mexico have the intention to extend
such treatment to other WTO Members having no such agreement?  Under the conditions granted by
the agreements to the countries above mentioned, can banks and security companies do businessthrough local branches?
P. 110, para. 115
In Mexico, there are five government-owned development banks and seven public trusts.  Does
Mexico have any plan to restructure these banks and public trusts?  In the area of financing for small
and medium-sized companies, as well as financing for infrastructures, how does Mexico demarcate
the role between the governmental financial institu tions and the privatized financial institutions?WT/TPR/M/97/Add.1
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P. 107, para. 106, p. 112, para. 120
The Report states that a foreign insurance company is prohibited to establish a subsidiary of which
the parent company owns 100% of the capital.  Japan considers that factors which lead to financial
instabilities, such as a systemic risk coming from the sudden capital flight, do not appear to have a
direct linkage with the opening up of the insurance market.  Japan is, therefore, of the view that this
foreign capital limitation should be abolished, and is interested to know Mexico’s view.
P. 115, para. 134
The Report states that, in mobile telephony services, foreign participation may exceed 49%, provided
that permission is obtained from the National Fore ign Investments Commission.  Please give detailed
information on the conditions required for obtaining this permission.
P. 120, para. 159
The Report states that, in the case of companies operating ships solely for high-seas traffic, foreign
participation above 49% may be authorized by the Fo reign Investment Commission.  Please provide
detailed information on the conditions required for obtaining this authorization.
P. 120, para. 160
The Report states that inland and cabotage shipping, except for tourist and cruising services, is
reserved for Mexican shipping companies that own Mexican vessels.  Does the term, “Mexican
shipping companies”, include a joint-stock company with foreign capitals?  Please explain in detailthe conditions for owning a Mexican vessel (i.e., the limitations on foreign ownership, nationality
requirements for board members, etc.).
P. 120, para. 161
The Report states that the Shipping Law provides for the possibility of reserving specific international
transport activities for Mexican companies, wholly  or partially, if the national economy is affected by
anti-competitive practices by foreign operators.  Please provide the detailed conditions for judging
“anti-competitive practices”.  If any cases of such reservation already exist, please explain in detail
what kind of practice was judged as “anti-competit ive”, and what kinds of services were reserved.
P. 121, para. 163
According to the Report, the maritime transport se ctor has been excluded from Mexico’s FTAs, with
the exception of those concluded with the EU and the EFTA.  How can this exclusion be explained tobe consistent with Article 5. 1(a) of the GATS?
During the current negotiations, the inclusion of multi-modal transport, mainly in the maritime
transport sector, is being considered.  If Me xico has any rules regulating multi-modal transport,
please provide a descriptive explanation of them.
MALAYSIA
Mexico attracted US$70 billion of FDI between 1997 and 2000 (table AI.5).  In Mexico’s view, what
were the main factors that have contributed to such a high rate of FDI?  Also please explain what
type of investment was made in the public adminis tration sector as this sector has attracted a high
rate of investment.WT/TPR/M/97/Add.1
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Mexico’s trade takes place mainly under preferential rules, particularly under NAFTA.  Does such
reliance deter Mexico from actively seeking other trade partners and what are the measures taken to
achieve this?
In para. 9 (Summary Observations) of the Secretariat’s report, Mexico acknowledged that the
advantages implicit in FTAs are of a temporary nature and hence no substitute for improving
competitiveness of its economy.  What measures are being undertaken by Mexico to improve its
competitiveness and to take advantage of further liberalisation initiatives being negotiated under theDoha Development Agenda to expand its trade and in vestment ties with other trading partners?
It is mentioned that since 1997, the simple average applied tariff rates of Mexico has increased by 3
percentage points to 16.5% and with reductions in preferential tariffs, this would widen the gap
between imports from MFN and pref erential sources.  Would this not further limit Mexico’s range of
trading partners?
It is stated in para 23 (Summary Observations) that the energy sector remains largely under state
control but that the Government is seeking to increase private sector participation.  We would
appreciate more details as to which areas would private sector involvement be encouraged.
UNITED STATES
Trade Policies and Practices by Measure
We are concerned that Mexico is utilizing other measures to combat dumping, which have
implications for legitimate trade.  We have w itnessed a proliferation in the number of products
subject to port restrictions; products subject to Mexico’s importer registry; products subject to
estimating pricing; and, in June of 2001, Mexico published a resolution prohibiting the international
transit of goods, such as textiles and electronics  from being shipped through Mexico.  In many
instances, the measures are published in the Official Journal on one day to be implemented the next.
Can you explain what measures are being taken to improve transparency in the process?
III(2)(vi), Other charges affecting imports
Automobiles designated “popular consumption” au tomobiles are exempt from the automobile tax
(ISAN).  In addition to a maximum value criterion, such automobiles must also have their enginesproduced domestically.  This domestic production bas is for a tax exemption qualifies as a local
content requirement and is a violation of Article III:5 of the GATT 94.  What does Mexico plan to do
to eliminate this national treatment violation?
(vii), Minimum import prices
The text clearly states that Mexico does not employ minimum import prices.  However, under section
(ii) Customs Valuation, the text indicates that Mexico introduced a price reference mechanism in
1994 to combat customs under-invoicing.  Under this system, a deposit of guarantee is required when
the declared price is inferior to the reference price.   The deposit should be equivalent to the amount of
duties (including import duties, countervailing and anti-dumping duties) that would be collected if the
value of the imported goods was equal to the refere nce price established by the authorities.  How is
this system not in fact a minimum import pricing system?  If an import brings a product in at a cost
below the reference price, a deposit is required for the goods accounting for duties assessed on the
higher reference price.  This establishes a minimum import price.WT/TPR/M/97/Add.1
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(viii), Import prohibitions, restrictions, and licensing
Under Import Prohibitions (b) Import restrictions  and licensing, one sees that Mexico maintains
import permits and employs an import licensing mechanism .  One percent of Mexico’s tariff lines are
subject to licensing.  Paragraph 4 notes that several WTO Members have expressed concerns about
this system.  The United States also has concerns  related to Mexico’s im port licensing mechanism.
Why has Mexico never notified the WTO Committee on Import Licensing of this practice.  In fact,
Mexico has never notified the Committee according to its obligations as a WTO member.  The UnitedStates suggests that Mexico make all necessary notifications to the Committee before the next meeting
on May 14, 2002.
(ix), Regulations, standards, and sanitary requirements
With the exception of some products subject to labeling requirements, imports of products subject to
verification at the border must be accompanied by a NOM certificate or a copy of the certificate.
Each importer must obtain a NOM certificate, even  when the product has already been tested for
another importer.  To obtain a NOM certificate, th e importer must send samples to a Mexican-based
test laboratory accredited by the Mexican accreditation entity and approved by the concernedgovernment agency.  When the product is found to be in compliance with the NOM, the DGN or an
accredited private certification organization issues the certificate in the name of the importer.
Certain imports, notably  those covered by specia l import regimes, are exempted from compliance
with technical regulations.  It is our understand ing that some of the Mexican Ministries will be
publishing revised certification procedures.  Can you tell us which Ministries and when Mexico
expects to publish the revised procedures?
Mexico's network of 65 calibration laboratories is overseen by the DGN with the active participation
of the Mexican Accreditation Entity, the National Metrology Center (CENAM) and the Federal
Consumer Protection Agency (PROFECO).  The labor atories in this network are responsible for
ensuring the provision of the equipment used by private testing laboratories.  The National System of
Testing Laboratories (SINALP) is in charge of providing the test data used by government agenciesand accredited certification bodies.  Mexico's policy of accrediting certification bodies based on a
"needs determination" precludes foreign certification bodies to apply to be recognized as certification
bodies in certain sectors – such as the electrical sector  – unless Mexico determines there is a need
for additional bodies.  Does Mexico plan to liberalize its policy to allow for certification bodies to
apply without Mexico first determining if there is need for additional bodies?
(3)(ii), p. 56, Export taxes
Other than agricultural products such as sugar, pl ease explain whether there are any other products
that are fully exempt from paying export taxes?  If so, can you please provide a list of all suchproducts?
(3)(vi), p. 57, Export subsidies
Please explain whether all exporters can benefit from the Program of Temporary Imports to Produce
Export Goods (PITEX).  If not, please provide further details as to what industries are eligible to
benefit from the PITEX program.  Please explain what qualification criteria these industries must
meet to qualify for these benefits.
Please describe in detail the tax and non-tax incentives that are provided under the PITEX program.WT/TPR/M/97/Add.1
Page 23
Please explain why the maquila, High-volume  Exporting Companies Program (ALTEX), the
drawback, and the Foreign Trading Companies Program (ECEX) programs do not meet the
notification requirements of Article 25 of th e WTO Agreement on Subsidies and Countervailing
Measures.
(3)(vii), p 57, Duty and tax concessions
In addition to the maquila, PITEX, ALTEX, ECEX and the duty drawback program, does the
Government of Mexico maintain other administrative tax facilitation schemes?
Can you please provide further details as to what exporters or which industries qualify for the
administrative tax facilitation schemes for regular exporters?
It appears that the maquila and PITEX programs have been converged into the same program.  You
have previously notified the PITEX program under Article 25 of the ASCM.  Therefore, please explain
whether you also plan to notify the maquila program and the benefits provided under this program, in
accordance with Article 25 of the WTO Agreement on Subsidies and Countervailing Measures?
It seems that PITEX and similar programs are contingent upon exportation.  As such, these programs
constitute prohibited export subsidies under Article 3 of the Agreement on Subsidies and
Countervailing Measures.  As such, please explain  whether the Government of Mexico plans to phase
out the PITEX program and similar programs that are contingent upon exportation?
(3)(vii)(b), p. 59, Other tax concessions
Please explain what specific industries can qualify for benefits under the sectoral promotion program
(PROSEC) program?
Other than the reduced duty rates are there any other incentives that these specific industries receive?
Could you please provide further information with regards to how the duty drawback scheme
operates?  In particular, please explain whether the scheme complies fully with the provisions of
Annex II of the Agreement on Subsidies and Countervailing Measures.
(3)(x), p. 60, Export finance, insurance, and guarantees
Please provide further information as to the loan rates for discounted trade related loans and soft
loans.  In addition, please explain what steps are being taken to notify this program under Article 25
of the WTO Agreement on Subsidies and Countervailing Measures.
(4)(iii), p. 66, Fiscal incentives
Can you please provide us with more detailed information on what “other tax concessions” or
“sector-specific” concessions exist for Mexican industries, in particular what types of incentives are
being offered.  In addition, please explain what st eps have been taken to notify this program under
Article 25 of the WTO Agreement on Subsidies and Countervailing Measures.
This program appears to be contingent upon exportation.  As such, it may constitute a prohibited
export subsidy program under Article 3 of the Agreement on Subsidies and Countervailing Measures.
Please explain whether the Government of Mexico plans to phase out the benefits under this program,
to the extent that they have export contingencies?WT/TPR/M/97/Add.1
Page 24
(4)(vi), Government procurement
The widespread use of short delivery dates (often below industry norms) and high penalties for late
delivery as a means to eliminate competition in or der to sell to a favoured supplier has been an
irritant to suppliers in Mexico’s procurement market over the years.  With respect to delivery dates
used as barriers, what recent initiatives has SEC ODAM or the government undertaken to ensure that
procurement takes place under procedures that promote equality and transparency?
(4)(x), p.72, Free-trade zones
Please explain whether there are any plans to extend the phase-out period for the free-trade zones
beyond the stated phase-out date of 31 December 2002?
Are there any financial incentives offered to compani es operating in free trade zones in the form of
providing assistance or tax breaks for special employee benefits (such as a reduction in social
security payments, reduction of financing employee training, etc...)?
Does the Government of Mexico have any statistical data showing the value and volume of exports
from these free trade zones?
(4)(xi), Intellectual Property Rights and Innovation
IMPI's Role in Mediating Trademark Infringement Suits
We understand that it is common for IMPI ("Instituto Mexicano de la Propriedad Industrial"),
Mexico's Industrial Property office, to mediate infringement cases for private parties.
Please provide describe in detail the circumstances under which IMPI may become involved as a
mediator in infringement cases, as well as an expl anation of this practice and provide a copy of the
relevant guidelines explaining these circumstances.
Geographical Indications
Please describe the measures Mexico has in pl ace to implement its obligations under the TRIPs
Agreement with respect to geographical indications.
Please describe the steps nationals of other WTO Members must take to obtain protection for
geographical indications in Mexico.
Please describe the steps such nationals must take to oppose potentially infringing use or registration
of a geographical indication.
Enforcement of Intellectual Property Rights
Please describe the programs used to train judges, prosecutors, police, customs and other law
enforcement office regarding measures for civil, criminal and border enforcement of intellectual
property rights.
IV(4), Manufacturing
Mexico’s industrial policy states that it encourages competitiveness through “efficient import
substitution” and “creating conditions for high profitability and export activities”.  Please explainWT/TPR/M/97/Add.1
Page 25
what is considered “efficient” import substitution how are conditions created for high profitability
and export activities
With respect to these industrial policies, please explain whether the Government of Mexico maintain
import substitution programs, and if so, please provide details of the incentives offered under these
programs.  Is such import substitution programs exist, please also explain why they have not been
notified to the Committee on Subsidies and Countervailing Measures.
IV(4), pp. 99-100, Manufacturing
Please explain what types of tax incentives and special assistance are provided to the motor-vehicles
industry.
IV(1), Overview
While the United States is pleased with the openness to increased foreign participation in the Mexican
economy, and the structural adjustments that have been made, we would like to know whether
additional steps are planned to enhance the transparency of procedures and regulation, continuing
the progress that has recently been made with bodies like Federal Regulatory Improvement
Commission (COFEMER).  If so, what kind of enhancements?
Also, could Mexico please provide some additional detail on the measures taken to strengthen the role
or the Internet-based Federal Register of Formalities and Services, and tell us what, if any, additional
measures are planned?
(3), Energy
Energy appears to be considered something othe r than a service.  In the opening section, the
Secretariat’s Report discusses Mexico’s sectoral policies in the energy sector independently from the
service sector (see p. xii).  This is reinforced in Section IV of the Secretariat Report.  Nevertheless, wefeel there are some questions to be raised concerning the energy sector as a service.  Please clarify
the extent to which foreign firms may participate in the following activities in accordance with present
and proposed legislation:
- Services involved in oil and gas exploration and development.- Electric power transmission, distribution, and marketing services.  With respect to
marketing, which classes of customers are (or will be) eligible to choose their power
marketer?
- Natural gas pipeline transportation, distribution, and marketing services.  With
respect to marketing, which classes of customers are (or will be) eligible to choose
their gas marketer?
Para. 41
From the description of state control over the petroleum industry, it seems production, refining, and
distribution are all controlled by PEMEX.  Please clarify if PEMEX’s control extends also to various
oil field services provided to production companies like seismic surveying, drilling, testing and
analysis, among others.WT/TPR/M/97/Add.1
Page 26
Paras. 50-51
Does Mexico accord market access and national treatment for pipeline transportation and local
distribution of natural gas, including the authorization to construct as well as the right to own and
operate pipelines and pipeline networks?  Can Mexico clarify the extent to which consumers of
natural gas can presently choose their natural gas supplier and explain how consumer choice is
planned to evolve under the current market reform program?
(5)(i), p. 107, Financial Services
How does this paragraph relate to the statement in paragraph 105 that the law was amended to allow
foreign investment to participate up to 100 percent in the capital of commercial banks, financial
groups, securities brokerage firms, and securities market specialists?
Para. 108
Is SHCP’s discretion to deny authorization to form  a holding companies [sic] limited to prudential
reasons?  If not, please describe the extent of the SHCP’s discretion.
The Secretariat’s Report indicates that Mexico’s commitments on market access and national
treatment for insurance services were only made for commercial presence, except in the case of re-
insurance services, for which national treatment was bound for cross-border supply (Para. 103).  In
the cross-border arena, what insurance services can be supplied on a cross-border basis in practice
(in addition to reinsurance as bound in Mexico’s schedule):
- Marine, aviation, and transport insurance?
- Insurance intermediation?
- Services auxiliary to insurance as defined in the financial services annex?
(5)(ii), Telecommunications
International issues
In September 2000, a senior Mexican official informed the United States that Mexico would propose
changes to its international long distance services rules no later than November of that year, with a
goal of permitting unrestricted competition in international services.  More than a year has passed
since that statement.
(a) Where does that initiative now stand?(b) Has Mexico drafted proposed rule changes?(c) What is the thrust of these rule changes?
(d) When do these rule changes take effect?
(e) Are these new rules publicly available?On March 25, 2002, a major Mexican carrier [Telmex] filed a request with Mexico’s
telecommunications regulatory body (“Cofetel”) that the Mexican government eliminate rules that
restrict competition in international services.WT/TPR/M/97/Add.1
Page 27
(a) Does the Mexican Government support elimination of rules restricting competition?(b) If so, will the Mexican government act on this request?(c) When will the Mexican government take such action?
Interconnection – Local
What has been the experience of the Government of Mexico in resolving interconnection disputes
where competing carriers are themselves unable to reach agreement?
(a) What domestic procedures does that Government of Mexico has to resolve such disputes?
(b) What timetables does Mexican law place on the resolution of such disputes?
(c) Has the Government of Mexico successfully intervened to resolve such disputes?We understand that there is currently an ongoing dispute between Telmex and a local competitor.  We
also understand that the local competitor requested  Cofetel to resolve this dispute over 15-months
ago.
