On March 23, Tatiana Clouthier, head of the Ministry of Economy, met virtually with U.S. Trade Representative (USTR), Katherine Tai, to discuss the importance of the bilateral trade relationship and the full implementation of the USMCA.
Both sides committed to future engagement on shared priorities such as economic recovery in the context of the Covid-19 pandemic and the full implementation of Mexico’s labor reform. Both sides also agreed on the mutual benefit derived from strong bilateral agricultural trade.
One day before this meeting, a group of 27 U.S. agricultural associations sent a letter to Secretary of Agriculture Tom Vilsack and the USTR that is available on the National Potato Council’s website. In addition, the Alliance for Trade Enforcement also issued a letter to the USTR this Wednesday.
Both associations have expressed their concerns about certain measures issued by the Mexican government that has already or will negatively impact a portion of U.S. agricultural exports and other sectors.
VTZ has addressed some of these issues in our previous newsletters and /or digital content. If you have any questions, please let us know.
Prior to the Electrical Industry Law reform publication in the Official Gazette on March 9, 2021, some of Mexico’s trading partners expressed their concerns about the impact of said reform on energy investments. If you wish to know more about this controversial reform, we consider this content relevant: Wilson Center
The Vice President for the Americas of the U.S. Chamber of Commerce, Neil Herrington, expressed that the reform was deeply troubling because it would reestablish a monopoly in the sector and affect Mexico’s commitments to the U.S. under the USMCA.
Mary Ng, Canadian Trade Minister, expressed through a letter sent to the Mexican Ministry of Economy, emphasizing Mexico’s obligation to maintain a stable and predictable business environment for Canadian companies.
In the same vein, EU’s representatives in Mexico recognized Mexico’s sovereign right to define its energy policy. However, they pointed out that this could lead to international arbitration, as well as a loss of confidence on behalf of investors.
Meanwhile, some companies in Mexico filed a constitutional remedy (amparo) against the electrical reform requesting the suspension of the reforms effects. A couple of Judges have granted suspensions (injunctions) and with general effects. In other words, the suspensions protect all companies that may be affected by the electrical reform in order to avoid market distortions.
At VTZ, we certainly believe that this reform could eventually trigger Investor-State disputes per FTAs and/or BIT. Furthermore, we consider it possible that the U.S. and Canada could initiate a USMCA (State-State) dispute, so there trade retaliation is possible in the event that an international panel rules against Mexico.
During the inauguration of the 104th General Assembly of the American Chamber of Commerce (Amcham), the Minister of Economy, Tatiana Cloutier, mentioned that the Mexican Government has a list of 200 studies and projects in which U.S. companies will be invited to invest. These projects have been worked in coordination with international organizations and focus on nine states in the southeast of Mexico.
In this regard, the incoming president of Amcham, Vladimiro de la Mora, added that Amcham members are committed to Mexico; however, to continue being a reliable, attractive, and safe partner for investment, Mexico needs to ensure an essential level of security, respect for the law and legal certainty.
Eventually, the projects will be announced, and we deem that such projects will be open to all companies, regardless of their nationality or origin. We expect that some projects will be related to the Isthmus Corridor project.
Last week, the Ministry of Finance issued a statement to inform that as of April 1, Ernesto Acevedo Fernández will be appointed as Alternate Executive Director of the World Bank.
As of the 1st of April Ernesto Acevedo Fernández will represent Mexico before the World Bank (@BancoMundial) as Alternate Executive Director of that institution.
— Hacienda 🇲🇽 (@Hacienda_Mexico) March 18, 2021
— Hacienda 🇲🇽 (@Hacienda_Mexico) March 18, 2021
Ernesto Acevedo is currently acting as undersecretary of Industry, Trade and Competitiveness at the Ministry of Economy. Mr. Acevedo is going to be substituted by Héctor Guerrero. According to the declarations of the Ministry of Economy, Tatiana Clouthier, Mr. Guerrero has worked in the private sector for a long time and joined the public sector when Andrés Manuel López Obrador became president.
