WORLD TRADE  
ORGANIZATION  WT/TPR/M/195 
14 April 2008 
 (08-1733) 
Trade Policy Review Body 
11 and 13 February 2008   
 
  
TRADE POLICY REVIEW 
 
MEXICO 
 
Minutes of Meeting
 
 
Chairperson:  HE Mr Vesa Himanen (Finland) 
  
  
Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF MEXICO 4 
III. STATEMENT BY THE DISCUSSANT 8 IV. STATEMENTS BY MEMBERS 10 
V. REPLIES BY THE REPRESENTATIVE OF MEXICO AND ADDITIONAL COMMENTS 20 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 24 
 
 
Note:   Advance written questions by WTO Me mbers and the replies provided by Mexico are 
reproduced in document WT/TPR/M/195/Ad d.1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/195 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The fourth Trade Policy Review of Mexico was held on 11 and 13 February 2008.  The 
Chairperson (HE Mr Vesa Himanen) welcom ed the delegation of Mexico, led by 
Ms Beatriz Leycegui, Undersecretary for Intern ational Trade Negotiations, and the discussant, 
HE Ms Claudia Uribe (Colombia).  As usual, th e discussant would speak in her personal capacity and 
not as a representative of her Government. 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures of the meeting.  The report by Mexico was contained in document WT/TPR/G/195, 
and that of the WTO Secretariat in WT/TPR/S/195.   As indicated in WT/TPR/6/Rev.1, the Member 
under review should provide written answers, by the beginning of the review meeting, to questions 
submitted at least two weeks before the meeting.  Questions posed subsequently should be answered, 
to the extent possible, before the start of the second session of the meeting.  Questions left 
unanswered at the end of the second session should be  answered in writing no later than one month 
after the meeting.  Questions by the following de legations had been submitted in writing at least 
two weeks in advance of the meeting and had been transmitted to the delegation of Mexico:  Brazil;  
the Separate Customs Territory of Taiwan, Penghu,  Kinmen and Matsu;  Switzerland;  China;  
New Zealand;  Argentina;  Canada;  the Republic of  Korea;  Australia;  Colombia;  Chile;  Japan and 
Costa Rica.  Copies of those questions and of the answers provided by the de legation of Mexico were 
available in the meeting room. 
3. The European Communities;  Hong Kong, China;  the United States;  Malaysia;  Panama;  
India;  Nicaragua;  Peru;  Singapore and Pakistan had submitted written questions after the two-week 
deadline.  Those questions had al so been transmitted to the delegation of Mexico;  copies of those 
questions were available in the meeting room.  Qu estions posed subsequently should be answered, to 
the extent possible, before the start of the second sessi on of the meeting.  Ques tions left unanswered at 
the end of the second session should be answered in writing, no later than one month after the 
meeting.  All advance questions, as well as the responses received from the delegation of Mexico, 
were reproduced in WT/TPR/M/195/Add.1. 
4. The Chairperson noted that, since its previous  Review in 2002, Mexico had continued to 
liberalize unilaterally its trade regime and progressi vely deepened its integration into the world 
economy.  Economic performance had been sound,  underpinned by prudent fiscal and monetary 
policies.  However, the report by Mexico noted th at its economy could slow down in the near future 
due to the deceleration of the US economy.  In this context, he believed Members would like to know 
about any policy changes that Mexico may be c onsidering in the face of a possible economic 
slowdown.  In addition, he noted that the two reports referred to the need to undertake further 
structural reforms in key areas.  He would be inte rested to hear the views of the Mexican delegation 
on the type and timing of any reform plans in the energy sector. WT/TPR/M/195 
Page 4  
 
  II. OPENING STATEMENT BY THE RE PRESENTATIVE OF MEXICO 
5. The representative of Mexico
 thanked the Director-General of the WTO for his presence 
during the review, the discussant for her work a nd Members for the interest shown by the high 
number of questions submitted.  She also thanked the Secretariat for the exhaustive and analytical 
report prepared. 
6. She indicated that her statement consisted of f our points, namely, the main benefits derived 
from liberalization of the Mexican economy;  actio n taken between 2002 and 2007;  the challenges 
and aims for the period 2007 to 2012;  and conclusions. 
7. In 1986, when Mexico had joined the GATT, it had taken a very important first step towards 
trade openness.  In 1994 the entry into force of  the North American Free Trade Agreement had 
furthered that process, which had subsequently b een intensified by the creation of the WTO and 
Mexico's signing of the Uruguay Round Agreements in  1995.  Trade opening had then continued with 
the negotiation of a number of bilateral and region al agreements.  Mexico was currently party to 
12 free trade agreements, 6 economic complementarity agreements and 23 bilate ral agreements for the 
protection of foreign investment. 
8. It should be emphasized that the foundation of Mexico's trade liberalization policy had been 
and would continue to be the multilateral trading system;  its bilateral and regional liberalization 
efforts were a complement to the multilateral system. 
9. Trade openness had been very important for th e Mexican economy as international trade had 
been gaining importance over the years;  in 2007 it represented 62 per cent of GDP.  From 1993 to date, exports had increased five fold, imports had quadrupled, and foreign direct investment had 
reached a level 13 times higher than in 1999. 
10. Regarding exports, she pointed out that in 1992 petroleum products had represented 70 per 
cent of total exports compared with 16 per cent currently, while manufactured products now 
accounted for 81 per cent of the total.  Export destin ations had not changed in recent years, the main 
destination being the United States. 
11. Intermediate inputs and capital accounted for 85 pe r cent of Mexico's imports.  It should be 
emphasized that, since 1993, there had been a signi ficant diversification of Mexico's main product 
suppliers at the regional level, unlike what had happe ned with regard to the destination of exports. 
12. The free trade agreements (FTAs) which Mexico had signed had become an important 
catalyst for Mexican imports.  At the same time, wh ile Mexico's trade with its trading partners had 
quadrupled, its trade with non-partner countries had increased ninefold. 
13. Trade liberalization had made a significant cont ribution to export-related employment.  One 
in five jobs was directly linked to firms engaged in  export activity, and one in six jobs was linked to 
firms which received foreign direct investment.  No t only had they contributed to creating more jobs 
but they had also created higher quality jobs.  Th e wages of workers in exporting companies were 
37 per cent higher than those of workers in non- exporting companies.  Moreover, the wages of 
workers in companies receiving foreign direct invest ment were 26 per cent higher than those of other 
workers.  Exports had been responsible for a pproximately half the jobs created in Mexico. 
14. Between 2002 and 2006 Mexico ha d unilaterally reduced its tariffs for approximately 
6,000 tariff headings.  The MFN tariff had reduced from 16.5 per cent in 2001 to 11 per cent in 2008.  
As regards export programmes, in 2006 Me xico had amalgamated the PITEX and 
Maquila  programmes under the Decree on the Promo tion of Manufacturing Industry and Export  WT/TPR/M/195 
 Page 5 
 
 
  Services (IMMEX), in order to streamline both regul atory and operational procedures.  The principal 
benefit of that programme consisted of deferring VAT  and tariff payments on inputs incorporated into 
exports where they had to be covered.  Unlike the drawback  scheme, this programme provided for the 
deferred payment of taxes.  The programme w as applied to all imported products and was not 
subsidized. 
15. Concerning customs procedures, a special programme for certified companies had been 
established to accelerate the customs formalities of  high-volume exporting companies with a good 
fiscal and commercial track record.  They were allo wed to use reserved channels and inspection times 
and procedures were reduced.  The Integrated Com puterized Customs system (SAAI) had also been 
created to facilitate customs clearance for importers and exporters, enabling them to make their import 
and export requests electronically. 
16. Regarding investment in infrastructure and technology, among other mechanisms to improve 
Mexican infrastructure, gamma rays had been insta lled to verify containers at strategic customs 
points.  A customs modernization plan to enha nce competitiveness had been implemented, with a 
view to continuing to improve customs infrastructure, giving customs officials further training and 
strengthening the participation of the private sector  as customs observers to supervise operations and 
reduce smuggling and ot her illegal operations. 
17. As regards foreign investment, in 2006 the Ley de Inversión Extranjera  (Foreign Investment 
Law) had been amended to allow foreign direct i nvestment up to 100 per cent in the financial sector 
(financial leasing companies, financial factori ng houses and limited scope financial companies).  
Moreover, the Federal Law on Economic Competition had been amended to strengthen the powers of 
the Federal Competition Commission ( Comisión Federal de Competencia  – CFC) to prevent and 
investigate anti-competitive practices.  The thre e principal changes to this Law included:  
strengthening the powers of the CFC by increasi ng the sanctions that could be imposed on the 
companies involved;  reinforcing the binding nature  of the CFC's opinions on regulated sectors;  and 
establishing an Immunity Programme so that compan ies affected by trade practices could report other 
companies involved and be exempted from sancti ons.  Concerning regulatory improvement, a special 
rapid business start-up system had been introduced , which involved reducing to 48 hours the time 
required to open low-risk companies.  Furthermor e, an electronic database had been established, 
which covered all the procedur es and regulations applicable to individuals and businesses. 
18. The principal macroeconomic indicators such as in terest rates, inflation, public deficit and 
country risk had fallen steadily.  However, the rate of growth had been insufficient to enable Mexico 
to reach the level of economic growth to which it as pired.  The average growth rate between 2001 and 
2007 had been 2.3 per cent, while in previous years it had stood at 4.1 per cent. 
19. Mexico wanted, inter alia , to improve health, education, and security.  Externally, Mexico 
was increasingly confronting an extremely competitive environment made up of countries in the 
vanguard of productivity, as well as the slow-down in the economy of the United States, Mexico's 
main export market. 
20. The measures being taken by Mexico to address those challenges and improve 
competitiveness could be divided into two categorie s:  measures which the Executive could take by 
itself and measures which it had to take jointly with the Congress of the Union. 
21. Actions related to tariffs and trade facilitati on and investment were designed to reduce tariff 
dispersion and inconsistency through bigger tariff cuts.  A further aim was to modify the quota 
allocation mechanisms by giving priority to a firs t come first served system.  Regarding non-tariff 
measures, the aim was to revise and simplify the curr ent administrative arrangements.  In the area of 
trade and investment, the special agency ProMexico  had recently been created to promote Mexican WT/TPR/M/195 
Page 6  
 