(a) What is the status of this dispute?(b) Has the Mexican Government taken action to resolve it?
(c) Doesn’t protracted lack of resolution unfairly disadvantage the competing local provider?
Interconnection – Long Distance
The United States welcomes Mexico’s progress in reducing certain long-distance interconnection
rates.  However, rates to regions where competitors do not have facilities or Telmex does not offer
local interconnection (“off-net” cities) still appear to  be significantly above cost (up to five time local
interconnection rates).
(a) How does Mexico plan to ensure that these rates are based in cost, consistent with Mexico’s
WTO commitments?
(b) Does Mexico have a procedure to ensure that these rates reach this level?
Resale
Mexico’s GATS Schedule of Commitments and its Telecommunications Law permit suppliers to offer
telecommunications on a resale basis (commercial agency services) both domestically and on a cross-
border basis.
(a) Domestically, Mexico’s GATS Schedule indicates that Mexico will introduce regulations to
permit the supply of commercial agency services on a commercial presence basis (mode 3).
However, to our knowledge, Mexico has not yet permitted this service despite the fact that
Mexico’s GATS commitments ente red into force over four years ago  When does Mexico plan
to liberalize this part of its market?WT/TPR/M/97/Add.1
Page 28
(b) Mexico did not take a similar limitations for the supply of cross-border “commercial agency”
services.
(i) Does Mexico permit a foreign service supplier to supply commercial agency services
(i.e., telecommunications services over leased capacity) on a cross-border basis?
(ii) If not, when does Mexico intend to permit the supply of such service, consistent with
its GATS commitments.
Dominant carrier regulation
What is the current status of Mexico’s dominant ca rrier regulations, issued by Cofetel in September
2000?
(a) Are these regulations in force?
(b) If so, has Telmex been complying with their provisions?(c) If not, when does Cofetel plan to issue new regulations?We understand that Cofetel has, in the past, recommended sanctioning Telmex for non-compliance
with these regulations.
(a) Have these sanctions been imposed?(b) If not, why not?A welcome aspect of Mexico’s dominant carrier regulations is the requirement that Telmex offer to
competitors quality of service no less favourable than it offers itself.  Section 2.2(a) of the Reference
Paper contains a similar requirement.  In 2000, we understand that Cofetel issued a report
concluding that Telmex was not meeting this requirement, resulting in severe congestion on localcalls to competitors networks.
(a) What has Mexico done to address this problem?(b) Based on reports as late as March of this year, competitors still claim degraded service.  How
does Mexico intend to address this issue?
Transparency of the Regulatory Process
A transparent regulatory process is helpful in developing good regulations and ensuring equal access
to information.
(a) What plans does Mexico have for improvements in this area?(b) Does Mexico plan on making interconnection agreements publicly available?(c) Does Mexico plan to introduce rulemaking procedures which provide public notice and the
opportunity to file comments?WT/TPR/M/97/Add.1
Page 29
Investment
New entrants in Mexico’s telecom market have ad vocated that the Government remove its foreign
investment limits in the telecom sector, asserting they need better access to foreign capital to
effectively compete against Telmex.
(a) Does Mexico recognize the value of lifting foreign investment limits as a way to promote
competition?
(b) Does the Mexican government support eliminating such restrictions?(c) What are Mexico's plans in this regard?
AUSTRALIA
Mexico introduced temporary tariffs varying from  3% to 10% on a range of primary and industrial
products in 2000.  When does the Mexican Government contemplate removing these tariffs?
Is Mexico aware that the 3% tariff on wool has caused potential distortion and diversion of
Australia's wool trade.  Given that the inclusi on of wool in the PROSEC scheme has not addressed
the underlying problem, is Mexico prepared to eliminate this temporary tariff?
Mexico recently introduced MFN tariff increases up to its bound rate of 39% on steel and steel
products.  How long does Mexico intend to maintain these tariff increases, and why are they applied
only to non-FTA countries?
When does the Mexican Government expect to be able to introduce the legislative changes required
for the liberalisation of the energy sector, in particular the natural gas and electricity generation
sectors?
INDIA
In paragraph 9 of the Overview, the Secretariat Report states that "awaiting the outcome of broader
liberalization initiatives, Mexico's main avenue to open its trade and investment regimes has been the
negotiation of FTAs.  Mexico acknowledges that the advantages implicit in FTAs are of a temporarynature, and hence no substitute for improving the competitiveness of its economy.  As is the case for
other Members following similar strategies, the large and growing number of Mexico's preferential
agreements can raise concerns about complexities resulting from the application of differing regimes,
and their effect on trade patterns".
We would request the delegation of Mexico to comment on these observations of the Secretariat.
Paragraph 5 of the Overview shows that the ma jority of Mexico's trade now takes place under
preferential rules, with the NAFTA remaining of paramount economic signific ance.  While the NAFTA
partners USA and Canada accounted for more than 90% of Mexico's exports, their share in importswas more than 75% in 2000.
We would like to know if Mexico has any plans to diversify its export markets.WT/TPR/M/97/Add.1
Page 30
TURKEY
Secretariat Report (WT/TPR/S/97)III(2)(i), p. 29, para. 11
The report indicates that Mexico maintains a verification system and sector-specific registers for
selected products including textiles, clothing, and footwear.  Furthermore, Mexico applies anothermeasure concerning textiles and clothing articles, namely the Automatic Notice of Importation
mechanism (para. 64).  Turkey considers that all th ese applications, creates a non-tariff barrier on
the trade of above-mentioned products.  Could the Mexican delegation provide their views on this
matter?
THAILAND
Secretariat Report (WT/TPR/S/97)III(2)(ii), p. 30, para. 18
According to the Report, the differential treatm ent of Mexican customs valuation in applying two
different values of imports, i.e. f.o.b. and c.i.f., to goods originating in the NAFTA region and those
from MFN sources respectively, has been a case of concern for some Members.  Could Mexico advise
if this basis for customs valuation, which accords pr eferential treatment to NAFTA countries, will be
maintained in the future?
(ii), p. 30, para. 19
The reference price mechanism introduced to combat customs under-invoicing is believed to have
unreasonably hampered to a certain extent a number of agricultural and processed food exports from
Thailand.  We would be interested to know about th e basis for determining the “reference” price for
imports in general, and that for rice and canned pineapple imports in particular.  It would also be
appreciated if a current copy of the list of products that are subject to this mechanism could be made
available to us.
(v)(a), pp. 32, 38, paras. 29, 49
The increase in MFN tariff rates for fiscal reasons made in January 1999, coupled with the granting
of tariff preferences through the progressive tariff reduction to imports from 39 countries, has caused
concerns about potential trade diversion and crea ted impediments for imports from Members that do
not benefit from such preferential schemes.  Do es Mexico contemplate any policy adjustments to do
away with the possible trade diversion and impediments to market access brought about by the
measures outlined above?
(v)(b), p. 34, para. 36
According to the Report, applied tariff rates for a few agricultural products subject to ad valorem
duties exceed their bound rates.  Should Mexico be fully aware of the existing gap between these two
rates, we would like to know if any policy adjustment aimed at rectifying the discrepancies are being
considered by the Government of Mexico?WT/TPR/M/97/Add.1
Page 31
(v)(d), p. 36, para. 39
In its Schedule of Concessions, Mexico included tariff quotas for several agricultural products, and
most quotas were allocated to selected countries through the incorporation of reserved access rights.
Since this practice of quota allocation constitutes restrictions on market entry for products
originating in other countries, would Mexico consider  to put an end to this measure in the light of a
new round of agricultural negotiation?
IV(2)(i), p. 84, para. 10
The Report indicates that substantial support ha s been made available to the sugar industry in
Mexico.  Domestic sugar prices are maintained well above international levels by more than 200 per
cent as a result of border protection.  We woul d like to know if Mexico will maintain the high
protection to the industry, or it has any plan of action to implement with a view to improving the
efficiency of the industry.
COSTA RICA
Intellectual Property
Please explain in detail how your legislati on implements Article 61 of the TRIPS Agreement.
Please describe the criminal procedures and penalties in your legislation, including imprisonment
and/or monetary fines sufficient to provide a deterren t that is consistent with the level of penalties
applied for offences of a corresponding gravity.
Please describe in detail the form of protection granted to plant varieties under your legislation and
state whether it is in full compliance with the International Union for the Protection of New Varieties
of Plants (UPOV) system.
Government Procurement
Government Report (WT/TPR/G/97)IV(h), para. 50
It is important for us to learn about Mexico's experience of the electronic government procurement
system, in particular with regard to the following points.  Does the system merely provide information
on government demand for goods, services and public works or does it also enable the entire
procurement process to be conducted on line?  What kinds or methods of government procurementcan be conducted on line and in what way is it being made easier for bidders to participate in
government procurement processes? At present, the system covers only on-line federal government
procurement:  are there any plans to include State procurement systems?
Secretariat Report (WT/TPR/S/97)
III(4)(vi), Para. 185
For purposes of reference, what is the relations hip between these figures on government procurement
and gross domestic product? According to footnote 73, these figures correspond to purchases from
the public and private sectors. It is unclear why statistics are included for both the public and private
sectors, given that the latter is not supposed to be involved in government procurement. DoWT/TPR/M/97/Add.1
Page 32
government procurement figures exist for sub-federa l entities? What amount or percentage of the
total value of government procurement in 1999 corresponds to procurement from foreign suppliers
(imports)?
Paras. 187 and 189
Mexico, by giving priority to the countries with which it has signed an FTA, undertakes to ensure that
they receive national and most-favoured-nation treatment. Are the measures mentioned in paragraph189, which differentiate between national and international procurement and give priority to domestic
suppliers when they participate with domestic goods, and the measure establishing a price preference
margin for domestic goods in international tendering, not inconsistent with these commitments? Are
goods and suppliers from countries with which Mexico has signed an FTA exempt from these
provisions? It would appear that foreign suppliers and foreign goods will only be able to participate
in Mexico's government procurement market when the procurement processes are international, when
it has been decided that domestic suppliers are unable to fulfil the tendering requirements or when
foreign prices are more appropriate, thereby limiting the real possibilities of suppliers from countries
which are contracting parties to an FTA with Mexico competing in its public procurement market.
Para. 192
What other authorities exist for challenging a traditional or on-line procurement process? What kind
of challenges can be made and at what stage of the process?
Para. 194
Has Mexico considered extending to its federal states the benefits of the chapters on government
procurement included in its free-trade agreemen ts, thereby ensuring the principles of national
treatment, most-favoured-nation treatment and tr ansparency and further opening up its procurement
market?
Services and Investment
How does Mexico levy the tax on remittances abroad?
What are the applicable percentages and in what circumstances are they applied?What are the criteria for including a country in the preferential fiscal regime?What are the procedures for removing a country from  this list and for what length of time is this
applicable?
SWITZERLAND
Secretariat Report (WT/TPR/S/97)
Paras. 2, 9, 19
The Report by the Secretariat mentions an increased risk for trade distortions due to two
contradicting developments – substantial extension of preferential trade agreement in the last few
years while increasing most MFN tariff rates.  What is the view of the Government of Mexico
regarding these concerns?WT/TPR/M/97/Add.1
Page 33
Para. 18
More than 90% of Mexican exports are undertaken by firms benefiting from various administrative
tax facilitation schemes.  Are such programs considered essential to permanently maintain export
competitiveness, and will subsequently be discontinued once progress has been made regarding
competitiveness?
I(5)(ii), paras. 22, 23
Does the Government of Mexico consider the heavy reliance on NAFTA countries as trading partners
as a potential problem?  Is the recent extension of preferential trading agreements part of a strategy
to broaden the export and import base?
III(2)(ix), para. 69
It is mentioned in paragraph 69 that "in general standards are voluntary, except when their
application is required in a technical regulation or when producers and retailers state that their
goods and services comply with specific standards".  Does this mean that a specific voluntarystandard becomes mandatory for those producers who apply this standard.  Please clarify the
relationship between voluntary and mandatory standards.
Para. 71
The report of the WTO Secretariat indicates that no accurate information were available on the
proportion of the technical regulations identical or equivalent to international standards.  The reportsalso states that 60% of technical regulations  and standards have a least a partial concordance with
international standards.  Does Mexico intend in the future to collect and provide more information
with regard to the equivalence between the Mexican technical regulations and the relevant
international harmonized standards?  If this is the case, when does Mexico intend to provide such
information?  Where only partly equivalence does  exist between national technical regulations and
international standards, does Mexico intend to esta blish some actions to improve the harmonization
of its requirements with the international standards?
Para.73
The report also indicates that in August 2001 there were fifteen "emergency technical regulations" in
force.  Could the Mexican authorities explain the reasons why only one over these fifteen regulations
was based on international standards?
(x) Contingency measures
Para. 98 and following
Mexico is one of the very active users of trade remedy, and in particular, antidumping measures.
What is the view of the Government of Mexico regarding the more and more widespread use of such
measures across the world?  Would a tightening of disciplines eventually be beneficial for all
countries?
(4)(xi), Para. 212, Intellectual property rights and innovation
With respect to the issue of exhaustion of intellec tual property rights, the Secretariat mentions that
Mexico has chosen not to restrict the importation of goods put on the market in another country withWT/TPR/M/97/Add.1
Page 34
the consent of their legitimate right holder.  Does this kind of exhaustion apply without distinction to
all the various fields of intellectual property?
Table III.10, p. 75, Overview of IPR protection in Mexico, 2001
Please provide more detailed information on the sy stem developed by Mexico to protect geographical
indications.  What are the conditions required to obtain such protection? Is this protection available
for geographical indication of all products?
Para. 227
The Secretariat’s Report notes that Mexico’s experience with regard to Tequila is a prime example of
the considerable financial benefit that can arise from the exclusive rights granted throughgeographical indications.  Could you please explain how the geographical indication "Tequila" is
protected in Mexico?  What are the effects of such protection?  Does this protection cover
geographical indications also for other products than spirits? If not, could you please explain how
geographical indications for other products are protected under Mexican Law and what the effects of
such protection are?WT/TPR/M/97/Add.1
Page 35
ANNEX II
WRITTEN RESPONSES BY THE DELEGATION OF MEXICO
I. TRADE POLICY REGIME
Introduction
Transparency and regulatory reform
The process under way in Mexico for the imposition of sanctions on public servants who
violate transparency requirements when formulating or amending regulations is covered by
Article 70-A of the Federal Administrative Proc edures Law (LFPA), which states the following:
"Article 70-A.  Failure to comply with this Law gives rise to liability and the sanctions
provided in the Federal Law on the Liability of Public Servants shall apply.  In such cases, the
offender shall be dismissed from his or her post and shall be ineligible for any public service
employment, post or mission for a period of at least one year:
…II. The head of an administrative unit who, on two occasions in the course of the same
employment, post or mission, fails to notify the person responsible according to Article 69-D
of information to be amended in the Federal Registry of Formalities and Services in respect of
formalities to be completed by individual persons for the purpose of complying with an
obligation, within five working days following th e entry into force of the provision that makes
the amendment necessary;
III. The head of an administrative unit who, on two occasions in the course of the same
employment, post or mission, fails to transmit to the person responsible according to
Article 69-D the preliminary drafts of the acts referred to in Article 4 and the corresponding
declarations, for the purposes of the provisions in Article 69-H;
IV. The public servant responsible for the Official Journal of the Federation who, on five
occasions, fails to comply with the provisions of Article 69-L.
…"In other words, a public official who fails to  inform the person in charge of regulatory
improvements in his decentralized unit or authority of amendments to formalities, regulations or
proposals issued by the decentralized unit or authority concerned, is liable to punishment in
accordance with the LFPA and the Federal Law on the Liability of Public Servants.  Likewise,sanctions apply to officials of a Government Depart ment who publish in the Official Journal of the
Federation (DOF) preliminary drafts of regulations issued by decentralized units or authorities in the
absence of a final decision by the Commission.
The United States would also like to know whether additional steps are planned to enhance
the transparency of procedures and regulations, continuing the progress that has recently been made
with bodies like the Federal Regula tory Improvement Commission (COFEMER).WT/TPR/M/97/Add.1
Page 36
In reply, the following are the principal actions taken by Mexico to improve the transparency
of procedures and regulations:
• The establishment of the Federal Registry of Formalities and Services (RFTS), which
should be completed by 2003.  The Registry at present includes around 1,100 Federalformalities applicable to private individuals and companies.  As of May 2003, the
only Federal formalities applicable will be those to be found in the RFTS, which can
be consulted on the Internet at www.cofemer.gob.mx.  During 2001, 19 per cent of
the formalities included in the RFTS at December 2000 were abolished.  Persons who
do not have access to the Internet can telephone the Primer Contacto  (First Contact)
service of the Department of the Economy (01.800.410.2000) to obtain specific
information on the formalities in the RFTS.  Private individuals may obtain advice on
formalities either from the Internet or the Fi rst Contact.  In order to ensure that all
Federal formalities and formats are included in time (May 2003), the COFEMER hasdrawn up a timetable for the inclusion of formalities for each of the decentralized
units and authorities and is working in cooperation with those in charge of regulatory
improvements to ensure full compliance.
