Volume 5, Number 19, Page 5
Recent Devlopment in brief
Agriculture, Mines & Cattle Industry
ARGENTINA
Argentina Opposes Grain Subsidies
Argentina has declared its opposition to subsidies for grain exports. Calling such subsidies contradictory during a time in which countries are working toward free trade, Argentina’s Secretary of Agriculture Federico Solá accused both the European Union and the United States of unfair practices. The Argentine official also stated that he would request that the Foreign Affairs Ministry make a formal complaint on the matter.
Argentina had a record-setting crop of 55 million tons of wheat for the 1997-98 season and is the world’s largest corn exporter after the US and the third largest soybean producer. Argentina criticized the US for its plan to purchase 2.5 million tons of wheat from domestic farmers to distribute freely to poor nations. The European Union’s average subsidy of US$ 27 per ton on wheat exports could threaten trade talks between the EU and Mercosur which have been working on an agreement in preparation for a summit to be held in 1999. Consulate General of Brazil, Trade Bureau of Miami.
MEXICO
Standard Amended
The Department of Agriculture, Livestock and Rural Development (SAGADAR) amended a standard dealing with tuberculosis in cattle. NOM-031-ZOO-1995 was originally published on March 8, 1996. Diario Oficial, 8/27/98.
Labeling Requirements Published
SECOFI published two technical standards establishing labeling rules for two specific products. NOM-128-SCFI-1998 sets labeling standards for containers in which avocados are packed. NOM-129-SCFI-1998 sets labeling standards for mango containers. Both standards apply to products from Mexico or imported into the country. Diario Oficial, 8/31/98.
Antitrust / Antidumping
MEXICO
Corn Syrup Antidumping Case Published
SECOFI published its decision on a special review of antidumping duties on imports of corn syrup from the U.S. On Jan. 23, SECOFI imposed antidumping duties of up to US$ 175.50 per metric ton on imports of corn syrup from various U.S. companies.
Imports from A.E. Staley Manufacturing Company had duties of US$ 95.58 dollars per metric ton, while imports from Archer Daniels had duties of US$ 65.12 dollars per metric ton. SECOFI decided to reduce these antidumping duties to US$ 90.26 dollars per metric ton for A.E. Staley and US$ 55.37 for Archer Daniels. Diario Oficial, 9/8/98.
Banking & Credit
VENEZUELA
Liquidation of Financial Institutions
A recent decree (O.G. 36.450 of May 11, 1998) allows the Financial Emergency Council to order the liquidation of any financial institution taken over by the State on the basis of the Financial Emergency Law, without requiring a prior formal intervention. Bentata Abogados.
Communications
BRAZIL
Embratel Invests in Fiber Optic Installation
The Brazilian long-distance carrier Embratel, which was acquired by US-based MCI at last month’s auction of the Telebrás system, has announced that it shall invest over R$620 million of its own funds during the remaining months of this year, particularly in the installation of fiber-optic cable. MCI executives were in Brazil last week to approve Embratel’s pre-privatization plan to invest a total of R$1.25 billion in 1998.
The company intends to lay over 20,000 miles of fiber-optic cable by this December, a project which in itself involves an investment of R$ 450 million by the end of this year. Gazeta Mercantil.
Consumer Law
MEXICO
Consulting Subsidies Announced
SECOFI announced a program to grant subsidies used for consulting. Qualifying micro, small and medium-sized companies can apply to receive a subsidy to hire specialized external consulting.
Companies seeking such subsidies must receive an evaluation by a Regional Center of Business Competitiveness that it is necessary to hire specialized consultation. The total amount of subsidies which will be granted is $21.32 million pesos. A maximum of $240 pesos per hour and 250 total hours may be approved per company. Diario Oficial, 8/24/98.
Standards Published
Technical standards applicable to pressure cooking pots were published by SECOFI. NOM-054-SCFI-1998 establishes the specifications and testing methods that pressure cooking pots must meet. Diario Oficial, 9/2/98.
