Volume 5, Number 11, Page 7
Recent Developments in Brief
Agriculture, Mines & Cattle Industry
MEXICO
Fishing Ban Imposed
The Department of Environment, Natural Resources and Fisheries (Semarnap) published the schedule for the shrimp fishing ban imposed in the Gulf of Mexico and the Caribbean.
The ban will be in effect from May through July. Semarnap also published the schedule banning shrimp fishing in the Pacific Ocean, including the Sea of Cortez. Diario Oficial, 4/30/98 and 5/4/98.
Antitrust/Antidumping Cases
MEXICO
Antidumping Case Settled
SECOFI has announced the settlement of an antidumping investigation involving U.S. apples. An investigation into this matter was initiated by SECOFI in December 1996 at the request of a farmers’ group from the state of Chihuahua. In September 1997, SECOFI published a preliminary ruling imposing provisional antidumping duties of 101.1 percent on several varieties of apples.
In March 1998, several U.S. companies and apple growers proposed a fixed price on apples imported from the U.S. in order to settle the dispute. SECOFI accepted the proposal and suspended the antidumping duty. Diario Oficial, 5/15/98.
Banking & Credit
MEXICO
Quotas Set for Auxiliary Credit Organizations and Money Exchange Offices
The Department of the Treasury (SHCP) published the fees for inspection and monitoring to be imposed on auxiliary credit organizations and money exchange offices for 1998. The publication lists different fees for several financial leasing and factoring companies, as well as for credit unions and money exchange offices. For example, GE Capital Leasing, S.A. de C.V., will pay a monthly fee of $1,870 pesos. Diario Oficial, 5/7/98.
Mexican Legislators Call For Money Laundering Investigation
Mexican legislators from all political parties urged the government to launch an investigation into alleged money laundering. Mexican banking giants Bancomer, Serfin and Confía are accused of engaging in money laundering activities. El Financiero.
Communications
BRAZIL
Remaining Telephone Shares to be Auctioned
The Brazilian state of Rio Grande do Sul has announced plans to sell shares it still holds in the Riograndense Telecommunications Company (CRT). The shares will be sold for an estimated US$ 800 million. The public offering is scheduled for June 16.
Consumer Law
MEXICO
Commerce Restrictions Under Investigation
The Federal Jurisdiction Commission published its decision on an investigation stemming from alleged unlawful trade restrictions in the state of San Luis Potosí. The case involved several acts of municipal authorities that imposed restrictions on the interstate commerce of meat and poultry. The municipal government required payment of a fee to put a mark on meat and poultry that were processed in meat plants outside the state of San Luis Potosí.
The Commission found that the imposition of the fee posed a barrier to interstate commerce and held the requirement invalid. Diario Oficial, 5/13/98.
Oil Labeling Standards Published
SECOFI published new technical standards applicable to oil for diesel and gasoline engines. NOM-116-SCFI-1997 establishes label information that must be provided on containers of oil that are sold to consumers. All information on the label must be in Spanish. Diario Oficial, 5/4/98.
Used Car Transactions Subject to New Rules
New rules for the purchase-sale and consignment of used cars were published by SECOFI in technical standard NOM-122-SCFI-1997. The standard requires that all transactions will be carried out in Mexican currency. Contracts for the purchase-sale of used cars should be registered with the Office of the Attorney for Consumer Protection (Profeco).
SECOFI also published NOM-124-SCFI-1997, which sets rules for automobile leasing operations. Diario Oficial, 5/6/98.
Energy
MEXICO
Gas Distribution Standards Published
The Department of Energy (SE) has published standards applicable to natural gas distribution. NOM-003-SECRE-1997 sets safety requirements for natural gas distribution systems, regulating materials, components, construction, tests, inspections, operation and maintenance.
The standards apply from the point of delivery by the provider or carrier up to the point of receipt by the end user. The distribution standards come at a time when major natural gas distribution permits have been granted to private companies throughout Mexico. Diario Oficial, 5/21/98.