• The creation of a new on-line system for Regulatory Impact Statements (MIRs),
which makes the formulation of regulations more transparent by allowing and
facilitating access by any interested person to preliminary drafts of regulations and
their respective MIRs.  All the regulation s proposed (laws, regulations, agreements,
Mexican Official Standards (NOMs)) must be sent to the COFEMER with a MIR at
least 30 working days before publication.  The drafts are available to the public when
they are received by the COFEMER.  The list of provisions being revised is availableon the Internet and is published within the first five working days of each month in
the DOF.  As of July 2002, the full texts of drafts will be available on line.  Some
drafts currently being revised can already be found at www.cofemermir.org.  It is a
legal obligation for the COFEMER to review all the comments received frominterested parties when preparing its decisions.
• The implementation of the Rapid Business Creation System (SARE) in order to
simplify the number of formalities and the time required to open a business.  At the
Federal level, only two formalities are now  required (RFC and an authorization to
establish a company) in order to set up a business and the time for reply is one
working day. The COFEMER is working with state and municipal authorities to
promote the adoption of the SARE by the three levels of Government.  In this
connection, agreements with eight states have already been signed (Tamaulipas, Stateof Mexico, Puebla, Aguascalientes, Guanajuato, Morelos, Querétaro, Yucatán and
Durango).  The first municipality to implement the SARE in full is Naucalpan and it
is also being applied in Puebla.
1. Foreign investment regime
i) Policy objectives and legal framework
Attracting foreign investment
Malaysia's questions provide us with an opportunity to explain Mexico's foreign investment
policy in greater detail.  The issue of attracting foreign investment to any country is complex becausethe factors that influence foreign investors when deciding where to invest are varied and potent
depending on the sector concerned.WT/TPR/M/97/Add.1
Page 37
Nevertheless, the decision to invest in a particular country is to a large extent determined by
an analysis of the return/risk ratio carried out by  any investor.  This means that investment flows
increase if a country offers an attractive combination of return and risk over a particular period.
During the period under review, foreign investors, through their investment, showed their
confidence in the economic performance mentioned in the Secretariat's Report.  This macroeconomic
stability, combined with Mexico's political stabil ity, meant that risks for investors were reduced.
Likewise, the reduction in the perception of risk was affected by the market access opportunities
afforded by Mexico, the legal predictability and security offered by various investment-related
international instruments, and strict compliance with  the disciplines of the multilateral trading system.
Some of the factors that may have contributed to increasing return on investment are,
inter alia , Mexico's geographical situation, access to high-quality inputs at competitive prices, the
growth in domestic demand over the period under re view, and the legal reforms that led to a higher
rate of foreign investment in certain sectors of the economy.
Mexico's authorities recognize, nevertheless, that Mexico needs continually to improve the
return/risk ratio so that it remains an attractive  country for foreign and domestic investment because
the ratio, by its very nature, is changeable.
Lastly, Malaysia mentions the high rate of foreign investment in the public sector between
1997 and 2000.  The classification shown in the reference table may give rise to confusion.  In fact,
the high rates of foreign investment shown in the last column entitled "Public administration and
others" do not cover investment flows channelled to the public administration but to "other (non-financial) services)".  If the 1994 figures for other services are subtracted, it can be seen that
US$697.8 million went to the restaurants and hotels sector, US$266.3 million to professional,
technical, specialized personnel and services, and US$95.5 million to repair and maintenance
services.  Likewise, in 2000, professional and technical services attracted US$979 million, and
restaurants and hotels US$117.1 million.
Neutral investment
The European Union refers to the "neutral in vestment" scheme in Mexico.  It should be
pointed out that neutral investment, far from being a restriction on investment, is a highly beneficialmechanism that allows Mexican firms to carry out their expansion or financial rehabilitation projects
without Mexican investors losing control of the firms in which they have holdings.  It should be
emphasized that this participation mechanism is not used to determine the foreign investment
percentage in the capital stock of Mexican firms.
The neutral investment scheme is applied on a most-favoured-nation basis because its benefits
are available to any foreigner in the United Mexican States, including investors from countries
signatories to the NAFTA.
Regarding restricted sectors, these are clearly defined in the Foreign Investment Law (LIE)
and mentioned in paragraphs 22 to 27
2 of the Report by the Secretariat.
                                                     
2 Paragraph 26 of the Secretariat's Report, however, mentions that there are limits on foreign ownership
of more than 49 per cent of the equity of portfolio management companies, shares representing the fixed capital
of investment companies and operating companies of investment corporations, although these activities are not
subject to any restrictions on foreign investment.WT/TPR/M/97/Add.1
Page 38
In the past, prior to the LIE (1993), authorization for neutral investment was only given to
companies whose shares were traded on the stock market and, through this mechanism, they were able
to obtain external resources and financing from investors among the wider public.  Neutral investmenttrusts were set up and their assets included a wide range of shares representative of equity in different
Mexican firms covering a broad spectrum of sectors.
Since the LIE has come into effect, the benefit of obtaining resources from abroad through the
neutral investment mechanism has also helped Mexican firms whose volume of operations and
turnover do not allow them to be listed on the st ock exchange.  The Law now provides that these
firms as well can make use of the various forms of neutral investment.  In this way, small and medium
industries can utilize this financing mechanism.  As already mentioned, neutral investment is a
beneficial financial scheme that allows firms to obtain new resources and yet remain under the
corporate control of Mexican investment.
Lastly, it should be noted that the factors taken into account by the competent authority are:
(i) the percentage of neutral investment sought;  and (ii) the corporate rights required by the applicant.
Neutral investment is considered to be a financing mechanism for Mexican firms so when
authorization under this scheme is sought by firms active in sectors where there is a restriction on
foreign investment, the authority takes special care to ensure that control of the firm in question
remains with Mexican investors with holdings in the firm.
Restrictions on foreign investment:  restricted zone
We have also received comments from the European Union on the so-called "restricted zone".
In this connection, Article 27, section I, of the Political Constitution of the United Mexican States
clearly establishes that "Under no circumstances may foreigners acquire direct ownership of lands orwaters within a zone of one hundred kilometres along the frontiers and of fifty kilometres along the
shores of the country."  The historical background to this constitutional restriction is the conservation
of the Mexican State's territorial integrity.  Nevertheless, secondary legislation, more specifically the
LIE, includes a mechanism whereby foreigners, through trusts, can acquire the right to use and
develop property in the restricted zone.
This restriction and the possibility of acquiring rights of use and development through trusts
apply to all foreigners in the United Mexican States.
It should be pointed out that the existing restrictions on foreign investment are those laid
down in the LIE by sector and mentioned in paragraphs 22 to 27 of the Secretariat's Report.  These
sectoral restrictions apply in the restricted zone and there are no other special sectoral restrictions in
this zone.  Although no restriction is provided in the LIE, the general rules to be found in Article 4
thereof provide that foreign investment may accoun t for any percentage of the equity of Mexican
firms, except as otherwise provided in the LIE.
2. International relations
As progress in tariff liberalization has been much slower in the multilateral trading system
than in regional agreements, Mexico, like many other countries, has promoted greater reciprocal
liberalization of markets within the framework of regional agreements.
The establishment of a permanent legal framework governing trade relations between Mexico
and its preferential trade partners has led to the further development of negotiated disciplines and
tariff liberalization that goes further than that achieved in the Uruguay Round.WT/TPR/M/97/Add.1
Page 39
To date, Mexico has negotiated Free Trade Agreements (FTAs) with 32 countries,
representing 860 million consumers.  We are one of the only two countries with preferential access to
the two major economic groupings in the world:  North America (United States and Canada) and theEuropean Union.  We have become a global trade power and the foremost in Latin America.
This policy of trade opening, together with our privileged geographical situation, have made
Mexico a production centre unique in the world and a strategic centre for attracting foreign direct
investment (FDI).  Mexico's export sector has become the major source of employment in the countryand pays wages that are higher than in the rest of the economy.
In response to the concern that Mexico's preferential trade agreements have had a negative
impact on trade with other countries, mentioned by some Members (Guatemala, India, Malaysia),
Mexico's trade policy at the bilateral level has not only strengthened Mexico's overall trade with its
partners but has also fostered trade in goods with other regions and countries with which Mexico does
not have any FTAs.
In Mexico's case, bilateral treaties have helped to increase total trade flows and have not
distorted trade with third countries.  In particular, trade with countries with which Mexico does nothave any FTAs has increased dramatically over the past decade.
Mexico's trade with Latin American countries with which it does not have any FTAs grew by
189 per cent from 1990 to 2001.  Although trade with these countries
3 decreased in some years due to
economic crises, the trend has been positive over the period as a whole.
Asia is a very dynamic region with which Mexico has not yet signed an FTA and even though
Mexico's economic relations with the region have not yet developed their full potential, trade with
these countries4 has grown at an average annual rate of 19.6 per cent since 1990 (see also Table AI.3
of the Secretariat's Report).
                                                     
3 Argentina, Brazil, Cuba, Dominican Republic, Ecuador, Panama, Paraguay, Peru, and Puerto Rico.
4 China, India, Indonesia, Japan, Malaysia, Pakistan, Philippines, Republic of Korea, Sri Lanka and
Thailand.1.82.32.83.0 3.2 3.34.0 3.9 3.83.54.95.2
0.01.02.03.04.05.06.0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001Mexico's trade with Latin American countries without FTAs
US$ milli ons.  Source:  Department of the Economy with BA NXICO data.WT/TPR/M/97/Add.1
Page 40
In 2001, which was characterized by a global economic slowdown caused by the decrease in
economic activity in the United States, Mexico's total volume of trade with countries with which it
has signed FTAs fell by 6.4 per cent, whereas trade in goods with countries with which it has no FTAs
rose by 16.6 per cent.
MEXICO'S TRADE BALANCE (US$ millions)
January-December
Heading
2000 2001Variation
%
Countries with FTAs
Total trade 306,921.6 287, 251.3 -6.4
  - Exports 158,487.9 150,829.5 -4.8
  - Imports 148,433.7 136,421.8 -8.1
Trade balance 10,054.2 14,407.7 43.3
Countries with FTAs
Total trade 33,975.3 39,614.4 16.6
  - Exports 7,936.1 7,695.2 -3.0
  - Imports 26,039.2 31,919.2 22.6
Trade balance -18,103.1 -24,224.0 n.a.
Source:  Department of the Economy.
Contrary to what has happened in other integr ation schemes, Mexico has not increased tariffs
applicable to third countries as a result of having negotiated a free trade or preferential agreement.  As
their numbers increase, the implementation of such agreements has led to the elimination of tariff
barriers and increased liberalization of trade flows, while at the same time providing incentives forgreater regional and multilateral liberalization and growth of trade in general.US$ milli ons.  Source:  Department of the Economy with BA NXICO data.3.0 4.45.9 6.88.6 7.49.010.6 11.313.417.821.5
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001Mexico's Trade with AsiaWT/TPR/M/97/Add.1
Page 41
In order to continue diversifying its trade, as observed by some Members (Guatemala, India
and Malaysia), Mexico is holding talks with Panama, Singapore and Japan, inter alia .  Moreover,
Mexico takes an active part in forums such as the Free Trade Area of the Americas(FTAA) and theAsia-Pacific Economic Cooperation Forum (APEC).
Mexico has participated actively in the WTO and has a marked interest in moving towards a
multilateral free trade system in all the areas covered by the Doha Declaration, as can be seen from
our recent participation in the Doha Ministerial Conference and our offer to host the Fifth MinisterialConference in 2003.
Responding to a question by one Member (Japan), it is in Mexico's interests to reduce bound
tariffs in all sectors through equitable multilateral negotiations in the context of the Doha
Development Agenda;  the speed, terms and scope of liberalization must be the result of thesemultilateral negotiations.
In conclusion, Mexico is committed to promoting the expansion of free trade and we are
convinced that our intensive bilateral activities help  to strengthen multilateralism.  The success of our
FTAs shows the benefits of trade openness and acts as a catalyst for moving ahead with themultilateral agenda.
We are certain that Mexico's active participation in bilateral and multilateral forums boosts
trade and investment in all regions of the world.
Tariff reductions within the framework of the G-3 FTA
Some clarification is required regarding paragraph 55 of the Secretariat's Report.
The G-3 Agreement provides, as a general rule, a timetable for tariff reduction in order to
reach zero at the latest by 1 July 2004.  In order to achieve this, a number of tariff reduction
procedures have been defined, of which the following are the most important:
- Freeing of tariffs upon entry into force of the Agreement;
- four equal tariff cuts to reach a zero tariff on 1 July 1999;
- ten equal tariff cuts to reach a zero tariff on 1 July 2004;
- goods in the automobile sector: zero tariff as of 1 January 2007.
These tariff reduction procedures apply to trade between Mexico and Colombia and Mexico
and Venezuela.  There is no provision in the Agreement indicating that the tariff reduction period will
only apply to Colombia in the first stage or that at any particular time a second round of tariff
reductions will have to be negotiated with Venezuela.
There is one provision in the Agreement, howev er, (Article 3-04.6) that allows the Parties to
hold consultations to examine the possibility of speeding up tariff reductions for certain products laid
down in each Party's timetable.  Mexico and Venezuela, for example, have decided to accelerate the
procedure for certain products and in March 2002 Mexico and Colombia also accelerated tariffreduction for some products.
Lastly, as mentioned in paragraph 55, this Agreement builds on the preferences previously
agreed among the Parties under the LAIA and some of the tariff procedures include provisions to this
effect.WT/TPR/M/97/Add.1
Page 42
Generalized System of Trade Preferences (GSTP)
One of the reasons why the tariff preferences granted by Mexico under the Generalized
System of Trade Preference (GSTP) are not used for imports is that Mexico already grants tariff
preferences under broader-scope agreements with countries belonging to this system that are
geographically closer to Mexico, especially Latin American countries, so there is an incentive to
apply the broader preferential agreement.
It might also be the case that an importer ignores the existence of a GSTP preference for
certain goods.
In addition, some products covered by the GSTP already benefit from the application of a
very low tariff.
The concessions granted by Mexico under the GSTP were published in the Official Journal of
the Federation on 21 July 1989.
II. TRADE POLICIES BY MEASURE
1. Measures directly affecting imports
i) Customs
Every day, over US$ 930 million worth of goods go through the Mexican customs.  This
means that, today, the volume of goods crossing Mexico's borders has increased fivefold compared
with ten years ago.  Each year, around 8 million import and export declarations are processed,
equivalent to a 600 per cent increase in declarations over the past decade.
In order to absorb this vast increase, in recent years Mexico has undertaken an ambitious
customs modernization programme that includes the following components:
• Almost all (90 per cent) of customs opera tions have been computerized.  Banks,
customs agents and the main foreign trade actors in general are linked electronically;
• around 85 per cent of operations ar e covered by a single document;
• as regards equipment, sophisticated technology has been installed (X-rays and gamma
rays), which makes physical inspection unnecessary;
• as regards integrity, the measures include training, technical examinations, rotation of
staff, and assessment of integrity;
• a special unit has been set up to verify that operations respect the rules and another
unit deals with complaints about any irregularities.
These efforts have yielded fruit as far as respect for the rules, better harmonized
interpretation, and a reduction in the time taken for review are concerned.
Nevertheless, there are still problems of piracy, smuggling and under-valuation, for which
measures consistent with Mexico's international commitments have been taken, for example,
estimated prices, specific customs offices and the importers' register.
Customs valuation
In response to the European Union, Mexico confirms that it has invoked the clauses and
reservations available to developing countries under the Customs Valuation Agreement.  TheseWT/TPR/M/97/Add.1
Page 43
reservations concern a request to reverse the order of implementation of Articles 5 and 6, and
implementation of the provisions under Article 5.2 on whether or not the importer makes a request.
Estimated prices
Estimated prices were introduced in 1994 to detect and rectify problems of under-valuation in
the import of goods because this practice is used to avoid the payment of taxes and is seriously
prejudicial to the domestic economy and Federal public revenue.  Products that have traditionallypresented problems in this respect are subject to the mechanism, mainly foodstuffs and beverages,
clothing, footwear, tools.  Products subject to estimated prices account for barely 5 per cent of
Mexico's imports.
In order to determine the estimated price of a good, the Department of the Treasury and
Public Credit examines international prices, the value and volume of import and export transactions
registered by the General Customs Administration, and elements that show the price of marketing
such goods under free market conditions.  Other elements such as the country's share of Mexico's
imports are also taken into account.  After this in formation has been examined, the Department of the
Treasury and Public Credit determines the estimated price of the good.
When a good is subject to the estimated price mechanism and the customs value declared by
the importer in the course of customs clearance is lower than the estimated price, the importer must
provide security to cover the difference between the duty paid
5 and the duty payable if the value of the
imported goods is found to be equivalent to the estimated price fixed.  The importer may provide
security to cover imports over a period of six months rather than separate security for each import
transaction.
The security referred to in the previous paragraph must be deposited with a financial system
institution in cash.  As an alternative to a cash deposit, the importer may also use contingent lines of
credit, an earmarked or established trust account, collateral or mortgage, shares or a credit card;
these are different forms of security because they allow the importer not to pay out at the time ofimport provided that he undertakes to pay the authority the duties it determines if it is shown that the
price declared was not properly calculated according to the Valuation Code.
While the security remains in effect, the author ity examines the possibility of initiating an
investigation into the declared value.  The security is usually released after six months or less, unlessthe customs authority has not completed its investigation.  If the deposit has been made in cash, the
amount deposited is returned with the interest it earned during the period concerned.
Estimated prices are regularly monitored by the Department of the Treasury to ensure that
they are adapted to the economic changes affecting the price of imported goods or their price oninternational markets.  This monitoring may also result in the exclusion of certain goods from
application of the measure.