La secretaria @tatclouthier felicita al subsecretario de Industria, Comercio y Competitividad, Ernesto Acevedo, por su nueva encomienda como representante de México en el Banco Mundial, y da la bienvenida a Héctor Guerrero, quien asumirá el cargo de subsecretario el 1 de abril. pic.twitter.com/zzsyXa93AK
— Economía México (@SE_mx) March 18, 2021
At this time, Mr. Guerrero is the Coordinator of the National Council for Investment, Employment and Economic Growth (COFINECE, acronym in Spanish), which is chaired by the Head of the Presidential Office. During the announcement, the Ministry also mentioned Alfonso Romo, who used to be in charge of the Presidential Office and is currently a sort of liaison between the private and public sectors.
Last week, the Chamber of Deputies approved the Federal Law for the Cannabis Regulation project. This law will allow the recreational use of marijuana (up to 28 grams), and the possibility of self-cultivation, including importation, through permits.
The project-law will return to the Chamber of Senators for the approval of the changes made by the Chamber of Deputies in order to conclude the legislative process.
Source: El Economista
Yesterday, Ms. Katherine Tai appeared before the Senate Finance Committee for her confirmation as the US Trade Representative. On Wednesday, Ms. Tai’s opening statements were released (available here), and we highlight the following three remarks:
As for Mexico-US trade relations, it is clear that Ms. Tai, as a future USTR, will seek to use the available legal tools provided in the USMCA. This was repeated in her hearing (Youtube video). In VTZ, we consider that USTR will be more receptive to labor complaints that may trigger a facility-specific rapid response mechanism. From her opening statements, it also appears that the US will have closer cooperation with WTO and that the US will continue to have a strong policy against China, and with the support of allies.
For more information on Labor and Trade:
Yesterday, US President, Joe Biden, signed an executive order that seeks “to address the vulnerabilities in our supply chains across additional critical sectors.” In the speech, the expression “building resilience” was mentioned frequently, and what is meant is “increasing our production of certain types of elements here at [US].” In the words of the US President, the order does two things.
What recommendations may arise as a result of the review? Besides possible statutory or regulatory changes that may impact supply chains, and that “federal incentives and any amendments to Federal procurement regulations that may be necessary to attract and retain investments in critical goods and materials and other essential goods and materials[…]”
The Director of the Roosevelt Institute, Todd N. Tucker, made an interesting thread in Twitter:
In addition, diplomatic actions to seek the support of allies to strengthen supply chains jointly. With the tensions rising on US energy investments in Mexico, we wonder whether Mexico will be invited to support this policy?
As a final note, international news outlets have reported that Canada is considering a Carbon “Tariff” (and possibly the US), which would take the form of a “border tax adjustment” per the GATT. We understand that Canada has a domestic “carbon” tax, which can put in a competitive disadvantage some Canadian industries against imported products. Although it is still a project, the Canadian government is studying the possibility of a “Carbon Tariff” (in the form of a border tax adjustment) on the imports from countries that do not have strong “green policies.”
Meanwhile in the USA, it has been reported that a carbon tax bill is being drafted in Congress and that a carbon “tariff” (in the form of a border tax adjustment) may also be considered. The European Union is also discussing similar measures as part of its green deal since last year.
One thing is clear, at least for us, Canada and the US will push for “green” policies together, as perceived in the recent Biden-Trudeau meeting. In turn, imports from polluting countries in Canada, the USA, and the EU may be affected in the mid or long term with a carbon “tariff”, and Mexican industries shall pay close attention to how this matter develops.More…
On Thursday of last week, the United States International Trade Commission (USITC) determined not to impose safeguard measures on berries, specifically blueberries. The investigation of “global” safeguard measures began on October 9, 2020, at the request of the U.S. Trade Representative during the Trump administration. The safeguard measures could have affected berries from more than 10 countries, including Mexico.
In sum, five USITC commissioners determined that blueberry imports do not cause harm or threaten the US industry. A report will eventually be published, probably during March. More information: USITC.