  exports through better coordination with the differe nt State Ministries and local authorities.  The 
agency's objectives would also include pr omoting exports to other destinations. 
22. As regards regulation, in the light of criteria  to increase competitiveness, Mexico had decided 
to implement the OECD's "competition tool kit" which was a legal and financial review process 
involving more than 1,000 laws and regulations .  Mexico would continue to promote the Sistema de 
Apertura Rápida de Empresas  – SARE (Rapid Business Start-Up  System), which had been very 
successful in opening new businesses and thus creating new jobs. 
23. In 2007, Mexico had implemented and announ ced a National Infrastructure Programme, the 
purpose of which was to increase the percentage of  GDP earmarked for that sector between 2007 and 
2012.  Some of the more important projects we re:  improving the 18,000 km. highway network, 
creating ten multimodal corridors and building new airports. 
24. To enhance competitiveness, Mexico had decided to focus on transforming its industries.  In 
that connection, it was necessary to increase the sc ale of value-added production by restructuring 
traditional industries (for example, the clothing, foot wear and toy industries) in favour of sectors with 
greater technological content such as the electronic, car parts and aerospace sectors, and strengthening 
the services sector, directing it towards the intensiv e use of design, engineering, logistical and 
information technologies. 
25. Mexico was seeking to implement at least three important reforms:  fiscal reform, pension 
reform and labour reform. 
26. The purpose of the fiscal reform was to achie ve a 2.1 per cent increase in GDP by 2012.  
Fifty per cent of the additional revenue woul d be allocated to projects under the National 
Infrastructure Programme and a significant percentage to the education sector. 
27. The purpose of the pension reform was to redu ce from 57 per cent to 35 per cent of GDP the 
fiscal burden that the payment of State employee pensions represented for the State. 
28. The labour reform was intended to enhance the fl exibility of the market in order to increase 
productivity and human capital devel opment, without changing fundamental workers' rights.  In the 
energy sector, the objective was to direct more ec onomic resources to securing energy supplies for the 
next decade.  The reserves-to-production ratio wa s nine years for proven reserves, and Mexico 
therefore needed to allocate more governmental and private resources to deep-water oil exploration. 
29. Lastly, Mexico would continue to promote the successful conclusion of the Doha Round 
negotiations.  Mexico had shown a strong commitment to those negotiations over the years.  It had 
organized the Cancún Ministerial Meeting;  it was considered to be one of the "middle-ground" 
countries in the attempt to achieve agreement on NAM A;  it was part of the G-20;  it was currently 
chairing the trade in services negotiations and it ha d previously chaired the negotiating groups on 
rules and intellectual property. 
30. Mexico would continue to deepen and optimize its  trade agreements.  Mexico considered that 
the achievement of treaty convergence could put it back  at the forefront in the trade negotiations.  A 
major step in that direction was the Pilot Progra mme for cumulation of origin of textile products, 
which had been successfully negotiated with the United States and the Central American countries 
and would enter into force as from April.  It was planned to reproduce the same mechanism in other 
free trade agreements and work was already proceed ing in close collaboration with the countries of 
Latin America with a view to achieving progress in that area.  WT/TPR/M/195 
 Page 7 
 
 
  31. Mexico was currently negotiating new FTAs with  Peru and Korea and it was reviewing its 
FTA with Colombia in order to deepen its trade relations with that country. 
32. Mexico faced major challenges and much work re mained to be done, but concrete results had 
been obtained.  In November 2007 foreign direct investment had reached a level of US$18,400 million, the second highest in history.  Also in 2007 Mexico had hoped to create 
600,000 new jobs and by 15 November 2007, 950,000 ne w jobs had been registered in the formal 
sector. 
33. Finally, Mexico would continue to give priority to trade liberalization and investment.  As 
one of the main exporters and impor ters of goods and services in the world, Mexico needed to rely on 
a sound, predictable and successful multilateral trad ing system which contributed to substantial 
growth in world trade.  Mexico continued to f ace important challenges, such as forward movement on 
pending structural reforms and the application of complementary domestic measures in order to make 
the economy more competitive. WT/TPR/M/195 
Page 8  
 
  III. STATEMENT BY THE DISCUSSANT 
34. The discussant
 (HE Ms Claudia Uribe) began by noting that Mexico was a country of 
contrasts in which people lived side by side with  economic, social and regional inequalities.  She 
observed that in spite of some difficulties, Mexi co's macroeconomic indicators were positive.  Per 
capita GDP had increased, exports, particularly to th e United States, had tripled, the stock exchange 
was one of the few in the world not to have poste d losses, foreign direct investment had increased, 
inflation was under control and the real and nomin al exchange rates had been fairly stable. 
35. In its last Global Competitiveness Report, the World Economic Forum had ranked Mexico 
52nd out of 131 countries, a drop of three places since 2006.  The 2007-2012 Development Plan aimed 
to place Mexico among the 30 most competitive econom ies in the world on the basis of the same 
measurement.  To that end Mexico needed to ma ke its labour market more flexible, improve the 
coverage and quality of education, enhance the sophistication of the financial system, introduce 
competition into the domestic market and strengthen public administration.  The foregoing appeared to indicate that in the interests of more sustai nable growth, it would be necessary to complete the 
unfinished tasks begun in the early 1990s, restoring the attractions to foreign investors, reducing 
dependency on petroleum resources and de pendency on the United States market. 
36. International competition was gaining ground in  markets where Mexico's participation had 
done so earlier and in preferential conditions.  She would be interested to know how Mexico planned 
to address international competition in terms of im proving productivity, and what "impulse measures" 
it was implementing. 
37. The North American Free Trade Agreement (N AFTA) appeared to have been the turning 
point in the behaviour of the Mexican economy a nd had been conducive to integration with the 
United States.  In the period under review, dependency on the latter market in foreign trade had been 
confirmed:  it accounted for 87 per cent of total exports.  Since 2003, the balance of payments had shown that Mexican workers resident abroad, main ly in the United States, sent remittances in an 
amount equivalent to foreign direct investment in Mexico. 
38. Employment in the informal economy contrast ed with an open unemployment rate of about 
3.7 per cent.  The causes of high informal empl oyment included lack of flexibility in the labour 
market and the heavy social contributions de manded of employers.  She wondered whether any 
government policies were currently being applie d to reduce informal employment and make the 
labour market more flexible. 
Mexico and the multilateral trading system 
39. Mexico was an active Member of the World Trade Organization, a frequent user of the 
dispute settlement system and an active particip ant in the Doha Devel opment Round negotiations. 
40. During the period under review there had been  no fundamental changes in trade policy, 
although a number of protectionist practices still existe d, namely:  restrictions on foreign investment 
in strategic sectors;  the large role of the Stat e in the provision of public services;  the absence of 
competition in several sectors;  the use of para-t ariff measures to protect sensitive agricultural and 
industrial products (textiles, chemicals and auto parts);  the use of the government procurement 
regime to provide incentives to domestic industry;  a lack of transparency in customs administration;  
and the need to facilitate market operations for traders. 
41. Mexico also maintained numerous sectoral development programmes providing financial, 
foreign trade and fiscal incentives.  Although these had been modified in the interests of producers, in 
aggregate figures they were not high impact programmes.  To improve governance, promote  WT/TPR/M/195 
 Page 9 
 
 
  democracy and achieve sustainable growth, Mexico  should establish rules for the management of 
interest groups and powerful monopolies. 
42. She noted Mexico's lateness in submitting various  notifications and enquired as to the reasons 
for it. 
43. In recent years, Mexico had continued to negotia te latest generation bilateral trade agreements 
which included rules that went be yond the merely commercial aspects. 
Foreign investment 
 
