English, News

Mexico Free Trade Agreements News – USMCA & EU-Mexico Free Trade Agreement – Newsletter

30 Apr , 2020  

USMCA, EUMEXFTA, Mexico, Free Trade Agreements, European Union, Rules of Origin, Auto, Labor

This week in our newsletter, The Trading Room, we address developments regarding the entry into force of USMCA as well as the modernization of the EU-Mexico Free Trade Agreement. Download our newsletter in PDF on the following link: Trading Room -30042020

USMCA

Last Friday the US Government notified the US Congress that Mexico and Canada “have taken measures necessary to comply with their commitments under [USMCA]”; Mexico is still in the process of modifying legislation. After notification to its congress, the USA notified Mexico and Canada and, therefore, USMCA will enter into force on July 1, according to the rules established in said treaty.

Automotive Sector

In an interview, Undersecretary of International Trade, Luz María de la Mora, indicated that the governments of the three countries are working to define the Uniform Regulations, including those relating to Vehicles and Autoparts. The goal is that these regulations should be published by July 1.

However, the Undersecretary also commented that producers of passenger vehicles and light trucks have the possibility of requesting an alternative staging regime to comply with the respective rules of origin. Accordingly, this possibility reduces the “urgency” of finalizing said Uniform Regulations. 

As a general rule, USMCA foresees a 3-year transition regime for said vehicles (e.g. VCR 66% to 75%); however, the appendix to Annex 4-B of USMCA foresees the possibility of an “alternative staging regime” to extend the transition for up to 5 years. Producers must justify their request and, if authorized, producers could benefit from a prolonged and gradual transition from Regional Content Value (including essential components), steel and aluminum content, and Labor Content Value.

Today, Thursday, April 30, the Mexican Ministry of Economy published in the Official Gazette the procedures to submit applications for an alternative staging regime. In general terms, the interested producers must present a (detailed) alternative staging regime plan, among other more specific requirements, that has to be submitted July 1, 2020, at the latest.

It should be noted that if the proposal is accepted by the Ministry of Economy, the alternative staging regime will be applicable to the producer’s eligibility to use the regime for imports into Mexico.

Labor

On Tuesday, April 28, the  Interagency Labor Committee for Monitoring and Enforcement was established by executive order. This Committee is not provided in the USMCA, rather it is an internal body of the USA whose creation was ordered in Section 711 of the USMCA Implementation Act. The committee will be chaired by the US Trade Representative (USTR) and the Department of Labor and other agencies will be members.

The Interagency Labor Committee will monitor compliance with the labor commitments assumed by Mexico and Canada, the implementation of the labor reform in Mexico, and to request enforcement actions concerning a USMCA country that is not in compliance. 

European Union-Mexico Free Trade Agreement

This Wednesday, April 29, and after four years of negotiations, the Ministry of Economy announced the end of the negotiations with the European Union on the modernization of the EUMEX-FTA.

The chapter that prevented the conclusion of the negotiations was the Public Procurement Chapter because the European Union had the interest of having access to tenders at the sub-federal (or state) level. Apparently, the result of the negotiations is to incorporate 17 Mexican states that are committed to international best practices. This is the first time that Mexico has negotiated public procurement at the sub-federal level in its history.

Now, the pending steps for the entry into force of this agreement are the legal review, translation, signature and the domestic approval process, i.e. the European bloc (European Parliament) as well as the legislative branch of each EU members because an investment chapter was included in the agreement, and, on the other hand, the Mexican Senate.

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English, News

Mexican Antidumping Investigation on dioctyl phthalate from Korea and the USA

19 Mar , 2020  

dioctyl phthalate, Korea, USA, Mexico, Eastman, Ministry of Economy, UPCI, International Trade, USMCA, antidumping, notice of initation

Today, 19 March 2020, the Mexican Ministry of Economy published in the official gazette the notice of initiation of the antidumping investigation regarding dioctyl phthalate imports from Korea and the USA.

