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FREE TRADE AGREEMENTS:FREE TRADE AGREEMENTS:

THE MEXICAN EXPERIENCETHE MEXICAN EXPERIENCE

20062006 Seoul International Forum on Trade RemediesSeoul International Forum on Trade Remedies

MSc. Armando

Barragan

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• The mexican system regarding trade remedies was created in 1986 as the country acceded the General Agreement on Tariffs and Trade (GATT).

Mexican Antidumping SystemMexican Antidumping System

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• Carry on dumping, subsidies and safeguards investigations.

• Defend the dumping and subsidies determinations before international dispute settlement mechanisms.

• Give legal and technical advice to Mexican exporters regarding their participation in third country investigations.

What we do?What we do?

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Legal instrumentsLegal instruments

• Foreign Trade Law (07/27/1993) and its Regulations (12/30/1993)• The General Agreement on Tariffs and Trade (GATT of 1994)• Antidumping Agreement• Agreement on Subsidies and Countervailing Measures• Agreement on Safeguards• Internationals Treaties signed by Mexico as described in the next chart. • Article 1904 Procedure Regulations and those of the Binational Panel of

the NAFTA • Understanding on Rules and Procedures Governing the settlement of

disputes.

• Working procedures for appellate Review. AMENDMENTS

Mexico amended its Foreign Trade Law (FTL) in order to provide transparency and predictability to the economic operators. Strict deadlines for the completion of investigations to ensure that complaints are dealt rapidly and efficiently. (03/13/2003)

Mexico amended its FTL in order to authorize the Ministry of Economy to conduct and resolve safeguard investigations, and impose the measures resulting from such investigations and provide legal and technical advice regarding Antidumping, Countervailing Duties and Safeguard investigations carried out in other countries and any other procedure that could result in an import restriction.(01/24/06)

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Mexico’s Free TradeMexico’s Free Trade AgreementsAgreements

Source: Ministry of Economy

* Acuerdos de Complementación Económica (ACEs)** Chipre, Eslovenia, Estonia, Hungría, Letonia, Lituania, Malta, Polonia, República Checa, República Eslovaca

*Cuba

*Perú

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1986 1993 1994 1995 2000 2001199919981992 2002 2004 2005

GATT(WTO)

ALADIChile APEC OECD

NAFTAUSA

Canada TLC TNGuatemalaHondurasSalvador

FTA G3ColombiaVenezuela

FTACosta Rica

FTABolivia

FTANicaragua

ALADIUruguay

ALADICuba

ALADIEcuador

ALADIPanama

ALADIArgentina

FTAEU*

FTAIsrael

ALADIPeru

ALADIParaguay

TLC AELCIceland

LiechtensteinNorway

Switzerland

ALADIMERCOSUR(framework agreement)

FTAUruguay

EAAJapanFTA

Chile

*EU: Germany, Austria, Belgium, Cyprus, Denmark, Slovenia, Spain, Estonia, Finland,

France, Greece, Hungary, Italy, Latvia, Lithuania, Luxembuorg, Malta, Netherlands,

Poland, Portugal, United Kingdom, Czech Republic, Slovakia and Sweden.

ALADIBrazil

FTAs signed by Mexico

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Mexico’s Free TradeMexico’s Free Trade AgreementsAgreementsFTAs

MEXICOTRADE REMEDIES CHAPTER (Specific

for AD / CVD)

SAFEGUARD CHAPTER

DISPUTE SETTLEMENT

CHAPTER

WTO DISPUTE SETTLEMENT

NAFTA(CANADA AND USA)

XIX VIII XIX Specific for AD / CVD

Non excluding

G3(COLOMBIA AND VENEZUELA)

IX VIII XIXNon specific

Excluding

COSTA RICA VIII VII XVII Non specific Excluding

BOLIVIA VIII VII XIX Non specific Excluding

NICARAGUA IX VIII XXNon specific

Excluding

CHILE Does not exist VI Does not exist Non excluding

EUROPEAN UNION(AUSTRIA, BELGIUM, DENMARK, FINLAND,

FRANCE, GERMANY, GREECE, IRELAND, ITALY, LUXEMBOURG, NETHERLANDS,

PORTUGAL, SPAIN, SWEDEN, UK)

Confirms WTO’s rights and

obligations

Article 15 Does not exist Non excluding

EUROPEAN FREE TRADE ASSOCIATION(ICELAND, LICHTENSTEIN, NORWAY, SWITZERLAND)

Confirms WTO’s rights and

obligations

Article 14 Mandatory consultation Non excluding

ISRAEL Does not exist V Does not exist Non excluding

NORTH TRIANGLE (SALVADOR, GUATEMALA AND HONDURAS)

IX VIII XIX Non specific Excluding

Japan Does not exist VI XVIII Excluding

Uruguay VII VI XV Excluding

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Safeguard measuresSafeguard measures

• Safeguard measures may be applied to imports that increase in such quantities and under such conditions as to cause serious injury or threat thereof to the domestic industry.