44. Foreign investment in Mexico was fundamental to integration into the global economy.  With 
the signing of the North American Free Trade Agreem ent, new investment had been attracted in a 
wide range of sectors.  However, foreign investme nt in high-technology sectors was slow in coming, 
not only because of the various restrictions imposed by domestic law, but also because of the many constraints on the establishment of enterprises.  She would be interested to know about the 
arrangements freeing up foreign investment under the 2006-12 National Development Plan.  She also 
enquired whether investment in the land transpor t, telecommunications, hydrocarbons and electricity 
sectors was to be liberalized. 
Measures directly affecting imports 
45. The complexity of Mexico's customs regime was a major concern of foreign trade agents, 
who perceived Customs as beset by red tape and complex operations.  She pointed out that for an 
economy so highly dependent on foreign trade, cust oms efficiency was essential.  Mexico had signed 
customs cooperation agreements with a number of  governments and played an active role in the 
WTO trade facilitation process. 
Agriculture 
 
46. Mexico's exports had increased, its agricultural ex ports in particular.  Although an efficient 
agricultural producer, Mexico was a net importer of food.  Following the liberalization of maize as a 
result of the NAFTA liberalization programme, ne ither domestic production nor prices had dropped.  
International developments had brought high pric es because of the new role of grains in the 
production of biofuels. 
47. It was essential that Mexico should deepen the agricultural reforms introduced in the 1990s 
aimed at more effective participation of the market in  determining type of pro duction.  Most of the aid 
provided by the State went to highly distortionary measures such as price support and output-based 
payments, and it targeted products that traditionall y posted deficits such as grains, beans, oil-seeds 
and dairy products. 
48. Furthermore, Mexico's protection and subsidiza tion policy had proved to be low-impact and 
highly inefficient.  Imports of agricultural products  were subject to quotas, which were complex to 
administer and not very transparent.  In order to  improve agricultural productivity, it was essential to 
continue to strengthen research and technology transfer and to broade n financial coverage. 
The services sector 
 
49. Monopoly practices were most prevalent in the ser vices sector.  In her view, it was a paradox 
that the Chairman of the Services Negotiating Group  should be Mexican and that the services sector 
in his country should be so highly protected.  It  was a matter not only of commitments made in the 
Uruguay Round, but also of the current legislation, which kept several important sectors of the 
Mexican economy closed. WT/TPR/M/195 
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  IV. STATEMENTS BY MEMBERS 
50. Members welcomed the Mexican delegation, headed by Ms Beatriz Leycegui, Under-
Secretary for International Trade Negotiations.  Th ey noted that the Mexican economy had recorded 
sustainable growth in recent years, that inflation was under control and that the fiscal position had been strengthened.  They congratulated Mexico on its constructive and active role in the current 
negotiations under the Doha Devel opment Agenda, and encouraged it to continue to support the 
multilateral  trading system.  They thanked Mexico  for its advance repli es and looked forward to 
receiving answers to the questions still pending. 
51. The representative of Brazil
 said that Mexico played an important role in international trade;  
in 2006, its imports and exports had amounted to US$500 billion.  Mexico also maintained a high 
level of direct investment abroad, mainly in Latin America.  Most of it went to telecommunications, 
the hotel sector and the food industry.  At the same  time, foreign direct investment in Mexico was 
considerable.  He pointed out that Mexico was Brazil's fifth largest trading partner and that trade between the two countries had grown consistently. 
52. Turning to the Secretariat Report, he noted certain aspects of it that warranted Mexico's 
attention, including structural reforms, the ad ministration of tariff quotas, customs reform, the 
simplification of trade rules, price support and tariff reductions.  These matters were best dealt with in 
the framework of the Doha Round.  In this connecti on, Brazil appreciated Mexico's active role in the 
negotiations, including its membership of the G-20, and its commitment to concluding the negotiations. 
53. Mexico was pursuing gradual unilateral liberaliz ation of its trade regime while maintaining 
sound economic results.  It had free trade agreements  with many countries and Brazil hoped that the 
MERCOSUR-Mexico Agreement, which was to lay th e foundations for a free trade area between the 
two parties, would soon become a reality. 
54. The representative of Chinese Taipei
 stressed the importance of Mexico's continued efforts to 
liberalize its trade and investment regime.  He noted  that the value of Mexico's trade had increased 
sharply to more than 60 per cent in 2006, and that Mexico was one of the most important destinations 
for FDI.  On the bilateral front, Mexico had 12 FTAs,  covering 85 per cent of its total trade.  He noted 
that Mexico was an active participant in the Doha Round negotiations and applauded its firm 
commitment to the multilateral trading system wh ile also pursuing bilateral and regional trade 
agreements. 
55. His delegation had some concerns regarding Mexi co's trade policy.  Fo r example, Mexico's 
estimated price system seemed to have been hol ding up the release of imported goods, so Chinese 
Taipei hoped that Mexico would continue its custom s reform in order to facilitate trade flows.  
Chinese Taipei would also be interested to lear n more about Mexico's policies in the areas of 
competition and intellectual property protection. 
56. The representative of Switzerland  noted that Mexico was Switzerland's second most 
important trading partner in Latin America.  After several years of stagnation, Swiss exports to and 
imports from Mexico had grown significantly in 2006 and 2007.  Switzerland was among the 
five most important investors in Mexico, where Swiss business benefited from a very good framework 
that included a comprehensive free trade agreement,  a double taxation agreement, and an investment 
promotion and protection agreement. 
57. Switzerland commended Mexico on its prudent fiscal management  and ongoing fiscal reform 
aimed at reducing the public finance reliance on o il revenue.  Mexico also needed to undertake  WT/TPR/M/195 
 Page 11 
 
 
  structural reforms to improve domestic competition, to shift employment into the formal sector, to 
make the economy less vulnerable to external fluctuations and to improve education. 
58. Regarding Mexico's trade regime, Switzerland welcomed the decrease in the average 
MFN tariff from 16.5 per cent to 11.2 per cent, although further progress would be necessary as the applied tariff remained complex and tariff dispersion had increased.  Referring to services, he noted 
that the market access provisions in the Mexican legi slation were more liberal than its commitments 
under GATS and that the predictability of the investme nt regime would be enhanced by closing this 
gap.  Switzerland supported Mexico's efforts to fight counterfeiting and pi racy and welcomed the 
establishment of the Office of the Well-Known Marks within the Mexican Industrial Property 
Institute.  On trade facilitation, Switzerland encourag ed Mexico to simplify and accelerate its customs 
procedures.  His delegation invited Mexico to join the Plurilateral Agreement on Government 
Procurement. 
59. The representative of China
 noted that the Mexican economy had achieved relatively rapid 
growth.  He appreciated Mexico's efforts to increas e the transparency of its trade regime and further 
liberalize its trade policy.  Certain aspects of Mexi co's trade policy could still be improved, however, 
such as high bound tariffs, in particular for agri cultural products, the gap between bound and applied 
rates, and market access and national treatment restrictions in several services sectors. 
60. China and Mexico were close trading partners  and the volume of their two-way trade had 
increased at an annual rate of more than 30 per cent, reaching US$15 billion in 2007, while bilateral 
investment had also increased rapidly.  Mexico wa s China's main trading partner in Latin America.  
However, China was concerned by Mexico's trade remedy measures.  Under Section 17 of China's 
Protocol of Accession, Mexico maintained num erous anti-dumping measures on products from China 
that were not in conformity with WTO rules.  According to China, these measures should have been 
brought into conformity with WTO rules six year s after China's accession to the WTO.  China urged 
Mexico to honour its WTO commitments and obligati ons by bringing these measures into conformity 
with WTO rules at an early date. 
61. The representative of New Zealand  noted that his country had a strong interest in enhancing 
its economic and trade relationship with Mexico, in cluding through strategic economic cooperation.  
The economies and trading profiles of both countries were complementary.  New Zealand commended Mexico's progress in negotiating FTAs and noted that its trade profile would stand to 
benefit from further diversification efforts.  The re presentative welcomed Mexico's policy intention to 
continue its trade liberalization agenda  through the negotiation of new FTAs. 
62. New Zealand also commended Mexico for the unilateral reductions it had applied to its 
MFN tariffs in 2002-2006.  However, he noted th e significant imbalance between the MFN rates and 
the preferential tariffs referred to in the Secretar iat's Report, and said that further reduction of 
MFN tariffs would benefit Mexico's productivity.  Referring to a sectoral programme in place in 
Mexico whereby companies can apply for reduced tariffs for inputs and machinery, he said that 
New Zealand companies had reported that the procedures were complicated and the reduction difficult 
to obtain. 
63. New Zealand companies had also reported difficu lties trading into and investing in Mexico 
due to its complex business environment.  The re presentative commended Mexico's ongoing efforts to 
reform business regulations and was confident that  more progress could be made in streamlining 
administrative procedures.  He also congratulated Mexico for its commitment  to trade liberalization 
and reform, reflected in its solid econo mic performance over the past few years. 
64. The representative of Argentina
 said that in 2007, Argentina had signed a Strategic 
Association Agreement with Mexico.  Mexico ha d concluded economic complementarity agreements WT/TPR/M/195 
Page 12  
 
