LIST OF KEY MARKET ACCESS BARRIERS IN MEXICO UNDER THE MARKET ACCESS STRATEGY 22 September 2016 MAAC/

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1 Barrier LIST OF KEY MARKET ACCESS BARRIERS IN MEXICO UNDER THE MARKET ACCESS STRATEGY 22 September 2016 MAAC/ Description Protection and enforcement of Intellectual Property Rights The huge market for counterfeit and piracy goods in Mexico is a major obstacle for the sale of certain authentic products. Effective controls and sanctions are needed to diminish the importation and commercialisation of counterfeit goods. The European sectors most affected include pharmaceuticals, luxury goods, electronics, alcoholic beverages, personal care, auto parts and tobacco industries among others as well as entertainment and cultural products in both physical and digital format and illegal software. Remark: Some progress. The EU welcomed the Congress approval in 2010 of granting the General Attorney s Office ex officio capacity to intervene in IPR violation cases and encourage Mexico to extend this capacity to Customs officials. We also welcomed the Government s recent efforts in strengthening IP rights through the creation of a specialised branch for IPR matters in the Mexican Federal Tribunal, in setting up electronic registration for industrial designs and trademarks and in ratifying the WIPO Madrid Protocol. The EU is urging Mexico to increase IPR enforcement efforts by focusing on administrative, civil and criminal measures: Enhance coordination among enforcement agencies, particularly between the federal, state and municipal authorities. Provide further protection to highly IPR-sensitive sectors such as the electronic, pharmaceutical and alcoholic beverages industries (among others) due to the economic as well as the public health dimensions they entail. Step up deterrence level by increasing prosecution efforts and the imposed fines. Increase resources and implement targeted actions for fighting Internet counterfeiting and piracy Geographical Indications and EU names The registration in Mexico of foreign geographical indications (GI) as such is not possible and alternatives offer only weak and uncertain protection. This opens the way to a number of imitations and usurpations of European names and GI s, which affect the access to the market of the authentic products and raise confusion among consumers. Remark: Not much progress.

2 Besides the registration related difficulties encountered by right holders for their GIs registered in the EU and/or under the Lisbon agreement, there is wide consumer confusion on the use of names or distinctive signs of EU countries and regions for all sorts of products. The main cases are Jerez, Manchego and Prosciutto di Parma. Labelling The EU is encouraging Mexico to take advantage of its experience with protected GIs (particularly spirits) and exploit its potential for future GIs as they are a useful contribution to increasing income, in particular in rural areas. Gains resulting from marketing GIs need to be protected against name usurpation. Mexico needs to update its legislation covering the registration and protection of foreign GIs, notably taking into account the need to comply with international commitments. Mexico should prevent labelling misleading consumers based on the use of EU-protected GIs and geographical names. Mexican labelling requirements are in many cases complex and difficult to comply with. The main affected sector is ceramic tiles. Mexico requires information on the labels which is different from, or in addition to, internationally agreed practices. This implies additional costs for EU exporters who have to study the Mexican labelling requirements, to gather information and to perform specific tasks for complying with Mexican rules. EU exporters of consumer products such as textiles and ceramic tiles have complained about the burdensome and costly labelling requirements in Mexico. Labelling in a permanent manner is often required for the Mexican market. Textiles - Excessive labelling requirements regarding the indication of size, trademark, name of the manufacturer and data on the importer which are considered burdensome and entailing additional costs for a special label for the Mexican market. Also in 2016 labelling problems for textiles were reported. Ceramic Tiles - Specific labels for the Mexican market on the products and/or labelling each package (instead of one label for one consignment) with specific information, such as the fiscal number of the importer (this is normally not known in the production phase) and other special characteristics to be respected for each label. Member States reported that also other sectors face labelling problems, including food, beverages (beer) and health products. Remark: No progress.. Registration of health products and agro-chemicals The EU views the requested label information as excessive, unnecessary and beyond the information needs of consumers. This implies additional costs for EU exporters who have to design specific labels for the Mexican market. The process for marketing authorisations for pharmaceuticals, agro-chemical products includes three stages and several actors. Therefore very few approvals are being awarded and the process of market access is delayed, which needs on average about 4 years.