This determination was strongly celebrated and applauded by the Mexican government and other political agents:
In 2019, imports of “blueberries” in the US, from Mexico, amounted $ 291,060,437.
This Monday, February 15, Dr. Ngozi Okonjo-Iweala was elected as Director-General of the WTO after a process that lasted nine months and in which 8 candidates participated. She will be the first woman in history to lead the WTO, her mandate will begin from March 1, 2020, to August 31, 2025, with the possibility that her mandate can be renewed.
The selection of Dr. Ngozi Okonjo-Iweala comes after the Minister of Commerce of the Republic of Korea, Yoo Myung-hee, withdrew her candidacy and the administration of the new US President, Joseph R. Biden, expressed its “strong support” and, thus, achieved the consensus of WTO members.
Dr. Ngozi Okonjo-Iweala is global finance and international development economist with over 30 years of experience working in Asia, Africa, Europe, Latin America, and North America. She served twice as Nigeria’s Minister of Finance and Foreign Affairs, being the first woman to hold both positions.
The incoming Director-General of the WTO is perceived as an effective consensus builder and mediator, trusted by governments and other stakeholders.
In her statement to the WTO General Council, Dr. Ngozi Okonjo-Iweala noted that one of her key priorities is to work with WTO members to address the economic and health consequences of the COVID-19 pandemic.
More information: WTO
In recent weeks, China and Korea have expressed their intention to join the Comprehensive and Progressive Treaty of Trans-Pacific Partnership (“CPTPP”).
On the one hand, the Korean government announced that it pledged to work this year to join CPTPP during a ministerial meeting on international economic policies for 2021. Joining CPTPP is reportedly placed among Korea’s top10 strategic international economic policies. Since 2018, the Korean government, like other States, has expressed its interest in participating in this Free Trade Agreement.
For more information Donga, Business Korea, and Insider Trade, and for more information on Korea and Mexico trade see Mexico and Korea Doing Business.
In the last couple of weeks, Henry Gao, a trade academic, has been quite active in his Twitter account. For instance, on January 13th, he noted that Yu Jianhua (former Chinese ambassador to the WTO) was appointed as the new international trade representative, a Ministerial position that had been vacant for over two years. According to Mr. Gao, China is going to negotiate “something big”.
A couple of days later, the Chinese Ministry of Commerce (MOFCOM) released that it was considering joining CPTPP, plus there has been a significant reshuffling of government positions within MOFCOM.
VTZ considers that the intention of these States to become CPTPP parties is a natural reaction to the geopolitical situation and the pandemic. We note that expanding CPTPP membership to Korea and, particularly China, may face significant resistance from Mexico and its private sectors, such as the steel, chemical, and textile sectors.
Moreover, VTZ recalls article 32.10 of USMCA that establishes that a USMCA party may terminate USMCA if another party has entered into another FTA with a non-market economy. In that sense, Mexico (and Canada) may argue against China’s membership in CPTPP as it may jeopardize USMCA and their trade relations with the USA. Moreover, Australia is also facing certain Chinese trade-restrictive measures, which are being challenged at the WTO. The Australia-China trade frictions are, of course, additional hurdles against China.
In any case, we deem that the CPTPP membership will most likely focus on the UK. After UK’s accession, then CPTPP membership may eventually open a round of discussions with China and /or Korea.
Last week, the Ministry of Economy announced the “Economic Reactivation Plan” to face the economic impact caused by the COVID-19 pandemic in Mexico in a press conference. The so-called plan will focus on four pillars that encompass priority sectors for the Mexican economy as well as a variety of actions. VTZ highlights specific actions of each pillar:
Internal market, employment, and business:
1) developing the 4.0 industry, 2) increasing local value-added through tax benefits, 3) working hand in hand with industries that add value to the domestic and export markets, such as the steel industry, chemical, electrical, electromechanical, plastics, medical devices, automotive and aerospace, and 4) develop productive chains and national supplier platforms. Also, the Ministry will focus on supporting SMEs.