Customs
BRAZIL
Exports Could Reach US$ 100 Billion
Brazilian exports rose nearly 12 percent during the first seven months of this year compared to the same period last year. However, the government’s goal of US$ 100 billion in total exports could be questioned in light of the international economic crisis, according to Executive Secretary of the Foreign Trade Bureau (Camex) José Roberto Mendonça de Barros.
Admitting that exports will likely grow at a slower pace for the rest of the year, Mr. Barros cited the diversity of Brazilian exports as the key to overcoming international economic turmoil and remains optimistic regarding the feasibility of continued high performance of Brazilian goods on the world market. Consulate General of Brazil, Trade Bureau of Miami.
Export Initiative Program To Begin in September
With the objective of reaching US$100 billion in exports by the year 2002, Brazil will be launching the Special Exportation Program in September. The initiative will provide incentives for 55 different sectors to increase their exports.
Such incentives relate to special financing for trade promotion, labor issues, logistics and technology. In order to administer the program efficiently, each sector will have twelve area-managers who will work not only toward a rise in supply of exportable goods, but also toward the amplification and promotion of the exporting culture in general. Gazeta Mercantil Latino-Americana.
MEXICO
List of Goods Subject to Import Rules Published
SECOFI published a list of the products whose importation is subject to regulations from a special commission. The commission which regulates such imports is the Multi-Sector Commission for the Control of the Process and Use of Plaguicides, Fertilizers and Toxic Substances.
The list includes the tariff category of the specific products. A special window is open at the General Directorate of Environmental Health from the Department of Health (SSA) to request an import permit. In a separate publication, SECOFI announced it has granted authority to different bureaucrats in matters related to automated importation notices. Diario Oficial, 8/26/98.
Quotas Exceeded
SECOFI announced that imports of ham from the U.S. and Canada have exceeded the quotas set forth in NAFTA. For that reason, ham and other similar products entering Mexico under tariff category 0203.12.01 will pay a 20 percent import duty from now until Dec. 31. Diario Oficial, 9/7/98.
REGIONAL
Agricultural Tariffs to be Debated at FTAA Talks
During the upcoming round of FTAA talks - the next in an ongoing series of negotiations leading to the creation of a free trade zone throughout the Americas - among the most hotly debated issues will be those related to the agricultural and food sectors. Several key points regarding both tariff and non-tariff measures remain unsettled among the exporting and importing countries. “Agricultural politics” is also expected to be a key issue during the meetings, scheduled to begin this month in Miami. Gazeta Mercantil.
VENEZUELA
Import Duty Increase
A recent decree (O.G. 36.434 April 19, 1998) establishes an additional 15 percent import tax on certain items on top of the ad-valorem regular duty. The increase is not applicable to goods originating in the Andean Community or to countries with agreements that have been established within the Montevideo Treaty of 1980. Bentata Abogados.
Official CIF Prices
A resolution of the Treasury Department (O.G. 36.502 of July 23, 1998) establishes the official CIF prices corresponding to the import of certain goods therein listed. The prices shall apply during 180 calendar days, unless previously amended. Bentata Abogados
Energy
BRAZIL
BNDES To Contract Appraisers for Power Utility Companies
The specifications for the hiring of consulting firms to perform financial appraisals of four power utility companies in the North and Northeast of Brazil are expected to be released by the National Bank of Economic and Social Development (BNDES) before the end of next month. According to Sueli B. Monerá, chief of the privatization department of BNDES, the four companies - Ceron (state of Rondônia), Cepisa (Piauí), Eletroacre (Acre) and Cemar (Maranhão) - were originally scheduled for privatization by the third quarter of this year. However, due to a re-evaluation by Eletobrás, Brazil’s national energy distribution company, the sale of these companies was delayed until the second or third quarter of next year. Gazeta Mercantil.