Importers may request that the estimated price be modified or that certain goods be excluded
from application of the measure.  In order to do this , they must make an application in writing to the
Department of the Treasury stating their intention, attaching the documentation justifying the request
and substantiating the grounds for the change requested.  The Department of the Treasury then
examines the request and fixes a new estimated price, provided that it is duly justified and
substantiated.  If it is not, the request is refused.
                                                     
5 Depending on the goods concerned, the duty includes payment of import taxes, VAT, the Special Tax
on Products and Services (IEPS), countervailing and anti-dumping duties.WT/TPR/M/97/Add.1
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The trade agreements to which Mexico is party do not give the possibility of excluding
products because of their origin as this is a generally applied mechanism.  It must be borne in mind
that the value declared on the invoice is the basis for paying domestic taxes (for example, VAT andIEPS) as well as the tariff.
As mentioned above, we can affirm that the estimated price mechanism is generally applied,
is not discriminatory nor burdensome, and is consistent with the WTO Agreement on Customs
Valuation and the international agreements to which Mexico is party, inasmuch as the value declared
by the importer is not rejected and he is allowed to withdraw his goods from the customs upon deposit
of security to cover payment of taxes to which the goods may finally be subject.
It is important to note that estimated prices are solely used as a reference and cannot under
any circumstances be used to determine the taxable base of the General Import Tax.  The estimatedprice mechanism does not therefore constitute a minimum import price but only represents a
parameter that helps to detect and combat under-valuation.  Lastly, the possibility of publishing
changes to the mechanism at an earlier stage will be examined.
A list of products to which the measure no longer applies is attached (Annex I).Ci.f. vs. f.o.b. (Colombia and the EU)
The application of c.i.f. and f.o.b. bases has been covered in the WTO's Committees on
Customs Valuation and on Regional Trade Agreements.  According to the Agreement on Customs
Valuation, both the c.i.f. and f.o.b. systems are equally valid.
Application of the c.i.f. basis for the customs valuation of goods imported into Mexico is the
same for products from all the contracting parties to the WTO, including non-originating goods from
the United States and Canada.
Other valuation issues
As explained in paragraphs 16 to 18 of this section of the Secretariat's Report, the valuation
method used by Mexico is the transaction value in conformity with Article VII of the GATT 1994,
and this is also the case for products subject to an estimated price.
Customs officials cannot decide whether a good does or does not comply with the Customs
Valuation Code at the time of import.  If a good is quite obviously under-valued, the customs officials
allow it to be imported, note the general details of the transaction and take a photocopy of the
documents for transmission to the auditing centre.
If the audit of the transaction shows that the imported good is under-valued, based on
Decision 6.1 of the WTO Committee on Customs Valuation approved at its meeting of 12 May 1995,
the customs authority requests the importer to provide a full explanation, together with the documents
or proof that the value declared represents the amount actually paid or payable adjusted in conformity
with Article 8 of the Agreement on Implementation of Article VII of the General Agreement onTariffs and Trade 1994.  If the information is not substantiated, the importer is asked to rectify the
declaration.  If he does not agree to this and the customs authority still has reason to doubt the
veracity or exactitude of the data or documents provided, it exercises its verification powers in order
to establish the correct customs valuation.WT/TPR/M/97/Add.1
Page 45
Specific customs offices
The purpose of designating specific customs offices for the clearance of certain products is to
improve the control of products where possible sanitary problems have been detected or there is a
high level of smuggling or piracy by utilizing the infrastructure that allows technical inspections of
such products to be conducted.  This measure applies mainly to the import of apples, compact discs,
cigars, bicycles, pig fat, poultry in brine, used tyres, footwear, textiles, and potatoes for sowing,
irrespective of the country of origin.  For exports, the measure applies to tequila.
In cases where specific customs offices have been designated for the import of certain
products, these offices usually deal with around 95 per cent of imports of such goods so the measure
does not have any serious effect on trade.
If there is a change to the specific customs offices, a period is allowed between the date of
publication and application of the measure.  The situation referred to with regard to textiles was not
typical because the original publication only designated six customs offices.  In order not to affect
trade, however, textiles were imported through all the customs offices until the situation was remedied
and 18 customs offices were finally designated for imports, and they deal with the majority of textilesimports.
For the aforementioned reasons, the specific customs offices do not constitute a barrier to
trade and application of this measure is in conformity with Mexico's commitments in the WTO.
Importers' register
With regard to the importers' register, it should be noted that Article 59, section IV, of the
Customs Law makes it mandatory to be listed in the importers' register.  Articles 71 to 79 of the Law's
Regulations indicate the documents to be submitted by persons wishing to import goods into Mexico.
For small-scale imports or potential imports, certain procedures are defined for the entry of
the goods, namely:
• It is not necessary to be listed in the importers' register for the goods indicated in
Rule 3.6.3 of the Miscellaneous Foreign Trade Resolution (RMCE) for 2000 and inArticle 76 of the aforementioned Regulations;
• registration in the importers' register is not required for goods that are not to be
marketed and have been authorized by the customs authorities, according to Article 1,
last paragraph, and Rule 3.6.7 of the RMCE of 2000;
• if the goods to be imported are explosive, inflammable, contaminating, radioactive,
corrosive, persistent or easily decompose or are live animals, they may be imported
without completing the registration formality in accordance with Rule 3.6.8. of the
RMCE of 2000.
In conclusion, and responding to the question by the United States, the measures referred to
such as estimated prices, specific customs offices and the importers' register are not imposed in order
to combat dumping, but to prevent smuggling, under-invoicing, piracy, inter alia .  As they are
published in the Official Journal, these measures are transparent.  Although sometimes it has been
necessary for the measures to enter into force the following day, these have been exceptional cases.WT/TPR/M/97/Add.1
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Fiscal stamps
Regarding fiscal stamps, we wish to state that this situation was not a typical one.  In
October 2001, large-scale counterfeiting of fiscal stamps was discovered so their distribution was
suspended both for domestic and imported products.  Despite this unfortunate and isolated case, at no
time did Mexico act in a way inconsiste nt with its international obligations.
Samples
Chile requests information on customs regulations concerning the entry of samples of
products for fairs and other trade promotion events or activities in Mexico.  We can provide the
following information in this respect:
In order to bring samples of products into Mexico lawfully, a person has the choice of
temporary import or use of an ATA carnet for the temporary entry of samples.  Both possibilities have
certain elements in common such as the period of entry (six months) and exemption from the need to
be listed in the importers' register.
For temporary entry, the customs declaration must state the purpose for which the goods are
to be imported and, where appropriate, the place where this purpose is to be fulfilled and the goods
are to be kept.  For the purposes of the Customs Law, samples to be used to present the goods
available are those whose quantity, weight, volume or other forms of presentation indicate without
any doubt that they are only to be used as samples and that they have have no commercial value
because they have physically been made unusable by marking, perforation, or breaking, or have been
dealt with in a way that makes their marketing im possible but does not prevent them being used as
samples, or goods whose value per unit does not exceed the national currency equivalent of US$ 1 or
its equivalent in other foreign currency.  In such cases, simply putting stamps or wording on the goods
is not considered to be physically making them unusable.
If an ATA carnet is used, its term may not exceed one year as of the date of its issue.  Goods
imported temporarily using a carnet must be presente d to the customs authority, together with the
ATA carnet, for physical and documentary examination.  In such cases, the automatic selection
mechanism does not have to be applied.
If no irregularities are detected, the customs authority shall clear the goods immediately and
certify the page in the ATA carnet corresponding to the customs operation concerned, placing the
stamp, name and signature of the official responsible for clearance on the cover and relevant page of
the carnet.
ii) Certificates of origin
The certified country of origin (CPO) scheme was introduced in 1994 in response to re-
shipment by third countries in order to avoid paying duty on products for which there had already
been a final determination of dumping or subsidies.  It was shown that this type of evasion was taking
place on a massive scale.
The scheme essentially consists of defining requirements of origin and certifying them for
certain products such as textiles, clothing and footwear.  The requirements of origin apply to all
countries, but the certification requirements differ for countries that are not members of the WTO and
preshipment inspection and formalization of the certificate of origin are required.WT/TPR/M/97/Add.1
Page 47
In addition, the scheme requires the certificate to be issued by the exporting country and
handed over to the importer.  It cannot be issued by a third country in which the product has been
marketed.  If it cannot be proved that the goods originate in a third country, they are considered tooriginate in the country on which the measure has been imposed and the corresponding duties are
payable.
The CPO is an administrative requirement need ed to ensure compliance with trade protection
provisions that are not inconsistent with the WTO.  It is neither an unjustified nor a burdensomerequirement because each foreign government can designate the certifying authority, which has to be
registered once only with the Government of Mexico.  The confirmation of the CPO by a Mexican
Embassy is only required for countries that are not Members of the WTO.
In the Secretariat's Report it is also stated that the rules differ depending on the origin of the
goods, which is not correct because the scheme uses the same rules to determine the country of origin
of goods.
iii) Tariffs
Increases in most-favoured-nation tariffs
Regarding the comments by several delegations on the increases in Mexico's MFN tariffs, it
should be pointed out that these were imposed without the need to seek exemptions from the WTO
provisions because the tariffs were lower or the same as the levels bound by Mexico.
When economic conditions so permit, the feasibility of lowering MFN tariffs to their previous
levels will be reviewed.  In any event, it is in Mexico's interest to make progress towards a more openmultilateral trading system in all the areas covered by the Doha Declaration.  With a view to the
negotiations, Mexico considers that it is up to the Members of the WTO to decide at what pace and
how far they wish to move in opening up trade.
We do not consider that the gap between MFN and preferential tariffs restricts the growth of
trade flows with countries with which Mexico does not have a free trade or preferential agreement.  In
fact, the average annual rate of increase in imports from countries with which Mexico has no such
agreement was 15 per cent for the period 1993-2001.
For example, imports from Malaysia rose from US$ 245.4 million in 1993 to US$ 2 billion in
2001, which increased Malaysia's share of Mexico's imports from 0.38 per cent to 1.119 per cent over
the same period.  In the case of the Republic of Korea as well, Mexico imported US$ 837.5 million in
1993 and in 2001 this figure had climbed to US$ 3,531.7, bringing the Republic of Korea's share of
Mexico's imports up from 1.28 per cent to 2.1 per cent over the period.  Another example is Thailand,
from which Mexico imported US$ 138.6 million 1993 and US$ 615.3 million in 2001.
Steel
Mexico increased MFN tariffs on steel to the bound level of 35 per cent.  The Decree will
expire in September 2002, but may be renewed.
This measure was looked at carefully at the domestic level.  By increasing its tariffs on certain
products, Mexico is simply making use of its right in the WTO and is not exceeding its bound tariffs.
As it does not exceed its bound tariffs, Mexico does not consider that the measure distorts the
development of the WTO's multilateral trading system.WT/TPR/M/97/Add.1
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iv) Licensing
Mexico is currently working at the national leve l in order to be able to notify the Committee
on Import Licensing in accordance with the Agreement.
v) Standards
Transparency in the formulation of technical regulations (NOMs)
As regards the formulation of Mexico's technical regulations, questions were received from
the European Union, Switzerland and Canada.  First of all, we should like to point out that Mexico
respects the relevant provisions of the World Trade Organization.  In Mexico, technical standards and
regulations are formulated pursuant to the Law on Metrology and Standardization (LFMN), which
contains the provisions laid down in the WTO's Agreement on Technical Barriers to Trade (TBT
Agreement).
All draft Mexican official standards (NOMs or technical regulations) are published in the
Federation's Official Journal (DOF, the official national publication) for comments from the public
within a period of 60 days (this period was recommended by the Committee on Technical Barriers to
Trade) and on the day of their publication the Mexican Permanent Mission to the WTO in Geneva isinformed so that it can make the relevant notifica tion to all the Members of the WTO.  During this
period, Members may send in their comments and the National Consultative Committee examines
them and, where applicable, incorporates them in the final text of the technical regulation.  The
comments and the corresponding replies are published in the DOF.
Mexico's standardization procedure allows any interested person from any country to make
comments on draft technical regulations within the period allowed for public consultation and theseare taken into account by the competent body during the process of formulating the regulation.  This
must be underlined because our LFMN goes beyond the obligation to be found in the TBT Agreement
by allowing any "interested party" - and not only WTO Members - to make comments on draft
technical regulations.
The LFMN also determines that the NOMs shall be reviewed every five years.  As a result,
this year more than 350 NOMs were revised.  All WTO Members can take part in this review by
sending in their comments and observations.
One delegation expressed an interest in knowing what criteria were used to determine whether
a draft technical regulation was considered to have a substantial impact.  The COFEMER established
this criterion, which is based on the following:
• Where the annual costs of compliance exceed Mex$ 800 million for producers of
goods, suppliers of services or consumers;  or
• where there are substantial costs for a specific sector or branch of the economy, a
group of consumers or a particular geographical zone.  The determination of whether
or not costs are substantial depends on the proportion of agents affected and the
amount of the annual costs expected.
The European Union and India commented on the number of technical regulations in the
footwear, textiles, etc. sectors.  It should be no ted that the TBT Agreement allows Members to adopt
the measures it deems necessary to fulfil a legitimate objective.  Around 100 per cent of the tariff
headings for textiles, footwear and head gear have been identified because they must respect a
technical regulation on labelling.  This figure does not imply a parameter that allows the degree ofWT/TPR/M/97/Add.1
Page 49
regulation applicable to a particular industry to be defined but is the Department's assessment of
compliance with technical regulations by product and by sector at the time of import into Mexico.
Regarding the use of the "performance" criterion when drawing up technical regulations,
Mexico does not at present have any estimate of which Mexican official standards were drawn up on
the basis of this criterion.  Nevertheless, this year will see the five-yearly review of over 500 Mexican
official standards and the use of this criterion will be promoted during this review.
As regards the "referential standards" mentioned by the European Union and Switzerland, it
should be noted that these are issued by units of the Federal public administration and they can only
be drawn up by the unit that intends to acquire, lease or contract particular goods or services if the
existing Mexican or international standards do not cover their requirements or if the specifications
contained in these standards are deemed to be inapplicable or obsolete.  These standards are not usedfor any other purpose.
Use of international standards when elaborating NOMs
Regarding the comments by the European Union, Switzerland and Canada concerning the use
of international standards, it should be noted that there is no provision in the TBT Agreement
determining that technical regulations must be in  full and strict compliance with international
standards.  Nevertheless, under the LFMN, Mexico uses international standards as a basis for
elaborating NOMs, except where they are ineffective or inappropriate for the fulfilment of the
legitimate objective.  The practice followed by Mexico includes the establishment of Emergency
NOMs in conformity with the WTO provisions, inte rnational trade agreements signed by Mexico,
Articles 41 and 44 of the LFMN, and Rule 28 of its Regulations.
Consequently, there is no possibility of any standard-setting body obtaining an exemption
allowing it not to base itself on international standards, but pursuant to Article 2.4 of the TBT
Agreement these bodies may decide not to use international standards if they are ineffective or
inappropriate for fulfilment of the legitimate objective fixed.
Regarding the reason why existing international standards have sometimes not been used
when elaborating certain Mexican official standards, four essential points should be made:
• The first and most important reason is that no international standard for the item to be
regulated exists;
• the second is that international standards are deemed inapplicable to the items to be
regulated;
• the third concerns climatic, geographical, technological infrastructure, phytosanitary
or animal health reasons or scientifically proven reasons;  and
• the last reason is where the standards provide an insufficient level of protection, the
foregoing in conformity with Rule 30, section I, of the Regulations of the LFMN andthe provisions in Article 2.4 of the TBT Agreement.
In accordance with the LFMN, during the five -yearly review of the NOMs, the competent
units must take into consideration existing international standards.
According to the Regulations of the LFMN, all technical regulations must mention their
degree of concordance with international standards, whether the regulation is identical, equivalent, or
not equivalent to the international standard used as  basis for its formulation.  At present, it is not
planned to create a database to determine the degree of concordance of technical regulations with
international standards.WT/TPR/M/97/Add.1
Page 50
Transparency  in legal texts other than the NOMs
With regard to the comments by the European Union and Canada on the question of
transparency, we should like to emphasize that Mexico also has provisions on transparency in the
elaboration of other legal texts.  As mentioned in other sections, the Federal Regulatory Improvement
Commission (COFEMER) is the decentralized ad ministrative body of the Department of the
Economy responsible for ensuring that the regulations which the Federal Government wishes to apply
do not constitute unnecessary formalities or obstacles for individual persons.
According to the Federal Administrative Procedures Law, when drawing up preliminary draft
laws, legislative decrees or administrative acts of a general nature for the purpose of laying down
specific obligations, the decentralized units or authorities of the public administration must submit
them to the COFEMER for examination and subs equent decision, attaching a regulatory impact
statement (MIR).
The COFEMER publishes these preliminary drafts and MIRs for comments (except where
publication might compromise the desired effect of the provision, i.e. collection of taxes).  The
preliminary drafts are made available through the COFEMER's web page or in a list publishedmonthly in the DOF;  comments are received and examined by the COFEMER and sent to the
competent units so that, where applicable, they can be incorporated in the proposed preliminary drafts.
Emergency regulations
Concerning the questions from Canada and the European Union on emergency regulations, in
Mexico these are only issued when an unexpected event occurs that affects or poses an imminentthreat to the security of persons or harms human, animal, or plant health, the environment as a whole
or the working environment, or the conservation of natural resources, as provided in Article 2.10 of
the TBT Agreement.
