Volume 4, Number 35, Page 4

RECENT DEVELOPMENTS in brief

Agriculture, Mines & Cattle Industry

MEXICO

Shrimp Fishing Permitted

The Department of the Environment, Natural Resources and Fisheries announced that it is permissible to fish for certain kinds of shrimp along specified parts of the Campeche and Tabasco coasts. Diario Oficial, 11/14/97.

Subsidies for Agricultural Products Announced

The Department of Agriculture, Livestock and Rural Development published rules for Procampo, a program to support agriculture in the autumn and winter. Procampo provides money to those farming during a specific period of time and complying with the program rules. Diario Oficial, 11/12/97.

REGIONAL

Chile & Argentina Postpone Mining Treaty

The signing of a mining treaty between Chile and Argentina has been postponed until the beginning of next year, according to Chile's Minister of Mining, Sergio Jiménez. The delay is primarily due to differences in the agreement's technical aspects relating to provisions on labor and the transport of goods. The agreement would authorize mining along the countries' shared border region. The signing was originally scheduled to occur during President Menem's trip to Chile in August. Jiménez believes the delay will not affect mining-related investment projects in either country, which are expected to generate an estimated $600 million over the next four years.

Communications

MEXICO

Agreement Signed for Border Broadcast

The Department of Communications and Transportation published rules regarding the use of several radio frequencies along the U.S.-Mexico border. The rules pertain to the use of frequencies from 932.5 to 935 MHz and from 941.5 to 944 MHz throughout a 60-kilometer distance on both sides of the border. On the following day, the Department published rules pertaining to frequencies used in aeronautic communications in the same region. Diario Oficial, 11/4/97 and 11/5/97.

Companies Seeking Concession

The Federal Telecommunications Commission published a list of parties interested in obtaining a concession to operate several radio frequencies in Mexico. Television Azteca, one of two giant broadcast companies in Mexico, is requesting the use of several frequencies. Diario Oficial, 11/3/97.

Consumer Law

MEXICO

Motor Oil Standards Proposed

Motor oil used in gasoline and diesel fuel will be regulated pursuant to technical standards published by the Department of Commerce and Industrial Development. Proposed standard NOM-116-SCFI-1997 establishes labeling requirements for these products. If approved, the standards will apply to all motor oil being sold in Mexico. Diario Oficial, 11/14/97.

Measuring Device Standards Published

The Department of Commerce and Industrial Development published technical standards dealing with measuring instruments. NOM-040-SCFI-1994 applies specifically to rulers. Diario Oficial, 11/6/97.

New Verifying Units List Published

A list of the various new certified verifying units was published by the Department of Commerce and Industrial Development. These verifying units certify products that comply with NOM-050-SCFI-1994, NOM-051-SCFI-1994 and NOM-024-SCFI-1994.

On the same date, the Department published a call for parties interested in obtaining a certification to operate as verifying units for NOM-020-SCFI-1993. This technical standard establishes labeling requirements for several leather products. Diario Oficial, 11/4/97.

Customs

MEXICO

Decree Establishing the Duties on Sugar Products Amended

A decree establishing duties for products with sugar content was amended by the Department of Commerce and Industrial Development. The decree was originally published on Dec. 12, 1995. Article 5, which establishes rules for imports of such products, has been amended. Diario Oficial, 11/14/97.

Safeguards Applied to U.S. Coffee

The Department of Commerce and Industrial Development announced that it will apply safeguards to the import of coffee from the U.S. According to the Department, the quota limits of coffee imports under NAFTA have been exceeded. For that reason, duties of 20% will apply to the product. Diario Oficial, 11/12/97.

Faster Tariff Elimination Studied

The Department of Commerce and Industrial Development published a call for comments regarding the acceleration of the tariff elimination process for different products under NAFTA. According to the trade agreement, each member may conduct consultations to study the possibility of accelerating the tariff elimination process. Diario Oficial, 11/3/97.

Energy

ECUADOR

Electricity Law Articles Ruled Unconstitutional

Certain articles of the Electricity Law were ruled unconstitutional, including one that would have permitted the sale of 39% of the assets of the Instituto Ecuatoriano de Electrificación.

Environment

MEXICO

Fuel-Related Standard Amended

The Department of the Environment, Natural Resources and Fisheries announced amendments to a technical standard pertaining to fuels. NOM-086-ECOL-1994, originally published on Dec. 2, 1994, establishes standards to protect the environment, including requirements for liquid and gas fossil fuels.

During the following week, the Department published amendments to NOM-085-ECOL-1994, which establishes maximum emission limits. Diario Oficial, 11/4/97 and 11/11/97.

REGIONAL

Hidrovia Project in South America

The absence of any environmental provisions within a South American agreement between Paraguay, Bolivia, Brazil, Argentina and Uruguay created to develop the Parana-Paraguay River channel has prompted formation of a group of non-governmental interests titled the Hidrovia Coordinating Committee. To date, the committee has slowed progress with the project by persuading the Inter-American Development Bank and United Nations Development Programme, which have been approached by the five countries for financial support, that further environmental impact assessments were warranted. In addition, the Canadian branch of the World Wildlife Fund (WWF) is due to complete its own analysis of project impacts in January 1998. After that time, IDB and UN officials are expected to reconvene to evaluate the additional information made available. Watch for progress with these issues on the International Rivers Network Web site, http://www.irn.org , or the WWF site, http://www.wwf.org

Upcoming NAFTA Impact Report

By January 1998 the Commission for Environmental Cooperation, created under the NAFTA side accord, is expected to produce its report analyzing NAFTA's environmental impact to date. The report is slated to focus on aspects of corn production, cattle feed lots, and deregulation of the power generation industry in the three NAFTA countries.