 

VTZ Law Firm prepared a summary with the most relevant information regarding the notice of initiation, which is available in the following link: VTZ – Antidumping Notice -dioctyl phthalate -19022020

 

Download the notice of initiation in the following link: Notice of Initiation dioctyl phthalate 

 

For additional information, do not hesitate to contact our members: adrian[@]vtz.mx, vero[@]vtz.mx, emilio[@]vtz.mx and mariana[@]vtz.mx

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English, News

Mexican Newsletter: FDI in Mexico, USMCA and EUMexFTA

21 Feb , 2020  

Newsletter, International Trade and Investment News in Mexico, Foreign Investment in Mexico, FDI, China, Coronavirus, USMCA, Secretaría de Economía, EUMEXFTA, Free Trade Agreement, International Trade

Trading Room: Mexican Trade and Investment News

(Download the PDF: Trading Room -21022020)

  Foreign Investment in Mexico during 2019

In UNCTAD’s 2019 investment report, it was mentioned that “Foreign Investors were reassured by the final signature of the revised [NAFTA] (now called the USMCA).” Now, the Mexican Ministry of  Economy issued a newsletter reporting the preliminary Foreign Direct Investment (FDI) results. FDI in 2019 increased 4.2% in relation to that of 2018; specifically, Mexico received  32.912 billion USD of inward investment in 2019, while in 31.604 billion USD in 2018.

 
We highlight that 53% of the FDI was reinvestment earnings, while 39% correspond to new equity flows; also, almost half of the FDI was absorbed by the manufacturing sector, meanwhile, the FDI inward flows mainly originated from USA (36.8%), Spain (12.1%), Canada (9.7%), Germany (9.2%), Italy (4.5%).

 

Bearing in mind this context, the Minister of Economy, Graciela Marquez, mentioned in a meeting with Senators that there is an expectation that foreign investment will react positively to the incentives that were established in USMCA; and, the Ministry has two tasks to help activate the economy: implementing USMCA and relocating companies that are in China to Mexico. However, the Minister noted that the global economy presents signs of the economic deceleration, not only pertaining to growth but also due to the unknown impact of the coronavirus.

 

 

USMCA Uniform Rules

As reported in a previous edition, the Ministry of Economy is organizing a seminar about USMCA (as well as CPTPP). This week’s session was about market access, rules of origin and trade facilitation. During the event, it was announced that Mexico has approached the USA and Canada on the matter regarding USMCA’s uniform regulations that have to be adopted and published in the near future. The rules will detail how the parties will interpret and apply the relevant Chapters, such as customs procedures and the rules of origin chapters, e.g. remanufactured goods, recovery of raw materials, auto, etc.

 

 

 Signature of the European Union-Mexico Free Trade Agreement  in 2020

In an event organized by the Spanish Chamber of Commerce in Mexico, it was announced that the Underminister of International Trade, Luz Maria de la Mora, announced that the negotiations regarding the update of the European Union-Mexico Free Trade Agreement are close to being concluded and that it will be signed at the end of 2020. It has been two years since the Mexican Ministry of Economy and the European Commission announced that there was an agreement in principle, Mexican authorities had also announced that the signature of the update was soon; however, some details had not been sorted out, such as government procurement. One of the main features of the update of the EUMEXFTA is the full liberalization of tariffs since the agricultural sector had been excluded from the original FTA.

 

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English, News

G20, Mexico-China, and Ministry of Economy- Trading Room

5 Jul , 2019  

newsletter, g20, Mexico-China, Ministry of Economy, Best Lawyers, VTZ

The Trading Room

(Download the PDF version of our newsletter: Trading Room)

G-20 Declaration: Global Economy

On June 28th and 29th, the G20 summit was held in Osaka, Japan, and the Mexican President did not attend. We highlight, of course, the following three trade topics that were addressed in the “Global Economy” section of the declaration. First, the leaders of the G20 recognized the importance to maintain a stable, non-discriminatory trade and investment environment. Second, the G20 reaffirmed, as in Buenos Aires 2018, their support to reform the WTO, and its dispute settlement system. Third, G20 calls for a consensus by fall 2019 regarding the Steel Excess Capacity which is being discussed in the OECD.

 

In addition, this summit served as a forum so that the US and China could discuss a solution towards the ongoing trade war. In fact, the US suspended an additional tariff raise on 300 billion USD Chinese imports; currently, the US measures (i.e. 25% tariff) affect 250 billion USD of Chinese imports.