Environment
MEXICO
Guidelines for Subsidies Published
The Department of the Environment, Natural Resources and Fisheries (SEMARNAP) published guidelines for granting subsidies to promote the development of forests.
A budget of up to 67.1 million pesos has been allocated for the subsidy during this year. At the same time, SEMARNAP published rules governing the process of applying for the subsidies under the Program of Forestry Development. Diario Oficial, 8/24/98.
VENEZUELA
Contamination by Hydrocarbons
Venezuela has adhered (O.G. 36.457 of May 20, 1998) to the Amended 1992 Amended Protocol of the International Agreement on the Constitution of an International Indemnity Fund designed to cover damages caused by hydrocarbon contamination. Bentata Abogados.
Foreign Investment
BRAZIL
Direct Investments for August to Reach Nearly US$3 Billion
The privatization of Telebrás added US$1.89 billion to the overall sum of direct foreign investment for the month of August 1998. The total sum of direct investment through August 21st was US$ 2.566 billion.
The Banco Central expects that total direct investment figures, when tallied for the month of August, will reach just under US$ 3 billion, according to Altamir Lopes, the head of the Economy Department of the Central Bank. Consulate General of Brazil, Trade Bureau of Miami.
Greater Investments in Technology Development
Investments in Brazil in the area of technological development have practically doubled in the past five years. According to Minister of Science and Technology José Israel Vargas, in 1993 investments in this area accounted for 0.7 percent of Brazil’s gross national product, while today that figure has reached 1.4 percent.
The government’s aim is to invest 1.5 percent of the GNP in the fields of science and technology by 1999. Last year, the Ministry of Science and Technology registered investments totaling R$ 10.74 in these areas. According to a government survey, 47.2 percent of those investments came from federal funds, 17.2 percent from state funds, 31.6 percent from corporations, and 4.1 percent from private universities. Consulate General of Brazil, Trade Bureau of Miami.
Brazilian Market Provides Opportunities for US Investors
The success of last month’s privatization of the Telebrás system clearly demonstrated international investors’ confidence in the economic future of Brazil. Equally significant has been the extensive US media coverage of not only the sale of Telebrás, but also the promising future of Brazil’s telecommunications sector - as well as other areas of Brazil’s economic activity.
As US investors increasingly turn to the stock market as the only investment option that can meet expectations of continued annual returns of at least 10 percent, and as analysts are forecasting diminishing likelihood of US stocks providing such high returns, many small investors are expected to look to the Brazilian stock market as a viable alternative for retirement fund investments. Consulate General of Brazil, Trade Bureau of Miami.
MEXICO
New FI Law Regulations Published
SECOFI published new Regulations of the Foreign Investment Law. The new Regulations simplify several procedures by requiring less information to request certain investment permits.
The Regulations develop various concepts included in the Law, such as the concept of trust in the border region in order for foreigners to use the land. The Regulations limit the time that SECOFI has to resolve certain matters related to direct foreign investment. The new Regulations repeal those published in 1989. Diario Oficial, 9/8/98.
Binational Investment Agreement
The Department of Foreign Relations (SRE) published an investment agreement between Mexico and Argentina. The agreement seeks the mutual promotion and protection of investments. Several provisions related to dispute resolution mechanisms are included in the agreement. Subsequently, the SRE published an agreement with the European Union. The agreement sets the basis for trade and investment between Mexico and that region. Diario Oficial, 8/28/98 and 8/31/98.
Government Administration
MEXICO
New Bylaws Published
The SRE published its own new Bylaws. The bylaws include the function and organization of the Department as well as the authority of the various undersecretaries and offices that form the Department. In a different publication, SECOFI published the bylaws of the Federal Competition Commission. The bylaws of the Department of the Interior (SG) were published later by the same Department. Diario Oficial, 8/28/98 and 8/31/98.
