1 FREE TRADE AGREEMENTS: THE MEXICAN EXPERIENCE 2006 Seoul International Forum on Trade Remedies MSc. Armando Barragan

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

3 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?

4 Legal 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)

5 Mexico’s Free Trade Agreements Source: Ministry of Economy * Acuerdos de Complementación Económica (ACEs) ** Chipre, Eslovenia, Estonia, Hungría, Letonia, Lituania, Malta, Polonia, República Checa, República Eslovaca *Cuba *Perú

GATT (WTO) ALADI Chile APECOECD NAFTA USA Canada TLC TN Guatemala Honduras Salvador FTA G3 Colombia Venezuela FTA Costa Rica FTA Bolivia FTA Nicaragua ALADI Uruguay ALADI Cuba ALADI Ecuador ALADI Panama ALADI Argentina FTA EU* FTA Israel ALADI Peru ALADI Paraguay TLC AELC Iceland Liechtenstein Norway Switzerland ALADI MERCOSUR (framework agreement) FTA Uruguay EAA Japan FTA 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. ALADI Brazil FTAs signed by Mexico

7 Mexico’s Free Trade Agreements FTAs MEXICO TRADE REMEDIES CHAPTER (Specific for AD / CVD) SAFEGUARD CHAPTER DISPUTE SETTLEMENT CHAPTER WTO DISPUTE SETTLEMENT NAFTA (CANADA AND USA) XIXVIII XIX Specific for AD / CVD Non excluding G3 (COLOMBIA AND VENEZUELA ) IXVIII XIX Non specific Excluding COSTA RICA VIIIVII XVII Non specificExcluding BOLIVIA VIIIVII XIX Non specificExcluding NICARAGUA IXVIII XX Non specific Excluding CHILE Does not existVIDoes not existNon 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 14Mandatory consultationNon excluding ISRAEL Does not existV Non excluding NORTH TRIANGLE (SALVADOR, GUATEMALA AND HONDURAS) IXVIIIXIX Non specific Excluding Japan Does not existVI XVIIIExcluding Uruguay VIIVI XVExcluding

8 Safeguard 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: COUNTRYPRODUCT El SalvadorFertilizers Canada Bicycles Steel EE.UU. Wheat gluten Lamb meat Steel wire rod Line Pipe Steel COUNTRYPRODUCT ChileWheat flour Steel Fructuose Liquid/powdered milk European Communities Mandarins Steel VenezuelaFootwear Paper Iron steel

9 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: Countervailing duties: 19 0 Total: Products subject to antidumping or countervailing duties: Steel, chemicals, textiles, footwear, rice, apples, beef, toys, bicycles, and others.

10 ANTIDUMPING AND COUNTERVAILING MEASURES

11 Exports and imports from Mexico Dollars CountryExportsImports Global213,994,709,891221,414,416,622 Partners205,610,214,789170,115,818,660 Others8,384,495,10251,298,597,962

12 Mexican Imports * Source: Ministry of Economy Millions of dollars

13 Before TLC ( ) After TLC (1994 until now)

14 Before TLC ( ) After TLC (1994 until now)

15 CHAPTER XIX BINATIONAL PANEL REVIEWS IN MEXICO, USA AND CANADA (109 CASES) TOTAL AD/CVD CASES IN : 1 USA: 64 cases 2 CANADA: 44 cases 3 MEXICO: 32 cases Source: NAFTA Secretariat

16 TRADE BETWEEN MEXICO AND CHILE 2006/1 Before TLCAfter TLC Millions of dollars

17 TRADE BETWEEN MEXICO AND EUROPEAN COMMUNITIES Thousands of millions of dollars Before TLCUEM After TLCUEM 2006/1

18 PROSPECTS 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.