WT/TPR/S/97 Trade Policy Review
Page 10
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES
(1) OVERVIEW
1. Since the previous Review of Mexico in 1997, th ere have been no fundamental changes to the
domestic legal regime.  Mexico's new administration, which took office in December 2000, is by and
large pursuing earlier trade policy objectives.  These are established in the 1996 Industrial Policy and
Foreign Trade Programme, which spells out formal links between industrial policy, economicderegulation and export promotion.
2. Mexico has come to consider the multilateral tr ading system as the main instrument for the
liberalization of world trade.  Its support for this sy stem has become more visible in recent years, for
example through its strong backing for the conclusion of the Doha Development Agenda and its offer
to host the WTO's Fifth Ministerial Conference.  Mexico accepted new multilateral commitmentswithin the context of the Fourth and Fifth Protocols to the GATS, on basic telecommunications and
financial services.  Mexico has been involved in only a few disputes before the WTO, either as a
complainant or defendant, in part because the bulk of its trade relations takes place under preferential
agreements.
3. Mexico has continued to open its trade and investment regimes through the negotiation of
preferential agreements.  The lion's share of Mexico's trade now takes place under preferential rules,
with the NAFTA remaining the cornerstone of Mexico's trade policy due to its key economic
significance.  Since 1997, Mexico has subscribed to new agreements with Chile, the European Free
Trade Association, the European Union, Israel, Nicaragua, and the Northern Triangle (El Salvador,
Guatemala and  Honduras).  As acknowledged by the authorities, the advantages implicit in all such
agreements are of a temporary nature, awaiting the outcome of broader liberalization initiatives, and
are hence not a substitute for continued efforts to improve the overall competitiveness of the domesticeconomy.  As is the case for other Members following similar strategies, the large and growing
number of Mexico's preferential agreements raise concerns about complexities resulting from the
application of differing regimes, and their effect on trade patterns.
4. Mexico's trade policy remains closely associated with the promotion of foreign investment,
rules for which have been part of both its multilateral and preferential initiatives.  Since its previousReview, Mexico has also undertaken important unilateral steps to open up various services activities,
notably financial services and telecommunications (Chapter IV).  However, a limited number of areas
remain off-limits to all private capital, are entirely reserved for Mexican capital, require majority of
Mexican capital, or are subject to prior approval for foreign investment to exceed 49% of total capital.
(2) F
ORMULATION AND APPLICATION OF TRADE POLICY
(i) General legal and institutional framework
5. No substantial changes have been made over the last four years to Mexico’s legal framework,
although several laws and regulations have been amended or enacted, including various trade and
investment-related statutes (see section (iii) below).  Several legislative changes were also made for
specific activities (Chapter IV).  New bilateral and regional agreements covering trade and investmenthave entered into force since 1997, and become part of the domestic legislation (section (4)(ii)).  At
the multilateral level, the Fourth Protocols to the GATS, on basic telecommunications and the Fifth
Protocol to the GATS, on financial services entered into force in February 1998 and March 1999
respectively.Mexico WT/TPR/S/97
Page 11
6. According to Article 133 of the Mexican Const itution, international treaties signed by the
President and ratified by the Senate, such as the WTO Agreements, have the status of Supreme Law
and are thus inserted into the domestic legal system.  They do not require further legislative
implementation to be applied or invoked before the domestic courts.  However, several domestic laws
governing foreign trade and investment have been  amended to harmonize them with international
obligations and thus facilitate their application.
7. The focus of Mexico's broad regulatory reform programme, which began in 1989, has evolved
from deregulation, to the consolidation of a system of regulatory management, through the
amendment of the Federal Administrative Procedures Law (LFPA) in April 2000.1  The amendments
sought to consolidate and give greater permanence to federal regulatory reform efforts through the
creation of the Federal Regulatory Improvement Commission (COFEMER), whose legal mandate isto ensure transparency in the drafting of federal regulations, and to promote the development of cost
effective regulations.  The amendment to the LFPA  also established the requirement to undertake
regulatory impact statements and full public disclosure as part of all legislative and administrative
proposals so that interested parties may better understand their implications and participate in their
review processes.  The statutory basis for the already existing Internet-based Federal Register ofFormalities and Services was also strengthened;  and established sanctions for public servants who
circumvent transparency requirements were established (dismissal and a one-year suspension from
public service).
8. In accordance with the LFPA, all regulatory proposals must be sent to COFEMER and made
public at least 30 working days before they enter into effect.  COFEMER must consider all comments
and proposals received from interested parties (whether domestic or foreign) before rendering its
judgement on proposed regulations.  COFEMER does not have the power to veto regulations, butDepartments and regulatory agencies must clearly justify disagreements with its judgement.  During
the last seven years, COFEMER (and its predeces sor the Economic Deregulation Unit) has reviewed
and proposed improvements to more than 1,200 draft legislative and administrative regulations.  The
use of regulatory impact statements since 1997 has made the evaluation, analysis, and justification of
draft regulations standard practice.  In 2001, new guidelines for development of regulatory impactstatements and for the review process of draft regulations were made available online.
2
9. COFEMER has also worked towards identifying all business and citizen formalities and then
eliminating or simplifying them as much as possible.  According to official data, between 1995 and
2000 over 45% of the business formalities applied by 11 Departments were eliminated, and
approximately 90% of the remainder were simplified.  The inventory of remaining formalities(including trade-related ones such as obtaining import permits or certificates of origin) can be found
online at the Federal Registry of Formalities and Services (RFTS), accessible through COFEMER’s
website.  All formalities listed in the RFTS must be applied exactly as they appear;  by 2003, only
formalities listed in the RFTS shall be legally applicable.
10. In 2001, new impetus was given to these efforts through the publication of a Decree ordering:
the elimination and simplification of at least 20% of all business formalities already listed in the
RFTS;  the identification for each government agency of at least its five most requested or highest
impact business formalities and the proposal of measures to eliminate or simplify them;  and the
establishment of two-year improvement regulation programmes in each government agency.
3
According to the authorities, this resulted in th e elimination of 16% of the existing formalities
in 2001.
                                                     
1 The LFPA was amended through Decrees published in the Official Journal  on 19 and 30 April 2000.
2 Available at:  http://www.cofemer.gob.mx/ and http://www.cofemermir.org/.
3 Decree published in the Official Journal  on 25 June 2001.WT/TPR/S/97 Trade Policy Review
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(ii) Trade policy formulation and objectives
(a) Trade policy formulation
11. There have been no major modifications to the structure of trade policy formulation since
Mexico's previous Review in 1997, although several trade-related agencies have been renamed or
have undergone internal reorganization.  The Federal Executive has the authority to control the flow
of imports, exports, and goods in transit, and to conduct international trade negotiations.  TheDepartment of the Economy (formerly SECOFI) is stil l in charge of trade policy:  under the Foreign
Trade Act, the Department is responsible for proposing tariff changes, establishing trade controls and
rules of origin, granting export and import licences and quotas, conducting trade defence
investigations, advising Mexican exporters affected by similar investigations abroad, coordinating
international trade negotiations, and establishing export promotion mechanisms.
12. The Foreign Trade Commission (COCEX) works as  a consultative inter-agency body to all
entities of the Federal Public Administration in matters concerning trade policy formulation, including
the review of proposed and existing regulations on tariff and non-tariff import measures, export
restrictions, and contingency measures.
4  The COCEX is responsible for issuing non-binding opinions
and recommendations on these matters, for which it may also hold public consultations with interestedparties.  To change tariff rates, the COCEX mu st submit recommendations to the President of the
Republic, to whom the Federal Congress has delegated the authority to regulate trade.  If such
recommendations are accepted, the changes are issued through decrees published in the
Official Journal .
13. The Joint Commission for Export Promotion continues to coordinate and undertake export
promotion activities (Chapter III(3)(xi)).  Mexico has no independent bodies that provide formal
public advice to the Government on general economic policies, including trade policies.  However,the Government conducts consultations with civil society on trade policy issues, notably with the
Coordinating Body of Foreign Trade (COECE), which includes representatives of agricultural,
industrial and services sectors, and with the Advi sory Council for International Trade Negotiations.