Furthermore, in conformity with Article 2.10.3 of the TBT Agreement, units may receive
comments on the emergency regulations issued so that, where appropriate, they can hold the
necessary discussions. In the meantime, the emergency technical regulation remains in force in order
to safeguard legitimate objectives without delay and also due to the nature of such regulations.
Concerning the procedure for establishing Mexican official emergency regulations, the
competent unit may draw the regulation up directly  without any preliminary draft or draft and, where
appropriate, with the participation of other competent units, and it is published in the Federation's
Official Journal with a maximum term of six months.  In no case may such a regulation be issued
more than twice consecutively.  Prior to being issued  for a second time, a regulatory impact statement
must be submitted to the COFEMER and if the unit that drew up the regulation decides to extend its
term or make it permanent, it must be submitted in the form of a preliminary draft regulation and
follow the whole process for the formul ation of Mexican official standards.
It is essential to note that, in order to be able to draw up a Mexican official standard of an
emergency character, the competent unit must prove that it has tried to prevent the unexpected event
that affects or poses an imminent threat to the s ecurity of persons or harms human, animal, or plant
health, the environment as a whole or the working environment, or the conservation of natural
resources.
When drawing up the standard, the corresponding international standards are taken into
account, where they exist but, in accordance with Article 2.4 of the TBT Agreement, the units mayWT/TPR/M/97/Add.1
Page 51
decide not to use such standards when they are ineffective or inappropriate for the fulfilment of the
legitimate objective fixed.
Mexico notifies the WTO of the application of Mexican emergency official standards through
its mission to the WTO in Geneva.
Conformity assessment procedures
In response to the questions by the United States, the European Union and Canada, it should
be pointed out that, pursuant to the LFMN, conformity assessment procedures may be carried out by
the competent units or through third parties, namely, laboratories, certification bodies or inspection
units, accredited by the Mexican Accreditation Entity (EMA) and approved by the unit that issued the
NOM.
Conformity assessment procedures may be found in the text of the NOM itself or are
published by the unit in the DOF.  The conformity assessment may be undertaken by type, line, lot or
heading of products, or by system.
When a unit utilizes third parties, the conformity assessment procedure commonly used is
certification.  The manufacturer or importer must obtain the corresponding certification because he is
liable to the competent authorities for compliance with the regulations established or to the sanctions
imposed for non-compliance.
The Department of Agriculture and Rural Development published its draft procedures for
conformity assessment in the area of animal health on 19 February 1999.  A number of commentswere received and examined and those that were applicable were incorporated in the final version,
which was published on 19 January 2000.  On 8 March 1999, the Department published its draft
procedures for conformity assessment in the phytosanitary area.
The Department of the Economy is presently revising its conformity assessment policies and
procedures (published on 24 October 1997 and amended on 29 February 2000).  When the
corresponding examination has been completed, the draft will be published in the DOF for comments
from the public.  No date has yet been set for publication, but when the text is published Mexico will
notify Members of the WTO, as required by the TBT Agreement.
The National Commission for Water Resources, the Department of Energy and the
Department of Communications and Transportation are developing their own draft conformity
assessment procedures, which will also be notified to the Members of the WTO once they are
published in the DOF for comments.
Recognition of conformity assessment procedures
Regarding the comments of the European Union, Switzerland, and the United States, we
should mention that Mexico accepts the result of other countries' conformity assessments through
Mutual Recognition Agreements (ARMs), which are si gned by the Department of the Economy, at the
request of any competent unit, by accreditation entities and accredited persons with their counterparts
in other countries.  There are a number of ARMs concluded by the Department of the Economy and
private organizations.
The LFMN also provides that, when a NOM makes it mandatory to use certain materials,
equipment, processes, testing methods, mechanisms, special technical procedures or technology, the
persons concerned may request authorization to use or apply alternative materials, equipment,WT/TPR/M/97/Add.1
Page 52
processes, testing methods, mechanisms, procedures or technology, which in practice means that it is
possible to use the conformity assessment procedures of other countries.  To date, no request to this
effect has been received.
In addition, for technical regulations, conformity assessment may be undertaken by the
competent unit or by accredited conformity assessment bodies and, where applicable, approved by the
unit.
Accreditation
Accreditation is the responsibility of the Mexican Accreditation Entity (EMA) and any
conformity assessment body may submit a request for accreditation.  In carrying out its activities, the
EMA uses the applicable international guidelines and recommendations, in particular ISO/IECGuides 61, 62, 65 and 66 in the case of certification bodies.
The competent units may approve the persons accredited and required for conformity
assessment.  It publishes a notice in the DOF for this purpose calling on conformity assessment bodies
to obtain accreditation and/or approval for the assessment of the Mexican official standardsconcerned.  For example, on 7 May 2001, the Department of Energy published in the DOF a notice
inviting interested bodies to obtain accreditation and/or approval as a certification body for the
product in NOM-017-ENER-1997, Energy efficiency of  compact fluorescent lamps.  Limits and
testing methods.
On 14 March 2000, the Department of the Economy published in the DOF a notice inviting
interested bodies to obtain accreditation and/or approval as a certification body for each of the groupsor subgroups indicated in order to assess the conformity of 25 NOMs (see Annex II).
Labelling
Regarding the questions and comments by Canada and the European Union, we should like to
emphasize once again that the labelling system in Mexico operates in accordance with the principles
in the TBT Agreement.  The relevant techni cal regulations specify the minimum commercial
information that must be given on a product so that the consumer can decide whether or not to
purchase it.  Mexico's provisions on labelling are th erefore simple and less strict when compared with
those in force in other countries.  For example, in some countries, the requirements vary from theState to the sub-federal levels, they may require the use of more than one language, or the use of
special colours or sizes for certain labels, and under some circumstances these constitute genuine
trade barriers.
The two main NOMs on labelling are NOM-050-SCFI-1994 and NOM-051-SCFI-1994,
which are based on international standards: NOM-050 on ISO 14, 37, and 41;  and NOM-051 on
CODEX STAN 1-1985, 107-1981, CAC/GL 1-1979, CAC/GL 2-1985 inter alia .
Consequently, there are no plans to simplify the labelling requirements.  During this year,
however, a large number of NOMs on labelling will be subject to the five-yearly review and so anyMember of the WTO may make comments in this respect.  It should be mentioned that, once the
process has begun, comments may be received from any interested party, including other countries.
Lastly, taking into account the observations of Canada and the European Union, the list of
Mexican official standards on labelling can be found in the list of NOMs on the Department of the
Economy's web page (www.economia-noms.gob.mx).WT/TPR/M/97/Add.1
Page 53
vi) Sanitary and phytosanitary measures
When applying measures, Mexico strictly observes the WTO Agreement on Sanitary and
Phytosanitary Measures.
The purpose of Mexico's cooperation agreements with various countries on sanitary and
phytosanitary measures is to facilitate trade by establishing common criteria, recognition, equivalence
or harmonization, inter alia , on a product basis or by disease or procedure.
Regarding the concerns expressed by India and Hungary relating to Mexico's application of
certain sanitary and phytosanitary measures, an investigation is being carried out in collaboration with
the competent sectors in order to be able to reply satisfactorily.
Concerning Thailand's concern, as stated in the Committee on Sanitary and Phytosanitary
Measures, imports of rice from Thailand do not face sanitary restrictions, but Thailand's concern has
been noted.
vii) Anti-dumping measures and countervailing duties
Mexico's obligations relating to anti-dumping and countervailing duties are contained in the
Foreign Trade Law and its Regulations, and in the Anti-Dumping Agreement and the Agreement on
Subsidies and Countervailing Measures.  According to Article 133 of the Constitution, as soon as the
Senate approved the Anti-Dumping Agreement and the Agreement on Subsidies and Countervailing
Measures, these automatically became law applicable to anti-dumping investigations and
countervailing duties and no further legislative amendments are required for their implementation.
The WTO Agreements also prevail over the law if there are any inconsistencies.  Consequently, it is
not necessary to amend the Law.
The European Union refers to the new Article 48 of the Regulations of the Foreign Trade Law
and, in this connection, we should indicate that there is no list of countries to which it applies.
Nevertheless, this Article covers in general all countries with centrally planned economies or
economies in transition, and the aim is to allow them to show that even producers of products subjectto investigation operate under market economy conditions.
The International Trade Practices Unit (UPCI) is the authority responsible for carrying out
anti-dumping and countervailing duty investigations and is also empowered to support exporters
under investigation.  This does not mean, as one Member (Canada) suggests, that there is a conflict ofinterest and in practice this has certainly not been the case.  The role of the UPCI in support of
Mexican exporters under investigation is limited to notifying them that they may be subject to
investigation in another country and, in some cases , if they agree, to providing them with basic
guidance on legal matters, the domestic legislation in the importing countries, or the WTO
Agreements.
The Republic of Korea refers to the high duties imposed on a number of its products without
proper preliminary affirmative determinations.  We should point out that, over the past ten years, there
have only been three investigations (out of nine) in which provisional anti-dumping duties have been
imposed.  Secondly, when initiating and carrying out these investigations, Mexico complied with itsobligations under the Anti-Dumping Agreement, including the provisions of Article 5.  In addition,
the level of proof for dumping and injury is not the same at the initiation, provisional determination
and definitive determination stages.  This is a critical point that makes it perfectly possible and valid
under the Anti-Dumping Agreement to impose a provisional duty and subsequently to conclude the
investigation without imposing duties.  Mexico shares the concern of the Republic of Korea regardingWT/TPR/M/97/Add.1
Page 54
the importance of preventing anti-dumping measures from being used as trade barriers, and this is
why our investigating authority has been extremely careful in its procedures, which in many cases
have resulted in negative definitive determinations.
Regarding our new notification on subsidies for 2001, we have serious budgetary problems
and these have affected our ability to meet this commitment (as explained in document G/SMC/489).
The notification will be made as soon as Mexico has overcome this lack of resources.
2. Measures directly affecting exports
i) Export promotion programmes:  PITEX and  Maquila
Export promotion programmes such as Maquila  and PITEX are mechanisms to administer the
provisions on "temporary import" in the Mexican Customs Law and they are established, modified
and operated by the Executive, without going beyond the benefits contained in the relevant section ofthe Customs Law.
These programmes contained a subsidy component, which consisted of tariff exemption on
imports of machinery and equipment depending on export performance.
The PITEX Programme was therefore notified under Article 25 of the SCM Agreement.  The
relevant part of the notification is the provis ion on "temporary import" in the Mexican Customs Law,
which is the only concession in these programmes.  (As stated in document G/SCM/N/3/MEX of the
Committee on Subsidies and Countervailing Measures, 21 November 1996.)
On 1 January 2001, however, Mexico abolished the tariff exemption for machinery and
equipment used to manufacture goods and for services under the "temporary import" section of theCustoms Law and consequently also in all the programmes thereunder.  This was the only subsidies
element in the legal provisions on temporary import in programmes such as PITEX and Maquila , and
there are no restrictions on sales in the domestic market.  The abolition of this subsidies component
occurred several years in advance of the time allowed under the SCM Agreement (Article 27.2(b).
Since then, Mexico has not granted any fiscal or tariff concessions dependent upon an exportrequirement;  these are solely of an administrative nature.  As they do not contain any subsidies
component, these programmes are fully compatible with the WTO provisions.  There is thus no need
to notify these provisions again and there is no date fixed or programme for their dismantling.
Unlike the drawback scheme in which taxes are paid on the import of inputs incorporated in
goods subsequently exported and, once they have been exported, a request is made for the refund of
tariffs paid on the inputs, the concessions granted under the Maquila  and PITEX schemes are of an
administrative nature.  The taxes on the import of inputs incorporated in goods that are subsequently
exported are not paid at the time of import, so there is no refund of tariffs upon export.  In other
words, instead of refunding tariffs transaction by transaction (drawback) to PITEX and Maquiladora
(assembly) enterprises, the latter are subject to control through a procedure that consists of registration
in a register kept by the Department of the Economy and an audit by the Department of the Treasury
so as to monitor their operations (restrictions on export to NAFTA countries apply).  The final
outcome, however, is the same.
For obvious reasons, the administrative facility described in the previous paragraph only
applies when exporters export on a regular basis and not on an ad hoc basis.  I t is adm inistratively
easier for the Government to control firms that export on a regular basis under the Maquila  or PITEX
schemes than those that export on an ad hoc basis.WT/TPR/M/97/Add.1
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This administrative benefit does not distinguish among firms and any exporter may request
the concession provided that it meets the PITEX and Maquila  condition of being a regular exporter
with annual sales of at least US$ 500,000 or less if it exports 10 per cent of its annual sales.
This provision facilitates administration, auditing and control by Mexico's financial
authorities because a high percentage of Mexico's exports come under this mechanism.
Drawback
The Decree establishing the drawback mechanism was amended (29 December 2000) in order
to adapt it to the changes envisaged under the NAFTA.  This scheme allows an exporter to request the
Government to refund the tariffs (drawback) paid on inputs incorporated in a final product
subsequently exported (under Article 303, restrictions on export to NAFTA countries apply).
This mechanism complies with the provisions in  Annex II to the Agreement on Subsidies and
Countervailing Measures inasmuch as the Decree requ ires that the inputs in question be incorporated
in the good exported and under no circumstances may the refund exceed the amount of the tariffs paid
on inputs at the time of their import.  There is no refund either for inputs not incorporated in the final
product, for example, machinery or equipment.
Notification of other programmes (ALTEX, ECEX)
As Mexico explained at the meetings of the Committee on Subsidies and Countervailing
Measures on 20 June 1997 and 11 February 2000, both programmes also grant measures of an
administrative nature, but in no case can any of the concessions be considered a subsidy subject tonotification.  For further details, see do cuments G/SCM/Q2/MEX/ 11 and G/SCM/Q2/MEX/15.
Functioning of the PROSEC programmes and beneficiaries
The PROSEC programmes consist of tariff reductions on a most-favoured-nation (MFN)
basis with end-use provisions, a practice commonly used in international agreements such as the
recent Information Technology Agreement (ITA) and pr ior to that in the Civil Aviation Agreement, as
well as in the tariffs of the United States, Canada and the European Union, inter alia .  Under these
end-use provisions, the same product may be subject to a particular MFN tariff for one use, but
another MFN tariff for other uses.
Several countries put their end-use provisions in their customs tariff and then leave the
implementation regulations up to the customs authorities, which in turn may require registration,
audits, reports and other formalities.  Mexico does not place its end-use provisions in its customs
tariff, but establishes them through the PROSEC decrees, which indicate precisely and transparentlythe implementation regulations in force.  Irrespective of the format used, the end result is the same:
there is an MFN import tariff that applies when a product has a particular end use, and no utilization
requirements are imposed on the user.
Any sector may be considered a PROSEC user.  At present, there are around 3,600 tariff
headings under these programmes and the followin g sectors may enjoy the benefits of PROSEC:
electrical and electronic goods, furniture, toys, footwear, mining and metallurgy, capital goods,
photographic goods, agricultural machinery, medical appliances, chemicals, plastics and rubber, iron
and steel, pharmaceuticals, transport equipment, paper and paperboard, wood, skins, automobiles and
parts thereof, confectionery and chocolate, coffee and textiles.WT/TPR/M/97/Add.1
Page 56
ii) Export tariffs
At present, Mexico does not apply export tariffs, with the exception of certain subproducts of
species in danger of extinction (especially turtles).
iii) Export finance, insurance and guarantees
Mexico does not grant financing at rates lower than the international rates (US Prime and
LIBOR).
3. Measures affecting production and trade
i) Fiscal incentives
Guatemala enquires about the programmes of the Department of the Treasury and Public
Credit on exemption from income tax (ISR).  In reply, exemptions from income tax only apply to
agricultural, livestock, forestry and fishing activ ities provided that the income does not exceed 20
times the minimum salary in the region.  For enterprises, there are fiscal incentives in the form of
abatement for investment in fixed assets, science and technology.  In some cases, the Department
negotiates with a particular enterprise an abatement of the tax base for a certain time.  Lastly, we
should note that the reference to Table III.9 is incorrect because this table refers to intellectual
property agreements.
ii) Government procurement
Mexico has a transparent government procurement system.  To date, no country has been
denied access to the government procurement market because it has or has not concluded an FTA.
In fact, with regard to the question from some Members (the European Union, Japan and
Norway) on Mexico's accession to the Plurilateral Agreement on Government Procurement (GPA), 85per cent of the countries belonging to the GPA presently have a government procurement agreement
with Mexico through the various free trade agreemen ts concluded.  Consequently suppliers from these
countries are already assured of the principles of transparency and national treatment in Mexico's
government procurement market, in the same way as Mexican suppliers benefit from these principles
in the markets of the other countries.  Mexico does not therefore plan to accede to the GPA.
One of the most effective instruments available to the Mexican Government in ensuring
transparency in government procurement is the COMPRANET government procurement system.
Federal Government units and agencies are obliged to put on the COMPRANET invitations to tender,
the bidding criteria, explanatory notes, the records of the boards, the decisions, and relevant dataconcerning contracts.
In response to a question by one Member (European Union), COMPRANET is open to states
and municipalities that wish to use it, but they must express a desire to do so.  At present, some states
and municipalities are using the system.
