./.WORLD TRADE
ORGANIZATIONG/L/601
10 January 2003
(03-0139)
Council for Trade in Goods Original:  Spanish
PROGRESS REPORT BY MEXICO ON THE PHASING-OUT OF THE TRIM
NOTIFIED UNDER ARTICLE 5.1 OF THE TRIMS AGREEMENT
The following communication, dated 20 December 2002, has been received from the
Permanent Mission of Mexico.
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Pursuant to Decision G/L/5001 adopted by the Council for Trade in Goods on
5 November 2001, Mexico hereby reports on the progress it has made in phasing out the TRIM
notified under Article 5.1 of the TRIMs Agreement.
Under the phase-out plan for eliminating its remaining TRIMs no later than
31 December 2003, in 2002 Mexico continued implementing the programme to dismantle national
value added and trade balance measures in accordan ce with the terms laid down in the Auto Decree,
as detailed below.
National value added
The percentage of national value added that an enterprise in the automotive assembly industry
is required to incorporate each year in the manufacture, in Mexico, of autoparts and motor vehicles
(Article 7 and 7A of the Auto Decree of 1995) was reduced to 30 per cent in 2002.  In order to apply
the measure, enterprises are notified prior to the issuing of the assembly industry registers of theirobligation to meet the relevant national value added requirement and are referred to the corresponding
Articles of the Auto Decree.
The reduction in the percentages of national value added has made it possible for enterprises
in the vehicle industry to achieve a flexibility that  enables them to import autoparts according to their
production needs.  This flexibility is reflected in the trade figures, since the period 1994-2001 saw a
65 per cent increase in imports of autoparts.
Trade balance
The factor used to (a) calculate the trade bala nce of an enterprise in the automotive assembly
industry, and (b) to divide the trade balance surplus of an enterprise in the assembly industry for the
purposes of determining the total value of new motor vehicles that can be imported each year
(Articles 4, 5, 8A, 8B and 12 of the Auto Decree of 1995) was reduced to .577 in 2002.
In order to apply the measure, enterprises ar e notified prior to the issuing of the assembly
industry registers of their obligation to show a favourable position in the relevant trade balance and
are referred to the corresponding Articles of the Auto Decree.
                                                     
1 MEXICO.  Extension of the transition period for the elimination of Trade-Related Investment
Measures notified under Article 5.1 of the Agreement on Trade-Related Investment Measures.G/L/601
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The phasing down of the trade balance requirement has been accompanied by a greater
opening up of the Mexican market.  While in 1995, for every 77 cents worth of vehicles exported,
1 dollar worth of vehicles could be imported, the cu rrent figure is 57 cents for every 1 dollar worth of
vehicles imported.  This opening up of the Mexican market is reflected in the growing share ofimported vehicles in market sales, with an increase from 12.5 per cent in 1994 to 52 per cent in 2001
and to 55 per cent for the period January-October 2002.
Report on preparations for eliminating the TRIMs
Mexico is currently preparing the necessary legislative amendments with a view to
eliminating its TRIMs no later than 31 December 2003, as stipulated in its WTO commitments.
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