In February 1999 the Mexican Council of Foreign Trade (COMCE) was established, which is
composed of private sector's organisms invo lved in foreign trade, including the COECE.
(b) Trade policy objectives
14. No changes have been made to Mexico’s general trade policy objectives since its previous
Review.  At the end of 2001, the administration that  took office in December 2000 was pursuing the
implementation of the objectives established in the Industrial Policy and Foreign Trade Programme
(PPICE) formulated in May 1996.  The new programme on Mexico's foreign trade and investmentpolicies for the period 2000-06 was to be published in early 2002.  The PPICE is organized around
two major objectives:  creation of a favourable environment for business, and promotion of the
competitiveness of small-size enterprises.  The first objective has been sought through a three-
pronged  strategy:  deregulation and simplification of business formalities (see section (i) above);
improvement of access to foreign markets;  and promotion of a "fair competition" environment.  Thesecond objective is pursued through several industrial policy instruments, including tax concessions,
financing facilities, technical cooperation, and training and consulting services (Chapter III(4)(iii)).
                                                     
4 The COCEX comprises representatives of the Central Bank, the Federal Competition Commission
and the Departments of:  Foreign Affairs;  the Treasury and Public Credit;  Social Development;  the Economy;Agriculture, Rural Development, Fisheries and Food; Environment and Natural Resources;  and Health.  Otherfederal or state agencies may be invited to participat e in meetings when COCEX is discussing specific sectoral
issues within their areas of responsibility.Mexico WT/TPR/S/97
Page 13
15. Secured and permanent access to foreign markets together with the capacity to attract foreign
direct investment are considered essential to Mexico's economic growth.  For that reason, efforts
towards the negotiation of new preferential trade agreements and investment treaties have been
intensified in recent years (see section (4)(ii) below).  Mexico's strategy for international negotiations
focus on:  overseeing the implementation of the negotiated free-trade agreements;  negotiating new
trade agreements;  participating in regional a nd international trade forums;  and negotiating
investment treaties.5
(iii) Principal trade laws and regulations
16. The main laws and regulations governing foreign trade in Mexico include Article 131 of the
Constitution, the Foreign Trade Act, the Regulations to the Foreign Trade Act, the Customs Law, the
General Import Tax Law, and the General Export Tax Law.  Over the last four years, no substantialchanges were made to these statutes although several amendments were adopted, introducing in
particular the adjustments required by reforms to the export promotion programmes (see
Chapter III(3)(vii)).  The General Import Tax Law was also amended repeatedly to carry out tariff rate
changes.  In addition, amendments or new bills were introduced affecting particular trade-related
measures such as technical regulations and standards, government procurement or intellectualproperty (see Chapter III).  Additional amendments and modifications were made to several
activity-specific statutes, including various service activities, as described in Chapter IV.
(3) F
OREIGN INVESTMENT REGIME
(i) Policy objectives and legal framework
17. As noted, Mexico considers foreign investment essential to complement trade liberalization
and to support economic growth and development.  Mexico's strategy to attract foreign investment has
relied on its economic stability, continued liberalization, economic deregulation, participation inmultilateral fora, and the negotiation of international agreements which enhance juridical security and
predictability for the investors.  Investment has also been favoured by the opening up, at least
partially, of important sectors of the economy previously closed to private investors, including some
electricity-related activities, natural gas, communications, railroad, and financial services.
18. In principle, Mexico does not grant direct incentives 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
(Chapter III).
19. No substantial changes have been made to Mexico's foreign investment regime since its
previous Review;  the regime is regulated by the 1993 Foreign Investment Law (LIE), amendedin 1995, 1996, 1998 and 1999, and its 1998 Regulations.
6  The LIE establishes that all activities not
specifically mentioned in the law are completely deregulated, thus allowing up to 100% foreign
investment in most economic sectors without the need to obtain an authorization (exceptions are
described below).  The National Foreign Investme nts Commission (CNIE) acts as a consultative body
on foreign investment and sets guidelines to enfor ce the legal provisions in this area.  The CNIE is
chaired by the Minister of the Economy and is com posed of nine other Ministers, plus any other
official agency the CNIE deems appropriate.  When an authorization is required, the CNIE evaluates
and makes decisions on the terms of foreign participation using criteria established in Article 29 of the
                                                     
5 Department of Economy (2000a).
6 The Regulations to the LIE were published in the Official Journal  on 8 September 1998;  the latest
amendment to the LIE was on 19 January 1999.WT/TPR/S/97 Trade Policy Review
Page 14
LIE:  impact upon employment and training of work ers;  technological contribution;  compliance with
environmental provisions included in the ecological  regulations governing the matter;  and, in general
contribution to increase the competitiveness of the country's productive system.
20. The LIE does not impose performance requirements, although Mexico still maintains such
requirements in the automotive industry (Chapter III(4)(viii)).  There are no restrictions on
remittances abroad of profits, royalties, dividends, an d interest paid on loans, or capital repatriation of
funds related to foreign investment.  In free-trad e agreements and investment treaties signed by
Mexico, there is an exception concerning the case of difficulties in the balance of payments.  In such a
case, transfers may be limited temporarily.
(ii) Restrictions to foreign investment
21. Although only a small percentage of foreign investment requires the approval of the CNIE, all
foreign investors and Mexican firms with foreign participation must be in the foreign investment
register (RNIE) established within the Department of the Economy.  For national security reasons, the
CNIE may prevent acquisitions through foreign investment.
22. In accordance with the Mexican Constitution, the LIE reserves certain strategic areas for the
Mexican State, including:  petroleum and other hydrocarbons;  basic petrochemicals;  electricity;generation of nuclear energy;  radioactive minerals;  telegraph and radiotelegraph services;  postal
services;  bank note issuing and coin minting;  control, supervision, and surveillance of ports, airports
and heliports;  and any other areas that may be expressly reserved by specific legislation.  The 1998
Regulations to the LIE define the scope of these reserved activities;  for instance, the reserve on
electricity activities does not apply to private generation of electricity under certain conditions
(Chapter IV(3)).
23. In addition, foreign investment may not participate directly or through trusts, agreements,
shareholder pacts, by-laws, pyramiding schemes, or any other mechanism that grants it control or
participation in the following activities:  domestic land transportation of passengers, tourism and
freight (excluding messenger and parcel services);  retail sale of gasoline and distribution of liquid
petroleum gas;  broadcasting and other radio and television services (with the exception of cable
television);  credit unions and development banking institutions;  and professional and technicalservices expressly reserved by sector-specific legislation.
24. Internal overland transportation of passengers, tourists, and freight between points in the
Mexican territory, and administrative services of central bus stations for passengers and auxiliary
services are also reserved for Mexican nationals or Mexican firms with a foreigners exclusion clause.
From 1 January 2001, maximum foreign participation in those activities is allowed up to 51%;beginning January 2004, participation should be allowed up to 100% without the need for a
favourable decision from the CNIE.
25. Foreign ownership limits of up to 10%, 25% or 49% remain in specific activities.  The 10%
maximum foreign participation applies to production cooperatives, and the 25% limit affects domestic
air transportation, air taxi services, and specialized air transportation.  Several financial servicesactivities in which foreign participation was limited to 49% were fully liberalized in 1999, including:
holding companies for financial groups;  commercia l (multiple) banking institutions;  securities
brokerage firms;  securities market specialists.
