RESTRICTED
WORLD TRADE G/SCM/Q2/MEX/2
21March 1997
ORGANIZATION(97-1161)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Questions from theEUROPEAN COMMUNITY Regarding theNew
andFullNotification ofMEXICO1
Thefollowing communication, dated 12March 1997, hasbeenreceived fromthePermanent
Delegation oftheEuropean Community.
_______________
Mexico submitted on18October 1996 itsnotification ofsubsidy programmes totheWTO
pursuant toArticle XVI:1 GATT 1994 andArticle 25oftheWTO Subsidies Agreement.
Inthisrespect, theCommunity would liketoobtain clarification onanumber ofissues onthe
notified scheme asdescribed below.
Moreover, theCommunity hasobtained information ondifferent subsidy schemes which were
notnotified totheWTO although theirnotification seems necessary pursuant toArticle 25.2ofthe
Subsidies Agreement.
I. NOTIFIED SUBSIDY PROGRAMMES
Thepresent analysis constitutes theremarks oftheCommunity andarequest forclarification.
(a) Programme ofTemporary Imports toProduce Export Goods
Thisprogramme isclearly contingent upon export performance. Mexico states that
theduration oftheprogramme is"indefinite". Could Mexico provide thetimetable
ofhowthisprogramme willbephased out?
II. ADDITIONAL PROGRAMMES NOT NOTIFIED TOTHE WTO
MexicohasnotnotifiedanumberofprogrammeswhichappeartobenotifiableunderArticle25.
TheCommunity findsthattheschemes described below provide afinancial contribution which confer
benefits tothelocalindustry. Inaddition theschemes areclearly specific (aspertaining toaspecific
sector orcontingent uponexports). Inaddition tothespecific questions asked, theCommunity would
likeclarification whytheseprogrammes werenotnotified totheWTO andrequests that,ifappropriate,
Mexico supplies anotification under Article 25,using thestandard format.
1G/SCM/N/3/MEX.
./.G/SCM/Q2/MEX/2
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1. In-bond Maquiladora Programme
Under theDecree fortheDevelopment andOperation ofExport Maquila Industries, companies
mayimport rawmaterials, containers, packing materials, fuelsetc.,without paying duties orvalue
added taxtomanufacture theirgoods providing these goods areexported.
2. Accelerated Investment Depreciation
Companies which arenotlocated intheMexico Cityarea, Guadalajara andMonterrey may
taketheoption ofaone-time depreciation deduction oftheirfixed assets. Thisprogramme isclearly
specific since itislimited toanumber ofregions inMexico.
3. BANKOMEXT (Financing forExporters)
TheBANKOMEXT programme provides preferential financing forexports from Mexico.
Thisprogramme isspecific since itiscontingent upon export, andconfers benefit totheextent that
loans areprovided atpreferential rates. BANKOMEXT provides other preferential financing, and
other benefits include Fiscal Promotion Certificates (CEPROFI) andreductions orexemptions from
import dutyoncertain products.
Could Mexico provide thetimetable ofhowthisprogramme willbephased out?
4. NAFINSA Financing
TheMexican Development Bank, Nacional Financiera (NAFINSA) hasdeveloped anumber
offinancing programmes forMexican companies.
- medium-term financial assistance (85% financing forperiods ofmore thanoneyear);
- short-term lineofcredit;
- letter ofcredit.
5. Venture Capital Programmes
TheBanco Nacional deComercio Exterior andNacional Financiera mayparticipate asstock
holders ininvestment projects orforeign companies investing inMexico. Once theproject ismature,
thedevelopment bankwithdraws from participation atalower price thantheinitial investment.
6. Taxincentives provided bytheState Authorities
7. Land Purchase Facilities
State governments maygrant reductions onthesaleoflandtheyowntoforeign investors.
8. TaxIncentives under theEconomic Recovery Pactof28October 1995