 

Sources:

https://www.eluniversal.com.mx/mundo/g20-advierte-sobre-los-riesgos-para-economia

https://www.excelsior.com.mx/global/g20-queda-fragmentado-ante-cambio-climatico-y-proteccionismo/1321530

https://lta.reuters.com/articulo/eeuu-china-tregua-idLTAKCN1TS1HC-OUSLT

https://www.nytimes.com/es/2019/06/28/g20-osaka-reuniones/

Mexico-China Relation 

This Monday and Tuesday, Mexican Foreign Affair Minister, Marcelo Ebrard, and the State Councilor and Foreign Minister, Wang Yi, gathered to agree on a joint work plan for the next 5 years with the aim to strengthen the “Strategic Partnership”. The partnership was established in 2013 during the term of Peña Nieto.

This joint work plan aims to promote trade, mainly agricultural exports from Mexico, attract Chinese investment in sectors such as advanced manufacturing, electric mobility, e-commerce, among others. The plan also includes cooperation in education, science and technology, and cultural matters. 

Sources:

https://www.excelsior.com.mx/nacional/pactan-mexico-y-china-ruta-de-5-anos-para-impulsar-el-comercio/1322047

https://aristeguinoticias.com/0406/mexico/mexico-y-china-acuerdan-asociacion-estrategica-integral/https://www.milenio.com/politica/marcelo-ebrard-mexico-busca-comercio-inversion-china

 

Ministry of Economy’s Foreign Offices to Be Closed?

This Tuesday the Senate approved the Federal Austerity Law, which the Chamber of Deputies will shortly discuss and vote.

 

This in itself generates uncertainty because article 15 of said law prohibits foreign “delegations” (except those related to security) and that the Mexican State will be represented abroad only by the Ministry of Foreign Affairs. This Law may have as a consequence the closure of the Ministry of Economy’s foreign offices, which are in charge of international trade topics and represent Mexico at international organizations, such as the WTO.

 

If the law is passed as such, experts are worried because the members of the Ministry of Foreign Affairs will absorb the tasks, and they lack experience in said topics. Will the members of the Ministry of Economy will be transferred to the Ministry of Foreign Affairs?

 

Sources:

https://www.bloomberg.com/news/articles/2019-07-03/mexico-trade-offices-face-the-ax-as-amlo-pushes-social-spending

https://www.elfinanciero.com.mx/economia/ley-de-austeridad-perfila-cierre-de-oficinas-comerciales-de-mexico-en-el-exterior

https://www.eluniversal.com.mx/columna/ricardo-ramirez-hernandez/cartera/austeridad-o-ineptitud-el-caso-de-la-secretaria-de

https://www.reforma.com/aplicacioneslibre/articulo/default.aspx?id=1714893&md5=c7831ceaada61e3c8335d41ed0275b97&ta=0dfdbac11765226904c16cb9ad1b2efe

 

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English, News

Migration and USMCA – The Trading Room

14 Jun , 2019  

Migration, Mexico and USA, International Trade and Tariffs, USMCA Ratification

The Trading Room

(Download the PDF version: Trading Room -20190614

Migration Pact stops Tariffs

Friday afternoon, Mexico and the US agreed on the migration crisis, an agreement that prevents, at least temporarily, the establishment of tariffs against products from Mexico. We highlight the following from the joint declaration and the press:

  • Mexico comprises to send the National Guard to the southern border, tackle human smuggling and trafficking organization.
  • Asylum Seekers in the US will be sent to Mexico, where they will await the adjudication of their US legal proceeding.
  • Mexico has 90 days to prove that the actions have been “effective”, a review in mid-July (45 days) will take place ;
  • Mexico rejected to be a “third-safe country”, at least for now.

 

Sources:

 

USMCA, ratification in Mexico

 

Now that a major hurdle was avoided, the Mexican Senate is currently holding meetings regarding USMCA ratification. The Ministry of Economy provided the final English and the preliminary Spanish text of the treaty that are available in the following link: USMCA.

According to news outlets, the Mexican Senate may ratify USMCA next week, probably Wednesday 19 of June.