26. The 49% limit on foreign ownership still applies on:  insurance institutions;  bonding
institutions;  currency exchange houses;  general deposit warehouses;  financial leasing companies;
financial factoring houses;  limited scope financial companies;  portfolio management companies;Mexico WT/TPR/S/97
Page 15
shares representing the fixed capital of investment companies;  operating companies of investment
corporations;  retirement fund management comp anies;  the manufacture or commercialization of
explosives, firearms, cartridges, munitions and fireworks, excluding the acquisition, preparation or
use of explosives for industrial and mining activities;  printing and publication of newspapers for
circulation only in Mexico;  series-T shares in co mpanies that own agricultural, ranching or forestry
lands;  fresh water, coastal, and exclusive economic zone fishing, excluding aquaculture;  integral portadministrations;  port piloting services for vessels carrying out inland navigation;  companies involved
in the commercial exploitation of ships engaged in inland and coastal navigation, excluding tourism
cruisers, the exploitation of marine dredging, and implements for port construction, conservation and
operation;  supply of fuel and lubricants for ships, airplanes, and railway equipment;  and
concessionaire companies in the telecommunication sector.  With respect to the above-mentionedfinancial services activities, the 49% limit might be  exceeded as provided for in financial regulations
(Chapter IV(5)(i)).
27. Certain additional activities require the prior approval of the CNIE for foreign investment to
exceed 49%:  port services for ships engaged in inland navigation operations, such as towing, mooring
and lighterage;  shipping companies engaged in the operation of ships solely for high-seas traffic;concessionaires of aerodromes for public service;  private education services, from  pre-school to high
school levels;  legal services;  credit information companies;  securities classification institutions;
insurance agents;  cellular telephone services;  the construction of pipelines for petroleum and refined
oil products;  the drilling of petroleum and gas wells;  the construction, operation and exploitation of
railroads considered as means of general communication;  and the supply of public railway services.
28. In addition, following criteria established in th e LIE, the CNIE may review and approve, on a
case-by-case basis, proposed acquisitions by foreign investors of more than 49% of the capital stockof Mexican companies engaged in economic activities, other than those mentioned above, when the
total value of the assets of the targeted company exceeds a threshold amount established annually by
the CNIE.  In 2000, the threshold level stood at some Mex$712 million (US$76 million).
29. The LIE allows foreigners to hold higher percentages in the capital of Mexican companies in
restricted areas through the concept of "neutral investment".  The neutral investment mechanismallows Mexican companies to issue shares with no voting rights or with limited corporate rights,
which grant their holders only pecuniary rights or limited corporate rights.  Such participation is not
computed to determine the foreign investment percentage in the capital stock of Mexican
corporations.  Neutral investment requires, however, a specific authorization from the Department of
the Department of the Economy, granted on a case-by-case basis.
30. The Mexican Constitution establishes 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.  The LIE, however, allows foreign participation in a Mexican company owning real
estate within the restricted zone for non-residential purposes;  for residential purposes, title of  the real
estate must be held through a trust with a Mexican  bank as trustee.  Approval of the Department
of Foreign Affairs is required.  Alternatively, foreigners may invest directly in Mexican
companies holding real property within the restricted  zones, if such companies have a "Calvo Clause"
in their by-laws, if the property is used for non-residential purposes, and if the acquisition is recorded
with the Department of Foreign Affairs.
(iii) International engagements and relations
31. The LIE applies to all foreign investors.  However, investors from countries with which
Mexico has an agreement covering investment enjoy additional protection;  for example, CanadianWT/TPR/S/97 Trade Policy Review
Page 16
and U.S. investors benefit from the protection provided by Chapter 11 of the NAFTA, which contains
disciplines on sectoral liberalization, performance requirements, national treatment, transfers,
expropriation, and dispute settlement.  With the exception of the agreement with Israel, all of
Mexico's free-trade agreements contain provisions on investment.  In general these provisions are
governed by the principles of MFN and national treatment (often with substantial caveats).  Mexico
grants MFN treatment only to foreign investment from countries with which a treaty establishing suchtreatment has been signed.
7
32. Mexico has continued its efforts to negotiate bilateral agreements for the promotion and
reciprocal protection of investment (bilateral in vestment treaties - BITs).  As at November 2001,
Mexico had signed such agreements with (date of publication in the Official Journal ):  Spain
(19 March 1997), Switzerland (20 August 1998), Argentina (28 August 1998), Germany (20 March
2001), the Netherlands (10 July 2000), Austria (23 March 2001), Belgium and Luxembourg
(pending), France (30 November 2000), Finland (30 November 2000), Uruguay (pending), Portugal
(8 January 2001), Italy (pending), Denmark (30 November 2000), Sweden (17 July 2001), Republic
of Korea (pending), Greece (pending), and Cuba (pending).8  In addition, negotiations were ongoing
with Israel, Japan, Paraguay, and the United Kingdom.
33. Mexico has entered into tax treaties with numerous countries to prevent double taxation.
Before 1997, Mexico had agreements with, inter alia :  Germany, Switzerland, the Netherlands, the
United Kingdom, Republic of Korea, Singapore, Norway, and Japan.  Since 1997, treaties have been
signed with Finland (12 February 1997), Denmark (11 June 1997), Chile (17 April 1998), Ireland
(28 October 1998), Israel (22 July 1999 ), and Portugal (11 November 1999).
34. As a Member of the Organization for Ec onomic Cooperation and Development (OECD),
Mexico signed the Codes of Liberalization of Capi tal Movements and of Curre nt Invisible Operations,
and the National Treatment Instrument.  Mexico is not Member of the Multilateral Investment
Guarantee Agency (MIGA) of the World Bank, although in early 2002 it was considering adherence.
(4) INTERNATIONAL RELATIONS
(i) World Trade Organization
35. Mexico acceded to the GATT in August 1986 and is an original Member of the WTO;  the
Marrakesh Agreement Establishing the WTO was ratified by the Mexican Congress on 22 November
1994.  Mexico accords at least MFN treatment to all countries.  During the Uruguay Round, Mexico
reduced its (MFN) tariff bindings for non-agricultural products from a general base level of 50%, to
35%, with certain exceptions;  reflecting the tariffication process, bindings for agricultural products
tend to be higher, ranging up to 254% (Chapter III(2)(v)).
36. In the context of this Review, the authorities stated that Mexico considers the multilateral
trading system as the main instrument for the liberalization of world trade.  As a developing country,
Mexico is committed to playing a more active role in  the WTO, reflecting its growing participation in
world trade.  Consistent with this, Mexico's support for the multilateral system has recently become
more visible, including through its strong backing for the conclusion of the Doha DevelopmentAgenda and its offer to host the WTO's Fifth Ministerial conference.
37. Mexico took part in the GATS negotiations on telecommunications and financial services and
accepted the GATS Fourth and Fifth Protocols respectively on 26 November 1997 and 29 January
                                                     
7 APEC (2001).
8 Countries are listed according to the date of signature of the treaty.Mexico WT/TPR/S/97
Page 17
1999.9  Mexico has also made various proposals in the context of the ongoing WTO negotiations on
agriculture and services.  For agriculture, these proposals advocate, among other things:  the
elimination of export subsidies;  the adoption of the "peace clause" as a permanent obligation for
developed countries with respect to imports from developing countries;  and the maintenance and
improvement of the existing provisions on special and differential treatment, and the inclusion of such
provisions in the results of the negotiations.10  With respect to the negotiations on services, Mexico
proposed the adoption of procedures to ensure  the prompt elimination of MFN exemptions.11
38. For the Third WTO Ministerial Conference, in Seattle, Mexico presented a proposal to
automatically extend the original transitional peri ods for all TRIMs that were notified to the
Committee on TRIMs, and were still in force, for a further period of five years as from 1 January2000.
12
39. Mexico has made a large number of notifications to the WTO, particularly on sanitary and
phytosanitary measures, technical barriers to trade, anti-dumping, and subsidies and countervailingmeasures (Table II.1).