One Member (European Union) enquires about preferences given to domestic suppliers in
government procurement.  Like those of many ot her countries, Mexico's international commitments
include transitional procedures and measures to promote the participation of Mexican micro and small
enterprises in its government procurement market. Preferences for Mexican rather than foreignproducts will continue to be applied in a manner consistent with Mexico's international commitments.WT/TPR/M/97/Add.1
Page 57
Another Member (United States) asks about the impact on competition of the delivery dates
set by various units and agencies for the goods they purchase.  The question of time limits for delivery
of goods has not been perceived by the supervisory authority for government procurement in Mexico(SECODAM) as an element that limits competition in the bidding process.
Purchasing bodies set time limits for delivery acco rding to their own needs.  If the time limit
is not sufficient, the purchasing entity will run the risk of not receiving the goods to be procured.
Furthermore, it should be noted that during the bidding process, suppliers taking part may
request further information on the requirements laid down by the purchasing entity, including the time
limit for delivery of the goods.
iii) Trade-related investment measures
Regarding Mexico's trade-related investment measures, questions were received from the
Republic of Korea, Colombia, Brazil and Guatemala.  In response to the question from the Republic
of Korea, the Auto Decree determines that only assembly enterprises established in Mexico may
import automobiles.  The Decree does not, however, limit the countries from which they may be
imported.  In this connection, one assembly enterprise in Mexico has imported over 40,863automobiles from the Republic of Korea over the past year and a half.
In response to the other questions, it is important to note that, in accordance with the
extension of the transitional period for the phase-out of trade-related investment measures (TRIMs)
requested by Mexico and approved by the Council for Trade in Goods (Decision G/L/463), there is a
plan for the gradual phase-out of the remaining measures by 1 January 2004.
This plan envisages the dismantling of the measures on national value added and the trade
balance as follows:
National value added
The percentage of national value added that must be included each year by a final assembly
plant manufacturing automobiles and spare parts in Mexico will be lowered as follows over the next
few years:
• 31 per cent from 1 January to 31 December 2001;
• 30 per cent from 1 January to 31 December 2002;
• 29 per cent from 1 January to 31 December 2003.
Trade balance
The factor used (a) to calculate the trade balance of a final assembly plant manufacturing
automobiles, and (b) to divide the surplus in the trade balance of a final assembly plant in order to
determine the total value of new automobiles that may be imported each year will be lowered asfollows over the next few years:
• 0.605 from 1 January to 31 December 2001;
• 0.577 from 1 January to 31 December 2002;
• 0.550 from 1 January to 31 December 2003.
Consequently, bearing in mind that (i) firms producing automobiles and spare parts play an
important role in Mexico's economy in terms of investment and jobs;  and (ii) that the situation thatWT/TPR/M/97/Add.1
Page 58
gave rise to the Decree still exists, it is considered that the abolition or modification of this gradual
phase-out plan would cause serious problems in the sector, therefore, it will not be possible to speed
up this elimination.
The delegation of Colombia refers to pages 66 and 67 of the Secretariat's Report, which deals
with fiscal incentives.  Apart from the Auto Decree, no other product has to meet the national content
requirements.
Lastly, in response to the delegation of Guatemala, Mexico's incentive programmes do not
violate the provisions of any of the WTO Agreements, more particularly the Agreement on Subsidies
and Countervailing Measures and the Agreement on Trade-Related Investment Measures.  In fact,
Mexico has shown that the trade-related fiscal incentives do not constitute an "optimum" policy
because they are not based on economic criteria of equity or efficiency.  In Mexico's communicationof November 1998 (WT/WGTI/W/64) to the Working Group on the Relationship between Trade and
Investment (GTCI), it is indicated that the costs associated with harmful tax competition, greater
lobbying and inefficient resource allocation can more than offset the benefits derived from granting
incentives and the need for the Working Group on the Relationship between Trade and Investment to
examine this issue further and explore options to eliminate its distorting effects is underlined.
iv) Free-trade zones
Regarding free-trade zones, consideration is being given to dismantling them by
31 December 2002, even though they apply to consumer products and not to machinery or inputs for
processing.
Unlike other countries, Mexico does not grant financial incentives to companies operating in
free zones in the form of assistance or fiscal concessions for special benefits for employees as Mexico
unfortunately does not have the financial resources needed to implement such programmes.
There are no statistics on exports from free-trade zones as these zones are used to produce
goods for domestic consumption not export.  For indicators on exports, see under PITEX,Maquiladora , and other products.
v) Intellectual property rights and innovation
a) Legal and institutional framework
Since the last review of Mexico's trade policy, its industrial property legislation has not been
amended.  As Mexican legislation is automatically applicable, international agreements such as the
TRIPS Agreement and the Stockholm revision of the Lisbon Agreement are supreme law in Mexico
and consequently mandatory.
Mexico received a number of questions concerning the issue of geographical indications.  In
this connection, we should point out that, under the Industrial Property Law and the various
agreements to which Mexico is party, other countries' geographical indications are protected in
Mexico.
In Mexico, there are two alternatives for the protection of geographical indications:  one is
through appellations of origin;  and the other is through collective marks.WT/TPR/M/97/Add.1
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Protection through an appellation of origin is stricter regarding the characteristics of the
geographical indication.  Collective marks are a system for protecting geographical indications that
affords greater trade flexibility.
The protection granted under the agreements applies both to the rights of Mexican citizens
and those of foreigners.  Foreign appellations of origin protected in Mexico under international
agreements enjoy the same benefits as national appellations of origin and the enforcement procedures
indicated in the Industrial Property Law (LPI) in cases of unlawful use of the appellation (Articles 157and 213 of the LPI) apply.
Article 157 of the LPI states the following:"The protection that this Law affords to appellations of origin begins with a declaration issued
to that effect by the Institute. Illegal use of the same appellation shall be punished, including
that in which it is accompanied by indications such as ‘kind', ‘type', ‘style', ‘imitation' or other
similar terms that create confusion in the mind of the consumer or imply unfair competition."
Likewise, Article 213 of the LPI determines what constitutes an administrative infringement:
"…IX. Performing, in the course of industrial activities or trade, acts that confuse, mislead or
deceive the public by causing it wrongly to believe or assume:
(a) that a relation or association exists between a given establishment and that of
a third party;
(b) that products are manufactured according to specifications, licences or
authorizations from a third party;
(c) that services are rendered or products sold according to authorizations,
licences or specifications from a third party;
(d) that the product concerned comes from a territory, region or locality different
from the true place of origin, in such a way as to mislead the public as to the
geographical origin of the product;
…XXII. Using an appellation of origin without the appropriate authorization or licence."Regarding collective marks, Article 96 of the LPI determines that associations or groups of
producers, manufacturers, traders or providers of services may apply for registration of a collectivemark to distinguish the products or services of their members on the market from those of third
parties.  This provision should be interpreted in the same way as Article 7 bis of the Paris Convention
for the Protection of Industrial Property, namely, collective marks are signs used to distinguish the
geographical origin or other common characteristics of products or services of different enterprises
that use the collective mark under the supervision of its owner.
The United States asked a question concerning the authority of the Mexican Industrial
Property Institute (IMPI) as a mediator.  In this connection, Article 199bis.8 of the LPI states that, in
the procedure for the administrative declaration of infringement, the Institute shall at all times seek to
reconcile the interests of those involved.  In other words, when one of the parties lodges a complaint,
the Institute proposes its services as mediator in order to seek a possible solution with the other party
and, if both parties are willing to negotiate, the IMPI allows them to meet as often as necessary inWT/TPR/M/97/Add.1
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order to settle the dispute in a way that is acceptable to both parties, although this is not always
possible.
In accordance with the provision in Article 199bis.8 of the LPI, the Institute is empowered to
act as an arbitrator in cases of administrative de claration of infringement, although it should be noted
that the parties concerned must request the Institute's involvement.
b) Intellectual property rights and innovation
Japan asked about the number of patent applications and the number of patents granted.  We
agree that there was a larger number of patent a pplications, but the number of substantive examiners
is not sufficient to deal with any more.  New examiners are currently completing their training,
however, so during this year and over the next two years there will be a notable increase in
productivity.
As in other international forums, there has been discussion as to whether a regular increase in
the number of examiners really constitutes a solution to the problem of excess demand or whether
other options should be considered.
c) Enforcement
Hong Kong, China referred to coordination between the IMPI and the National Copyright
Institute (I NDAUTOR) on protec tion of copyright.  The powers of the two authorities are clearly
defined.  The IMPI is a decentralized public body under the Department of the Economy.  Its main
responsibilities include protecting industrial property by regulating and granting patents, registering
utility models and industrial designs, trademarks and advertising slogans, publishing trade names,
declaring the protection of appellations of origin and preventing acts that infringe industrial propertyor constitute industrial-property-related unfair competition.
Independently of the above, as of the entry into force of the Federal Copyright Law and based
on Article 232 thereof, the Mexican Industrial Property Institute has been responsible for dealing with
trade-related infringements.
The Industrial Property Law and the Copyright Law define the procedures required to prevent
and punish any action that fails to respect intellectual property.  It should be noted that the IMPI is
empowered to adopt the following provisional measures:
I. Order the withdrawal from circulation or prevent circulation of goods that infringe
rights protected by the Law;
II. Order the withdrawal from circulation of:
(a) Objects manufactured or used illegally;
(b) objects, wrappers, containers, packaging, paperwork, advertising material and
similar articles that infringe any of the rights protected by the Law;
(c) signs, labels, tags, paperwork and similar articles that infringe any of the
rights protected by the Law;  and
(d) implements or instruments intended or used for the manufacture, or
production of any of the articles specified in items (a), (b) and (c) above;WT/TPR/M/97/Add.1
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III. prohibit, with immediate effect, the marketing or use of the goods by which one of
the rights protected by this Law is violated;
IV. order the seizure of goods, which shall take place in accordance with the provisions
of Articles 211 to 212 bis.2;
V. order the alleged infringer or third parties to suspend or discontinue acts constituting
a violation of the provisions of this Law;  and
VI. order the suspension of the rendering of the service or the closing of the
establishment where the measures provided for in the foregoing subparagraphs are
not sufficient to prevent or avoid the violation of the rights protected by this Law.
If the product or service is on the market, the traders or the providers of the service shall be
under the obligation to abstain from disposing of the product or rendering the service as from
the date on which the ruling is notified to them.
Producers, manufacturers and importers shall be under the same obligation, as shall their
distributors, who shall be responsible for imme diately recovering any goods that are already
on the market.
INDAUTOR, on the other hand, is a body belonging to the Department of Public Education.
It is the administrative authority responsible, inter alia , for the Public Copyright Register and it
promotes the creation of literary and artistic works.
Mexico's legislation also gives powers to the Federal judicial authorities for industrial-
property related matters as the authorities responsible for reviewing the legality of the decisions taken
by the IMPI.  The judicial authorities concerned are the following:
• District courts;
• bench of circuit judges.
The United States asked a question about the training programmes for officials responsible for
protecting intellectual property rights.  In order to deal with procedures relating to the invalidity, lapse
or annulment of industrial property rights, to take decisions and issue the corresponding
administrative declarations, the IMPI, through various international cooperation mechanisms, is
constantly striving to raise the level of efficiency of its staff.  In this connection, the results of theannual work programmes with intellectual property offices in more developed countries and with
international organizations, which include training both in Mexico and abroad, have for a number of
years enabled us to play a dual role in international cooperation, both as a recipient and a provider.
Regarding the training of staff outside the IMPI, as part of the work programmes under
international cooperation programmes with institut ions and organizations responsible for registering
and protecting industrial property some courses and seminars have been held abroad for members of
the Judiciary Council.
In response to the comment by Hong Kong, Chin a that enforcement action is  weak, it should
be noted that the IMPI has taken action against piracy, together with the Department of the Treasury
and Public Credit and the Federal Prevention Police.
In Mexico's anti-piracy campaigns, the IMPI maintains close contact with the Government
authorities and representatives of various business associations.WT/TPR/M/97/Add.1
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Mexico has conducted a National Campaign against Counterfeiting so as to improve and take
more coordinated action against the import, production, distribution, storage and marketing of
counterfeit goods, and unfair competition.  This Campaign involves the Government authorities andthe industrial sectors concerned.  It includes the following measures:  dissemination of notices in the
media against counterfeiting, joint inspection visits (c oordinated with the judicial authorities), seizure
of counterfeit goods, and collaboration between the industrial sectors and authorities concerned.
The Mexican authorities launched a campaign against piracy of intellectual property with the
following three major components:
1. Amendments to intellectual property legislation (Industrial Property Law, Criminal
Code, Code of Criminal Procedure), which have been in force since 18 May 1999;
The main aims of the amendments are:
- To classify intellectual property offences as serious offences, which results in more
flexible procedures for obtaining arrest warrants and does not allow bail;
- to increase the economic sanctions and the terms of imprisonment.
2. To augment the number of closures and allocate more resources to the implementing
authorities.
3. To conduct educational programmes on intellectual property matters for judges,
prosecutors and the public in general.
Lastly, we are pleased to state that we are completing the preparation of a national campaign
to be entitled "Zero Tolerance", to combat piracy  of copyright and industrial property, principally
computer programmes for businesses and training , films (VHS and DVD), music (tapes and CDs),
clothing and footwear, inter alia .
III. TRADE POLICIES BY SECTOR
1. Agriculture
Sugar
In response to Guatemala's questions on sugar, first of all we should like to clarify that the
"border protection" mentioned in the document is the tariff applied at the border.
Mexico is attaching a copy of the Decree published in the Federation's Official Journal on 3
September 2001 expropriating sugar mills (Annex III).  Below are the considerations taken intoaccount by the Mexican Government when it expropriated 27 sugar mills:
• The sugar agro-industry is an activity that has a marked social impact because of its
production and the jobs it creates in the Mexican countryside;  sugar is the product ofthis industry and is a necessary consumer product.  It is a basic component of the diet
of low-income sectors of the population because of its high energy content.  Theactivities involved, such as sowing, cultivation, harvesting, and industrial processing
of sugar cane are of public interest;
• the Government of Mexico seeks to ensure that good and fair administration is the
common denominator in the Mexican sugar industry, abolishing irregular practices byWT/TPR/M/97/Add.1
Page 63
a group of persons involved in this industry that have had a significant impact on the
sector;
• the owners of 27 sugar mills have caused th eir firms to lose their financial vitality,
contracting large debts with various credit companies and Government of Mexico
authorities, thereby endangering not only th e assets of the workers in the field, but
also of all Mexicans;
• prior to the 2001-2002 harvest next autumn, there is a strong probability that a certain
number of sugar mills accounting for a high percentage of Mexico's production willnot have the resources needed to repair the mills which guarantee efficient and proper
processing of over 20 million tonnes of sugar cane in the Mexican countryside thatare now growing and maturing for harvesting that is the culmination of the efforts of
almost 50 per cent of producers;
• sugar cane producers that supply the 27 sugar mills have, by various means, made
known their decision not to deliver their harvest to these mills as long as they aremanaged by the current owners;
• the proper processing of the sugar cane owned by tens of thousands of sugar cane
growers in Mexico and contracted to 27 sugar cane mills whose lack of financial
viability makes them incapable of operating efficiently and of meeting their
commitments and endangers the jobs of workers in these mills, suppliers of related
services, and economic activity in extensive areas in the states where they are
situated.
Question by Argentina
Argentina requests information on the tariff rate applied outside the quota and whether
preferences on some agricultural products have been granted.  The following table explains the
situation:
Product Tariff bound in
the WTOTariff bound
under WTO
quotaBest unilateral
tariff treatment
determined on
MFN basisBest tariff treatment
resulting from
preferential
agreements
Pig fat 254% 50% Exists
Pig and poultry
fats and oils254% 50% Does not exist Exists
Poultry not cut
in pieces, fresh
or chilled234% 50% Exists:  quota
66,000 tonnes for
northern borderfringe, with tariffExists
Maté 30% No quota MFN tariff of
23% without
restrictionExists
Beans, other
than for sowing128% 50% Exists:
additional quotas
opened in certain
years for supply
reasonsExistsWT/TPR/M/97/Add.1
Page 64
Tariff ceiling
Unlike many other Members of the WTO, since 1 January 1995 Mexico has as far as possible
implemented the tariffs scheduled for the end of the transition period, i.e. January 2004.  Seven years
have gone by and some minor adjustments are perhaps required.  Mexico is working to remedy the
situation as soon as possible.
2. Energy
The United States and Malaysia ask Mexico for information on the extent to which foreign
firms may participate in prospecting and developing petroleum and gas;  the transmission, distribution
and marketing of electric power;  and the transport, distribution and marketing of natural gas services.
Services related to the prospecting and exploitation of hydrocarbons .  According to
Articles 25, 27 and 28 of Mexico's Constitution, the State has direct ownership of petroleum and
solid, liquid or gaseous hydrocarbons.  These Articles determine that the transport, foreign trade,
storage, distribution, and first sale of crude petroleum and products obtained from refining or
processing crude petroleum, as well as basic petrochemicals, are the prerogative of the Mexican State.
Transmission, distribution and marketing of electric power .  In 1992, reforms were
introduced into the Law for the Electric Energy Public Service (LSPEE) so as to open up new
opportunities for private investors to participate in ge nerating electric power that does not constitute a
public service, through a system of permits granted by the Energy Regulatory Commission (CRE).