Electricity Transmission Service Charges Approved
The Department of Energy (SE) published a notice establishing the method to be used to determine charges for the transmission of electrical services. The complete text of the method was published as an annex to the notice. Diario Oficial, 5/15/98.
Deadline Extended
The Energy Regulation Commission (CRE) extended a deadline for the regularization of activities not considered to constitute public services. Since such services are provided by the federal government or by private parties with the authorization of the CRE, any individuals or entities providing such services should inform the CRE.
Information may be obtained at Horacio #1750, Col. Los Morales Polanco, México D.F., C.P. 11510. Tel. (52-5) 283-1515, ext. 1522, 2002 and 2012 or send an e-mail to: aperaza@cre.gob.mx. Diario Oficial, 4/30/98.
New Natural Gas Distribution Area Set
The Energy Regulatory Commission (CRE) has announced that the bidding will soon be opened to obtain a natural gas distribution permit for the Tijuana region. The area open for bids includes the cities of Tijuana, Ensenada and Tecate, in the state of Baja California. Diario Oficial, 5/11/98.
URUGUAY
U.S.-Spanish Consortium to Supply Natural Gas
A consortium comprised of U.S. Pacific Enterprises and Spain’s Unión Fenosa has won a contract with the Uruguayan government to distribute natural gas throughout the country, according to the Ministry of Industry, Energy and Mining.
The consortium plans to supply approximately 777,000 users. The consortium’s vice president for Latin America, William Melvin, says that the group will invest an estimated US$ 200 million in the project. Prensalibre, 5/18/98.
Foreign Investment
MEXICO
Rules for Foreign Mine and Water Exploitation Amended
The Department of Foreign Relations (SRE) has published rules establishing when foreigners may enter into an agreement with the SRE in order to obtain concessions for the development of mines and waters. According to Section I of Article 27 of the Mexican Constitution, foreigners may obtain concessions to develop mines and waters if they agree to be treated as Mexican nationals and not to request protection from their governments. The SRE announced that this opportunity is open exclusively to investors from countries with which Mexico has diplomatic relations. Diario Oficial, 5/11/98.
Government Administration
MEXICO
Organizational Manual Published
The Department of the Comptroller General of the Federation has published its own organizational manual. The structure and organization of the Department, as well as the functions of the different offices inside the Department, are described in the manual. Diario Oficial, 5/13/98.
Intellectual Property
MEXICO
Rates Modified
The Mexican Institute of Industrial Property (IMPI) has amended the fees assessed for different services it provides. The new fees relate mainly to the registration process for electronic circuit boards. Diario Oficial, 5/4/98.
Labor Law
MEXICO
Labor Amendments Proposed
The Department of Labor and Social Services (STPS) has proposed amending a standard establishing work-safety conditions at premises where workers handle flammable substances and combustibles. NOM-005-STPS-1993 relates to the handling, transportation and storage of those substances. Diario Oficial, 5/15/98.
Various
ARGENTINA
Supermarkets at War
Large supermarket chains in Argentina are looking for strategic investment partners while mid-sized chains are trying to survive in a economic war that is rapidly eliminating small competitors.
With the arrival of Wal-Mart in Argentina three years ago, the door to international investment in the supermarket industry was opened. Other international businesses have followed suit and now own four of the five largest supermarket chains in the nation.
BRAZIL
Brazilian President Criticizes Protectionist Practices in Industrialized Countries
While attending the Geneva meeting on world trade, Brazilian President Fernando Henrique Cardoso condemned the industrial countries’ protectionist policies. Cardoso expressed Brazil’s position in favor of liberalizing trade in agricultural commodities and criticized those nations that have attempted to obstruct liberalization through subsidies and other government intervention. Jornal do Brasil.