Table II.1
Status of notifications made by Mexico to the WTO, October 2001
Article/instrument
imposing obligationWTO document – date
(latest document if recurrent)Description of requirement
Agreement on Agriculture
Article 10 & 18.2 G/AG/N/MEX/8, 14.9.00;  G/AG/N/MEX/4,
28.11.96;  G/AG/N/MEX/10, 30.11.00Table ES:1 – Export subsidies
Article 18.2 G/AG/N/MEX/7, 15.9.00;
G/AG/N/MEX/5/Corr.1, 26.9.00;
G/AG/N/MEX/5, 3.3.97Table DS:1 – Domestic support
Article 18.2 G/AG/N/MEX/1,  27.11.96 Table MA:1 – Tariffs and other quotas
Article 18.2 G/AG/N/MEX/2, 28.11.96;
G/AG/N/MEX/11/Rev.1, 25.1.01;
G/AG/N/MEX/11, 20.12.00Table MA:2 – Tariffs and other quotas
Article 18.3 G/AG/N/MEX/6,  14.11.00 Table DS:2 – Domestic support
Article 5.7 and 18.2 G/AG/N/MEX/9,  26.9.00;
G/AG/N/MEX/3, 28.11.96Table MA:5 – Special safeguards
Anti-dumping (Agreement on Implementation of GATT Article VI)
Article 16.4 G/ADP/N/78/MEX;  7.8.01 Semi-annual report
Article 16.5 G/ADP/N/14/Add.12, 17.4.01 Competent authorities
Article 18.5 G/ADP/N/1/MEX/1/Corr.2, 17.7.95;
G/ADP/N/1/MEX/1/Corr.1, 16.6.95;
G/ADP/N/1/MEX/1, 18.5.95Incorporation of Agreement in national legislation
Agreement on Import Licensing Procedures
Article 5.1, 5.2, 5.3 G/LIC/N/2/MEX/1, 30.10.98 Publications of laws and regulations
Agreement on Preshipment Inspection
Article 5 G/PSI/N/1/Add.8, 28.9.99 Laws and regulations
Agreement on Rules of Origin
Annex II (4) G/RO/N/12, 1.10.96 Preferential rules
Article 5.2 G/RO/N/12, 1.10.96 Non-preferential rules
Table II.1 (cont'd)
                                                     
9 WTO documents WT/LET/213 of 30 January 1998 and WT/LET/288 of 18 February 1999.  See also
Chapter IV(5).
10 WTO document G/AG/NG/W/138, 19 March 2001.
11 WTO document S/CSS/W/103, 21 September 2001.
12 WTO document WT/GC/W/351, 11 October 1999.WT/TPR/S/97 Trade Policy Review
Page 18
Article/instrument
imposing obligationWTO document – date
(latest document if recurrent)Description of requirement
Agreement on Safeguards
Article 12.6 G/SG/N/1/MEX/1, 12.5.95 Notification of laws, regulations and administrative procedures
Agreement on Subsidies and Countervailing Measures
Article 25.1 G/SCM/N/60/MEX,15.11.00;
G/SCM/N/48/MEX, 15.11.00Annual report on subsidies
Article 25.11 G/SCM/N/68/MEX, 15.2.01 Semi-annual report on countervailing actions
Article 25.12 G/SCM/N/18/Add.12, 17.4.01 Competent authorities
Article 32.6 G/SCM/N/1/MEX/1/Corr.1, 14.7.95;
G/SCM/N/1/MEX/1, 17.5.95Incorporation of the Agreement
Agreement on Technical Barriers to Trade
Annex 3(c) G/TBT/CS/N/68, 1.7.97;  G/TBT/CS/N/119,
10.8.00;  G/TBT/CS/N/115, 27.10.99;
G/TBT/CS/N/114, 27.10.99;
G/TBT/CS/N/113, 27.10.99;G/TBT/CS/N/112, 27.10.99;
G/TBT/CS/N/111, 27.10.99Acceptance of Code of Good Practice on voluntary standards
Article 15.2 G/TBT/2/ADD.14, 19.7.96 Laws and regulations
Article 2.9 & 2.10 G/TBT/N/MEX/7, 1.10.01 Proposed and adopted technical regulations
Agreement on Textiles and Clothing
Article 2.11 G/TMB/N401, 21.05.01;
G/TMB/N/249/Add.1, 18.12.97;
G/TMB/N/249, 27.5.97Lists of products to be included in the second stage of the
integration process
Article 2.7 G/TMB/N/45/Add.1,18.12.97;
G/TMB/N/45, 28.4.95Lists of products to be included in the first stage of the
integration process
Article 3.1 G/TMB/N/70, 28.4.95 Non-MFA restrictions
Article 6.1 G/TMB/N/19, 6.3.95 Retention of right to use safeguard mechanism
Agreement on the Application of Sanitary and Phytosanitary Measures
Article 7, Annex B G/SPS/N/MEX/173, 11.9.01 Transparency of regulations
TRIPS Agreement
Article 4(d) IP/N/4/MEX/1, 12.2.96 Justification of MFN exemptions
Article 63.2 IP/N/6/MEX/1, 30.3.00;  IP/N/1/MEX/P/2,
13.3.00;   IP/N/1/MEX/P/1, 17.3.00;IP/N/1/MEX/I/2, 17.3.00;  IP/N/1/MEX/I/1,
13.3.00;  IP/N/1/MEX/C/2, 10.3.00;
IP/N/1/MEX/C/, 17.3.00;  IP/N/1/MEX/1,
21.2.00Notification of laws and regulations
Article 5.1 G/TRIMS/N/1/MEX/1, 12.4.95 Notification of TRIM inconsistent with the Agreement
General Agreement on Trade in Services
Article III: and IV:2 S/ENQ/6, 25.3.96 Notification of enquiry points
Article V:7 S/C/N/4, 1.3.95;  S/C/N/142, 14.3.01 Notification of agreements liberalizing trade in services
State Trading (Understanding on the Interpretation of Article XVII of the GATT 1994)
Article XVII:4(a) G/STR/N/6/MEX, 31.7.00 Annual state-trading activities
General Agreement on Tariffs and Trade (GATT) 1994
Article XXIV:7(a) WT/REG125/N/1, 8.3.01;
WT/REG124/N/1, 8.3.01;
WT/REG109/N/1, 1.8.00Notification of Free Trade Agreements
Article XXVIII:5 G/MA/23, 13.1.97 Reservation of right to modify schedule
Source: WTO Secretariat.
40. A relatively limited number of complaints have been raised against Mexico's trade practices
before the WTO;  Mexico has been the respondent in seven disputes, one of which has led to the
adoption of a Panel Report.  Areas of concern have  included mostly anti-dumping practices, but alsoMexico WT/TPR/S/97
Page 19
isolated complaints against alleged monopolistic practices and limited market access in
telecommunication services and non-tariff barriers to trade.
41. Similarly, Mexico's use of the WTO dispute settlement mechanism as complainant has
remained confined to a few cases;  all but one were related to the anti-dumping provisions and
practices of its partners;  the exception concerned the European Union's regime for the importation
and distribution of bananas.  Mexico has also participated as a third party in complaints raised byother WTO Members (Table II.2).  Mexico's relatively limited involvement in the WTO dispute
settlement mechanism is explained in part by the fact that the bulk of its trade relations takes place
under preferential agreements, most of which contain specific dispute settlement procedures (seebelow).