As a result of these reforms, the self-sufficiency and joint generation components were re-structured
and new components such as small-scale production, independent production (PIE), import and export
not exceeding 30Mw were introduced.  Permit holders are not authorized to market or resell capacityor energy generated.  The 2001 amendments to the Law determine that holders of permits for self-
sufficiency and joint generation may sell their surpluses to the Federal Electricity Commission (CFE )
and the Central Light and Power (LFC).    In such cases, there is no limit on the percentage of foreign
investment in companies that hold a permit provid ed that the company is established in Mexico.
Transmission, distribution and marketing of natural gas .  Since 1995, the transport,
storage and distribution of gas has been carried out by social and private sectors, which may build,
operate and own gas pipelines, plants and equipment.  The Natural Gas Regulations, published in
1995, lay down clear bases for the development of this industry.
Further details on the requirements for permits can be obtained www.cre.gob.mx.
In addition, soil mechanics surveys, drilling, testing and analysis are under the responsibility
and the exclusive control of Mexican Petroleum (PEMEX).
Regarding market access and national treatment for transport through gas pipelines and local
distribution of natural gas, including the authorizat ion to build and the right to own and operate gas
pipeline networks in Mexico, to the extent that consumers of natural gas can at present choose their
supplier, it should be noted that there are no additional regulations or requirements for obtaining
licences or permits for investors from countries that do not have a trade agreement with Mexico.  Thecurrent reforms are designed to introduce competitio n into areas that are potentially competitive while
at the same time regulating areas deemed to be strategic.
Norway, Australia and Malaysia ask about the initiatives taken by the Mexican authorities to
increase private participation in the energy sector and request information on the areas where a higher
level of private participation yields greater benefits.WT/TPR/M/97/Add.1
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The structure of the national energy sector corresponds to the provisions in Articles 25, 27
and 28 of Mexico's Constitution, which establishes the State's direct ownership of petroleum and all
solid, liquid and gaseous hydrocarbons.  The Constitution also draws distinctions between strategicareas, those exclusive functions of the State that do not constitute a monopoly, and priority areas for
development, where the State may participate on its own or together with private or social sectors,
maintaining overall supervision and granting concessions and permits.
Natural gas subsector
The Federal Government has been promoting far-reaching structural reform of this industry.
Before this reform, the only entity authorized to build, operate, and lay gas pipelines, import, export
and market natural gas in Mexico was PEMEX.
In 1995, the reform of the Law Regulating Article 27 of the Constitution in the Petroleum
Sector opened up the opportunity for the private sector to build, operate and own systems for the
transport, distribution and storage of natural gas, all activities that had previously been restricted to
the PEMEX.  The reform draws a distinction between the areas that are still restricted to the State and
those that allow private operators at different stages. As a result, the State remains the owner,regulator and operator of the public sector, ensuring that the institutions involved have clear
objectives and that their action is consistent and coordinated.  The reform authorized the Department
of Energy to implement Mexico's energy policy and to supervise, coordinate and direct operations by
firms in the sector.  PEMEX, on the other hand, remains an operator.
In addition, regulation responsibilities accrue to the CRE.  The Law that created the CRE in
October 1995 determines that the Commission is the regulatory authority responsible for guiding theprocess of reforming the natural gas industry.  It is responsible for applying the regulations on the
natural gas market and has the requisite authority and autonomy.
During the period 1995-2000, the regulatory framework was amended to allow the CRE to
grant a total of 99 permits to various firms interest ed in investing in projec ts for the transport and
distribution of natural gas.  The current regulations allow vertical integration of natural gas transport
and marketing activities.
As a result of the growing private participation in the development of the natural gas
infrastructure, the 99 permits granted by the CRE represent investment commitments amounting toover US$2.3 billion from leading companies in Belgium, Canada, France, Mexico, Spain and the
United States for the development of the energy infrastructure and around 39,000 km. of gas pipelines
in 24 states in Mexico.
Electricity subsector
Since it was nationalized in 1960, the electricity industry has been administered exclusively
by the State through the Federal Electricity Co mmission (CFE) and Central Light and Power (LFC).
In the early 1980s, the State adopted measures for the financial rehabilitation of the electricity
sector in order to meet demand.  The generation of electricity for regular private and emergency use
was opened up to private investment.  In such cases, use of the energy generated must be for
emergency situations or when the supply entities are unable to provide the service because it is not
possible or is inappropriate.  In December 1992, reforms were introduced into the Law designed to
open up new opportunities for private investors to participate in generating electric power that does
not constitute a public service through a system of permits granted by the CRE.  For this purpose, theWT/TPR/M/97/Add.1
Page 66
self-sufficiency and joint generation components were re-structured and new components such as
small-scale production, independent production (PIE), import and export were introduced.
In December 1993, the Regulations of the Law for the Electric Energy Public Service
(RLSPEE) were published in order to regulate the Law as far as the supply of the public electric
power service and activities in the Law not deemed to be a public service are concerned.  In 1994, the
responsibilities of the Department of Energy were modified in order to promote the participation of
private persons in generating and developing energy.
As a result of the 1992 and 1993 regulatory reforms, persons holding permits and having
surplus energy capacity of 20 MW or less were allowed to sign an agreement with the CFE or LFC for
its purchase.  Subsequently, as a result of further reforms of 24 May 2001, persons holding self-
sufficiency and joint generation permits have been allowed to sell their surpluses to the CFE or LFC
without an agreement and for any volume.
To summarize, private participation has led to 580.5 MW of electricity under joint generation
projects and 399 MW in self-sufficiency projects in the form of new investment.  As of 1996,
27 generating projects accounting for capacity of 11,427 MW have been implemented, together with38 transmission and processing projects totalling 20,272 MVA and 6,732 Km-c, all with private
participation and at different stages of the bidding, construction and operating phases.
Future objectives
In order to open up the overall energy sector still further, the 2001-2006 Sectoral Energy
Programme sets the following objectives:
• To ensure sufficient supplies of energy, at international quality standards and
competitive prices, using public and private world-class energy companies for this
purpose;
• to make the legal framework an instrument  for the development of the energy sector,
giving legal security and predictability to economic agents and ensuring the energy
sovereignty and supervision of the State.
3. Manufacturing
The United States posed two questions concerning Mexico's industrial policy.  In this
connection, we should like to explain that the import substitution programmes are to be seen as
programmes to develop suppliers of inputs for the production of final goods.
The Government of Mexico has implemented the Supplier Development Programme through
which it seeks, at the national level, to integrate SMEs in the industrial, trade and services systems of
large enterprises established in Mexico by:
• Facilitating initial contacts between micro, small and medium enterprises and large
enterprises established in Mexico;
• disseminating among micro, small and medium enterprises lists of products needed by
large enterprises, with technical specifications, and the criteria and policies they
follow when choosing suppliers;
• fostering business between large enterprises and potential suppliers.
Micro, small and medium enterprises benefit from this programme and are given (i)
appointments with large enterprises;  (ii) a personalized timetable during the programme;  (iii) anWT/TPR/M/97/Add.1
Page 67
opportunity to acquaint large enterprises with their products and/or services; (iv) information about
the selection and/or qualification criteria for suppliers of large enterprises;  and (v) an opportunity to
participate in an orientation and training seminar.
The advantages for the large enterprises are (i) integration of their production and/or services
chain and lower production and marketing costs;  (ii) diversification of the sources of supply of
inputs, parts, components, financing and/or services;  (iii) promotion of efficient and competitive
suppliers in Mexico thus avoiding exchange rate fluctuations that have a negative impact on operatingcosts;  (iv) establishment of closer relations with suppliers so as to cover the needs of local markets
and export;  and (v) development of a work philosophy that provides an identical product, at a
satisfactory price, within the period fixed and in the right place.
The programme is not a subsidy within the meaning of Article 1 of the WTO Agreement on
Subsidies and Countervailing Measures, therefore, it does not need to be notified.
The most important action taken to promote exports and competitiveness has been the
negotiation of a network of free trade agreements through which markets for Mexican exports have
been opened up, inputs have been obtained on competitive terms, and Mexico has become a strategicplace for new investment aimed at supplying international markets with preferential access.
4. Services
i) Financial services
Mexico is taking part in the current multilateral negotiations in a positive frame of mind in
order to negotiate further opening up of various sectors, provided that in return the Mexican economy
benefits from equivalent commitments.  Mexico has liberalized investment in some intermediaries and
lowered the limits for foreign participation in others.  Mexico may reduce the limits in its reservations
at the WTO depending on the agreements reached during the negotiations.
With regard to whether or not banks and securities companies can conduct business through
local branches, Mexico's current legislation does not allow branches in this sector.
Regarding development banks and public trusts and the different roles of government and
private financial institutions, Mexico does not only have a plan but is also working on a regulatory
framework to restructure development banks and public trusts.
Concerning the distinction between government and private financial institutions, the role of
development banks is to complement the private economic credit cycle.
Japan would like to know Mexico's point of view on insurance.  Mexico already allows
foreign investment in up to 49 per cent of the equity  of insurance companies, but through subsidiaries,
two companies of Japanese origin have been allo wed to operate as insurance institutions, namely,
Tokyo Marine Insurance Company S.A. de C.V., in which Tokyo Marine Delaware Corporation of
the United States of America holds 99.99 per cent of the shares;  and Yasuda Kasai México,
Compañia de Seguros S.A. de C.V., in which the Yasuda Fire and Marine Insurance Company of
America and the Yasuda Claim Services Inc. of the United States of America hold 100 per cent.
ii) Telecommunications
Canada asks about Mexico's new Telecommunications Law and its relationship to Mexico's
commitments in the Reference Paper.  The aim of the draft Federal Telecommunications Law is toWT/TPR/M/97/Add.1
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adapt the regulatory framework to new technological and regulatory trends and to promote
telecommunications density and connections, facilitate technological convergence, and boost the
development of remote health and learning services, as well as promoting technological research anddevelopment.
As regards Mexico's commitments in the Reference Paper, the proposed reform  of the
Federal Telecommunications Law provides for the following:
• Strengthening of the management capacity of the regulatory authority, giving it a
solid legal basis, defining its functions, and entrusting it with new powers in certainareas;
• introduction of a section on the social cover of telecommunications to ensure that the
population will have access to minimum defined services of quality at competitiveprices, irrespective of their geographical location, and that the services are
transparent, non-discriminatory and competitively impartial;
• incorporation of more precise and specific bases concerning the obligation on
concessionaires of public telecommunications networks to interconnect theirnetworks with those of other concessionaires when so requested, on non-
discriminatory and transparent terms based on objective criteria, as well as specific
obligations regarding interconnection applicable to concessionaires of public
telecommunications networks in a dominant position.
In addition, in response to the specific question by the Republic of Korea concerning the rate
of interconnection for value-added services, Mexico informs it that during the period from 1997 to
2002, the interconnection rate fell sharply from Mex$ 0.763 to Mex$ 0.09 per minute at constant
prices.  In other words, the rate fell by 88 per cent over the period, becoming one of the mostcompetitive rates at the international level.  The interconnection rate does not, therefore, in any way
constitute a barrier to market access for operators of public telecommunications networks or suppliers
of value-added services.
The criteria for obtaining an authorization from the National Foreign Investment Commission
to allow foreign participation in Mexican compan ies providing mobile telephone services to exceed
49 per cent can be found in Articles 28 and 29 of th e Foreign Investment Law, which states that the
Commission must take a decision on requests for authorization within a maximum of 45 working days
as of the date of submission of the request (with tacit acceptance at the expiry of this period).  In
examining the requests, the Commission applies the following criteria:
• The impact on employment and training of workers;
• the technological contribution;
• compliance with environmental provisions;  and
• in general, the contribution made to enhancing the competitiveness of the production
plant.
Lastly, Article 30 of the Law determines that the Commission may prevent foreign
investment holdings for reasons of national security.
In addition, in response to the European Union, we confirm that in Mexico there is no
restriction on the number of concessions granted in the telecommunications sector.
Replying to the question of why a concession is imposed in cases when there is a scarce
resource and a licence or an authorization is not simply granted instead, it is important to note that,WT/TPR/M/97/Add.1
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according to Mexico's legislation, telecommunications are a State matter and it is the responsibility of
the State to supervise them and to protect national security and sovereignty.  Article 28 of Mexico's
Constitution also provides that, if it is in the general interest, the State may grant a concession for thesupply of public services.
In this sense, telecommunications services are public services.  Accordingly, as
telecommunications services can be supplied not only through frequency bands on the radio spectrum
but also through public telecommunications networks, a concession is required.
There is a restriction on foreign ownership for the following reasons:  Article 7, section III,
paragraph x) of the Foreign Investment Law (LIE) provides that, as a general rule, foreign investment
in firms holding telecommunications concessions governed by Articles 11 and 12 of the Federal
Telecommunications Law may account for up to 49 per cent of the equity.
The only exception to this is in the case of mobile telephony, where a larger percentage of
foreign participation is allowed provided that a favourable decision is obtained beforehand from the
National Foreign Investment Commission, in accordance with Article 8, section (ix) of the LIE.
The Federal Competition Commission has only identified Telmex as having substantial power
in the market.
Dominant carrier regulations
As the dominant carrier regulations are in fo rce, if Telmex fails to comply with them,
COFETEL has proposed the application of sancti ons by the Department of Communications and
Transportation (SCT) and the latter has applied sanctions.
COFETEL considers that the dominant carrier regulations suffice to ensure that there are no
anti-competitive practices by this operator in the Mexican telecommunications market.
Mexico's dominant carrier regulations include a requirement that Telmex must provide its
competitors with a service that is no less favourab le than that Telmex provides for itself.  In 2000,
COFETEL published a report in which it recognized that, for competitors, there had been congestion
in local calls.
Last year, after COFETEL had received complaints from some operators and had obtained the
necessary evidence, which showed that there was a problem, it gave Telmex a time limit in which to
remedy the problem and this was done.
This year, COFETEL has not received any official complaint from local operators stating that
there is a problem.
Transparency of the regulatory process
The United States wishes to know Mexico's plans for the regulatory process and its
transparency in the telecommunications sector.
In Mexico, the Federal Administrative Procedures  Law provides that, if an authority wishes to
enact general provisions, there must be a review by the Federal Regulatory Improvement
Commission.  During this review stage, any private individual may make his views known.
Consequently, it can be stated that Mexico already has a transparent regulatory process of an
international standard similar to that in the United States.WT/TPR/M/97/Add.1
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COFETEL has already proposed that interconnection agreements among operators of public
telecommunications networks should be made public  provided that they do not contain information
that is strategic or of commercial value.
iii) Air transport
Referring to the Report, the European Union would like to know what procedure allows a
share of foreign investment that is higher than 49 per cent for companies opting for airport service
concessions.  The procedure is laid down in Articles  28 and 29 of the Foreign Investment Law already
mentioned in connection with mobile telephony, and the application must also show that regional and
technological development is being promoted and the sovereign integrity of the nation safeguarded, in
accordance with Article 19 of the Airports Law.
The scope of airport administration covers the supply of airport services such as the use of
runways, taxi ways, aprons, visual aids, lighting, pa ssenger and freight terminals, air bridges, airport
security services, fire fighting and rescue services.  In addition, according to Article 48 of the Airports
Law, complementary services can be the subject of concessions, for example, apron and traffic
services, the supply of fuel to aircraft, catering, freight storage and security, maintenance and repair of
aircraft, or commercial services consisting of the sale of products or supply of services to users of
airports that are not essential to their operation, for example, the sale of goods and restaurant services,
car hire, advertising, postal services, foreign exchange bureaux, banks, hotels, etc.
iv) Maritime transport
Norway requests information on the restrictions on insuring Mexican vessels abroad.
Pursuant to Mexican legislation, vessels flying the Mexican flag or owned by persons
domiciled in Mexico must be insured with Mexican firms, without prejudice to observance of foreign
legislation when the vessel is in waters under the jurisdiction of another country and taking into
account Mexico's commitments under international agreements.
Foreign shipping companies and vessels may take  part in international maritime transport in
Mexico without restriction.  As indicated in the first paragraph of Article 33 of the Shipping Law, the
operation or exploitation of ocean-going vessels is open to ships and vessels from all countries.
The last part of this Article states:  "… where there is reciprocity under international
agreements".  It would only apply in cases where a country does not allow ships flying the Mexicanflag to provide high-seas shipping services beginning and ending in its ports.
In response to Japan's request for information on the criteria required for obtaining
authorization for foreign participation exceeding 49 per cent in Mexican shipping companies solely
operating high-seas traffic, we can state that as regards percentages exceeding 49 per cent, Articles 28and 29 of the Foreign Investment Law determine that the Commission must take a decision on
requests for authorization within a period not exceeding 45 working days as of the date of submission
of the request (with tacit acceptance at the expiry of this period). In examining the requests, the
Commission applies the following criteria:
• The impact on employment and training of workers;
• the technological contribution;
• compliance with environmental provisions;  and
• in general, the contribution made to enhancing the competitiveness of the production
plant.WT/TPR/M/97/Add.1
Page 71
Lastly, Article 30 of the Law determines that the Commission may prevent foreign
investment holdings for reasons of national security.
In Mexico's legislation, the expression "Mexican shipping companies" includes companies
with foreign capital.  Paragraph v) of Section III of  Article 7 of the Foreign Investment Law states that
foreign investment may account for up to 49 per cent of  the capital of shipping companies involved in
the commercial operation of vessels for inland navigation and cabotage.
The penultimate paragraph of Article 34 of the Shipping Law states that the operation and
exploitation of inland navigation and cabotage for tourist cruises may be carried out by Mexican or
foreign shipping companies using Mexican or foreign vessels.