Sources:

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English, News

Trade Alert: End of Mexican Countermeasures Against US Products

20 May , 2019  

Elimination of Mexico Countermeasures against US Products, 232 measures

End of Mexican Countermeasures Against US Products

(Download the PDF version: Trade Alert – 20052019)

Last Friday a joint statement by the US and Mexico was issued regarding the elimination of the so-called Section 232 tariffs on Mexican steel and aluminum. On Sunday 19th, the US President issued a Proclamation that eliminated the 232 measures applicable to said Mexican imports.

Today, 20th of May, the President of Mexico issued the following Decree:

DECREE that modifies the former Decree by which it modifies the Tariff of the Law of the Import and Export Tariffs, the Decree that establishes the Applicable Rate for 2003 of the Import Tariff for the goods originating in America of the North, and the Decree establishing various Sectoral Promotion Programs, published on June 5, 2018.

[…]

Sole  Article.-  Articles 1, 2 and 9 are repealed of the Decree[….] published on June 5th, 2018, in the Official Gazette.

I.    US Goods

In today’s Decree, the Mexican President eliminates the countermeasures that were taken against goods originating from the US (Decree of June 5th, 2018), such as steel and aluminum products, pork meat, cheese, agricultural products, motor boats, fans, “bourbon whiskey”, lamps and metal furniture, among others. The Decree enters into force today, so said US products can again benefit from the preferential tariffs that were established in NAFTA.

II.  Mexico-US Agreement

As mentioned in the joint statement and the Proclamation, we note that the elimination of the 232 tariffs is accompanied by a series of measures that will aim “to prevent the importation of steel articles that are unfairly subsidized or sold at dumped prices, to prevent the transshipment of steel articles, and to monitor for and avoid import surges.” According to the joint statement, the US and Mexico “agreed” that tariffs may be imposed to an individual steel or aluminum product in the event that imports surge, and that the “exporting” country can only retaliate in the affected sector; this clearly limits Mexico’s possible retaliatory measures which proved to be effective. Finally, Mexico and the US agreed to terminate all WTO litigation regarding this matter.

III.Steel Products from Third Countries without an FTA

VTZ notes that in the Presidential Decree of June 5th, 2018, Mexico temporally raised tariffs against steel products from third countries with which it does not have a Free Trade Agreement. Such tariffs expired on January 31st, 2019. Mexico adopted said measure because it considered that it was likely a substantial increase in exports to Mexico, in part, because of the unilateral measures adopted by the US.

 

Notwithstanding that the aforementioned measures expired, again Mexico temporally raised tariffs on steel products from third countries on March 25th, 2019, claiming that there is an oversupply of steel. These “temporal” tariffs will be in force for 180 days, i.e. September 22, 2019.

IV.               USMCA

Finally, VTZ highlights and considers that these events constitute a significant step towards the ratification process of USMCA in Mexico and the USA (as well as Canada). In this sense, companies established in the region shall start to prepare for its entry into force possibly in 2020.

For more information, please do not hesitate to contact Adrian B. Vázquez (adrian[@]vtz.mx),   Eduardo Zepeda (eduardo[@]vtz.mx), Emilio Arteaga (emilio[@]vtz.mx).

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News

Habemus NAFTA…or USMCA! – Trading Room 5/10/2018

5 Oct , 2018  

This week on The Trading Room:

Habemus NAFTA…or USMCA

Late Sunday night, Canada and the US reached an agreement, which allowed to maintain the updated version of the trilateral agreement, now called USMCA. The text… See More.

Mexican Senate and USMCA 

The future Mexican Minister of Foreign Affairs proposed by the President-Elect visited the Senate to recommend the ratification of USMCA….See More.

Looking for USMCA text? Click Here: Agreement Between The United States of America, Mexico, and Canada Text.

Esta semana en Trading Room:

Habemus TLCAN…o AMEC

El domingo pasado, Canadá y EEUU lograron llegar a un acuerdo, el cual permite mantener una versión actualizada del acuerdo trilateral, ahora llamado AMEC. El texto del acuerdo….Ver más

Senado Mexicano y AMEC

El futuro secretario de Relaciones Exteriores propuesto por el Presidente Electo visitó el Senado para recomendar la ratificación del AMEC…Ver más

¿Buscas el texto del TMEC? Haz click aquí: TMEC

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English, News

Why Should We Keep Chapter 19 of the NAFTA?