Table II.2
Dispute-related WTO matters involving Mexico, 1995-October 2001
Subject Against/raised by Actions taken (date) WTO documenta
Issues raised against Mexico
Customs valuation of
importsMexico/EU Consultations requested 27 August 1996, concerning
Mexico's alleged application of c.i.f. value as the
basis of customs valuation of imports originating in
non-NAFTA countries, and of f.o.b. value for
imports originating in NAFTA countries.WT/DS53/1-4, 09.09.96
Anti-dumping
investigation of high-
fructose corn syrup
(HFCS)Mexico/U.S. Consultations requested 4 September 1997.  See
DS 132.WT/DS101/1, 15.09.97
Anti-dumping
investigation of high-fructose corn syrup
(HFCS)Mexico/U.S. Consultations requested (May 1998);  Panel report
adopted (February 2000);  mutual agreement onreasonable period of time for implementation
(April 2000);  recourse by the United States to
Article 21.5 of DSU (October 2000);  compositionof the panel (November 2000);  request for extension
of implementation time-period pursuant to
Article 21.3 (a) (January 2001).  Panel report
circulated 22 June 2001.WT/DS132/1-8, 15.05.98
WT/DS132/R, 28.01.00
Measures affecting trade
in live swineMexico/U.S. Consultations requested (July 2000). WT/DS/203/1, 13.07.00
Measures affecting
telecommunications
servicesMexico/U.S. Consultations requested (August 2000);  request for
the establishment of a panel (November 2000).WT/DS204/1-2, 29.08.00
Provisional anti-dumping
measure on electric
transformersMexico/Brazil Consultations requested (January 2001). WT/DS216/1-3, 04.01.01
Measures affecting the
import of matchesMexico/Chile Consultations requested 17 May 2001. WT/DS232/1, 28.05.01
Mexico as a complainant
Anti-dumping
investigation regarding
imports of fresh or chilled
tomatoes from MexicoU.S./Mexico Consultations requested 1 July 1996, asking for
expedited procedures.  U.S. Department of
Commerce official releases indicate that the case has
been settled.WT/DS/49/1, 08.07.96
Tariff Act of 1930 signed
on 28 October 2000 with
the title of "Continueddumping and subsidy
offset Act of 2000"U.S./Australia,
Brazil, Chile, EU,
India, Indonesia,Japan, Korea,
Thailand,
Argentina, Canada,
MexicoConsultations requested (December 2000). WT/DS217/1-4, 09.01.01
Table II.2 (cont'd)WT/TPR/S/97 Trade Policy Review
Page 20
Subject Against/raised by Actions taken (date) WTO documenta
Definitive anti-dumping
measure regarding grey
portland cementGuatemala/Mexico Consultations requested 5 January 1999.  Panel
established 22 September 1999.  Panel reportcirculated 24 October 2000 and adopted
17 November 2000.  At DSB meeting of
12 December 2000, Guatemala informed that it had
removed its anti-dumping measure in October 2000.WT/DS156/1-4, 08.01.99
WT/DS156/R, 24.10.00
Anti-dumping
investigation in respect ofimports of certain oil
country tubular goodsVenezuela/Mexico By a letter dated 6 May 1997, Mexico informed
the Secretariat that Venezuela had terminated the
anti-dumping investigation in this matter.WT/DS23/1, 04.01.96
Provisional anti-dumping
measure on cement from
MexicoEcuador/Mexico Consultations requested 5 October 1999, concerning
a provisional anti-dumping measure imposed byEcuador (Official Register of 14 July 1999), on
imports of cement from Mexico.DS182/1, 08.10.99
Definitive anti-dumping
measure on cement from
MexicoEcuador/Mexico Consultations requested 15 March 2000, concerning
a definitive anti-dumping measure imposed byEcuador, (Official Register No. 361 of 14 January
2000), on imports of cement from Mexico.DS191/1, 17.03.00
Regime for the
importation, sale and
distribution of bananasEU/U.S., Ecuador,
Guatemala,Honduras and
MexicoConsultations requested (February 1996);  Panel and
Appellate Body reports adopted (September 1997);award of the Arbitrator (January 1998);  re-request
for consultations (August 1998);  award of Arbitrator
(March 1999);  retaliation by the United States underArticle 22.7 of the DSU (April 1999);  status report
circulated (July 1999);  request for arbitration by the
E.C. (Nov 1999);  re-request for arbitration by
Ecuador, Honduras and Guatemala (May 2001).WT/DS27/1-57 & Add. 1-11,
12.02.96WT/DS27/R/MEX, 22.05.97
WT/DS27/AB/R, 09.09.97
WT/DS27/RW/EEC, 12.04.99
WT/DS27/ARB, 09.04.99
Mexico as Third Party
Import prohibition ofcertain shrimp and
shrimp productsU.S./India,
Malaysia, Pakistan
and ThailandConsultations requested (October 1996);  Panel and
Appellate Body reports adopted (November 1998);
status report circulated (July 1999);  recourse byMalaysia to Article 21.5 of DSU (October 2000);
request for extension of implementation time-period
(March 2001).
  Panel report circulated 15 June
2001.WT/DS58/1-19 & Add.1-4,
14.10.96
WT/DS58/R, 15.05.98
WT/DS/58AB/R, 12.10.98
Anti-dumping duty ondynamic random access
memory semiconductors(DRAMS) on one megabit
or above from KoreaU.S./Korea Consultations requested (August 1997);  Panel report
adopted (March 1999);  recourse to Article 21.5 of
the DSU by Korea (March 2000);  Panel proceedingssuspended in the context of bilateral talks
(September 2000).WT/DS99/1-11, 15.08.97
WT/DS99/R, 29.01.99
Anti-dumping Act of 1916 U.S./EU, Japan Consultations requested (June 1998);  Panel and
Appellate Body report adopted (September 2000).WT/DS136/1-12, 24.06.98
WT/DS162/1-15, 16.02.99WT/DS136/R, 31.03.00
WT/DS136/AB/R, 28.08.00
Imposition of
countervailing duties oncertain hot-rolled lead and
bismuth carbon steel
products originating in the
United KingdomU.S./EU Consultations requested (June 1998);  Panel and
Appellate Body report adopted (2000).WTDS138/1-9, 06.07.00
WT/DS138/R, 23.12.99
WT/DS138/AB/R, 10.05.00
Definitive safeguard
measures on imports ofcellular welded carbon
quality line pipe from
KoreaU.S./Korea Consultations requested (June 2000);  panel
established (January 2001).WT/DS202/1-5, 15.06.00
Regime for the
importation, sale and
distribution of bananasEU/Panama Panama did not specify which provisions the EC
regime violates.  This is the same regime that was
the subject of a successful challenge by the U.S.,
Ecuador, Guatemala, Honduras, and Mexico (DS27).WT/DS105/1, 29.10.97
Table II.2 (cont'd)Mexico WT/TPR/S/97
Page 21
Subject Against/raised by Actions taken (date) WTO documenta
Taxes on alcoholic
beveragesKorea/U.S. Consultations requested (May 1997);  Panel and
Appellate Body reports adopted (February 1999);award of Arbitrator (June 1999);  status report
circulated (January 2000).WT/DS84/1-16, 28.05.97
WT/DS84/R, 17.09.98
WT/DS84/AB/R, 18.01.99
Measures affecting the
importation of milk and
the exportation of
dairy productsCanada/U.S.,
New ZealandConsultations requested (October 1997);  Panel and
Appellate Body reports adopted (October 1999);
recourse by the United States to Article 21.5 of the
DSU (February 2001);  re-establishment of theoriginal panel (April 2001).  Panel report circulated
11 July 2001.WT/DS103/1-19 & Add.1-3,
13.10.97
WT/DS113/1-19, 08.01.98
WT/DS/103/R, 17.05.99WT/DS/103/AB/R, 13.10.99
a For recurrent documents the date corresponds to the first document of the series.
Source : WTO Secretariat.
(ii) Preferential agreements
42. Since the previous Trade Policy Review of Mexico, the importance of free-trade agreements
(FTAs) for Mexico's trade has continued to increa se.  New FTAs were signed with Nicaragua (in
force from 1 July 1998), Chile (1 July 1999),  Israel (1 July 2000), the European Union (1 July 2000),
the Northern Triangle - El Salvador, Guatemala a nd  Honduras - (15 March 2001 for El Salvador and
Guatemala, and 1 June 2001 for Honduras), and the European Free Trade Association (entered intoforce on 1 July 2001 in Mexico, Norway and Switzerland, on 1 October in Iceland, and on
1 November in Liechtenstein).  Tariff concessions made under the LAIA Economic Complementarity
Agreement with Uruguay were significantly exte nded through the adoption of a new Protocol in
late 1999.  In addition to the new agreements, Mexico maintains FTAs with Bolivia, Canada, Costa
Rica, Colombia, the United States, and Venezuela.
13
43. Regional and bilateral agreements have become core elements of Mexico’s trade relations.
The Mexican Government views FTAs as complementary to its policy objectives within the
multilateral trading system.  Mexico’s stated strategy for negotiating FTAs has been to seek wide
coverage of products and clearly defined rules (e.g. on origin, safeguards, and dispute settlement),based on multilateral principles where applicable.