Investment promotion and facilitation:
1) attracting foreign investment with the support of embassies and consulates in coordination with the private sector and investment funds and, 2) regarding USMCA, establishing production plants of foreign companies that are seeking to relocate to promote the North America region.
1) promoting international trade, 2) negotiating trade agreements, 3) diversifying and increasing exports to new and existing markets, and 4) facilitating international trade through the recently created National Committee for Trade Facilitation.
Regionalization and sectors:
1) continue with the tax benefits for the southern border and taking advantage to attract investment, and 2) continue with the development of the priority infrastructure projects that can help to promote ancillary businesses with different business organizations.
We consider that this “so-called” plan is, in its face, a re-statement of the Ministry’s policies established at the beginning of the current administration. There are few (to none) measurable objectives, plus we find it interesting that the Ministry claims that it has as a policy to negotiate new agreements, without specifying the country or countries. Needless to say, we consider that the Ministry is possibly referring to the UK as well as the pending steps regarding the modernization of the Free Trade Agreement with the European Union, or will there be a surprise?
As noted in news outlets, the Minister of Economy, Tatiana Clouthier, acknowledged last Wednesday that some international trade procedures, such as permits, have been very slow due to bureaucracy within the Ministry as a result of the austerity measures. However, the Ministry of Economy indicated that they are committed to finding mechanisms to streamline international trade procedures.
It is important to note that Dora Rodríguez Romero has been appointed as the new Director-General on Trade Facilitation and International Trade.
Also, last Friday, January 22, 2020, the National Committee on Trade Facilitation was created per the Facilitation Trade Agreement of the WTO. Business Organizations, such as COMCE (for which VTZ is a member), may be invited to the meetings without the right to vote.
In this sense, we wonder whether soon there will be a 180º shift in trade facilitation measures in Mexico.
Finally, VTZ managing partner, Adrian Vázquez, and VTZ’s Chinese Desk Director, Susana Muñoz, attended the relaunching of the Mexican Chapter of the Pacific Economic Cooperation Council (PECC), which was attended by high-level government officials.
A series of decisions and regulations trade-related were published in December 2021. The most relevant in our opinion are the following:
Should you need more information, do not hesitate to ask us.
Do you remember that when the union AFL-CIO announced, in September, that it was going to submit a Labor Complaint against Mexico within 30 days?
Well, this week Trumpka, AFLI-CIO leader, claims that they will submit said labor complaint to trigger the facility-specific rapid response mechanism as soon as Biden takes office. Apparently, it is being reported that the AFL-CIO perceived resistance on behalf of Trump’s USTR regarding the labor complaint. If submitted, this will probably be the first USMCA task that the new Mexican Minister of Economy will have to oversee.
The Mexican president has submitted the idea that independent and autonomous bodies must cease to exist per “austerity” policies. These bodies are the Anti-trust Commission, Telecommunications Institute (IFT), Transparency Institute, and the Human Rights Commission.
As a result of this idea, which is being discussed in the cabinet, experts have expressed, that eliminating the IFT, in particular, puts Mexico at risk of not complying with relevant USMCA obligations.
The Under-minister of International Trade, Luz de la Mora, expressed in an interview that the Federal Government will seek to bring any proposed public policy into compliance with Mexico’s international obligations, including anti-trust.
In VTZ, we consider that this sudden public policy proposal and its reach, which requires constitutional amendments, will affect democratic institutions and rule of law.
The Mexican Ministry of Economy and Senate published an e-book titled “Implementing the USMCA : A test for North America ”, which contains chapters in Spanish and English.
If your interested, you can access the e-book: here.
In December, we organized a webinar in a round table format (in Spanish) that discussed trade and tax-related matters. You can access the video at the following link: Webinar.
The “Free Zone of the Northern Border” program will be valid until 2024 in accordance with the decrees signed by the President of Mexico, AMLO, on November 27th, 2020. Established in 2018, the program grants tax incentives on VAT, Income Tax (“ISR”), and the Special Tax on Production and Services (“IEPS”) applicable to fuels to companies located in the northern border strip. A more detailed description of the benefits of this program is discussed in our Tax Chapter of the Doing Business Guide.
