NAFTA Works. Mexico Economic Update. 10 YEARS: Mexican Institute. Inside this issue: Mar ch 2004 Volume 9, Issue 03

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1 NAFTA Works A MONTHLY NEWSLETTER ON NAFTA AND RELATED ISSUES VISIT US AT Mar ch 2004 Volume 9, Issue 03 Inside this issue: 10 Years: Mexican Institute of Industrial Property (IMPI) Mexico Economic Update 1 Diario Oficial Notices 2 Related Events 2 Selected Readings 2 Profile of Oregon 3 United States Eases Visa Process for Mexican Professionals Profile of Estado de Mexico 4 Success Stories YEARS: Mexican Institute of Industrial Property (IMPI) It s been 10 years since the creation of the IMPI in In it s 10 years period, what strategies has IMPI implemented? How was its performance? What benefits has IMPI provided to the people? Has the IMPI made any change in its structure?, and what s the future project of IMPI? The answers to all of the above questions are positive. First of all, the strategies of IMPI have been targeted to improve the Mexican intellectual property (IP) enforcement system. An example of a strategy is the Ex-Officio visits. Ex-Officio deals with inspection visits to establishments to ensure that there are no infringements on industrial property and copyrights. In 1994, 947 inspection visits were performed and in 1999, there were 4,420. As seen in the graph, these visits have increased dramatically. Reducing violations on industrial property and copyrights. In 2003, the less inspection visits were required, only 2,990 where performed. This is a sign that the rule of law in industrial property and copyrights is being respected. This is a positive answer and a positive achievement by the IMPI. Moreover, table 1 represents total items seized from 1994 to and 2000 were the peak years of items seized. However, the figures for 2003 are lower. This shows an effective impact by IMPI in its war to protect both industrial property and copyrights. IMPI actively participates in technological forums to encourage and support Mexican inventors as well as researches. The objective of a technological forum is to develop a connection between enterprises and Mexican inventors. In the XIII Edition of Technological forum, 20 prototypes were displayed and 3,450 visitors attended, while in the XV edition, 47 prototypes were displayed and 11,750 visitors attended. Clearly, the Mexican inventors and researches are benefiting from IMPI s knowledge and resources. IMPI is building human capital by encouraging innovation as well as broadening the inventor s skills. As IMPI moves towards innovation and paperless procedures, the challenge faced is to develop processing capacity to patent and trademark applications online. This will reduce to a great extent the time and paper for the corresponding agency in charge and the customers. Ten years of hard work have proved that IMPI has been successful in achieving its main goals and looks toward a more successful future. 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 QUANTITY OF ITEMS SEIZED IP CR Mexico Economic Update Foreign Trade Feb 2004 Value Annual Change (US bd) % Exports Oil Imports Balance (0.07) (2.7) 11.9 (125.2) Jan-Feb 2003 Value Annual Change (US bd) % (3.0) (0.26) (280.9) Feb 2003 Feb 2004 Financial Indicators Inflation Rate (Feb/Feb) Interest Rate (CETES 28) Stock Market Index (IPC) Exchange Rate (pesos/dollar) International Reserves (US bd) 5.5% 9.04% 5, $ % 5.57% 9, $59.1 Employment Open Unemployment 2.74% 3.92% Jan 2002 Jan 2003 Economic Growth Global Economic Activity 2.2% Index (IGAE) Industrial Activity Industrial Production Mining Construction 0.5% -0.4% 1.3% 3.7% 3.9% 0.8% -0.1% 6.0% 3.0% Source: Ministry of the Economy with Banxico and INEGI data. US bd= US billion dollar

2 D iario Oficial Notices Seventh resolution that modifies the General Rules for Foreign Trade in 2003 and Annex 1. (Feb 3, 2004) Notice that requests comments to a possible harmonization of Most Favored Nation tariffs between Mexico, the US and Canada and a possible liberalization of NAFTA s rules of origin. (Feb 12, 2004) Mexican Official Standard NOM-012/1-SEDG Pressurized stationary containers for L.P. gas. General requirements for design and manufacture. (Feb 20, 2004) April Plast Imagen México 2004 México, D.F. Expo Santa Fe Plastimagen Mexico 2004 is the region's most important expo and conference event for the plastics industry. It is the port of entry to the Latin American market and the best choice for promoting products and services. It offers the opportunity to find new clients, obtain new contacts and reactivate past contacts. The previous edition of Plastimagen Mexico attracted 29,084 visitors from 29 countries, who attended the event in search of high-tech machinery, raw materials and equipment that would enable them to continue improving their companies' competitiveness. N AFTA Related Events Selected Readings April Expo Transportación Intermodal México, D.F. World Trade Center This forum offers an exhibition featuring, for the most important suppliers of overland, train, shipment, aerial, or intermodal transportation services, infrastructure and equipment for freightage transportation. It also provides technical conferences and workshops that will introduce intermodal concept to PYMES (smaller and medium companies), imports and exports. Emigration Wages in Source Countries: Evidence from Mexico (Prachi Mishra; Columbia University; October 2003). This paper presents an econometric study of the effect of emigration on the national wages in a source country, particularly the effect of Mexican emigration to the United States on the wages in Mexico. The Big Bang: Ending Quota and Tariff policies (Edward Gresser on behalf of a coalition of US importing and retailing associations; January 2004). This paper talks about the tariff elimination on textiles in 2005 and its benefits. April Expo Joya Abril 2004 Guadalajara, Jal. Centro de Exposiciones Expo Guadalajara XXXVI internatioonal exhibition of jewelry, silver, precious and semiprecious stones, machinery, watch-making, tools and natural resources used by the jewel and goldsmith industry. Volume 9, Issue 03 Page 2