Foreign Investment

COSTA RICA

Statistics Published

The government announced that it expects direct foreign investment to reach $512 million this year. Intel, whose plant is scheduled to open in March 1998, was the largest investor. In 1996, Costa Rica received $400 million, considerably more than El Salvador, Guatemala, Honduras and Nicaragua, which received less than $100 million each.

MEXICO

Foreign Investment Up 65%

Foreign direct investment jumped 65% during the first eight months of this year compared to the same period last year, reaching an estimated $5.54 billion, according to Mexico's Department of Commerce.
Commerce officials anticipate that total foreign investment for this year will reach $10 billion to $11 billion, compared with $9 billion for 1996.

Government Administration

MEXICO

Congress Publishes Operating Rules

The House of Representatives published operating rules to regulate its own sessions, agenda and discussions and to debate deliberation and voting procedures. The House had to confront these issues during the first weeks of the congressional session because currently no political party has a majority. Diario Oficial, 11/11/97.

Insurance

CHILE

Royal & Sun Allience Expands Presence

A British insurance company, Royal & SunAllience, purchased 40% of the shares of Compañía de Seguros de Vida La Construcción for $122 million. The agreement includes an additional option that allows Royal & SunAllience to acquire up to 51% in five years. In case of a dispute, and under a reciprocal clause, Royal & SunAllience may acquire 100%.

Labor Law

CENTRAL AMERICA

Drivers May Strike

The region's freight carriers announced that they will strike unless transportation officials eliminate obstacles to the transportation of goods through Costa Rica and Nicaragua by Dec. 12.

In a letter written to the directors of the region's departments of transportation, drivers called for the elimination of visa requirements for entry into those two countries and explained that they imposed the deadline after the region's presidents failed to adopt concrete measures to address their concerns at a recent presidential summit in the Dominican Republic. An estimated 10,000 workers are expected to honor the strike if it is called.

Labor Ministers Meet

Central America's labor ministers met during the first week of this month to discuss labor conditions— particularly for children— across the region. U.S. Secretary of Labor Alexis Herman, who joined representatives from El Salvador, Costa Rica, Nicaragua, Honduras, Guatemala, Belize and the Dominican Republic, said that workers' rights and standards of living form part of the discussions that have begun between the U.S. and Central American countries.
Herman announced that the U.S. has allocated $3 million to assist the region's labor ministers in strengthening their efforts to reach agreements on child labor issues with the clothing industry.

DOMINICAN REPUBLIC

Public Transportation Workers Strike

Public transportation workers went on strike Nov. 11 and 12, leaving many citizens unable to attend work. Employee attendance rates in the industrial zones averaged only 67%. The business sector lost an estimated 4 billion pesos.

MEXICO

Textile Labor Contract Amended

The Department of Labor and Social Services published amendments to a national labor contract applicable to the textile industry. The most important change to the contract is an increase of 22% in the minimum wage. As of Nov. 10, the new minimum daily wage is 50.97 pesos. Diario Oficial, 11/10/97.

Transportation

HONDURAS

Airport Management Concessions Permitted

Congress approved legislation permitting private foreign firms specializing in airport operations to administer the nation's four international airports. Beginning in 1998, the management concession will be contracted by bid for a period of 20 years.

MEXICO

Port Concession Modified

Terms of a concession to operate various ports in Capeche were modified by the Department of Communications and Transportation. On March 6, 1996, the Department granted a concession to Administración Integral de Campeche, S.A. de C.V. (terms of the original concession were published on July 24, 1996). Diario Oficial, 11/7/97.

Tire Standards Set

The Department of Commerce and Industrial Development published technical standards applicable to tires sold in Mexico. NOM-016-SCT-2-1996 establishes requirements and testing methods pertaining to new tires for trucks, pick-up trucks, tractors, buses and others. Diario Oficial, 11/3/97.

Various

CENTRAL AMERICA

Free Trade Pact with Dominican Republic to be Negotiated

The Dominican Republic will negotiate a free trade pact with Central American countries during the first trimester of 1998, according to a declaration signed earlier this month in Santo Domingo by the ministers of economy from participating countries. This will be the second time the region negotiates as a bloc. Government officials involved in the talks believe the treaty will be facilitated by the numerous socio-economic similarities between the Dominican Republic and Central American countries.

EL SALVADOR

Exports Rise 35%

Exports grew 35% between January and September, compared to the same period last year, according to the country's Central Reserve Bank. The maquila sector proved to be the most profitable, generating $786 million of the total $812 million in profits during that period. Imports rose by 16% for the same period; the bulk of the rise consisted of products for the maquila industry.

IDB to Loan $250 Million

The Inter-American Development Bank has granted El Salvador $250 million in loans for 1998 to be used primarily for social programs, according to IDB President Enrique Iglesias, who recently visited El Salvador. Projects planned thus far address urban pollution cleanup, modernization of the health sector and education.

REGIONAL

Mercosur Tariff Rate Increase

On Nov. 13, Mercosur authorities increased the Common External Tariff (AEC) by three points, raising the average rate from 14% to 17% and the maximum rate from 20% to 23%. Brazil and Argentina decided to apply the increase immediately, while Paraguay and Uruguay will wait to define their positions during a meeting of heads of state scheduled for Dec. 14 -15. A proposal to exclude Chile from the rate increase has been prohibited by the WTO.