It is noteworthy that the minimum wage is higher in the northern border region, i.e. 185.56 pesos (+/- 8.25 USD) instead of 123.22 pesos (+/- 5.50 USD).
The President also announced that the Program will be replicated in the southern border strip of Mexico as a complementary policy to the Mayan Train project and the Trans-isthmic Corridor.
The Southern Border will include 22 cities or communities of Chiapas, Tabasco, Campeche and Quintana Roo that have a border with Guatemala, which will enjoy the same benefits as the Mexican northern border.
Creation of a “Free Trade Zone”
In addition, Chetumal, Quintana Roo, will become a Free Trade Zone where import duties and the customs processing fees will not be applicable, allegedly. The Presidential Decrees have not been issued in the Official Gazette yet and, thus, we are still unaware of the details and/or rules. However, the President announced that these programs will enter into force in January 2021.
The Mexican president, AMLO, announced changes to his cabinet this Monday. We highlight the nomination of Tatiana Clouthier as the new Minister of Economy, while Graciela Márquez will leave said position in a couple of days to join the board of the National Institute of Statistics and Geography (“INEGI”).
Tatiana Clouthier is currently the vice-coordinator of the MORENA party in the Chamber of Representatives, and she was the coordinator of AMLO’s presidential campaign in 2018. In that sense, Ms. Clouthier is close to the President, but she has also been critical to a couple of the President’s decisions.
Ms. Clouthier’s academic background is not related to the economy or international trade, however, she has held different positions in the public sector for more than 10 years, such as being a representative and working in local governments.
During a press conference, Ms. Clouthier stated that “[…] the objective of this job is very clear: more and better companies, to promote better jobs for all […]”, while in Twitter she expressed that “With pleasure and of course commitment I will accept the challenge of this job to which the President is inviting me. We will work to become a space that seeks to solve through dialogue, ideas and innovation in favor of our motherland”
Despite some frictions between the government and the private sector, the next head of the Ministry of Economy appears to show that she is open to dialogue, which is much needed to meet the needs of the current economic context that Mexico is experiencing due to the COVID-19 pandemic. As a Minister of Economy, Ms. Clouthier will be responsible of foreign investment, international trade programs and restrictions, free trade agreements, among other matters.
VTZ will be organizing a webinar with a round table format (in Spanish), where our members will share their 2020 professional experiences (trade, customs, tax, real estate, and labor) as well as our expectations for the next year. If you are interested, please register in the following link: Zoom Webinar
The Mexican Antitrust Commission (COFECE, acronym in Spanish) presented 12 measures in order to reactivate the national economy for the following relevant sectors: pharmaceutical, financial, energy, transportation, public procurement, and regulation.
VTZ highlights that one of these measures focuses on International Trade regulations, specifically on trade remedies matters. In general, the COFECE proposed measure consists of “avoiding the imposition of restrictive measures on international trade without a prior analysis of the negative effects on the consumer.”
Though many of the proposals are encouraged, VTZ notes that some of these “trade” measures would require reforming Mexico’s International Trade Law.
What does COFECE propose?
Modifying the operation of the International Trade Commission (ITC) so that (i) its composition is more balanced, for example, including the Federal Attorney for the Consumer (PROFECO, acronym in Spanish), (ii) having the opportunity to hear the opinion of those who may be affected; (iii)publishing the stenographic versions of the sessions; and (iv) the information allows the ITC to assess the potential costs and benefits of the proposed measure, with special care on the consumer.
Yesterday, October 22, the Government of Mexico published a Decree modifying its tariffs items and duties. In line with Mexico’s commitments on climate change and promoting the use of cleaner energies, the President ordered unfolding tariff items regarding used and new trolleybuses as well as their respective tariffs.
Accordingly, new trolleybuses are subject to a 0% import duty, a rate that will be temporarily available until September 30th, 2024, while used trolleybuses will be subject to a 50% tariff.