• Safeguard measures can be: Bilateral(FTA’s)

Bilateral(FTA’s)

Global(WTO)Global(WTO)

Mexico has been excluded from different safeguard measures applied by our trading partners like:

COUNTRY PRODUCT

El Salvador Fertilizers

CanadaBicycles

Steel

EE.UU.

Wheat gluten

Lamb meat

Steel wire rod

Line Pipe

Steel

COUNTRY PRODUCT

Chile Wheat flour

Steel

Fructuose

Liquid/powdered milk

European Communities

Mandarins

Steel

Venezuela Footwear

Paper

Iron steel

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Number of antidumping or countervailing duty orders in Mexico from January 1st, 1987 to April 7, 2006

Unfair trade practices investigations: 266 (may impose one or more AD / CVD duties)

Total In force

Antidumping duties: 314 73

Countervailing duties: 19 0

Total: 333 73

Products subject to antidumping or countervailing duties:

Steel, chemicals, textiles, footwear, rice, apples, beef, toys, bicycles, and others.

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ANTIDUMPING AND COUNTERVAILING MEASURESANTIDUMPING AND COUNTERVAILING MEASURES

39%

17%7%

2%

3%

8%

24%

USA

ChinaBrazil

VenezuelaKorea

European UnionOthers

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Exports and imports from Mexico

0

50,000,000,000

100,000,000,000

150,000,000,000

200,000,000,000

250,000,000,000

Exports Imports

Global

Commercial partners

Others

Dollars

Country Exports Imports

Global 213,994,709,891

221,414,416,622

Partners 205,610,214,789

170,115,818,660

Others 8,384,495,102 51,298,597,962

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Mexican Imports

YEAR 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006Exp. Canada 1482 1987 2172 2156 1518 2391 3353 3069 2806 2831 2764 3369 490Exp. USA 51645 66272 80574 94184 102923 120392 147685 140296 143047 146802 165111 185290 32918Imp. Canada 1620 1374 1743 1968 2290 2948 4016 4234 4480 4120 5419 6163 1084Imp. USA 54790 53828 67536 82002 93258 105267 127534 113766 106556 105685 109558 118406 19763

* Source: Ministry of Economy* Source: Ministry of Economy

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

1994 1997 2000 2003 2006

Export Canada

Export USA

Import Canada

Import USA

Millions of dollars

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0

10

20

30

40

50

Investigations EE.UU. VS Mexico

1 2Before TLC

(1981-1993)

After TLC

(1994 until now)

14

0

5

10

15

20

25

30

35

40

45

50

Investigations Mexico VS EE.UU.

1 2Before TLC

(1981-1993)

After TLC

(1994 until now)

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CHAPTER XIX BINATIONAL PANEL REVIEWS IN MEXICO, USA AND CANADA (109 CASES)

USA (73)67%

MEXICO (16)15%

CANADA (20)18%

USA (73)

MEXICO (16)

CANADA (20)

TOTAL AD/CVD CASES IN 1994-2006:

1 USA: 64 cases

2 CANADA: 44 cases

3 MEXICO: 32 cases

Source: NAFTA Secretariat. www.nafta-sec-alena.org, http://www.cbsa-asfc.gc.ca/sima/anti-dumping,

www.economia.gob.mx

1

2

3

16

TRADE BETWEEN MEXICO AND CHILE

0

200

400

600

800

1000

1200

1400

1600

1800

1993 1995 1997 1999 2001 2003 2005

Exports

Imports

2006/1

Before TLC After TLC

Millions of dollars

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TRADE BETWEEN MEXICO AND EUROPEAN COMMUNITIES

0

5

10

15

20

25

30

1997 1999 2001 2003 2005

Exports

Imports

Thousands of millions of

dollars

Before TLCUEM

After TLCUEM

2006/1

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PROSPECTS FOR MEXICO’S TRADE REMEDY SYSTEMPROSPECTS FOR MEXICO’S TRADE REMEDY SYSTEM

Mexico is firmly committed to the promotion of open and fair trade with all its trading partners.

Mexican legislation and procedures concur with applicable WTO and other international agreements.

In order to have precise and adequate rules against unfair trade, Mexico participates in several international forums (OECD, Friends of Antidumping, WTO Committees, Negotiating Group on Rules) to improve the international trade remedies legislation.