Mexico: from a market economy to an open economy
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- Oliver Armstrong
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1 Mexico: from a market economy to an open economy T he process of trade liberalization in Mexico begun 23 years ago. During its first 18 years, this process focused on the construction of the legal framework that established the basis for an increase in trade exchanges of goods and services, as well as attraction of direct investment from our major trading partners. Since 2000, this legal framework has been completed with the governmental idea that, in order to consolidate free trade in Mexico, it was also necessary to work in the domestic arena to offer greater guarantees to both trade and investment partners and the society as a whole. TABLE OF CONTENTS MEXICO Mexico: the right infrastructure to conduct business Economic Indicators MEXICO-EU FREE TRADE AGREEMENT Available: Information for the Promotion of Trade and Investment Mexico's Official Gazette Notices EU Official Journal INVEST IN MEXICO Investment opportunities in the States of Puebla and Sonora MEXICO: WORLD S SUPPLIER Trade fairs and exhibits in Mexico Supplying opportunities in Sonora October 2005 Year 5, no. 10 In fact, Mexico decided to evolve from a market economy into an open economy, which in turn would offer the advantages resulting from trade openess, plus the guarantees granted by a country that respects freedom of speech, and association; a country committed to transparency and government accountability. Today, in Mexico: Respect of each other s opinion is evident in the daily debates that take place in congress and the authentic divisions of powers. Freedom of speech is exercised every day by the press Freedom of association has fostered the relationship between employees and authorities, allowing for cooperation and shared responsibility between parties. This in turn has resulted in the reduction of 40% in the incidence of strikes during the last 5 years. Commitment to transparency and government accountability is guaranteed by the Federal Institute of Access to Public Governmental Information. The above transition has been accompanied by sound fiscal and monetary policies, which have made possible to achieve the greatest macroeconomic stability of the last 30 years. This evolution is now tangible for the international business community and explains why Mexico has consolidated as the 10 th economy and the 8 th exporter and importer of the world. Today, Mexico not only offers one of the largest network of free trade agreements, a constantly-expanding domestic market and its neighborhood with the largest market of the world; but also is able to offer a sound environment that favors the conduction of businesses. Economic Indicators Inflation rate: 0.12% (August 2005); 1.31% (January-August 2005) Industrial Gross Domestic Product: -1.10% (July 2005/July 2004) Manufacturing 2.10%; Construction 2.50%; Mining 1.00% General Index of Economic Activity: 1.98% (July 2005/July 2004) Consumer Confidence Index: points (September 2005) 4.6 percentage points (September 2005/September 2004) Open unemployment rate: 4.05% (August 2005) Source: INEGI
2 Mexico s Official Gazette Notices 06/09/05 Agreement establishing an additional quota to import powder milk from WTO member States, during /09/05 Decree approving the Rome Statute of the International Criminal Court, of 17/07/ /09/05 Decree promulgating the Agreement modifying and adding the existing Convention on Air Transport between Mexico an Italy, of 23/12/ /09/05 Resolution revoking the authorization granted to KBC Bank, NV to establish and operate a representative office in Mexico. 14/09/05 Decree reforming and adding certain provisions of the Federal Copyright Regulation. 15/09/05 Agreement modifying the Mexican Official Standard NOM-144-SEMARANT-2004, of 18/01/2005, which establishes the international SPS measures applicable to the packaging of wood used in international trade of goods. 23/09/05 Agreement publishing the second quarterly report for 2005, regarding the trust fund of the Mexico- EC Cooperation Program on Human Rights. EU Official Journal 13/09/05 L236 Commission Regulation (EC) No 1478/2005 of 12/09/2005 amending Annexes V, VII and VIII to Council Regulation (EEC) No 3030/93 on common rules for imports of certain textile products from third countries. 17//09/05 L241 Commission Regulation (EC) No 1512/2005 of 15/ amending Regulation (EC) No 753/2002 laying down certain rules for applying Council Regulation (EC) No 1493/1999 as protection of certain wine sector products. 