Brazil’s Cost of Living Continues to Rise
Brazilian newspaper O Globo reports that the cost of basic foodstuffs rose in May by 5.2% in Rio de Janeiro and 7.6% in São Paulo. This increase is largely due to a rise in the cost of rice, resulting from a poor rice crop this year.
Brazilian President Cardoso Receptive to Globalization
President Fernando Henrique Cardoso announced recently that the process of economic globalization is inevitable and that governments must find ways to handle its consequences. Folha de São Paulo.
COSTA RICA
Costa Rica to Reduce National Debt and Inflation
Costa Rican President Miguel Angel Rodriguez Echeverria has vowed to decrease the government’s enormous debt and rate of inflation. The country’s high rate of inflation is caused by 1 trillion colones of government debt. The government plans to cut public spending by 20 billion colones and convert its national debt to foreign debt. It also plans to privatize the Banco de Costa Rica and the Banco Internacional de Costa Rica, among other assets.
The recently elected president also intends to reduce the 11% inflation rate projected for this year to 5% by the end of his four-year presidential term. Reducing inflation is “the best social program,” according to finance minister Leonel Baruch, and will result in a decline in interest rates.
MEXICO
U.S. Exports to Mexico up by 27.5% in March
Mexico is still the second-largest market for U.S. goods, surpassed only by Canada. During March, 1998, total U.S. exports worldwide grew by 2.3%, while exports to Mexico (the fastest growing among U.S. trading partners) grew by 27.5% over March 1997. U.S. exports to Japan decreased by almost 14%, Singapore by 17%, Korea by 48%, Taiwan by 3.5% and Hong Kong by 15.5%. In March, 1998, the U.S. sold U.S.$ 6.7 billion worth of goods to Mexico, compared to approximately U.S.$ 5.2 billion to Japan and U.S.$ 1 billion to China.
U.S. total imports grew by 1.7% in March, and U.S. imports from Mexico increased by almost 20% to a total of U.S.$ 8.3 billion. Mexico is now the third-largest supplier to the U.S. after Canada and Japan. (Information provided by the SECOFI-Nafta office in Washington, D.C.)
Mexico City Companies Expect Drop in Profits
Seventy-one percent of Mexico City companies surveyed by the newspaper Reforma indicate they expect to generate a profit this year, down from 75% in 1997. Correspondingly, the percentage of Mexico City workers receiving profit-sharing bonuses dropped to 48% from 52% last year. Reforma.
B.A.T. Forms Partnership for Production in Mexico
San Diego-based B.A.T. International has joined with U.S., Canadian and Mexican firms to form a global partnership for the high-volume production of electric vehicles in Otay Mesa, Mexico and other locations.
The Mexican partner, Environmental Process Advanced, S.A., will work with B.A.T. to produce an electrically-powered “Clean World Car.” The car will match the acceleration and speed of today’s internal combustion vehicles and produce no pollution. B.A.T. will lease a 40,000 square foot plant in Mexico to manage distribution throughout North America. Business Wire 4/6/98.
REGIONAL
ECLA Outlines New Challenges for Latin America
Delegates to the 20th Annual Meeting of the Economic Commission on Latin America and the Caribbean (ECLA) held in Aruba drafted a list of challenges the region faces as it enters the new millennium. During the six-day series of meetings culminating on May 17, 1998, delegates representing 37 countries in the Americas drafted and signed the “Aruba Resolution,” which confers broad support for ECLA recommendations relating to the need for fiscal reform in the region.
Delegates also approved proposed organizational reforms to ECLA itself, mirroring a similar process the United Nations is now undergoing to increase its effectiveness and impact. Mexico will host the next ECLA meeting, which is scheduled for the year 2000. El Día, 5/18/98.
VENEZUELA
Venezuela to Reform Privatization Contracts
The Venezuelan Investment Fund will ask the Congress to modify privatization contracts involving Venalum, Bauxilum, Alcasa and Carbonorca. The proposed changes require congressional approval and call for debt restructuring and termination of workers. Economia Hoy.