  with MERCOSUR as a first step towards future  association with the group through a free trade 
agreement.  Argentina was Mexico's third largest trading partner in Latin America and investment 
between the two countries was considerable.  He noted the positive results of Mexico's economy and 
the high level of development in a number of sector s.  The Mexican economy had seen broad changes, 
due to the opening up of the market, and this was reflected in the various trade agreements that 
Mexico had signed. 
65. Mexican trade policy issues of particular inte rest to Argentina included the role of the 
National Foreign Investment Commission, the scope  of the Convention Esta blishing the Multilateral 
Investment Guarantee Agency, signed by Mexico , the customs processing fee (DTA), the export 
promotion programmes (IMMEX, ALTEX and ECEX) which were subject to export requirements, 
the exclusion of environmenta l, recreation, cultural and sports services from Mexico's 
GATS commitments, customs valuation, rules of origin, tariff bindings and the establishment and 
taxation of companies. 
66. The representative of Canada
 noted that Canada and Mexico had developed a deep trade and 
investment relationship.  Canada was Mexico's  second largest export market and Mexico was 
Canada's third largest supplier of goods.  Likewise, Canada's foreign direct investment in Mexico was 
significant, reaching US$3.8 billion in 2006. 
67. Canada and Mexico worked closely as NAFTA  and WTO partners to expand their trade 
relationship.  Their bilateral relationship was al so underpinned by the Canada-Mexico Partnership 
which enhanced relations by furt hering cooperation on bilateral trad e, public-private partnerships, 
business-to-business linkages, educational ex changes, and good governance practices. 
68. Mexico had maintained its commitment to trad e liberalization as a central element of its 
overall development strategy.  Over the past few years several trade-related tensions had arisen between Canada and Mexico, including some SPS issu es, although Canada was confident to resolve 
these shortly.  Canada welcomed Mexico's commitm ent to its NAFTA obligations, made evident in 
the final tariff eliminations under that agre ement that took effect in January 2008. 
69. Canada commended Mexico for its efforts in strengthening its institutions and increasing 
transparency in areas such as tec hnical standards and custom procedures.  However, Canada would 
like to see more progress on specific issues faced by Canadian exporters.  Canada noted Mexico's 
continued work on deregulation a nd unilateral tariff reductions. 
70. The representative of Korea
 stressed that Korea and Mexico  had steadily increased their trade 
relations.  Mexico was Korea's first export market in Latin America and its eighth export market in 
the world.  Korea's investments in Mexico had also significantly increased.  Mexico and Korea had 
initiated bilateral FTA negotiations in December 2007.  Korea welcomed Mexico's solid economic 
performance and continued trade liberalization. 
71. Korea was concerned that since 1994 Mexico  had maintained discriminatory measures 
requiring special certification of origin for imports  of textiles, clothing, and footwear from some 
Asian countries.  Korea requested that Me xico remove the discriminatory measures. 
72. Regarding customs valuation, Korea expressed  concern over Mexico's estimated price 
mechanism for certain products and post-importati on verifications.  Korea urged Mexico to apply 
those measures in a manner that would further facilitate  trade in accordance with  the provisions of the 
Customs Valuation Agreement. 
73. Mexico provided a preferential price margin of  up to 10 per cent to local suppliers in 
international tendering.  Korea encouraged Mexico to  eliminate or to lower the preference margin so  WT/TPR/M/195 
 Page 13 
 
 
  as to provide more procurement opportunities for inte rnational suppliers.  Furthermore, Korea would 
welcome Mexico's accession to the Government Procurement Agreement. 
74. Korea expressed concern regarding Mexico's de facto prohibition on the importation of non-
NAFTA used motor vehicles on environmental grounds, and asked if Mexico had any plans to reduce 
such restriction in the near future. 
75. The representative of Australia  noted that his country and Mexico had a healthy and growing 
bilateral relationship with two-way trade totalling 1.9 billion Australian dollars in 2006-07.  They also 
shared the objectives of promoting greater global trade liberalization and regional integration.  
Mexico was Australia's largest trading partner in Latin America and in recent years the two countries 
had concluded several memoranda of understanding.  In 2006, the Australia-Mexico Joint Experts 
Group (JEG) was established in recognition of the potential to strengthen the bilateral economic 
relationship.  The group was identifying further opport unities to consolidate the trade and investment 
relationship. 
76. Australia acknowledged Mexico's commitment to market liberalization, demonstrated by its 
2007 tax and fiscal reforms as well as its reduction of  MFN tariffs in 2006.  However, Australia noted 
that Mexico's average MFN ta riffs remained well above the levels prevailing in other 
OECD countries.  These high MFN tariffs were par ticularly disadvantageous to Australian and other 
MFN exporters.  Accordingly, Australia encouraged  Mexico to continue to reduce and simplify its 
MFN applied tariff rates, including in the agricu lture sector, so as to address the inconsistencies 
existing between MFN and preferential arrangem ents.  Australia would also welcome the 
liberalization of Mexico's energy sector so as to a llow foreign participation and investment in projects 
and technology necessary to sustain and advance Mexico's economic growth. 
77. The representative of Colombia  said that Mexico's macroeconomic performance had 
improved significantly.  Mexico was also engage d in major efforts in education.  It faced 
two challenges, one domestic and the other external.  In the domestic context, Mexico needed to raise 
the living standards of its people and reduce poverty;  and externally, it should reduce the gap 
separating it from the richer OECD countries.  In Colombia's view, Mexico could make progress on 
both fronts by:  speeding up the reform process;  reducing non-tariff barriers, including the complex customs procedures and technical requirements that obstructed trade;  improving physical infrastructure;  strengthening competition;  improvi ng the level of human capital;  introducing labour 
market adjustments;  improving education and broadening social  security coverage. 
78. Colombia's bilateral trade with Mexico, an im portant trading partner, had grown significantly 
in recent years.  There was also considerable fore ign direct investment between the two countries.  
This trading relationship was based on the G-3 Free Trade Agreement, which the two countries 
intended to deepen through negotiations which they hoped to conclude in the current year. 
79. The representative of Chile
 said that Mexico's economic performance had been good although 
major challenges still lay ahead, particularly povert y reduction, which would require faster economic 
growth and increased productivity, improved co mpetition in the domestic market and the 
establishment of a uniform incentive structure.  He referred to the OECD's recommendations for 
carrying out reforms in foreign investment, competition and trade policy. 
80. With regard to multilateral trade, Chile and Mexi co had shared interests in a number of areas, 
such as deepening open trade practices in agricultu ral markets and the progressive liberalization of 
services.  With regard to bilateral trade, since the entry into force of the Preferential Trade Agreement, 
the process of integration between the two economie s had been moving forward dynamically across 
the board.  Mexico was Chile's third largest trad ing partner in Latin America.  In the area of 
investment, there had also been a marked increase in capital flows. WT/TPR/M/195 
Page 14  
 
