. /.  WORLD TRADE  
ORGANIZATION  G/C/42 
20 January 2004  
 
(04-0157) 
Council for Trade in Goods Original:   Spanish 
   
PROGRESS REPORT BY MEXICO ON THE PHASING-OUT OF THE TRIM  
NOTIFIED UNDER ARTICLE 5.1 OF THE TRIMS AGREEMENT 
 
Notification by Mexico
 
  
 The following communication, dated 16 January 2004, is circulated at the request of the 
delegation of Mexico.   
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 Pursuant to Decision G/C/W/334
1, adopted by the Council for Trade in Goods on 
5 November 2001, Mexico hereby reports on the progress it has made in phasing out the TRIM notified under Article 5.1 of the TRIMs Agreement.     Under the phase-out plan for eliminating its remaining TRIM no later than 
31 December 2003, in 2003 Mexico continued to implement the programme to dismantle national 
value added and trade balance measures in accord ance with the terms laid down in the Automotive 
Decree, as detailed below.    National value added
 
 
 The percentage of national value added that an  enterprise in the moto r vehicle final assembly 
industry is required to incorporate each year in the manufacture in Mexico of autoparts and motor vehicles (Article 7 and 7A of the Automotive Decree of 1995) was reduced to 29 per cent in 2003.   
  In order to apply this measure, when the fi nal assembly registers are issued, enterprises are 
notified of their obligation to meet the relevant national value added require ment and are referred to 
the relevant articles of the Automotive Decree.     The reduction in the percentages of national va lue added has made it possible for enterprises 
in the final assembly industry to achieve a flexibility  that enables them to import autoparts according 
to their production needs.  This flexibility is refl ected in the trade figures, since the period 1994-2002 
saw a 56 per cent increase in imports of autoparts.    Trade balance
 
 
 The factor used to (a) calculate the trade bala nce of an enterprise in the motor vehicle final 
assembly industry, and (b) to  divide the trade balance surplus of an enterprise in the final assembly 
industry for the purposes of determining the total value of new motor vehicles that can imported each year (Articles 4, 5, 8A, 8B and 12 of the Automo tive Decree of 1995) was reduced to .550 in 2003.  
 
                                                     
 
1 MEXICO.  Extension of the transition period fo r the elimination of Trade-Related Investment 
Measures notified under Article 5.1 of the Agreement on Trade-Related Investment Measures.  G/C/42 
Page 2  
 
 In order to apply this measure, when fina l assembly registers are issued, enterprises are 
notified that they must show a favourable position in the relevant trade balance and are referred to the 
relevant articles of the Automotive Decree.    The phasing down of the trade balance requi rement has been accompanied by a greater 
opening up of the Mexican market.  While in 1995,  for every 77 cents worth of vehicles exported, 
1 dollar worth of vehicles could be imported, the cu rrent figure is 55 cents for every 1 dollar worth of 
vehicles imported.  This opening up of the Mexican market is reflected in the growing share of imported vehicles in market sales, with an increase from 12.5 per cent in 1994 to 56 per cent in 2002 and to 60 per cent for the period January-October 2003.  
 
Abrogation of the Automotive Decree 
 
  The First Transitional Article of the Decree amending the Decree on the Development and Modernization of the Automotive Industry, publ ished on 31 May 1995, establishes that the 
Automotive Decree shall be ope rative until 31 December 2003. 
  In this context, all provisions under the Au tomotive Decree, such as the Agreement on Rules 
of Application, cease to be operative as from 1 January  2004, together with ad ministrative formalities 
carried out by automotive enterprises, as follows:  
• Submission of preliminary and annual trade balance and national value added reports; 
• inclusion or confirmation in the Register  as National Autoparts Industry or National 
Supplier Enterprises; 
• crediting of automotive foreign exchange; 
• submission of reports verifying automotive foreign exchange; 
• registration or confirmation of audit reports on automotive foreign exchange. 
  The elimination of these formalities was notif ied to the Federal Regulatory Improvement 
Commission (COFEMER), under the 2003-2005 Biennial Regulatory Improvement Programme.  
 Accordingly, Mexico has fulfilled the commitm ent to dismantle the national value added and 
trade balance measures, as well as the provisions under the Automotive Decr ee, within the agreed 
time-frame.  Elimination of prior import permit
 
 
 As an additional measure, and in view of th e exclusive right of motor vehicle final assembly 
enterprises to import new automobiles, the Agreement amending the Decree establishing the 
Classification and Codification of Import and Expo rt Goods Subject to a Ministry of the Economy 
Permit was published on 30 June 2003 and does away  with prior import permits for new automobiles 
regardless of the country of origin, as from 1 January 2004. 
 
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