Intellectual Property
VENEZUELA
New Division in MIC
The reorganization of the Ministry of Commerce and Industry (MIC) has formalized, as of May 1, an Intellectual Property Division encompassing industrial property and the copyright office. For the first time, the Division has been given executive powers and is likely to order the execution of certain decisions. These are issues evidencing considerable progress. The Division may also arbitrate certain disputes. Bentata Abogados.
Transportation
REGIONAL
Railway To Link Brazil and Chile
The same consortium that acquired control of the greater part of recently privatized railway lines in Brazil has also purchased two Argentinean lines, which connect that country with Chile, Uruguay and Paraguay. At the same time, the group (which is comprised of Interférrea S.A. and Judori Participações) announced its three-year plan to create the “Mercotrain,” a direct rail line from the city of Salvador, in the Brazilian Northeast, to Pacific ports in Chile, passing through the city of Córdoba in Northern Argentina.
A major impetus for the project will likely be this month’s auction of São Paulo’s state railway, Fepasa, which will link up the other lines already controlled by Interférria. Gazeta Mercantil Latino-Americana.
Various
BRAZIL
Expansion of Electric Conductors Industry
The Brazilian cable and electric conductor industry has undergone unprecedented growth recently, mainly due to increased private investment in the areas of energy and telecommunications. According to Adilson Primo, president of the Electric Conductors Industry Syndicate (Sindicel), the sector achieved revenues of $1.2 billion in 1997 and should double that figure within five to seven years. Surveys conducted by Sindecel also predict yearly growth rates of 10-15 percent over the next ten years. Gazeta Mercantil.
REGIONAL
Mercosur No Longer Seen as a Challenge to the US
Political tides seem to be turning in the United States’ view of Mercosur. There seems to be a better understanding of Mercosur’s potential benefits in facilitating the US’ goal of Pan-Regional free trade. Only recently, viewpoints expressed by US officials in trade talks at the FTAA meetings suggested that the US perceived Mercosur as a threat to the US economy.
According to Arturo Valenzuela, former Under Secretary for Interamerican Affairs (as reported in Mercopress), “the American continent overall has an ever-growing importance for Washington since it already absorbs 50 percent of US exports and at the same time represents 40 percent of imports for the rest of the continent.” Mr. Valenzuela also pointed out that in ten years, at the present rate, Hispanics will become the second most populous group in the United States. By the year 2050, Americans of European descent will be a minority in the US. MercoPress.
VENEZUELA
No Legalization Required on Foreign Documents
The much-expected law approving Venezuela’s membership in the Hague Treaty of October 5, 1961 (O.G. 36446 of May 5, 1998) has now been passed. It will, in due course, eliminate the requirement of legalization by the Venezuelan Consular authority of documents issued by foreign public administrations. Private commercial documents are ruled by separate legislation.
The Apostille shall by affixed by the designated authority of the issuing country in the very same document and in the French language. The Treaty supersedes other agreements on the subject. The Treaty becomes enforceable 60 days after 6 months from receipt of the official notification by the Dutch Ministry of External Affairs, and its five years duration is automatically extended, unless previous notice to the contrary is given. Among the Member Countries of the Treaty are, in addition to Venezuela, Argentina, Austria, Belgium, France, Germany, Israel, Italy, Japan, the Netherlands, Norway, Portugal, Spain, Switzerland, the UK. and the USA. Venezuela’s membership in the Treaty will result in considerable savings of costs and time. Bentata Abogados.
Casinos Law Rulings
A partial Amendment of the Rulings of the Law Controlling Casinos, Bingo Facilities and Slot Machines (O.G. 5.240 Extra of June 26, 1998) regulates the system applicable to the compulsory public referendum which occurs before a casino is authorized in a particular location. Bentata Abogados.
The National Law Center for Inter-American Free Trade appreciates the special contribution to the summaries by Bentata Abogados from Venezuela and the Consulate of Brazil in Miami.