  81. Chile was concerned at the delays in recen t months in authorizing and rehabilitating 
processing plants for animal products from Chile.  Chile would like to know whether the regulations 
to the Federal Law on Animal Health were in forc e and, if so, how the new regulations would be 
applied. 
82. The representative of Japan
 appreciated Mexico's good economic performance and was 
pleased that the export-oriented manufacturing sector had continued to play a key role in Mexican 
GDP.  With respect to economic policy, Japan found it valuable and encouraging that Mexico's prime 
objective was to increase economic growth in a su stainable way.  Japan took note of Mexico's 
commitment to the promotion and implementation of structural reforms. 
83. Regarding trade liberalization in goods and ser vices, Japan welcomed Mexico's efforts to 
lower tariffs on non-agricultural products, and to lib eralize its services sectors, but concurred with the 
Secretariat Report by maintaining that Mexico coul d further enhance the predictability of its trade 
regime by closing the gap between bound and appl ied rates, and between its services commitments 
and the actual opening of its market.  Japan also a ppreciated Mexico's ongoing efforts to strengthen its 
competition policy, although it noted that there we re still monopolies and insufficient competition in 
some areas, such as electricity and hydrocarbons.  Japan understood that draft legislation on tax 
reform, passed in 2007, introduced a system whereb y a company was required to pay the higher of the 
so-called flat rate business tax or  current corporation tax.  Japan would like to learn more about the 
rationale behind this legislation and its impact on FD I.  There were other issues of concern regarding 
the business environment, which Japan hoped would be addressed bilaterally. 
84. The representative of Costa Rica  said that bilateral trade had shown great buoyancy over the 
past ten years.  The Mexican market was very impor tant to Costa Rica, particularly for palm oil and 
flat-rolled products of iron and steel.  Furthermore, Mexico was the second largest investor in Costa Rica, after the United States.  Costa Rica acknow ledged Mexico's commitm ent to the multilateral 
trading system, trade liberalization, clear rules a nd transparency.  With regard to Mexico's trade 
policy, Costa Rica had asked questions concerning rules of origin, customs valuation, technical 
regulations, government procurement, and telecommunication and insurance services. 
85. The representative of the European Communities
 said that the Communities had friendly and 
long-standing economic, political and cultural ties w ith Mexico.  Although Mexico had performed 
well economically, had consolidated the federal budget and reduced public  debt, it needed to tackle a 
number of challenges such as reducing poverty and ine quality, and to make further structural changes 
in order to improve public sect or revenue collection capacity. 
86. He referred to the overall agreement that the EC  had signed with Mexico ten years earlier, and 
its economic, political and cooperation components.  Mexico was a traditional Latin American trading 
partner of the EC, and the EC was Mexico's second largest trading partner.  It also accounted for 
33 per cent of foreign direct investment in Mexico. 
87. The European Communities observed that open trade practices and competition in key sectors 
of the Mexican economy, such as energy and teleco mmunications, were limite d and were an obstacle 
to Mexico's competitiveness.  The EC therefore noted with satisfaction the reforms Mexico had 
accomplished in competition policy and hoped that  these would make market operations more 
efficient.  The EC also urged Mexico to deepen and accelerate the liberalization of foreign investment. 
88. The European Communities had also noted positiv e changes in Mexican regulations and an 
improvement in market access conditions.  Noneth eless, there were still rules and procedures that 
obstructed trade unnecessarily, and the EC urged Mexico to eliminate them.  WT/TPR/M/195 
 Page 15 
 
 
  89. The representative of Hong Kong, China  noted that Mexico had maintained very good trade 
relations with his country and he h oped that the trend would continue. 
90. Hong Kong, China commended Mexico's initiativ es and its determination to undertake a 
series of regulatory reforms in the infrastructural sectors of telecommunications, services, and financial services as part of its strategy to in crease national competitiveness .  Hong Kong, China 
encouraged Mexico to continue its efforts in this  direction, in all services sectors, so as to create a 
more competitive environment for trade in servi ces and to increase the overall competitiveness of its 
economy. 
91. Hong Kong, China noted that Mexico attached  huge importance to its  maritime transport 
services and was aware of the n eed to improve port infrastructure and remove bottlenecks in 
multimodal transport.  Hong Kong, Ch ina believed that further liberali zation of the maritime transport 
and logistics sectors would help to enhance their co mpetitiveness and contribute to Mexico's role as a 
logistics hub.  He therefore encouraged Mexico to undertake deeper commitments in its next revised 
services offer. 
92. On market access for goods, Hong Kong, China appreciated that Mexico had maintained 
ad valorem  rates for 99.3 per cent of its tariff lines, ha d bound all its tariffs and reduced the average 
applied tariff to 11.2 per cent.  However, there re mained a substantial gap between Mexico's applied 
and bound rates.  On customs procedures, Mexico had adopted a series of streamlining measures to 
facilitate foreign trade transactions.  The representa tive encouraged Mexico to continue with the 
process of customs reform and the simplification of foreign trade regulations. 
93. Regarding anti-dumping, Hong Kong, China was gl ad to see a decrease in the number of anti-
dumping measures and only limited use of countervaili ng and safeguard measures by Mexico in the 
past few years.  He encouraged Mexico to contin ue exercising caution in relation to such measures 
and to work to ensure that due process and tran sparency principles were followed when conducting 
investigations or reviews of measures. 
94. The representative of the United States
 noted that Mexico's trade regime was of considerable 
interest to his country.  The foundation of their tr ading relationship had been the North American Free 
Trade Agreement (NAFTA).  Since the entry into force of the NAFTA, US goods exports to Mexico 
had more than tripled.  Total two-way trade be tween the United States and Mexico had more than 
quadrupled, reaching US$332.5 billion in  2006.  Bilateral foreign dir ect investment had also been 
increasing.  He noted that the remaining NAFTA tariffs and quotas had been eliminated on 1 January 2008. 
95. Mexico's economy had grown but additional reform s over a wide range of areas were needed 
in order to move the economy onto a higher and more  sustainable growth path.  Referring to an 
OECD report, the representative mentioned the need  for Mexico to reduce MFN tariffs and complex 
customs more procedures and technical regulati ons, as well as restrictions on foreign direct 
investment.  The United States encouraged Mexico to make further improveme nts in areas where it 
could further liberalize its regime and enhan ce its competitiveness.  Among other measures, the 
United States encouraged Mexico to accede to the Government Procurement Agreement;  to improve 
certification and conformity assessment requirements relating to animal products;  to strengthen 
intellectual property rights protection and enforcem ent;  and to take part in activities within the 
purview of the TBT Agreement regarding Mexico's ap proach to technical regulations and standards. 
96. The representative of Malaysia
 noted that Mexico was an important trading partner and his 
country's second largest partner in Latin America.  He expressed his satisfaction that trade between 
the two countries had been growing.  He appreciated  that during the period under review Mexico had WT/TPR/M/195 
Page 16  
 
  lowered its simple average MFN tariff from 16.5 pe r cent to 11.2 per cent, but encouraged Mexico to 
reduce the gap between bound and applied tariffs in the coming years. 
97. The representative of Panama
 said that Mexico was a very important trading partner for his 
country given the volume of bilateral trade.  Mexico  was also a major investor in Panama.  Panama 
was therefore interested in several areas of Mexico's  trade policy, particularly the regime for foreign 
direct investment, the customs regime of the Par tial Scope Agreement between the two countries, the 
management of agricultural tariff quotas, Mexica n legislation on safeguards, and administrative 
procedures for the creation of new enterprises. 
98. The representative of India  said that Mexico had a buoyant export trade, had improved access 
to international markets, and achieved competitive production costs and had a skilled labour force.  
However, Mexico's main challenge was to apply policies that would significantly increase and sustain 
the pace of GDP growth and reduce poverty. 
99. The Government of Mexico was close to reaching a balance in its finances, most of the public 
debt was long-term and denominated in pesos, and the credit market, though modest, had grown.  It 
was to be hoped that the recently approved tax refo rm would help to finance public investment in 
roads and other infrastructure works.  It was al so to be hoped that the continued commitment to 
prudent economic policies, the increase in public ex penditure on infrastructure and the high income 
from petroleum would offset the e ffects of the slowdown in the United States economy.  Recently, a 
considerable amount of foreign inv estment had gone directly to servi ces rather than production, and if 
this continued it would help to cover the present curre nt account deficit.  Some economists feared that 
family remittances, the second most important sour ce of foreign exchange after petroleum, might 
decline in the current year, with nega tive implications for economic growth. 
100. In India's view, Mexico offered good opportuniti es for investors, given its broad network of 
FTAs.  India also appreciated Mexico's commitmen t to a sound and predictable multilateral system.  
In 2007, India and Mexico had signed several important agreements, including a Double Taxation 
Agreement, and had established ways and means of  facilitating and promoting trade and investment.  
India had asked several questions about Mexico's trade policy pertaining to sanitary and phytosanitary 
measures, technical barriers to trade, econom ic reforms and visas for business travellers. 
101. The representative of Nicaragua  expressed appreciation for Mexico's replies to the questions 
asked by her country. 
102. The representative of Peru  expressed satisfaction at Mexico's positive macroeconomic 
indicators, but acknowledged that the fight against poverty and inequality remained a challenge that 
required domestic reforms.  Despite  the substantial trade between th em, Peru and Mexico had not as 
yet realized the full potential of their economies.  He hoped that the negotiations to renew the Partial 
Scope Agreement between the two countries woul d be concluded shortl y and would offer new 
opportunities and benefits for both parties.  Like Mexico, Peru believed in the complementarity of 
unilateral, bilateral, regional and multilateral trade liberalization initiativ es.  Peru had put questions to 
Mexico on its customs procedures, rules of origin and services. 
103. The representative of Singapore  noted the steady growth in Mexico's economy, due largely to 
its external trade.  Mexico had been a key ec onomic and trading partner for her country as it was 
Singapore's third largest trading partner in Latin Amer ica.  She also noted that Singapore's presence in 
Mexico had grown steadily in several sectors.  Singapore commended Mexico's trade liberalization 
efforts although there remained scope for improvement , such as reducing bound tariffs so as to narrow 
the gap between average applied and bound rates.  The representative encouraged Mexico to make 
commitments in environmental services and to participate in NAMA sectorals.  WT/TPR/M/195 
 Page 17 
 