Hopefully, the Mexican Government does not forget to renew the 0% import duty before its expiry.
Last month, UNCTAD released its 2020 Trade and Development Report. On its website, a short article addressing the report and the global economic situation due to the COVID-19 pandemic was published.
Accordingly, UNCTAD warns of “a lost decade” if national governments decide to adopt austerity policies. It should come as no surprise that austerity policies would trigger low job creation, stagnant wages, slower economic growth, and increased pressure on government budgets. It would also mean not fulfilling the 2030 Agenda for Sustainable Development.
In contrast, the article indicates that boosting public investment with international support and coordination could double the global growth rate for the next decade. Also, UNCTAD emphasizes actions that the multilateral system can take for economic recovery, such as expanding the use of Special Drawing Rights to boost global liquidity and the closure of the Doha Development Agenda, which has been suspended or frozen for almost two decades.
According to UNCTAD, the world economy will contract this year by more than 4%, leaving a deficit in world production at the end of the year of more than $ 6 trillion (US dollars), while “trade will shrink by around one-fifth this year, foreign direct investment by up to 40%.”
In the case of Latin America, the article points out that the region is likely to have a decline in production of 7.6% this year, while some of its largest economies, Argentina and Mexico, will have a sharp double-digit decline.
For this reason, the Director of the Division of Globalization and Development Strategies of UNCTAD Richard Kozul-Wright mentions that “[…] a V-shaped recovery… would require double-digit global growth next year, which is out of the question.”
According to a Mexican news outlet, an interesting infrastructure project is being planned that will further integrate North America. The project entails a rail and logistic corridor that will connect the Mazatlan, Sinaloa, to Winnipeg, Canada crossing the United States.
Per the report, 167 km of rail need refurbishment and 87 km of rail construction is needed in Mexico. The budget of this project will be private and not government funded. Check out the report here (in Spanish).
Accordingly, the Mexican Ministry of Economy and the Attorney General for Consumer Protection issued a “ban” on specific cheese and yogurt products. The Ministry of Economy issued a public statement identifying the following cheese and other yogurt trademarks, while news outlets identified specific products.
According to the public information, the identified cheese products are not complying with labeling requirements, origin markings, failing to provide the exact weight, or using prohibited ingredients (e.g. adding vegetal fat). As for yogurt products, the Ministry identified, for instance, some “natural” drinkable yogurts that have a low protein intake per the mandatory labeling standard. The standard does not distinguish between drinkable and “container” natural yogurt, while “fruit” yogurts do have such distinction and, thus, drinkable “fruit” yogurts have a lower minimum protein content requirement.
This government measure, of course, has sparked reactions in the business community. Mondelez issued a public statement calling the measure as “totally baseless”, while Lala, Danone, and Fud claim that their products comply with the Mexican mandatory standards. However, the Industry has claimed that they will correct any inconsistency with their products. For more information, see the following report of the Associated Press (English).
In February 2018, Mexico started public consultations on draft-projects regarding mandatory standards on dairy products (i.e. powder milk, yogurt, and cheese) as noted in our Trading Room. These standards were eventually adopted, and they were published in 2019.
VTZ is, of course, aware that new labeling rules applicable to imports started to apply as of the beginning of October. The new rules have impacted, for instance, “intermediate” products that are used in industrial processes and not destined for final consumers. This has caused bottlenecks in Mexican customs as reported by a news outlet this Monday.
On September 7, 2020 The Legal 500 published its 2021 ranking where classifies the best law firms in the different Areas of Practice.
Vazquéz, Tercero & Zepeda appears again in the number 1 band of leading firms in International Trade and Customs. The legal ranking also recognizes leading individuals of our team, in this edition appears as leader Adrián Vázquez, and as next generation partners, Emilio Arteaga, who is currently a Junior Partner, also mentions our partners Eduardo Zepeda and Eduardo González, as well as our partners mentioned above, as Practice Heads.