44. Mexico's growing number of trade agreements raises concerns about their administrative costs
to the extent that differences among agreements, for instance with respect to rules of origin, require
economic agents involved in foreign trade activities to manage different rules and procedures.  In this
respect, the Mexican authorities have indicated that one of the main benefits expected from the FTAAnegotiations was that this agreement would provide Mexico with clear and homogeneous rules forregional trade and thus generate benefits for agents involved in foreign trade activities.
(a) North American Free Trade Agreement
45. The North American Free Trade Agreement (NAFTA) between Canada, Mexico, and the
United States came into force on 1 January 1994.
14  The NAFTA was notified to GATT contracting
parties as a free-trade area on 1 February 1993 under the provisions of paragraph 7(a) ofArticle XXIV of the GATT, and as an economic integration agreement to the WTO on 1 March 1995
under paragraph 7(a) of Article V of the GATS.  The WTO Committee on Regional Trade
Agreements had completed its factual examination of the NAFTA by mid-2001 but its report was yet
to be finalized.
15
                                                     
13 The Mexican authorities estimate that countries with which Mexico has preferential arrangements
represent some 61% of world trade (see Department of Economy, 2000).
14 See WTO (1998).
15 WTO document WT/REG/W/43, 21 September 2001.WT/TPR/S/97 Trade Policy Review
Page 22
46. Following an agreed schedule of tariff reductions, most merchandise trade between Mexico
and its NAFTA partners was liberalized in 1994 and 1998.  As of May 2001, the average tariff rate
for imports originating in the United States was 1.1%, while for imports from Canada it was 1.6%
(Table III.3).  This process should be completed for most remaining products on 1 January 2003, or
for new motor vehicles in 2004.  Full liberalization for a small number of products, including
beans, maize and milk, should take place in 2008.  The NAFTA provides for gradual liberalization ofused-motor-vehicle imports, which will remain prohibited until 2009;  thereon imports will be
authorized progressively with full liberalization of NAFTA-originating vehicles taking place on
1 January 2019.
47. Since the last Review, several issues of interest to Mexico have been advanced within the
NAFTA Committee on sanitary and phytosanitary measures, including the recognition of anincreasing number of disease-free zones for the exportation of different products, such as pork,
chicken, wheat, and fruit.
48. Mexico has actively used the Review and Dispute Settlement in Antidumping and
Countervailing Duty Matters of the NAFTA (Chapt er 19).  Between 1996 and 2001, 26 investigations
were initiated with Mexico (or Mexican producers) as a petitioner;  Mexico has been a defendant in11 cases, involving mostly steel products, but also agriculture (Table II.3 and Chapter III(2)(ix)).
Mexico also made use of NAFTA's institutional arrangements and dispute settlement procedures
(Chapter 20) against the United States for safeguard action taken on broom corn brooms and for
market access restrictions for cross-border services and investment in the trucking sector;  in both
cases the ruling was in favour of Mexico.
16
49. The mechanism for the settlement of investment disputes (Chapter 11) has been used against
Mexico in three instances;  Mexico was found at fault in one case.
50. Generally, when a conflict concerns a matter that may be dealt with both in NAFTA and in
the WTO, the NAFTA gives the complaining party th e option to choose either forum to settle the
dispute.  The case dealing with imports of high fructose corn syrup was dealt with both in NAFTA
and the WTO (Tables II.2 and II.3).  The Mexican authorities noted that under Chapter XIX of the
NAFTA an exporter, producer or importer subject to an anti-dumping or countervailing dutydetermination may request the establishment of a bi-national panel to “determine whether such
determination was in accordance with the antidumping or countervailing duty law of the importing
law”.  Accordingly, U.S. high fructose corn syrup producers requested the establishment of a
Chapter XIX panel.  In parallel, the U.S. Government requested the establishment of a panel under the
DSU to determine whether the Mexican determination imposing duties on high corn fructose syrupwas “inconsistent with a covered Agreement (Anti-dumping)”.  Both the NAFTA and WTO
panels found that the threat of injury determination was inconsistent, with  Mexican law and the WTO
Anti-dumping Code, respectively.
                                                     
16 Details can be found in NAFTA online information.  Available at:  http://www.nafta-sec-alena.org.Mexico WT/TPR/S/97
Page 23
Table II.3
NAFTA dispute settlement procedures involving Mexico, 1994 – September 2001
Subject Against/raised by: Actions taken
Settlement of Investment Disputes (Chapter 11)
Mexico as defendant
State San Luis Potosí refused a U.S. company permission to re-open
a waste disposal facilityMexico/Metalclad Tribunal ruled in favor of Metalclad
on 02.09.00
Public waste management services concession Mexico/Waste
Management Inc.Tribunal declined jurisdiction
on 02.06.00
Annulation of a concession for the collection of municipal waste inNaucalpanMexico/DESONA Tribunal ruled in favor of Mexico
on 01.11.99
Review and Dispute Settlement in Anti-dumping and Countervailing Duty Measures (Chapter 19)
Mexico as complainant
Leather Wearing Apparel from Mexico.  DOC Final Results of
Countervailing Duty Administrative Review USA-94-1904-02U.S./Mexico Panel remanded final determination.
Remand affirmed 20.10.95
Porcelain-on-Steel Cookware from Mexico.  DOC Final Results ofAnti-dumping Duty Administrative Review USA-95-1904-01U.S./Mexico Panel remanded in part determination.
Remand affirmed 19.07.96
Gray Portland Cement and Cement Clinker from Mexico.  DOC
Final Results of Anti-dumping Duty Administrative Review USA-
95-1904-02U.S./Mexico Panel affirmed DOC determination
Oil Country Tubular Goods from Mexico.  DOC Final Determination
of Sales at Less than Fair Value USA-95-1904-04U.S./Mexico Panel remanded in part determination
Remand affirmed 02.12.96
Fresh Cut Flowers from Mexico.  DOC Final Results of Anti-dumping Duty Administrative Review USA-95-1904-05U.S./Mexico Panel remanded determination
Remand affirmed 03.03.97
Porcelain-on-Steel Cooking Ware from Mexico.  DOC Final Results
of 6th Antidumping Duty Administrative Review USA-96-1904-01U.S./Mexico Panel review automatically terminated
by requester
Gray Portland Cement and Clinker.  Department of Commerce
(DOC) Final Results of 5th Anti-dumping Duty Administrative
Review USA-97-1904-01U.S./Mexico Panel remanded DOC's determination.
Remand affirmed 10.2.00.  Request foran ECC filed 23.03.00
Gray Portland Cement and Clinker from Mexico.  DOC Final Results
of 4th Anti-dumping Duty Administrative Review USA-97-1904-02U.S./Mexico Panel affirmed DOC determination
Porcelain-on-Steel Cookware from Mexico.  DOC Final Results of
the 8th Anti-dumping Duty Administrative Review USA-97-1904-05U.S./Mexico Panel review terminated by the
requestors
Circular Welded Non-Alloy Steel Pipe and Tube from Mexico.DOC Final Results of the Anti-dumping Duty Administrative ReviewUSA-97-1904-06U.S./Mexico Panel review terminated by participants
Porcelain-on-Steel Cookware from Mexico.  DOC Final Results of
the 9th Anti-dumping Duty Administrative Review USA-97-1904-07U.S./Mexico Panel remanded in part determination.
Remand affirmed 09.07.99.