 
  104. The representative of Pakistan  noted that Mexico had achieved sustained growth.  However, 
there were some areas where improvements were still needed so as to maintain its sustainable growth 
and reduce poverty.  In addition to the gap betw een bound and applied tariff rates, several other 
measures were cause for concern.  These included:  an ad valorem customs processing fee, the non-
application of the WTO Valuation Rules on over 300 tariff headings for textiles and clothing;  the 
requirement of import licences for about 160 items;  and discriminatory SPS policies. 
105. The representative of El Salvador  noted that Mexico had conti nued the gradual and unilateral 
liberalization of its trade regime and entered into  new free trade agreements.  Although Mexico had 
not made any fundamental changes to its internal legal framework or its trade policy, El Salvador 
noted that Mexico's policy was aimed at expa nding and diversifying foreign markets through 
preferential agreements, and attracting foreign in vestment.  El Salvador expressed concern at 
Mexico's customs procedures and practices which remained complex. 
106. She said that the free trade agreement between Mexico, El Salvador and two other Central 
American countries had promoted the improvement of El Salvador's trade balance and its trade with 
Mexico.  Mexico and El Salvador shared common goa ls in the field of intellectual property and they 
had concluded a cooperation and technical assistance  agreement on that topic.  El Salvador was 
pleased that Mexico had extended copyright protection to cover not only the lifet ime of the author but 
100 years following his or her death. 
107. The representative of Honduras  noted that the Mexican economy had regained momentum, 
reaching a per capita GDP of US$8,000, while prude nt fiscal management had been maintained.  
Nevertheless, Honduras believe d that Mexico needed to make a number of reforms in order to ensure 
higher GDP growth and reduce poverty, such as the further reduction of non-tariff barriers, including 
complex customs procedures and complicated techni cal requirements.  Honduras also wanted Mexico 
to provide information on the progress of the cu stoms modernization plan announced in 2007. 
108. He noted that Mexico was not party to th e WTO Information Technology Agreement and 
asked if it had any immediate plans to join that Agreement, the purpose of which was to promote the 
development of the information technology industry. 
109. Honduras considered Mexico to be an important  partner, and trade relations between the 
two countries showed a trade balance favourable to  Mexico.  Honduras hoped, however, to narrow the 
gap in the future and to augment a nd deepen bilateral trade relations. 
110. The representative of Guatemala  said that relations between Mexico and Guatemala were 
governed by a free trade agreement that had entere d into force in 2001.  Mexico was Guatemala's 
fourth largest export market and, at the same ti me, the country with which Guatemala had resolved 
most dispute settlement cases at the WTO. 
111. The representative referred to Mexico's requireme nt that a factory or laboratory be established 
on Mexican soil ("plant requirement") in order to ob tain sanitary registration authorizing it to import 
or market medicines.  In a dispute on that subject between El Salvador and Mexico, an arbitral panel 
set up under the Mexico-Northern Triangle Free Trad e Agreement (FTA) had ruled that the "plant 
requirement" was inconsistent with the principl e of national treatment set forth in the FTA.  
Guatemala had doubts about the legitimacy of th at requirement under the WTO Agreements and, 
since it had been determined that the requirement  was in breach of national treatment under the 
aforementioned FTA, did not understand why Mexico had eliminated the requirement for only one of 
the three Central American countries party to that agreement.  Guatemala would be closely following 
the steps taken by Mexico to eliminate the requi rement within the framework of the regulatory 
improvement that formed an integral part of the modernization and structural reform of its economy. WT/TPR/M/195 
Page 18  
 
  112. Guatemala was one of a number of countries that had concluded phytosanitary cooperation 
agreements with Mexico.  To date, however, Mexico  had not granted equivalence for two Guatemalan 
products, tomato and chilli, even though those pr oducts had already been recognized by other 
countries.  Guatemala hoped that Mexico would recognize equivalence for these two products of 
special interest to Guatemalan exporters within th e context of its regulatory improvement or, if not, 
explain why such recognition had not been granted. 
113. The representative of Ecuador
 noted that Mexico's macroeconomic achievements were an 
indication of prudent fiscal management that had facilitated the consolidatio n of the federal public 
sector budget and allowed for a significant reduction in  public debt as a percentage of GDP.  In 
addition, Mexico had consistently implemented an international trade policy aimed at general trade 
liberalization and open regionalism. 
114. Ecuador shared Mexico's view that the Doha R ound had to produce fair and balanced results 
in all sectors of interest to the developing countri es.  Ecuador had signed four trade agreements with 
Mexico within the framework of the LAIA;  three concerning partial tariff preferences and one 
relating to disciplines for the elimination of technical  barriers to trade.  A bilateral tax agreement for 
the abolition of double taxation was also in effect. 
115. Since 2002, Mexican foreign direct investment (FDI) in Ecuador had grown significantly and 
Ecuadorian exports to Mexico had increased by 179 per cent.  Nevertheless, Ecuador maintained a 
very significant and growing deficit in its trade balance with Mexico.  Ecuador was therefore very 
interested in widening, diversifying and deepeni ng even further its trade participation in Mexican 
markets through bilateral and multilateral channe ls, possibly by deepening the partial scope 
agreements concluded with Mexico  and establishing disciplines that clarified and were specific to 
matters such as sanitary and phytosanitary measures, conformity and trade defence. 
116. Mexico was one of the biggest users of the anti-dumping system;  in March 2007 it had had 
70 measures in effect.  Ecuador asked Mexico for further clarification regarding procedures for the 
determination of dumping and the lifting of that type  of trade defence measure and, more specifically, 
regarding the countervailing duty that had been app lied to Ecuadorian exports of ceramics since 2000.  
Ecuador wished to know why that measure continued to be applied, since it had been lifted for other 
countries with a much larger export base than Ecuador. 
117. The representative of Nigeria  noted that Mexico had continued the gradual liberalization of its 
trade regime, thereby ensuring a solid economic performance and an increase in employment.  He also noted that the slowdown in the US economy in 2007 and 2008 could reduce Mexico's growth rate.  He 
enquired as to what steps had been taken to prevent such an outcome. 
118. Preferential agreements had led to the substan tial liberalization of Mexico's trade regime.  
However, the complexity and cost of their admi nistration for the authorities and economic agents 
were cause for concern.  Nigeria asked whether Mexico had in place a strategy to tackle the 
complexity of different MFN and preferential regimes. 
119. The representative of Uruguay
 said that Mexico had been able to combine long-standing 
active and constructive participation in the WTO wi th the negotiation and conclusion of preferential 
agreements.  The links between Mexico and Urug uay had been institutionalized not only through 
various mechanisms such as the Binational Standing  Commission, but through a number of treaties, 
conventions and agreements between  the two countries.  Bilateral economic and trade relations had 
taken on greater importance with the signing of the Agreement on the Promotion and Reciprocal 
Protection of Investments and the entry into  force of the free trade agreement in 2004.  WT/TPR/M/195 
 Page 19 
 
 
  120. Uruguay was closely following a number of aspects  of Mexico's trade policy, such as the 
prior import licensing system, tariff quota administration, the application of rules of origin, and sanitary and phytosanitary requirements. 
121. The representative of Norway
 noted that Mexico's economic results had been favourable.  
Mexico had continued with its policy of opening up and unilaterally liberalizing its trade regime and 
had concluded new free trade agreements.  This, co mbined with a regime relatively open to FDI and 
structural reforms, had contributed to the grow th of GDP.  Furthermore, the Government had 
implemented a prudent fiscal policy and kept inflatio n under control.  Nevertheless, Mexico still had 
to make efforts to improve competitiveness, create more jobs and reduce poverty. 
122. Mexico continued to attract FDI, while the macroeconomic and trade policies conducive to 
business remained stable.  Nevertheless, the repres entative expressed concern regarding a number of 
points, namely the relatively low level of educati on and public safety, problems with corruption, and 
high concentration levels in some sectors such as electricity, telecommunica tions and hydrocarbons.  
With regard to the latter, Norway believed that Me xico could increase its efforts to establish a more 
favourable environment for foreign participants so  as to make more efficient use of its offshore 
resources. 
123. He welcomed the steps taken by Mexico to fac ilitate and modernize foreign trade procedures.  
However, he felt that some procedures remained complex and that trade could benefit from further 
customs reforms and the narrowing of the gap between  bound and applied tariffs.  In his view, the free 
trade agreement concluded between the European  Free Trade Association and Mexico in 2000 was 
beneficial to both parties.  His country wish ed to maintain close cooperation with Mexico. 
124. The representative of Turkey  noted Mexico's solid economic performance and sound 
macroeconomic policies.  Although the key econo mic variables were solid, Mexico faced some 
challenges.  There was a need to continue structural reform in various sectors of the economy, to 
achieve a higher level of competitiveness in the do mestic market, to increase productivity, and to 
reduce poverty. 
125. As a complement to its support for the multilate ral trading system, Mexico followed a very 
ambitious agenda of preferential trade agreements .  Around 85 per cent of Mexico's trade was now 
being conducted under preferential agreements wi th the aim of diversifying and expanding into 
foreign markets.  Turkey asked Mexico to explai n whether these agreements had been successful in 
terms of market expansion, and what policies were  in place to tackle the complexity of their 
administration. 
126. Turkey noted that Mexico had adopted important  measures to facilitate trade transactions and 
had lowered its simple average MFN tariff.  Howeve r, Turkey encouraged Mexico to take further 
steps to improve certain areas such as market acc ess, the gap between applied and bound rates, high 
MFN tariffs, the customs processing fee, and import permits for some products, including clothing. 
127. The representative mentioned a number of simila rities between Turkey and Mexico and noted 
that although bilateral trade had been growing it fell short of reflecting the full potential of both 
economies.  He said that Turkey was ready to fu rther strengthen its trade relations with Mexico. 
128. The representative of Paraguay  supported the efforts that Mexico had made in all areas, 
especially those to reduce poverty.  As far as the economy and trade were concerned, Paraguay and 
Mexico still had a long way to go.  Paraguay hoped it would soon be able to implement an agreement 
with Mexico that would enable cooperation and tr ade between the two countries to be extended and 
broadened within the MERCOSUR framework. WT/TPR/M/195 
Page 20  
 