There is no provision allowing the possibility of reserving all or some specific international
transport activities for Mexican companies if the national economy is affected by anti-competitive
practices by foreign operators.  This was repealed by the new Article 34 of the Shipping Law.
The Report by the Secretariat gives the impression that the maritime transport sector has been
excluded from the free trade agreements concluded by Mexico.  In this connection, it should be notedthat maritime transport has not been excluded by Mexico in any of the free trade agreements, so there
is full compliance with Article V of the GATS, and services related to navigation on the high seas are
open in Mexico, irrespective of whether or not a free trade agreement exists.
Mexico's multimodal transport legislation can be found in a regulation published in the
Official Journal of 7 July 1989 showing the scope of multimodal transport defined as the movement
of goods using this form of transport.  In addition, the regulations cover the activities of operators,establishing their rights and responsibilities towards the authority and to users.  The regulation also
sets out the requirements to be met by suppliers of services in order to obtain an authorization from
the Department of Communications and Transportation.
Inland navigation and cabotage in Mexican waters are restricted to Mexican shipping
companies using Mexican vessels and only in cases where no Mexican vessel is available does
Article 34 of the Shipping Law allow temporary permits to be granted for navigation using vessels
flying a foreign flag.  The procedure for obtaining such a permit has been simplified to the maximum
and it is now obtainable within 10 working days.
v) Professional services
The European Union asks about the social service obligation on foreigners who study abroad
without social cost to the State.
According to the legislation in effect, complying with the social service obligation is
mandatory for all professionals and social service is a requirement for obtaining a professional
licence.  As this obligation is imposed under a law that is generally applicable, there is no indication
as to whether the social service obligation applies to Mexican or foreign professionals.  In practice,
the obligation has to be met by all professionals who wish to register their professional credentials and
obtain the corresponding licence that allows them to practice in Mexico, irrespective of the nationalityof the professional concerned.
The purpose of social service is not solely to pay back society but also to contribute to the
academic and professional training of social service providers, as established in the legislation.WT/TPR/M/97/Add.1
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Nevertheless, several different regulatory alternatives are being explored in order to examine
other types of treatment for social service by foreigners.
Mexico's specific commitments on accounting, architecture, engineering, medicine and
dentistry services are limited to modes 1 to 3 and those in mode 4 are horizontal commitments.  When
a foreigner who has studied abroad requests a professional licence, he will be subject to the provisions
in international agreements to which Mexico is a party or the principle of reciprocity in the exercise of
a profession in the country to which he belongs.
In Mexico, a limited number of professions at the Federal level are reserved for Mexican
nationals.  These professions are listed in paragraph 166 of the Secretariat's Report.  Some professions
are also listed in the legislation of certain states, but their number is very limited and this only occurs
in very few states.
In addition, Mexican nationality is a requirement for the exercise of certain professions or
activities not included in Mexico's schedule because Mexico has not undertaken any commitment on
these professions or activities.WT/TPR/M/97/Add.1
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ANNEX I
Goods Eliminated from the Estimated Price Mechanism (1999-2002)
Tariff heading IV.  Description
2204.21.02 Red, rosé, claret or white wine with an alcohol content not exceeding 14o
Gay-Lussac at the temperature of 15oC, in earthenware, china or glass
containers
2204.21.03 Grape wines, called fine, of the claret type, with an alcohol content not
exceeding 14o Gay-Lussac at the temperature of 15oC.  Minimum alcohol
content of 11.5o to 12o respectively, for red and white wines;  maximum
volatile acidity of 1.30o per litre.  For "Rhine" type wines, the alcohol
content may be a minimum of 11o.  Quality certificate issued by a State
authority in the exporting country.  Bottles of a capacity not exceeding 0.750
litre labelled with an indication of the year of the vintage and the registered
trademark of the wine or cellar of origin.
2204.21.04 Champagne and other sparkling wines
2208.20.01 Cognac
2208.30.03 Whisky or whiskey of an alcohol content of 40o o r  m o r e  G a y - L u s s a c ,
distilled to an alcoholic strength of less than 94.8% volume in such a way
that the product of the distillation has an aroma and taste derived from the
raw materials used, matured for at least three years in wooden barrels
containing at least 700 litres, in earthenware, china or glass containers
2915.33.01 n-Butyl acetate
2917.11.99 Oxalic acid
3102.10.01 Urea, whether or not in aqueous solution
6402.12.01 Ski boots and snowboard boots
6912.00.99 Other
8201.50.01 Secateurs and similar one-handed pruners and shears (including poultry
shears)
9017.80.02 Measuring rods or callipers
9503.30.01 Therapeutic or pedagogic articles recognized as being exclusively for
clinical use, in order to correct psychomotor dysfunction or slow learning
difficulties, in special educational establishments or similar
9503.49.02 Therapeutic or pedagogic articles recognized as being exclusively for
clinical use, in order to correct psychomotor dysfunction or slow learning
difficulties, in special educational establishments or similar
9503.60.01 Therapeutic or pedagogic articles recognized as being exclusively for
clinical use, in order to correct psychomotor dysfunction or slow learning
difficulties, in special educational establishments or similar
9503.70.01 Therapeutic or pedagogic articles recognized as being exclusively for
clinical use, in order to correct psychomotor dysfunction or slow learning
difficulties, in special educational establishments or similar
95.03.80.01 Therapeutic or pedagogic articles recognized as being exclusively for
clinical use, in order to correct psychomotor dysfunction or slow learning
difficulties, in special educational establishments or similar
9802.00.52 Bond or ledger paper of 40g/m2 or more by weight but not exceeding
150g/m2, for use in the production of continuous rollsWT/TPR/M/97/Add.1
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ANNEX II
On 14 May 2000, the Department of the Economy published in the Federation's Official
Journal an invitation to interested bodies calling on them to obtain accreditation and/or approval as a
certification entity for the products, groups or subgroups of products listed below in order to assess
the conformity of 25 NOMs.
Group ASubgroup A.1
• NOM-005-SCFI-1994 (Measuring instruments – Systems for measuring and
dispensing petrol and other liquid fuels)
• NOM-012-SCFI-1994 (Measurement of water in closed circuit hydraulic systems –
Meters for cold drinking water – Specifications)
• NOM-014-SCFI-1997 (Orifice-type positive displacement meters for natural gas or
L.P.G., with a maximum capacity of 16m
3/h and a maximum pressure drop of 200 Pa
(20.40 mm water column)
Subgroup A.2
• NOM-040-SCFI-1994 (Measuring instruments – Rigid instruments – Graduated rules
for the measurement of length – For commercial use
• NOM-046-SCFI-1999 (Measuring instruments, steel metric tape measures and
flexometers)
Subgroup A.3
• NOM-044-SCFI-1999 (Measuring instruments – Electromechanical Watt-hour meters
- Definitions, characteristics and testing methods)
• NOM-127-SCFI-1999 (Measuring instruments – Multipurpose meters for electricity
systems – Specifications and testing methods)
Subgroup A.4
• NOM-010-SCFI-1994 (Measuring instruments – Non-automatic weighing machines –
Technical and metrological requirements)
• NOM-041-SCFI-1997 (Measuring instruments – Metallic volumetric measures,
cylindrical, for liquids with a capacity of from 25 ml. to 10 l.)
• NOM-042-SCFI-1997 (Measuring instruments - Metallic volumetric measures with a
graduated neck for liquids with a capacity of 5 l., 10 l., and 20 l.)
Subgroup A.5
• NOM-009-SCFI-1993 (Measuring instruments – Mercury-column
sphygmomanometers, with an elastic sensor, for measuring human blood pressure)
• NOM-011-SCFI-1993 (Measuring instruments – Liquid thermometers of glass for
general use)
• NOM-013-SCFI-1993 (Measuring instruments – Manometers with an elastic element
– Specifications)WT/TPR/M/97/Add.1
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• NOM-093-SCFI-1994 (Spring-operated pressure relief valves (safety, safety-relief
and relief), made of steel or brass)
Subgroup A.6
• NOM-007-SCFI-1998 (Measuring instruments – Electronic taxi meters)
• NOM-048-SCFI-1997 (Measuring instruments – Time recorders/registers – Using
different energy sources)
Group B
• NOM-090-SCFI-1994 (Portable lighters, disposable or refillable – Safety
requirements)
• NOM-118-SCFI-1995 (Match industry – Matches – Safety requirements)
Group C
• NOM-113-SCFI-1995 (Liquid for hydraulic brakes used in automobiles – Safety
specifications and testing methods)
• NOM-119-SCFI-1996 (Automobile industry – Automobiles – Safety belts – Safety
specifications and testing methods)
Group D
• NOM-114-SCFI-1995 (Bottle jacks – Safety specifications and testing methods)
Group E
• NOM-133/1-SCFI-1999 (Infant products – Operation of walkers for infant safety –
Specifications and testing methods)
• NOM-133/2-SCFI-1999 (Infant products – Operation of baby carriages for infant
safety – Specifications and testing methods)
• NOM-133/3-SCFI-1999 (Infant products – Oper ation of playpens and enclosures –
Specifications and testing methods)
Group F
• NOM-134-SCFI-1999 (Valves for inner tubes and valves for rims used for tubeless
tyres – Safety specifications and testing methods)WT/TPR/M/97/Add.1
Page 76
ANNEX III
Department of Agriculture, Rural Development, Fisheries and Food
V. DECREE expropriating for public purposes in favour of the Nation the shares,
dividends and/or stock certificates representing th e capital or holdings in the companies listed
At the margin, a stamp showing the national shield stating "United Mexican States –
Presidency of the Republic"
VICENTE FOX QUESADA  President of the United Mexican States, in exercise of his powers
conferred by Article 89, section I, of the Political Constitution of the United Mexican States and based
on paragraphs two and three and the second paragraph of section VI of Article 27 of the saidConstitution, as well as Articles 1, sections V, VII, IX and X, 2, 3, 4, 8, 10, 19 and 20 of the
Expropriation Law;  14 and 63, section II, of the General Law on National Assets;  31, 34, 35 and 37
of the Basic Federal Public Administration Law,
WHEREAS
The sugar agro-industry is an activity that has a marked social impact because of its
production and the jobs it creates in the Mexican countryside;  sugar is the product of this industry, is
a necessary consumer product and constitutes a basic component of the diet of low-income sectors of
the population because of its high energy content;  the activities involved such as sowing, cultivation,
harvesting and industrial processing of sugar cane are of public interest,
The Federal Government seeks to ensure that good and fair administration is the common
denominator in the nation's sugar industry, abolishing irregular practices by a group of persons
involved in this agro-industry that have had a significant impact on the sector,
The owners of the companies listed in Article 1 of this Decree have caused their enterprises to
lose their financial vitality, contracting large debts with various credit companies and Federal
Government authorities, thereby endangering the assets not only of the workers in the field, but also
of all Mexicans,
Prior to the 2001-2002 harvest next autumn, there is a strong probability that a number of
sugar mills accounting for a high percentage of Mexico's production will not have the resources
needed to repair the mills which guarantee efficient and proper processing of over 20 million tonnes
of sugar cane in the Mexican countryside that are now growing and maturing for harvesting that is the
culmination of the efforts of almost 50 per cent of producers,
Sugar cane producers that supply the sugar enterprises referred to in this Decree have, by
various means, made known their decision not to deliv er their harvest to these enterprises as long as
they are managed by the current owners,
The proper processing of the sugar cane owned by tens of thousands of sugar cane growers in
Mexico and contracted to the enterprises mentioned in this Decree, whose lack of financial viability
makes them incapable of operating efficiently and of meeting their commitments and endangers the
jobs of workers in the sugar mills, suppliers of related services and economic activity in extensive
areas in the states where they are situated,
The Federal Government, with the expropriation that is the subject of this Decree, assumes
control of the enterprises listed in Article 1 of this Decree and in so doing acquires the assets thatWT/TPR/M/97/Add.1
Page 77
could be used to promote and conserve sugar production so as to contribute to effective functioning of
the market and guarantee the continuation of these enterprises, the jobs they create and, in general,
compliance with their other obligations towards the community,
The Department of Agriculture, Rural Development, Fisheries and Food prepared the
administrative dossier containing the technical data attesting to the suitability of the goods to be
expropriated referred to in this Decree in order to meet the public purposes that justify this instrument,
and
It is indispensable to act energetically and immediately in order to take measures to remedy
the inappropriate effects of such operations and ensu re that investment is no longer used for private
profit but becomes an economic source of social well-being, has decided as follows:
DECREE
Article 1. – The shares, dividends and/or stock certificates representing the capital or shares
in the companies listed below are hereby expropriated for public purposes in favour of the Nation.
The expropriation includes, inter alia , the industrial units called sugar mills, together with all their
machinery and equipment, land, buildings and structures, rights, patents, trademarks, trade names,
storage tanks, cellars, workshops, laboratories and their apparatus, electrical plants, water supply
services and their related infrastructure, transport equipment, property used as housing by the
administrators, as well as sugar warehouses, the sugar contained therein, and all other tangible and
intangible property belonging to the following companies:
Ingenio de Atencingo, S.A. de C.V.;
Ingenio de Casasano La Abeja, S.A. de C.V.;
Ingenio El Modelo, S.A.;
Ingenio El Potrero S.A.;
Ingenio Emiliano Zapata, S.A. de C.V.;
Ingenio La Providencia, S.A. de C.V.;Ingenio Plan de San Luis, S.A. de C.V.;
Impulsora de la Cuenca del Papaloapan, S.A. de C.V.;
Ingenio San Miguelito, S.A. de C.V.;
Ingenio Presidente Benito Juárez, S.A. de C.V.;
Ingenio José María Martínez, S.A. de C.V.;Ingenio Lázaro Cárdenas, S.A. de C.V.;
Ingenio San Francisco El Naranjal, S.A. de C.V.;
Compañia Industrial Azucarera San Pedro, S.A. de C.V.;
Ingenio Eldorado, S.A. de C.V.;
Central Progreso, S.A. de C.V.;Ingenio José María Morelos, S.A. de C.V.;
Ingenio La Margarita, S.A. de C.V.;
Fomento Azucarero del Golfo, S.A. de C.V.;
Ingenios Alianza Popular, S.A. de C.V.;
Ingenio Plan de Ayala, S.A. de C.V.;Compañia Azucarera del Ingenio Bella Vista, S.A. de C.V.;
Ingenio Pedernales, S.A. de C.V.;
Azucarera de la Chontalpa, S.A.;
Ingenio La Joya, S.A. de C.V.;
Compañia Industrial Azucarera, S.A. de C.V.;  and
Ingenio San Gabriel Ver, S.A. de C.V..WT/TPR/M/97/Add.1
Page 78
The administrative dossier prepared for this expropriation referred to in the penultimate
preambular paragraph of this Decree is available to interested parties in the offices of the General
Legal Coordination Office of the Department of Ag riculture, Rural Development, Fisheries and Food.
Article 2. – The Federal Government, through the Department of Agriculture, Rural
Development, Fisheries and Food, in coordination with the Department of the Comptroller General
and Administrative Development, shall immediately take possession of the assets affected by the
expropriation.
The Department of Agriculture, Rural Developm ent, Fisheries and Food shall appoint persons
to administer the assets expropriated in each indus trial unit.  The persons so appointed shall draw up
an inventory of the assets referred to in Article 1 of this Decree and shall be empowered to take the
necessary measures to ensure the proper functioning of these units and to implement any measuresdetermined by the Department for this purpose.
Article 3. – The Federal Government, through the Commission for the Valuation of National
Assets, shall fix the amount of compensation that must legally be paid to any person who proves his
legal right thereto.
The corresponding compensation for the assets expropriated shall be paid subject to the
handing over of the shares, dividends and/or stock certificates representing the capital or shares and
shall be taken from the budget of the Department of Agriculture, Rural Development, Fisheries and
Food in conformity with Article 27 of the Constitution, the Expropriation Law and other relevant
legal texts.
Article 4. – The Departments of the Treasury and Public Credit and of the Comptroller
General and Administrative Development, each w ithin its respective competence and with the
participation of the Department of the Economy and of Agriculture, Rural Development, Fisheries and
Food shall monitor strict compliance with this Decree.
Article 5. – To be notified personally to the interested  parties at their domiciles listed in the
expropriation dossier.  If these domiciles are incorrect, to be published once again in the Official
Journal of the Federation, which shall have the effect of personal notification.
TRANSITIONAL CLAUSE
FIRST. – This Decree shall enter into force upon the date of its first publication in the
Official Journal of the Federation.
SECOND. -  The rights of workers in the enterprises expropriated shall be respected in all
respects in conformity with labour legislation.
THIRD. – The Departments of the Treasury and Public Credit and of Agriculture, Rural
Development, Fisheries and Food shall take the necessary action to establish the parastatal body or
bodies they determine for the purpose of administering the assets expropriated under this Decreewithin ninety days following its publication.WT/TPR/M/97/Add.1
Page 79
Done at the residence of the Federal Executive Power in Mexico City, Federal District, on the
second day of September in the year two thousand and one. – Vicente Fox Quesada.  – Signed. –The
Secretary for the Economy, Luis Ernesto Derbez Bautista . – Signed. – The Secretary for
Agriculture, Rural Development, Fisheries and Food, Javier Bernardo Usabiaga Arroyo . – signed. –
The Secretary for the Treasury and Public Credit, José Francisco Gil Díaz . – Signed. – The
Comptroller General and Secretary for Administrative Development, Francisco Javier Barrio
Terrazas . – Signed.
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