3 COFEPRIS has improved its registration processes since 2011 as regards transparency and bureaucracy in the first registration stage. With the second stage at the level of the Health Council of the Ministry of Health, molecules are approved for scientific use. The 3 rd stage is the more problematic for the approval of purchasing and using health products for patients. Social security institutions (ISSTE, IMSS and SP) covering workers in the private and public sectors are blocking. COFEPRIS has a rejection rate of around 5% since 2010, but IMSS has only released 4% (down from 24% in 2011) of the molecules approved by COFEPRIS. Therefore Mexico should also streamline the interaction of COFEPRIS with the other institutions involved in marketing approval procedures. Member States reported that there are recently also registration problems of food additives, in particular sugar substitutes. Remark: Some progress. EU industry is registering tangible results after recent changes in COFEPRIS. On 5 October 2012, Mexico unilaterally granted recognition of sanitary registrations emitted by the European Medicines Agency (EMA) for new medicines. EU supports the modernisation of the Mexican health care system and encourages Mexico to continue to improve the institutional capacity of COFEPRIS and to streamline interaction with the other institutions involved in marketing approval procedures. EU remains open to dialogue and cooperation in order to compare our systems and to increase awareness of the benefits of the EU system. EU and Member States are offering to exchange experiences on how to accelerate authorisation processes. With regard to public procurement in the health sector, Member States informed that only laboratories included in a list of reference drugs of the public sector ("cuadro básico") can participate in tenders of the public health sector or in other cases complex procedures prohibit to tender because in practice the supplier has to be on the specific list of each public health unit. Arbitrary customs procedures Excessive document requirements for importers are causing delays and represent a non-tariff barrier. EU companies report that customs procedures are sometimes not transparent and not consistent with the rules stipulated in the EU- Mexico Free Trade Agreement. These issues have been partially addressed in the recent customs reform of Member States reported that the main customs issues concern the sectors of textiles, footwear and steel, due to new monitoring and control measures and specific reference prices. Remark: Progress in various areas. The EU welcomed the implemented trade facilitation measures based on the 2008 customs reform and the reform of the customs law in October The customs reform of 2013 included the abolishment of the obligatory use of customs brokers, the possibility of customs clearance by companies, the elimination of a second round of customs inspection and the use of non-intrusive technology for customs inspection. EU stresses that improving the efficiency of

4 customs will both facilitate trade and enhance security. The implementation of all pending measures established in the reforms of the years 2008 and 2013 need to be accelerated. The requested extensive documentation represents still a non-tariff barrier and is delaying the customs clearance process and additional fees on importers discourage imports suffering from excessive and arbitrary customs procedures. Procedure for the approval of establishments without prior inspection Mexico communicated that it was ready to initiate the procedure to recognise the EU as a single entity for the exports of fresh meat and products. This would include the authorisation of establishments by pre-listing. To initiate this procedure, pig meat and products have been identified as the starting commodities. The Commission and 8 Member States answered very exhaustive questionnaires that were sent to the Mexican authorities on 30 April Other MS and products could be added at a later stage. The EU received Mexican auditors in 8 Member States in 2015 in order to open the market to pig meat from the EU. Very little advances since then. The preliminary report of SENASICA s inspection on pig meat visit concluded that the EU cannot be considered as a single entity as the Mexican auditors noted that the EU legislation is not fulfilled by the EU MS visited. In the report there are significant inconsistencies and misunderstandings of the EU SPS harmonised system, which led to wrong conclusions. Moreover, the conclusions of the report do not match with the findings in specific establishments for which not enough details were provided. In addition, the report makes reference to the possibility to continue managing this dossier bilaterally, country by country. The Commission sent a letter to Mexico indicating the mistakes included in the Mexican findings and requesting clarifications on the next steps. Remark: No progress. Waiting for Mexico s reaction. Fresh fruit and vegetables The risk mitigating measures proposed by Mexico are overly strict and not based on International Plant Protection Convention (IPPC) rules. The EU wants Mexico to consider equivalent risk mitigation measures and not to request preimport inspection (preclearance). The Commission is working with MS to present a work plan to Mexico on apples and pears. Remark: No progress.

5 Import measures for EU beef, beef products and other bovine products including collagen and gelatine due to BSE Pig meat, pig semen and breeding pigs. Mexico does not allow imports of beef and bovine products of animals of more than 30 months from EU Member States due to bovine spongiform encephalopathy (BSE). This is against the World Organisation for Animal Health (OIE) code which recommends no trade restrictions on imports of meat and meat products from a country, zone or compartment posing a controlled BSE risk (article ) or posing an undetermined BSE risk (article ), regardless of the age of the cattle (with the exceptions stated in art a&b for Specific Risk Material). Measures for deboned meat depending on the age of the animal are against the mentioned articles. Remark: No progress. At the Special SPS Committee in October 2011, the export certificate for pig semen and for pig meat were agreed. Negotiations are still ongoing for the export certificate for breeding pigs. The only Member State which was authorised to export fresh pig meat to Mexico, Denmark, has seen its trade unjustifiably disrupted because of Mexico s internal coordination problems regarding the agreed harmonised certificate of exports of EU pork. Remark: Little progress.

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