Gray Portland Cement and Clinker from Mexico.  DOC Final Results
of 6th Anti-dumping Duty Administrative Review USA-MEX-98-
1904-02US/Mexico Pending
Porcelain-on-Steel Cookware from Mexico.  DOC Final Results of
10th Anti-dumping Duty Administrative Review USA-MEX-98-
1904-04U.S./Mexico Pending
Circular Welded Non-Alloy Steel Pipe.  DOC Final Scope Ruling-
Anti-dumping Order USA-MEX-98-1904-05U.S./Mexico Pending
Certain Hot-Rolled Carbon Steel Plate, Originating in or Exported
from Mexico CDA-MEX-99-1904-01Canada/ Mexico CITT Injury Finding Corrigendum to the
Finding of 27.10.97
Gray Portland Cement and Clinker.  DOC Final Results of 7th Anti-
dumping Duty Administrative Review USA-MEX-99-1904-03U.S./Mexico Pending
Porcelain-on-Steel Cookware.  DOC Final Results of the 11th Anti-
dumping Duty Administrative Review USA-MEX-99-1904-05U.S./Mexico Decision due 23.11.01
Gray Portland Cement and Clinker.  DOC Final Results of 8th Anti-
dumping Duty Administrative Review USA-MEX-2000-1904-03U.S./Mexico Pending
Porcelain-on-Steel Cookware.   DOC Final Results of 12th Anti-
dumping Duty Administrative Review USA-MEX-2000-1904-04U.S./Mexico Pending
Gray Portland Cement and Clinker.  DOC Final Results of the Full
Sunset Review of the Antidumping Duty Order USA-MEX-2000-
1904-05U.S./Mexico Pending
Table II.3 (cont'd)WT/TPR/S/97 Trade Policy Review
Page 24
Subject Against/raised by: Actions taken
Gray Portland Cement and Clinker .  USITC Final Results of Five-
Year Review of the Anti-dumping Duty Order USA-MEX-2000-
1904-10U.S./Mexico Pending
Porcelain-on-Steel Cookware.  DOC Final Results of 13th Anti-
dumping Duty Administrative Review USA-MEX-2001-1904-02U.S./Mexico Decision due 18.01.02
Oil Country Tubular Goods.  DOC Final Results of the Full Sunset
Review of the Anti-dumping Duty Order USA-MEX-2001-1904-03U.S./Mexico Decision due 15.02.02
Gray Portland Cement and Clinker.  DOC Final Results of 9th Anti-
dumping Duty Administrative Review USA-MEX-2001-1904-04U.S./Mexico Decision due 15.02.02
Oil Country Tubular Goods.  DOC Final Results of 4th Anti-dumping
Duty Administrative Review USA-MEX-2001-1904-05U.S./Mexico Decision due 01.03.02
Oil Country Tubular Goods.  USITC Final Results of Five Year
Review of the Anti-dumping Duty Order USA-MEX-2001-1904-06U.S./Mexico Decision due 02.06.02
Mexico as defendant
Import of Flat Coated Steel Products, in and from the U.S.  SECOFI
Final Anti-dumping Duty Determination MEX-94-1904-01Mexico/U.S. Panel remanded case twice to SECOFI.
Determination second remand 13.04.98
Imports of Cut-to-Length Plate Products from the U.S.  SECOFI
Final Anti-dumping Duty Determination MEX-94-1904-02Mexico/U.S. Panel remanded case.  Determination on
Remand affirmed 30.10.95
Polystyrene and Impact Crystal from the U.S.  SECOFI Final Anti-
dumping Duty Determination MEX-94-1904-03Mexico/U.S. Panel affirmed SECOFI's determination
Seamless Line Pipe Originating in the U.S.  SECOFI Final Anti-
dumping Duty Determination. MEX-95-1904-01Mexico/U.S. Panel review automatically terminated
by requester
Cold-Rolled Steel Sheet originating in or exported from Canada.
SECOFI Final Anti-dumping Duty Determination MEX-96-1904-01Mexico/ Canada Panel review automatically terminated
at request of participants
Rolled Steel Plate originating in or exported from Canada.  SECOFI
Final Anti-dumping Duty Determination. MEX-96-1904-02Mexico/ Canada Panel remanded in part determination
twice.  2nd remand affirmed 18.12.98
Hot-Rolled Steel Sheet originating in or exported from Canada.SECOFI Final Anti-dumping Duty Determination MEX-96-1904-03Mexico/ Canada Panel remanded in part determination.
Remand affirmed 15.09.97
Imports of Hydrogen Peroxide Originating in the U.S.  SECOFI Final
Countervailing Duty Determination MEX-97-1904-01Mexico/U.S. Panel review terminated by joint consent
of participants
Imports of High Fructose Corn Syrup.  SECOFI Final Anti-dumping
Duty Determination MEX-USA-98-1904-01Mexico/U.S. On 3.8.01, Panel unanimously remanded
the agency's determination
Imports of Urea Originating.  SECOFI Final Anti-dumping DutyDetermination MEX-USA-00-1904-01Mexico/U.S. Pending
Bovine Carcasses and Half Carcasses, Fresh or Chilled.  SECOFI
Final Anti-dumping Duty Determination MEX-USA-00-1904-02Mexico/U.S. Pending
Extraordinary Challenge Committee Proceedings (ECC)
Gray Portland Cement and Clinker.  Extraordinary Challenge
Committee (ECC) Proceeding relating to USA-97-1904-01 Panel
Review ECC-2000-1904-01USAU.S./Mexico Requested by: U.S. Government
Pending
Institutional arrangements and DS procedures (Chapter 20)
Safeguard Action on Broomcorn Brooms from Mexico USA-97-2008-01 U.S./Mexico Panel report issued 30.1.98.
Cross-Border Services and Investment in Trucking Sector USA-98-2008-01U.S./Mexico Panel report issued 06.02.01.
Source: NAFTA Secretariat (2001), Status Report [Online].  Available at:  http://www.nafta-sec-alena.org/ [9 October 2001].
(b) Other preferential arrangements
Free Trade Agreement with the European Union51. The FTA between the European Union and Mexico was signed on 25 November 1999 and
notified to the WTO in August 2000.
17  The Agreement was ratified by Mexico on 20 March 2000 and
came into force on 1 July 2000.  The Mexican authorities have noted that one of the reasons for
entering into the Agreement was to strengthen Mexico's trade and investment links with the EU,
which had weakened in relative terms during the 1990s, particularly up to 1997.18
                                                     
17 WTO document WT/REG/109/1, 3 August 2000.
18 Department of Economy (2001).Mexico WT/TPR/S/97
Page 25
52. The agreement covers:  market access in goods;  rules of origin;  technical regulations;
sanitary and phytosanitary measures;  safeguards;  investment;  trade in services;  government
procurement;  competition policy;  intellectual property;  and dispute settlement.  With respect to
market access in goods, the FTA provides for the progressive and reciprocal elimination of tariffs;  the
time-frame for tariff reduction varies according to partners and sectors.  The GSP rates applied to
Mexican exports were taken as base rate for the EU's tariff reduction process.  For industrial goods,Mexico should eliminate all import duties by 2007, while the EU agreed to do so by 2003.  For
agricultural and fisheries products, Mexico should eliminate tariffs for most products by 2010 (the EU
should do so by 2008).  A limited list of sensitive products was excluded from tariff elimination, in
the case of Mexico the list includes cereal, meat, and milk products.  The internal measure of support
to the agriculture sector was not covered by the FTA, while subsidized exports were excluded frompreferential market access.  The agreement also established tariff quotas for certain agricultural and
fisheries products.
Free Trade Agreement with EFTA
53. The Free Trade Agreement between the EFTA states (Iceland, Liechtenstein, Norway, and
Switzerland) and Mexico was notified to the WTO in August 2001.
19  Mexico ratified the agreement
on 30 April 2001, and Norway and Switzerland in June 2001;  it entered into force in the three
countries on 1 July 2001.  In Iceland it entered into force on 1 October 2001, while, after provisional
application in Liechtenstein from 1 July 2001, it came into force officially on 1 November 2001.  The
agreement is similar to the one negotiated with the EU.  Trade in agricultural products is governed by
bilateral agreements concluded between Mexico and each individual EFTA State, containing, in
particular, specific rules of origin (Chapter III(2)(iv)).
Free Trade Agreement with Chile54. This agreement has been in place since 1992.  Both parties decided to expand the scope of the
original agreement, and as FTA was signed on 17 April 1998, and ratified by Mexico in November of
the same year.  The FTA came into force on 1 August 1999, after it was ratified by Chile.  The
agreement established provisions in market access in goods;  rules of origin;  technical regulations;
sanitary and phytosanitary measures;  safeguards;  investment;  trade in services;  governmentprocurement;  competition policy;  intellectual property;  and dispute settlement.  Negotiations with
respect to government procurement and financial services started in August 2000.  As at May 2001,
the total tariff average for imports originating in Chile, 0.3%, was the lowest of all preferential
origins;  this was mainly explained by the relatively low tariff barriers applied to agricultural products
originating in Chile (Table III.3).
