Head, Federal Regulatory Improvement Commission Mexico’s Federal Regulatory Improvement Programme: Experience and Future Priorities Carlos Arce Macias Head, Federal Regulatory Improvement Commission Mexico (52) 57.29.92.30 carce@economia.gob.mx Singapore, February 2001

The need for regulatory improvement Began in 1989 as a natural complement to the process of trade liberalisation (1986) Financial crisis of 1994-1995 gave added impetus to the reform process General need to improve economic performance and job creation in an environment of fiscal austerity.

Reform of the Federal Administrative Procedures Law (2000) Unanimously approved by Congress Strengthened and consolidated regulatory improvement programme Created Federal Regulatory Improvement Commission (COFEMER), with technical and functional independence, and greater review powers Created Regulatory Improvement Council (business, academic, labor, rural and government representatives)

Review, elimination and simplification of formalities Federal Registry of Formalities and Services contains information on requirements, processing times, office locations and forms for nearly all business formalities. Citizen formalities must be included by May 2003. Number of formalities reduced by 45% from 1996 to 2000, and 95%of remaining simplified. Formalities not registered by May 2003 will no longer be applicable. Register of Accredited Persons must be created. Allows faster processing of formalities. Complement to e-government.

Review of draft regulations Since 1996, more than 800 draft legislative and administrative proposals reviewed in detail with the help of the Regulatory Improvement Council and ad hoc private sector working groups. All regulatory proposals are public, and must be sent to COFEMER at least 30 working days before adoption. Transparency and analysis-based review process (regulatory impact statements, public consultation, net benefit to society).

COFEMER reform proposals COFEMER can diagnose the quality of existing regulation in specific regulatory areas and propose reforms to the head executive. Reforms carried out include: natural gas law and implementing rules (1995), civil and mercantile judicial procedures (1996), standards Law (1996), mining law (1996), competition law implementing rules (1998), and Federal Administrative Procedures Law (2000). New diagnoses have been prepared for: water distribution and conservation, medical devices, fertilizers and pesticides, electricity reform, and freedom of information.

Regulatory reform across levels of government Since 1995, the need for better co-ordination and congruence between the federal, state and local governments was explicitly recognised. COFEMER provides technical advice to states and municipalities. Most state governments have created their own regulatory improvement programmes, and 23 have signed agreements with their main municipalities. National state regulatory reform meetings every 6 months. The private sector publishes an annual state regulatory rankings.

Benefits of reform Market openness and deregulation of entry, exit and pricing in tradable goods has: Increased competition and innovation Improved quality of services Lowered prices Increased resilience to economic shocks Regulatory reform also: Directs public resources to their most productive uses Improves policy co-ordination Creates transparency and supports democratic values Strengthens rule of law

Future priorities Consolidation of the programme (implementing rules for review criteria and impact assessments). Training and capacity building. Co-operation with states and particularly municipalities. Public consultation and higher public profile for COFEMER. Reform of electricity sector and freedom of information act.

APEC-OECD 2002 Mexico presidency of APEC. Importance of continued Asia-Pacific cooperation in regulatory reform. Plans for regulatory reform workshop in Merida, Yucatan in spring 2002.