27/09/05 L /663/EC: Council Decision of 18/ on the conclusion, on behalf of the EC and its Member States, of a Protocol to the Agreement on Cooperation and Customs Union between the EEC and the San Marino, regarding participation, as Contracting Parties, of the 10 new EU Member States. 30/09/05 L254 Council Decision of 13/ on the signature of the Additional Protocol to the Agreement establishing an Association between the EEC and Turkey following the enlargement of the EU. 30/09/05 L255 Directive 2005/36/EC of the European Parliament and of the Council of 7/ on the recognition of professional qualifications. (to access texts visit Available: Information for the Promotion of Trade and Investment O n October 1st, 2005, the Representative Office in Europe of Mexico s Ministry of the Economy made available to entrepreneurs, the presentation Information for the Promotion of Trade and Investment (IPTI). This presentation intends to be a useful tool in the promotion of business in Mexico. IPTI provides relevant information to domestic and foreign exporters and investors. European investors will find useful information for the evaluation of Mexico as an attractive place to locate their operations, as well as detailed information regarding existing Agreements and other legal instruments in place between Europe and Mexico. In addition, IPTI offers information specifically designed to help Mexican exporters with interest in the European market. IPTI s content is organized in 4 sections: Information for the Promotion of Trade and Investment: This section highlights the mean features of Mexico s business environment and its competitive and comparative advantages. It provides foreign investors with a inventory of incentives available in Mexico. The Free Trade Agreement: This section is mostly dedicated to the Mexico-European Union Free Trade Agreement (MEUFTA). It contains links to documents and legal texts of all trade Agreements signed by Mexico, including those with the European Union and EFTA. Business incentives in Mexico: Mexico has developed an attractive set of programs and incentives specifically designed to promote productive investment in Mexico. This section contains inventory of incentives and programs available to investors at federal and local levels. In addition, it includes guides and documents that could be useful for firms planning to operate, and/or for those already doing business, in Mexico. Mexican exporters: Mexican entrepreneurs interested in exporting will find in this section information that could help them plan and develop export projects. In this section, there are available guides, business contacts, and links to programs and information systems specifically designed to help exporter access the European market. IPTI presentation is user friendly and can be navigated as a webpage. In fact, in a near future, IPTI will become the new online face of the Representative Office in Europe of Mexico s Ministry of the Economy. For additional information: 2
3 INVEST IN MEXICO Investment opportunities IN PUEBLA The State of Puebla has developed important industrial clusters and has designed attractive incentives to domestic and foreign investors. The payroll tax is 1% FISCAL INCENTIVES NON FISCAL INCENTIVES Free advice for the obtention of permits, licenses and financing. The state works in coordination with Bancomext and NAFIN The State Office for Foreign Investment also advises for any procedure in order to create a new company Special opportunities in sectors such as automotive and auto parts, textile and apparel, metal-mechanics, electric-electronics, plastics, chemicals and pharmaceutical INCENTIVES FOR TRAINING Privileged access to training programs for up to three months INDUSTRIAL INFRASTRUCTURE / ESTABLISHED CLUSTERS Automotive / auto parts Electric-electronics Food and kindred products Metal and working tools Pharmaceutical Medical equipment Petrochemical and plastics Textile and apparel Investment opportunities IN SONORA In order to promote productive investment in its region, the State of Sonora has developed important industrial clusters and has designed attractive incentives to domestic and foreign investors. FISCAL INCENTIVES 2% reduction on the payroll tax up to a five year period NON FISCAL INCENTIVES Financial support on programs related to business expansion Financial support for the acquisition of industrial facilities and for development of infrastructure and services Special opportunities in sectors such as automotive and auto parts, aerospace, metalmechanics, electronics and software development INCENTIVES FOR TRAINING Privileged access to training programs INDUSTRIAL INFRASTRUCTURE / ESTABLISHED CLUSTERS Aerospace Automotrive / auto parts Electric-electronics Food and kindred products Pharmaceutical Medical equipment Metal and working tools Petrochemical and plastics Textile and apparel For detailed information, visit: For detailed information, visit: 3