Free Trade Agreement Mexico-Colombia-Venezuela (G-3)
55. The G-3 Agreement came into force in 1995.  Its aim is to consolidate an FTA between the
three countries by 2005, through a three-stage tariff reduction programme, in 1995, 2000, and 2005,
with the exception of the automobile industry, wh ich is to be fully liberalized in 2007.  The
liberalization programme between Mexico, Colomb ia, and Venezuela builds on the earlier LAIA
partial scope agreements.  Tariff reductions with Co lombia are at the first stage;  negotiations for the
second round of tariff reductions were concluded with Venezuela in 1999.  In the case of agricultural
products, tariff quotas are applied for certain goods during the transition period (ten years);  there is
also a list of temporary exceptions, which is periodically reviewed and may continue beyond the
transition period.  Export subsidies are banned, including for agricultural products when they are fully
liberalized.  The agreement contains disciplines with respect to dispute settlement, contingency
                                                     
19 WTO document WT/REG/126/1, 24 August 2001.WT/TPR/S/97 Trade Policy Review
Page 26
measures, SPS, technical barriers to trade, state trading, customs procedures, investment, movement
of persons, government procurement, intellectual property, and services.
Free Trade Agreement Mexico-Guatem ala, Honduras and El Salvador
56. The FTA between Mexico and Guatemala, Honduras and El Salvador was signed in
May 2000 and came into force on 15 March 2001.  The agreement covers market access in goods;
customs procedures;  rules of origin;  technical regulations;  sanitary and phytosanitary measures;contingency measures;  safeguards;  investment;  trade in services;  intellectual property;  and dispute
settlement.  The programme of tariff reductions is asymmetric and should be concluded in 11 years.
Over 50% of Mexico's exports of industrial pr oducts and some 65% of exports from Guatemala,
Honduras, and El Salvador were granted duty-free access from the outset;  65% and 80%,
respectively, will be duty free by 2005.  Some 30% of Mexico's agricultural exports were grantedduty-free treatment at the outset.  The agreement includes a special safeguard for sensitive agricultural
products.  As at May 2001, the average tariff rate applied to goods originating in Guatemala and
Honduras was 3%, some 13 percentage point below the MFN average, while the rate for El Salvador
was 5% (Table III.3).
Other free-trade agreements57. Mexico signed an FTA with Israel on 10 April 2000, which came into effect on 1 July 2000.
This FTA includes provisions on market access;  rules of origin;  customs procedures;  safeguards;
government procurement;  competition;  and disp ute settlement.  Trade in industrial goods should be
fully liberalized by 2005;  the agreement covers some 96% of trade in agricultural goods.
58. Mexico's FTA with Nicaragua came into force on 1 July 1998.  The agreement included
provisions on:  market access in goods; sanitary and phytosanitary measures;  rules of origin;  customs
procedures; technical regulations; contingency measures;  safeguards;  investment;  governmentprocurement;  trade in services;  intellectual property;  and dispute settlement.  Some 45% of Mexico's
exports to Nicaragua and 77% of Nicaragua's exports to Mexico were granted duty-free treatment
with immediate effect.
59. Trade liberalization under Mexico's FTAs with Bolivia and Costa Rica in 1995 has been
pursued;  as at May 2001, average tariff rates applied by Mexico to goods originating in these countrywere respectively 1.5% and 1.3% (Table III.3).
20
Other preferential arrangements
60. Mexico is a participant in all regional agreements within the LAIA, and has signed partial
scope agreements with all LAIA members and some  countries that do not participate in the LAIA.21
Among these, Mexico signed an Economic Complementarity Agreement with Uruguay  on
29 December 1999.  The agreement introduces disciplines such as technical regulations, SPS
measures, contingency measures, and dispute settlement, and makes some 90% of tariff lines duty
free.
61. The LAIA Partial Scope Agreement with Brazil was extended in May 2000 to include
bilateral trade in automobiles.  Under the agreement, which has an initial duration of two years, areciprocal tariff quota of 40,000 vehicles at an 8% tariff rate has been set for the first year, increasing
                                                     
20 See WTO (1999), and WTO document WT/TPR/S83, 9 April 2001.
21 The agreements under the LAIA have been communicated to the Committee on Trade and
Development.  WTO documents WT/COMTD/7, 30 September 1996, and WT/COMTD/11, 8 October 1997.Mexico WT/TPR/S/97
Page 27
to 50,000 vehicles in the second year.  In 2001, the agreement was extended to include provisions for
autoparts trade.  Similarly, the LAIA Partial Scope Agreement with Argentina was extended in 2001,
establishing a bilateral quota for 19,000 vehicles.  In October 2000, Mexico also signed a LAIA
Economic Complementarity Agreement with Cuba, which will be in force until May 2002.
62. Mexico has been a member of the Asia-Pacific Economic Cooperation (APEC) forum
since 1993.  Mexico is Chair of APEC for 2002.  Together with all Western-Hemisphere countries
except Cuba, Mexico is participating in the Free-Trade Area of the Americas (FTAA), launched inDecember 1994, with the aim of eliminating most tariffs by 2005.
63. Mexico also participates in the Global System of Trade Preferences.  The authorities indicated
that between 1997 and 2001, Mexico issued 3,020 certificate of origin for Mexican products to beexported under this scheme, mainly to Egypt, India, Indonesia, and Sri Lanka.  Mexico provides tariff
preferences under the GSTP, although these are not being requested.
64. Mexico receives preferential market access under the General System of Preferences.
As noted before, the negotiation of the FTA between Mexico and the European Union resulted in
a consolidation of the GSP concessions granted to Mexico.  In the case of concessions granted byEFTA countries, Switzerland eliminated GSP fo r Mexico from 1998, while the other countries
eliminated the GSP concessions from the entry in  force of the FTA on 1 July 2001.  Between 1997
and 30 June 2001, Mexico issued some 33,000 certificates of origin for exports representing a value
of US$2.1 billion, destined mainly for Australia, the European Union, and Japan.
65. Under the San José Pact of 1980, which is renewed annually, Mexico and Venezuela decided
on 3 August 2001 to continue to supply petroleum (a total of 160,000 barrels per day;  80,000 each) to
certain countries of Central America and the Caribbean, on commercial terms.  The Pact also includes
a scheme to finance development projects and the purchase of goods and services from Venezuelan
and Mexican suppliers.
22
Negotiations  currently under way
66. In late 2001, Mexico was negotiating agreements with Ecuador, Japan, Panama, Peru,
Singapore, and Trinidad and Tobago.  The agreement with Trinidad and Tobago is expected to be a
comprehensive FTA;  negotiations started in 1998, in areas such as market access, technical barriers
to trade, investment, and dispute settlement.  The negotiations for an FTA with Panama are welladvanced and were initially expected to be concluded during 2001.
67. Negotiations towards an FTA with Peru were at a standstill in late 2001 due to Peru's
negotiations with the Andean Community and Me rcosur;  the bilateral agreement currently in
existence under LAIA has been provisionally expanded and deepened, to allow for the settlement of
disputes and an extension of preferences.  This provisional agreement was signed in February 2000
and will remain in force until 30 June 2002.  Mexico is also negotiating a free-trade agreement withEcuador, to replace the partial agreement currently in place.
68. In addition to its participation in the APEC, Mexico  is also seeking to foster preferential trade
relations with Japan and Singapore.  To this effect, in mid-2001 the Japanese and Mexican authoritiesagreed to establish a joint study group to explore the possibility of initiating formal negotiations.  The
Mexican authorities indicated that negotiations for the establishment of an FTA with Singapore were
initiated in July 2000.
                                                     
22 The countries benefiting from the ensured oil supply and credits are: Barbados, Belize, Costa Rica,
El Salvador, Guatemala, Haiti, Honduras, Jamaica, Nicaragua, Panama, and the Dominican Republic.