  V. REPLIES BY THE REPRESENTATIVE OF MEXICO AND ADDITIONAL 
COMMENTS  
129. The representative of Mexico
 noted that both the Secretariat's report and the statements made 
by various delegations highlighted the positive performance of the Mexican economy and its sound 
macroeconomic and financial positio n.  They also indicated, however, that Mexico faced a less 
favourable international environment in 2008.  Me xico had prepared for that situation by taking a 
series of measures. 
130. One of those measures was the application of a counter-cyclical fiscal policy, which meant 
that during 2008, public investment would grow  by 24.6 per cent, while programmable expenditure 
would increase by 10.5 per cent, social devel opment expenditure by 8.1 per cent, economic 
development expenditure by 13.6 per cent, expend iture on public safety by 39.4 per cent and 
expenditure on the environment by 30.1 per cent.  Mexico had also set up the National Infrastructure 
Fund, which would amount to US$24,000 million. 
131. The second measure envisaged by Mexico was to  take advantage of other export markets 
offering more favourable conditions. 
132. Combating poverty was one of Mexico's top priorities.  The Federal Government was 
committed to the Mexican rural sector and was ta king steps to meet the significant challenges it 
posed.  In 2008, the Federal Government would allocate 204,000 million Mexican pesos to producers 
and inhabitants in rural areas, with a view to improving the living conditions of rural families, 
sustainably increasing food production and productivit y, and diversifying rura l development options. 
133. In 1997, the Opportunities Programme had been im plemented and, given its success, had been 
extended and strengthened.  The programme benefi ted more than 4 million families living in poverty 
and extreme poverty, providing support in terms of health, nutrition, income and education.  As a 
result of the programme, the Economic Commission for Latin America and the Caribbean (ECLAC) 
had estimated that the percentage of the populatio n living in poverty had reduced consistently in 
Mexico, falling from 39.4 per cent in 2002 to 31.7 per cent in 2006, while the population living below 
the extreme poverty line had fallen from 12.6 per cent to 8.7 per cent over the same period. 
134. It was fundamentally important for Mexico to have an education system that could develop 
the human capital required to ensure sustainable deve lopment.  In this context, in addition to the 
Opportunities Programme, two other programmes were  being implemented:  the Quality Schools 
Programme, which sought to improve the planning and assessment culture in schools and resolve 
deficiencies in infrastructure and equipment;  and the Full-Time Basic Education Schools Programme, 
launched in 2008 to promote the learning and deve lopment of the skills and abilities promoted by 
basic education. 
135. Mexico believed that in order to combat poverty it was necessary to address the 
competitiveness agenda.  Mexico was committed to enhancing the country's competitiveness and to 
that end was working on improving the busin ess environment and the regulatory framework, 
strengthening economic competitiveness and implemen ting structural reforms and other measures.  
Mexico hoped that such action would lead to gr eater national and foreign investment flows. 
136. In 2007, Mexico had approved the reform of St ate workers' pensions, the tax reform and 
electoral reform.  In 2008, it would continue to work on other priority areas such as education, human capital, energy and telecommunications. 
137. Thanks to the tax reform, Mexico had gained a fairer and simpler tax system that provided a 
basis for the prevention of tax evasion and avoi dance by eliminating preferential regimes and  WT/TPR/M/195 
 Page 21 
 
 
  improving tax collection through flexible instrument s.  The reform would enable annual tax receipts 
to be increased by 2.3 percentage points of GDP, which would be allocated to social programmes, 
infrastructure and the development of production facilities. 
138. Mexico had four main objectives in the energy sector:  to ensure the energy supply required 
for Mexico's economic growth;  to promote hydro carbon operations in accordance with international 
standards of efficiency, transparency and accountab ility;  to increase in a sustainable manner the 
prospecting, production and processing of hydrocarbons;  and to mitigate the increase in emissions of 
greenhouse gases. 
139. A large proportion of Mexico's hydrocarbon resources was located in the Gulf of Mexico in 
stretches of deep water.  Significant investment  would therefore be required to maintain the 
production platform at current levels. 
140. Congress and the Executive were currently jointl y analysing possible ways of amending the 
sector's energy framework to meet the new challe nges.  Such initiatives did not involve opening up 
State-reserved activities to the private sector. 
141. The Sectoral Energy Programme sought greater private investment participation in energy 
infrastructure projects for the transportation, storage and distribution of natural gas.  With regard to 
basic petrochemicals, the programme also promoted  the integration of the private sector secondary 
petrochemicals production chain with the St ate-owned basic petrochemicals industry. 
142. In the electricity sector, the private sector c ould invest in generating plants for self-supply, 
cogeneration, or as an independent power producer .  Much of the generating capacity required to 
satisfy the demand expected in the years ahead would come from those sources. 
143. The Mexican Congress had begun work to reform  the Telecommunications Law with a view 
to strengthening the legal framework governing this  sector and possibly opening it up further to 
foreign investment in fixed telecommunications.  Up to 100 per cent of FDI was currently accepted in 
mobile telephony.  In order to improve the leve l of competition in the market, Mexico had also 
introduced the following measures:  competitive bi dding for radio spectrum frequency bands, which 
would allow new participants to enter the market;  the use of the Federal Electricity Commission's 
fibre optic network to provide wholesale services to other telecommunication operators;  the introduction of 'number portability' which would reduce the cost for consumers when changing 
provider;  and the reduction in the number of service areas, which would reduce the cost paid by operators to terminate calls. 
144. With regard to tariffs, Mexico had brought c onsistency to its tariff policy so as to ensure 
certainty and predictability for economic operators.  Mexico would continue to review its tariff 
structure so as to reduce tariff dispersion even further, revise tariff discrepancies and replace 
exceptional arrangements with general arrangements.   A successful outcome to the Doha Round 
would mean a substantial reduction in the differen tial between Mexico's applied and bound tariffs.  
For this reason, Mexico had submitted ambitious market access proposals. 
145. Mexico's imports of virtually all products subject to tariff quotas had been greater than the 
WTO-bound quota amounts.  Most imports of such pr oducts were subject to better access conditions 
than those established in Mexico's commitments.  Th e 'first come, first served' method of allocation 
had been maintained for all quotas bound at the WT O, except for powdered milk, where the direct 
allocation mechanism was applied on the basis of past imports. 
146. In December 2007, the Tax Administration System (SAT) had been restruct ured.  As a result, 
the General Customs Administration would only be  concerned with customs clearance activities, WT/TPR/M/195 
Page 22  
 