The ranking shows the following review of our firm:
A top-notch player in the international trade and customs arena, Vázquez Tercero & Zepeda has a very strong focus on anti-dumping matters and the maquiladora industry. The 14-strong practice, which covers a wide array of matters, including including trade policy, customs compliance, regulatory matters, customs litigation, and tax planning and litigation; is a popular choice for clients from the Asian market. Managing partner and trade disputes expert Adrián Vázquez co-heads the practice with Mexico City colleague Emilio Arteaga (promoted to partner in May 2019, he has been active in anti-dumping investigations); and Guadalajara-based partners Eduardo Zepeda, who has a robust knowledge of the IMMEX/maquiladora industry, and skilled litigator Eduardo González. Support comes from key associate Mariana Malvaez. Notably, in addition to the aforementioned offices, the firm also operates from León, Monterrey, Puebla, Reynosa, Matamoros, Tijuana and Los Cabos, and has a promotion trade and investment office in Hong Kong. Former partner Horacio López Portillo left to establish his own boutique, López Portillo Consultores, S.C., in June 2019.
The publication also mentions some clients with whom our firm has collaborated. Consult here: The Legal 500 2021
Today, October 5, 2020, the Final Resolution of the antidumping investigation on imports of wind towers originating in the People’s Republic of China was published in the Official Gazette of the Federation, regardless of the country of origin. The companies requesting the investigation were Arcosa Industries de México, S. de R.L. de C.V., and Speco Wind Power, S.A. de C.V., and four Chinese producer-exporters and Mexican importers of wind towers appeared at the investigation.
In this investigation, both the producer-exporter companies and the importers argued, among other reasons, that the eventual imposition of antidumping duties implies a barrier to entry into the domestic market, price setting by domestic producers, monopolistic or oligopolistic practices, distortion prices, increases in electricity prices, impact on consumers and obstacles to goals. Likewise, the counterparts asked the Ministry to evaluate the “public interest” of the environmental factor in light of Mexico’s international commitments regarding the production of clean energy, climate change, and sustainable development. In this regard, the Ministry concluded in paragraph 420 of the Final Determination, the following:
420. The Ministry considers that the arguments of the appearing parties regarding the negative effects that the application of countervailing duties could cause in the domestic market are inadmissible since the eventual imposition of countervailing duties is only intended to restore fair conditions of competition and correct the distortion in prices generated by the concurrence of imports to the domestic market under conditions of price discrimination and not for other purposes.
The Ministry of Economy preliminarily applied countervailing duties that ranged from a range of 41.22% to 66.49 for three participating Chinese producer-exporters and 143.06% for a Chinese producer-exporter and the other Chinese exporters. However, in its Final Resolution, it noted the following:
418. In the preliminary stage of the investigation, the Ministry determined it appropriate to apply provisional countervailing duties to imports of wind towers originating in China, equivalent to the margins of price discrimination. This was due to the fact that it reached a preliminary affirmative determination on the existence of price discrimination and pecuniary injury caused to the domestic wind tower industry, and considered them necessary to prevent them from continuing to cause injury to the industry during the investigation, in accordance with the provisions of Article 7.1 of the Anti-Dumping Agreement.
As stated in paragraph 425 of the aforementioned Final Resolution, in this investigation the Ministry of Economy imposed a “lesser duty” in order to restore fair conditions of competition and eliminate damage to the domestic industry.
In paragraph 429 of the Final Resolution, the Ministry of Economy determined to impose a final compensatory quota of 21% on imports of wind towers originating in China, regardless of the country of origin, which enter through the tariff section 8502.31.01 of the TIGIE, or by any other.
Vázquez Tercero & Zepeda (VTZ), through his team of lawyers, represented the production-exporters in this investigation (Chengxi Shipyard Co. Ltd., Penglai Dajin Offshore Heavy Industry Co. Ltd., Shanghai Taisheng Wind Power Equipment Co. Ltd . and Suzhou Titan New Energy Technology Co. Ltd.) The team was led by Adrian Vázquez, supported by Emilio Arteaga, Verónica Vázquez, Mariana Rivera, and Mariana Malvaez.