Volume 5, Number 9, Page 4

MEXICO

Congressional Highlights

compiled by Alfonso Trujillo from the

Camara de Diputados press releases

Banking — The Treasury Commission met with Bank of Mexico (BM) Governor Guillermo Ortiz Martínez to discuss the recent banking reform initiatives sent to Congress by the Executive Branch. Among the issues discussed during the question and answer session were the BM’s emphasis on increasing available credit domestically; controlling inflation; promoting foreign investment into the BM without ceding control; inserting corrective measures in the reform package that would prevent future peso devaluations; addressing discretion of the National Banking & Securities Commission (CNBV); and debating the objectives of the BM, including its autonomy and authority over monetary exchange policy, sanctions for private financial institutions, and the Savings Protection Banking Fund (Fobaproa). PRD deputies within the Treasury Commission proposed that only Congress be allowed to designate the BM Governor, as the reforms would allow the BM Governor to make policy decisions outside the legislative realm. Boletínes 626 & 629, 4/6/98.

Environment — To expand protection of Mexico’s native plant life, the PVEM presented a proposal before Congress which would ban the removal, commercialization and exportation of endangered timber. The proposal calls for the Executive Branch to declare intermediate protection zones for the preservation of endangered timber habitat. The proposed measure would also increase sanctions for violations of existing environmental laws and expand protection for Mexico’s tropical woodlands. Boletín 653, 4/12/98.

Credit — A PAN-sponsored initiative which would amend the Civil and Commercial Codes in material pertaining to the repayment of credit obligations was presented to Congress and turned over to the commission for review. As drafted, the measure would extend to debtors the right to demand an equitable reduction of their credit obligation when payment has become overly burdensome due to unforeseen circumstances, and would be applicable to civil and mercantile contracts, bank loans, contractual obligations, and other contracts of deferred execution. Those in favor of the proposal consider the reforms integral to an overall strategy for preventing future economic crises. Boletín 648, 4/11/98.

Social Security — Legislation proposed by PAN requires the Mexican Institute of Social Security (IMSS) to recognize the insurance rights of the disabled in cases of disability, maternity, illness, retirement, child care, and other social services. Specifically, the measure would reform Articles 13, 222, 227, & 228 of the Social Security Law to ensure that the disabled have access to therapy, treatment and care required by their disabilities. Boletín 647, 4/10/98.

Environment — The creation of a Forestry Investigation and Evaluation Commission was proposed in a recent report presented by the Forestry Commission. Such a commission would integrate representatives of the legislative branch, executive branch, forest industry, non-governmental organizations, the academic sector and the private sector. The Commission would seek to establish the parameters of Mexico’s forestry policy and strategy while strengthening the policies established by the Department of the Environment, Natural Resources, and Fisheries (Semarnap). It would also evaluate new projects aimed at protecting Mexico’s environment. Boletín 668, 4/19/98.

Trade — According to statements made by U.S. economist Dr. John Seeney, an expert in international commerce, during a conference hosted by the International Affairs Committee, U.S. exports to Mexico have increased 58% since the implementation of NAFTA, with a 62% increase in total commerce among U.S., Mexico and Canada. This growth rate would indicate that Mexico will supplant Japan as the second most important trading partner of the U.S. Boletín 666, 4/18/98.

Foreign Relations — With the goal of contributing to political understanding and improving bilateral relations between Mexico and Guatemala, the Southern Frontier Affairs Commission will conduct a series of meetings with Guatemalan civil servants and politicians, concentrating on immigration, narcotics trafficking and commercial trade. Boletín 665, 4/18/98.

Telecommunications — A meeting was held between the president of the Transportation and Communications Commission and his French counterpart regarding the possible joint venture between Telefonos de México (Telmex) and France Telecom. The venture would aim at improving the overall quality, price accessibility and total coverage of Mexico’s public telephone system by the year 2000. Boletín 664, 4/18/98.

Transportation — A proposal to investigate the impact and benefits of a trans-isthmus canal project in the states of Oaxaca and Veracruz was turned over to the Commission of Internal Regime & Political Coordination, the Commission of Forestry, Ecology & Environment, and the Commission of Communications & Transportation for review. The project would connect Mexico’s east and west coasts via a 300 kilometer navigable canal for the purpose of increasing domestic and foreign trade. Opponents of the project cite the possible unconstitutional environmental impact and want a series of consultations. Boletín 661, 4/16/98.

FROM THE EDITOR

The Free Trade Agreement of the Americas (FTAA) seems to be closer to becoming a reality. During the II Summit of the Americas it was announced that the FTAA would begin in the year 2005. The staff of the Inter-American Trade Report searched through the major newspapers of Latin America to assess the reaction to this important event.

We were struck by the fact that there was such little press coverage of the summit. The majority of newspapers covered the story only briefly on the front page or inside the business section. The following are the main issues appearing in Latin America.

• Argentina: General coverage with few specifics.
• Bolivia: The news focused on a plan between the U.S. and Bolivia to combat narcotraffic. Social issues were given special attention.
• Brazil: The media gave special attention to Brazilian concern about alleged U.S. protectionism.
• Costa Rica: Centered its attention on social matters, such as the development of education and culture in the FTAA.
• El Salvador: Even though the headline of an article from “El Diario Hoy” mentioned the creation of the FTAA, the emphasis was focused on three agreements signed by El Salvador.
• Paraguay: Like several other countries, attention focused on social matters.

It appears that few people are paying attention to what will be one of the most important agreements in the history of the Americas. The importance given in Latin America to the news of the FTAA seems minor, considering the scope of the agreement. The region covered by the FTAA has a gross domestic product of U.S. $10 trillion dollars and a population of approximately 750 million: the biggest free trade area in the world.

The FTAA is more expansive than 35 bilateral agreements currently in effect in the hemisphere.

We should look further to the impact this agreement will have in the rest of the world. We only need to observe NAFTA to realize that not only the parties to the trade agreement benefit, but also other countries. NAFTA has created major investment opportunities for Asian and European companies in Mexico, the U.S. and Canada. Companies owned by Asians and Europeans established in the NAFTA region are buying supplies from this region. The same will happen in the FTAA region.

—José Felipe García