  which would ensure greater transparency and effici ency and save time.  Post-clearance inspection and 
audit powers had been transferred to another administrative unit. 
147. Importers who definitively impor ted goods subject to estimated prices were required to put up 
a deposit or security for the difference between the de clared customs value and the price estimated by 
the Ministry of Finance and Public Credit.  The SA T had the authority to release securities paid in 
respect of the possible omission of the payment of contributions.  To reduce the financial cost, it had 
recently been established that the cancellation of such  securities was to take place within three months 
of the date of importation.  The estimated prices did not reject the value declared by the importer, nor 
did they constitute the taxable base.  They were  merely a mechanism to prevent undervaluation.  
Furthermore, that mechanism was cu rrently undergoing fresh review. 
148. With a view to gathering data that could be used , if necessary, to carry out audits of irregular 
importers, private companies had been contracted to verify the declared values and the existence of 
the suppliers.  That service facilitated the exercise  of powers of authority since it was more assertive 
and did not require authority to be transferred abroad.  Furthermore, the cooperation of foreign 
suppliers was voluntary and confidential.  Mexico would carry out a major review of administrative 
procedures under the various non-tariff regulations, so  as to determine, on the basis of their 
effectiveness, whether they should be eliminated, modified or simplified. 
149. In Annex 7 of China's Protocol of Accession to  the WTO, China and Mexico had agreed that 
"during six years after the accession of China, Mexi co's existing measures [ … ] shall not be subject 
to the provisions of either the WTO Agreement or the anti-dumping provisions of this Protocol".  In 
accordance with that commitment, prior to the expiry of Mexico's reservation, the Mexican 
investigating authority had begun an administrativ e review process with a view to ensuring that 
measures were made subject to and brought into line w ith WTO rules, as stipulated in the Protocol.  It 
was important to note that the terms of Mexico's re servation were different to those of other countries 
which were also set forth in the Annex to the Pr otocol and which consisted of the obligation to 
eliminate measures by a certain date.  China had said that its interpretation was different with regard 
to Mexico's obligations under Annex 7.  Mexico  and China had therefore held discussions on the 
matter and were working to find a mutually satisfactory solution. 
150. In October 2006, Mexico had provided notifi cation of domestic support for agriculture.  On 
7 February 2008, the WTO Secretariat had circulated  a notification on export subsidies, which meant 
that Mexico's commitments in respect of both matte rs were covered until 2004. Mexico was preparing 
its notifications for 2005 and 2006 a nd would release them shortly.  The notifications on tariff quotas 
would be notified in March 2008. 
151. The discussant
 encouraged Mexico to continue with the institutional and structural reforms 
needed to meet the challenges lying ahead, despite the difficulties faced by the Latin American 
countries in carrying out these types of reform expe ditiously.  She requested further information on 
the competitiveness committees of the Chamber of  Deputies and the Senate, since it was the 
legislature that made a large number of the deci sions relating to the development of Mexico's 
competitiveness.  In view of the current customs -related problems, it was important to reform the 
structure of that institution.  She commended th e programmes implemented by Mexico to combat 
poverty and hoped that they would enable the country to achieve the desired objectives. 
152. The representative of the EC  thanked Mexico for the replies to its questions.  She 
congratulated Mexico on its efforts and wished Me xico success in the implementation of its policies 
and measures.  WT/TPR/M/195 
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  153. The representative of China  noted that the anti-dumping measures applied by Mexico to 
Chinese products should be brought into conformity w ith WTO rules.  He hoped that their bilateral 
consultations would produce positive results th at would be acceptable to both countries. 
154. The representative of Japan  wished Mexico success in the implementation of its six-year plan 
and its reforms. 
155. In reply to the discussant's ques tion, the representative of Mexico  explained that the 
competitiveness committees had been set up in Congr ess under the previous administration.  There 
was one such committee in the Senate and another in  the Chamber of Deputies, and the work they had 
carried out had been extremely useful.  Any initia tives with an impact on co mpetitiveness were to be 
brought before those committees and considered in th e light of that key objective, since the issue of 
competitiveness had become a State policy. 
156. With regard to services, and in reply to the di scussant, she said that if services open to full 
competition were compared with those facing obs tacles, it was clear that foreigners had the 
opportunity to compete in a large number of services in Mexico.  Restrictions on investment in professional services were limited only to lawyer s who provided domestic services in respect of 
domestic legislation, since the sector was fully open  to those who provided foreign legal consultancy 
services in respect of international law.  Computer and training services and services relating to business, telephony (excluding fixe d telephony), construction, dist ribution, education, banking, 
health, tourism, etc. were entirely open to foreig n investment.  The possibility of opening up fixed 
telecommunication services was under discussion in the Mexican Congress. 
157. In regard to Ecuador's question on the anti-dum ping investigation into Ecuadorian ceramics, 
on 17 July 2003 the Ministry of the Economy had published the final resolution of the anti-dumping 
investigation, whereby it was decided to impose a definitive anti-dumping duty of 3.75 per cent on 
imports from Ecuador.  In July 2008, the measure woul d have been in force for five years.  Pursuant 
to Article 11.3 of the Anti-Dumping Agreement, if  no five-year review was initiated, the measure 
would be eliminated.  If, on the contrary, it was deci ded to initiate such a review, all the interested 
parties, including Ecuador, would be duly notified so th at they were aware of and could participate in 
the proceedings. 
158. Regarding Guatemala's question on phytosanitary matters, Mexico applied the relevant risk 
analysis procedures for the recognition of pest-fr ee products in accordance with internationally 
recognized provisions, standards and guidelin es and the WTO Agreement on Sanitary and 
Phytosanitary Measures.  Mexico would, however, tr ansmit the concerns raised by Guatemala to the 
competent Mexican agricultural and health authoritie s with a view to providing a more comprehensive 
reply. 
159. The discussant
 encouraged Mexico to make changes in a number of service sectors where 
such changes were vital to increasing Mexican competitiveness. WT/TPR/M/195 
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  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
160. This fourth Trade Policy Review of Mexico has allowed this Body to consider Mexico's trade 
and investment policies and practices against the background of its economic and institutional 
environment.  We owe the success of this Review to the participation of the Vice Minister of 
International Trade Negotiations,  Mrs Beatriz Le ycegui, of Ambassador Fernando de Mateo and the 
rest of the Mexican delegation, to the forthri ght comments by the discussant, Ambassador Claudia 
Uribe, and to the active involvement of many Members. 
161. Members welcomed Mexico's robust economic growth, which had come hand-in-hand with 
its deeper integration into the world economy.  Ho wever, a cyclical economic slowdown is a risk, and 
reducing poverty remains an important  challenge in the long-run.  Mexico was thus urged to carry out 
the needed structural reforms to  enhance competitiveness and improve economic performance.  In this 
regard, Mexico provided details on its reform agenda, and how it aims to raise productivity and 
economic growth in a sustainable manner. 
162. Members expressed great appreciation for Mexi co's constructive role in the multilateral 
trading system, and its contribution to the Doha Development Agenda.  Me xico underscored that it 
considers the WTO to be the main mechanism for trade liberalization,  with its extensive network of 
preferential agreements playing a complementary role. 
163. Members commended Mexico's commitment to trade liberalization, as demonstrated by its 
unilateral reduction of tariffs in 2006.  However, Me xico was urged to continue simplifying its trade 
regulations and to reduce the gap between bound and applied ta riffs in order to increase the 
predictability of its trade regime.  Concerns were  expressed regarding issues such as customs fees, the 
estimated price mechanism, certification requireme nts, anti-dumping, and SPS and TBT measures.  
Mexico pointed out that customs modernization an d transparency are key components of its reform 
efforts. 
164. Responding to questions on the incentive schemes it  maintains, Mexico clarified that none of 
them is contingent upon exportation.  On comp etition policy, Mexico was congratulated for the 
improvements it has made although implementation pr oblems persist.  Some Members called for the 
elimination of domestic preferences in government procurement and for Mexico to join the GPA, 
which Mexico indicated it is not currently considerin g.  Mexico also responded in detail to a range of 
questions concerning its intellectual property regime. 
165. Foreign investment has played an important role in Mexico's development strategy but 
restrictions apply in different areas of the all- important services sector, including telecommunications 
and transport.  Members encouraged Mexico to  reduce such restrictions, and to improve its 
GATS commitments with a view to closing the ga p between these and Mexico's legal framework. 
166. Questions were raised about the effectiveness of the support given to the agriculture sector, 
and the transparency of tariff-quota administration,  with Mexico engaging to  submit various related 
outstanding notifications.  Mexico acknowledged th e need for reform in the energy sector, and 
indicated that, while changes are under considera tion, the liberalization of existing investment 
restrictions is not. 
167. In conclusion, Members congratulated Mexico  for its steadfast support of the multilateral 
trading system, and welcomed the progress it has made  in liberalizing its trade regime.  Members also 
expressed unequivocal support for the authorities' aim to introduce reforms that include further trade 
and investment liberalization complemented by internal measures.  Implementing such reforms 
represents a challenge that will require the collabora tion of diverse domestic st akeholders.  Success in 
this endeavour would be instrumental for Mexico to  attain the higher prosperity to which it aspires.  WT/TPR/M/195 
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  168. I would like to close this review by thanking once again Vice-Minister Leycegui, Ambassador 
de Mateo, and the rest of the Mexican delega tion, as well as the discussant and the numerous 
Members that took part in this meeting for contributin g to an extremely valuable  review.  I would also 
like to express my appreciation to the Mexican de legation for the many responses provided during the 
meeting.  We look forward to receiving the outstanding responses within the next month. 
__________