4 MEXICO: WORLD S SUPPLIER Trade Fairs and Exhibits in Mexico EXPO MEDICA HOSPITAL 2005 November 15-17, 2005 Mexico, D.F., Mexico International exposition of equipment, materials and services for the Medical/Hospital sector. Event Management: REMEX Centro Banamex Tel: (52 55) Fax: (52 55) info@remexexpos.com Website: EXPOTRANSPORTE ANPACT 2005 November 16-18, 2005 Guadalajara, Jalisco, Mexico International exhibition for passenger and freight vehicles; parts, accessories and services. Event Management: Messe Frankfurt México Tel: (52 55) Fax: (52 55) antonio.barrera@mexico.messefrankfurt.com Website: EXPO FORESTAL MEXICO SIGLO XXI November 25-27, 2005 Morelia, Michoacan, Mexico Machinery, equipment, tools and services related to the forestry sector. Event Management: Messe Frankfurt México Tel: (52 55) ext. 110 Fax: (52 55) Paulia.valencia@mexico.messefrankfurt.com Website: expoforestal/ Among the programs and services that the government of the State of Sonora offers to the Micro, Small and Medium Sized Enterprises (MSMEs) interested in exporting, increasing exports and/or diversifying export markets, we can highlight Py- MEXPORTA Sonora. It is a center which offers services such as advisory, consulting and promotion of MSMEs in order to strengthen its competitiveness and boost its exports through a product region market approach. PyMEXPORTA Sonora is an excellent point of contact for companies looking for suppliers of almost any products and industries. The main services offered are: Personalized attention and basic advisory to enterprises interested in exporting, increasing exports and/or diversifying export markets Specialized consulting for the development of the export project, through a consulting company specialized in international trade Participation in international seminars and trade fairs, in order to promote regional products and services abroad Entrepreneurial linkages, consisting in connect the companies with public and private institutions which can give support and advisory in specific requests Exporting incubator, designed to help firms established in Sonora, which are ready to start in the export activity, to easily find clients, suppliers and markets For more information, please contact directly: PYMEXPORTA SONORA Lic. Oscar Gastelum Donnadieu Director del Centro PyMEXPORTA Sonora Paseo Río Sonora Edificio Sonora 3er piso. Hermosillo Sonora. Tel , Fax Lada sin costo informes@pymexportasonora.com Mexico-EU Trade Links is a monthly informational newsletter published by the Mexican Mission to the EU, Representative office of the Ministry of the Economy. Av. Franklin Roosevelt 94, 1050, Brussels, Belgium. For more detailed information or questions regarding this issue please contact us: bruselas@economia.gob.mx, fax: 32 (02) or visit our web site at 4
5 SEMINAR* ON PROCUREMENT OPPORTUNITIES IN MEXICO UNDER THE EU MEXICO FREE TRADE AGREEMENT Jointly organised by the Directorate-General for Trade of the European Commission and the Secretaría de Economía de Mexico WEDNESDAY 19 October 2005, from 10:00 am to 1:00 pm (Translation ES/EN/FR/DE) Borschette Centre Building rue Froissart Brussels * Free entrance but places available are limited * Please Free confirm entrance your attendance but places by available filling in are the limited registration form in annex Please confirm your attendance by filling in the registration form in annex
6 AGENDA Welcome Introduction to the Mexican procurement market and regime A practical presentation of procurement at the Federal level An overview of procurement at the local level the example of Mexico City Procurement by Government Enterprises : a) CFE Comisión Federal de Electricidad (electricity sector) b) PEMEX Petróleos Mexicanos (energy sector) c) Servicio Postal Mexicano (postal sector) Questions and Answers Concluding Remarks *******
7 ANNEX Registration form for the Seminar on Procurement opportunities in Mexico under the EU-Mexico Free Trade Agreement - Brussels, 19 October For security reasons, please complete and send this registration form to the address below, so that the necessary practical arrangements can be taken. Please type or write in CAPITAL letters. Family Name: First name: Country: Organisation: Title/ responsibilities: Postal Address: Phone: Fax: This form should be returned by fax or by 17 October 2005 at 12 noon, at the latest, to: Ms Agnes Gorgemans European Commission DG Trade C1 Fax No: (+ 32) agnes.gorgemans@cec.eu.int
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