3 Oregon Between 1993 and 2003 Oregon's exports to Mexico grew 213% Mexico is the 8th largest consumer of Oregon's exports. United States Eases Visa Process for Mexican Professionals Exports to Mexico (Millions of US Dollars) By Sector (NAICS) 2003 Third Quarter Computer & electronic 12% The U.S. Department of Homeland Security (DHS) recently implemented new rules that will allow an unlimited number of Mexican professionals to seek "Trade NAFTA" (TN) nonimmigrant visas allowing them to work in the United States. In addition, the new rules will simplify the process for Mexican professionals to secure TN nonimmigrant status. Under the NAFTA, the United States, Mexico and Canada agreed to ease the process for temporary entry of professionals. However, the agreement allowed the United States to limit the number of new Mexican professionals admitted as TN nonimmigrants to 5,500 annually for the first ten years of the agreement. In order to manage this numerical cap, the United States required Mexican professionals (and their employers) seeking TN nonimmigrant status to follow procedures similar to those for H-1B visa applicants, including filing a Form I-129 petition with DHS and securing a certified labor condition application (LCA) from the Labor Department. Machinery 30% Wood products 4% Plastics 4% Others 13% Under the new rules announced by DHS, on January 1, 2004 the United States eliminated the numerical cap in accordance with article 1603 of the NAFTA. It also removed the I-129 and LCA requirements. This new policy will significantly ease the application process by allowing Mexican professionals to request a TN nonimmigrant visa at a U.S. consulate in Mexico. These visas, which also cover spouses and children, are valid for up to one year with no limit on the number of renewal requests. The DHS published the new interim rules in the Federal Register on March 10, 2004 and established May 10 as the deadline to submit comments. Transportation Eq. 37% Source: US Census, MISER and SE-NAFTA. SIC Series , NAICS series. For more information on visas visit Volume 9, Issue 03 Page 3

4 Capital: Main cities: Population: Toluca Toluca, Naucalpan, Tlalnepantla, Cuautitlán Izcalli & Ecatepec 13,096,686 (2000 Census) 86% in the urban area 60% under 30 years old 611 people per square kilometer 94% Literacy rate 268 Universities and technological institutes 441 Hospitals 1,536,724 Fixed telephone lines 20 Radio stations Investment Highlights Aid in setting up operations and training workers. Major Economic Activity in 2001 Major exports: Electronic equipment, computers and textile Exports: US $ 15,172 Millions (2002) 33.4% Imports: US $ 19,316 Millions (2002) Foreign Direct Investment: Source: Ministry of the Economy Others 5.9% Commerce 21.1% Between 1999 and September 2003, Estado de México received US$ 3.4 billion in foreign investment. Transportation & communications 10.2% Main sector: (Automotive & Chemical), Commerce and Financial services. Countries with major investments in Jalisco, include: USA, Spain, Germany, Korea and Canada Other services 14.5% Financial services 14.9% Source: Ministry of Economy with INEGI data. Maquiladora: There are 46 maquiladoras. Maquiladora Companies employ 5,304 workers. Source: Ministry of the Economy, Government of State and INEGI. Infrastructure: 4,661 km of paved roads 772 km of highways (4 lanes) 14 TV stations 1 International Airport Contact Web-site: dgpi@mail.edomex.gob.mx Tel/Fax: (722) Volume 9, Issue 03 Page 4

5 Success Stories New Virtual Business Center in Mexico Mexico's Nuevo Leon state government is putting the final touches to a Virtual Business Center, which aims to use e-commerce to stimulate small- and mediumsized enterprises in the state, local paper El Norte reported. The portal, found on the web site of state development agency Sedeco Nuevo Leon, seeks to link up local small suppliers with large, foreign companies. It also provides information about local and national e- government services available to these companies. On the web: Mortgage Credits for Mexicans Abroad Hipotecaria Nacional opened this month a new representation office in New York City which will be known as Hipotecaria Mexicana, it will offer mortgage credits to Mexican citizens living in New York, New Jersey and Connecticut. Credits will allow of Mexican citizens living in this area, to provide their families a house in their towns in Mexico. Mexican citizens will need to provide their consular ID and must prove income and job stability (with either bank statements or money transfers to Mexico, and a two year employment with their current employer). Payments can be made through a US bank or directly in Mexico. A monthly newsletter on 1911 Pennsylvania Av NW Washington, D. C Phone: (202) Fax: (202) naftadsk@economia.gob.mx naftadsk@naftamexico.net Visit us at Volume 9, Issue 03 Page 5