27 Sep , 2018  

A group of Trade Law Experts from the Mexican Trade Law Bar, including our partner Adrian Vázquezissued the following statement about: Why Should We Keep Chapter 19 of the NAFTA?

But first….

 

More…

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News

VTZ Trading Room -07/09/2018

7 Sep , 2018  

This week on The Trading Room:

  • November 29, 2018, the Signature of NAFTA 2.0?

“Last Friday, the USTR issued a statement notifying that President Trump notified Congress “…of his intent to sign a trade agreement with Mexico and Canada, if it is willing – 90 days from now.” Jennifer Hillman, US trade expert and former AB member of the WTO, noted there are a number of scenarios in order for a deal to be signed on or before November 29, 2018,…See more

  • Canadian Standoff: Chapter 19

Last Friday was also the deadline to reach an Agreement in Principle between Canada and US, but it was not met after talks were suspended due to a “bomb-shell” news. Notwithstanding, talks were resumed on Wednesday, when Canadian President Trudeau….See more.

Want to subscribe to our newsletter? Leave a comment or send us an email.

Esta semana en Trading Room:

  • ¿Noviembre 29, firma del TLCAN?

El viernes pasado, el USTR emitió un comunicado notificando que el Presidente Trump notificó al congreso “..su intención de firmar un tratado comercial con México y Canadá, si éste tiene la voluntad- 90 días a partir de hoy”. Jennifer Hillman, experta y ex miembro del OA de la OMC, comenta que existen diferentes escenarios para que un acuerdo sea firmado el 29 de noviembre…Ver más.

  • Enfrentamiento Canadiense: C. 19

El viernes pasado también fue el plazo para alcanzar un Acuerdo en Principio entre Canadá y EEUU, pero no fue logrado después de que salió una “bomba” como noticia. No obstante, las negociaciones se reanudaron el miércoles, cuando el Presidente Trudeau declaró…Ver más.

¿Quieres suscribirte a nuestro boletín? Déjanos un comentario o envíanos un correo electrónico.

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English, Reports

Mexico strikes back: Countermeasures

5 Jun , 2018  

Secretaría de Economía, Precios estimados, Subvaluación, sectores calzado, textil y confección, Secretaría de Bienestar, Zona Económica Especial, NOM-051, Información comercial y sanitaria, Etiquetado, alimentos y bebidas no alcohólicas preenvasados, Tratado de Libre Comercio, México, Panamá, Certificado de origen, Devolución de aranceles, Instructivo de llenado, COVID-19, Plazos, Términos,Prácticas desleales de comercio internacional, UPCI, Dirección General de Facilitación Comercial y de Comercio Exterior (DGFCCE), certificados de elegibilidad para bienes textiles y prendas de vestir (TPL) y certificados de cupo, SNICE, Colombia, bienes textiles y del vestido, IMPI, Alianza del Pacífico, Cosméticos, Eliminación de Obstáculos Técnicos al Comercio, Emergencia Sanitaria, Actividades esenciales, Investigación antidumping

Today, the President of Mexico, Enrique Peña Nieto, issued two Decrees that adopted countermeasures against the United States (US) as a result of the US tariffs applied to aluminum and steel imports from Mexico. Most Mexican countermeasures come into effect today.

Mexico has adopted a strong position against the US, selecting a wide range of products from pork to steel products, which may be adjusted through time.

Further, Mexico raised its Most Favored Nation (MFN) tariffs temporarily for a list of selected steel products.

Mexico’s trade measures can be classified as follows:

  1. Steel and Aluminum Products
  2. Pork Meat and Cheese
  3. Other Products

VTZ prepared a report about the recent events, available in the following link: VTZ Report: Mexico – Countermeasures

  1. DECRETO por el que se modifica la Tarifa de la Ley de los Impuestos Generales de Importación y de Exportación, el Decreto por el que se establece la Tasa Aplicable durante 2003, del Impuesto General de Importación, para las mercancías originarias de América del Norte y el Decreto por el que se establecen diversos Programas de Promoción Sectorial.
  2. ACUERDO mediante el cual se da a conocer el cupo para importar, con el arancel-cupo establecido, carne de cerdo fresca, refrigerada y congelada.

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