Volume 5, Number 23, Page 4
Recent Developments
Antitrust/Antidumping Cases
Argentina
Protection Against Dumping
Among the Latin American States, Argentina is the country that has established the most measures to protect their national production rights in relation to its volume of commerce. Last week the Government reduced the necessary term to finalize the investigation for presumed dumping from 120 to 60 days, which was well-received in the business sector.
During 1998, the Department of Industry (Secretaría de Industria) imposed compensatory rights for dumping cases and subsidies for several products, from fireworks and steel silverware, to playing cards and padlocks, all made in China. There were also other products made in Brazil, Taiwan, Korea, Italy, and from the European Union.
Mexico
Antidumping Investigation into Cigarette Lighters
The Department of Commerce and Industrial Development (SECOFI) published a preliminary decision on an antidumping investigation of Chinese cigarette lighters. On Oct. 17, 1997 Tokai de México, S.A. de C.V. requested an antidumping investigation on disposable lighters from China.
SECOFI imposed preliminary antidumping duties of US$ 0.1231 per lighter imported from China under tariff category 9613.10.01. Diario Oficial, 10/29/98.
U.S. Steel Decision Revised
SECOFI announced its revision of a decision on a U.S. steel antidumping case. On February 7, 1992, Hylsa, S.A. de C.V. and Altos Hornos de Mexico, S.A. de C.V. requested that SECOFI implement an antidumping investigation into imports of certain steel products from the U.S. On April 28, 1993 SECOFI published its resolution imposing antidumping duties on the U.S. products. On May 20, 1993 several U.S. steel companies requested an "amparo" against the decision of SECOFI. Subsequently, a District Court in Mexico City granted the "amparo" to the U.S. companies. SECOFI and other Mexican companies appealed the decision of the District Court but a Circuit Court affirmed the decision.
To comply with the court, SECOFI completed a new analysis of the antidumping investigation. On November 22, 1996 several U.S. companies presented an appeal alleging defects in the application of the Circuit Court's judgment. The appeal was granted. After an ongoing legal dispute, SECOFI was order to re-evaluate its decision. SECOFI has now imposed antidumping duties of up to 28.67 percent. Diario Oficial, 10/30/98.
U.S. Hydrogen Peroxide Decision Revised
A resolution announcing the initiation of a revision of a case involving hydrogen peroxide imported from the U.S. was published by SECOFI. On Dec. 23, 1993 SECOFI published its final decision on an antidumping investigation of hydrogen peroxide from the U.S., applying a 34.5 percent antidumping duty.
SECOFI announced the initiation of a revision of imports of hydrogen peroxide from Degussa Corporation and Solvay Interox from July 1, 1997 to June 30, 1998. Diario Oficial, 10/30/98.
Banks, Travel Agents Under Investigation
The Federal Competition Commission announced an investigation of two alleged monopolistic practices. First the Commission announced the investigation of agreements between competitors to provide a number, volume and frequency of banking services.
The second investigation involves alleged practices between competitors to establish and coordinate policies or to abstain from participating in the procurement of travel agent services. Diario Oficial, 10/30/98.
Consumer Law
Brazil
Court of Arbitration
The Brazilian Protocol, which is an additional document to the Asunción Treaty, has created a Court of Arbitration. The Protocol establishes the protocols to be followed when a dispute between countries of the Mercosur arises. The steps to follow are direct negotiation, the intervention of the Group Mercado Común (GMC, executive branch of Mercosur) and finally the advice of the Court of Arbitration.
The process begins with direct negotiation between the parties, which must inform the GMC about arrangements made during the negotiations phase and their results. These direct negotiations between the parties cannot exceed, excepting previous agreements between the parties, 15 days from the day the dispute was established. If these direct negotiations fail, any of the parties can take the issue to the GMC, which then evaluate the situation after listening to both parties and specialists. After that, the GMC makes recommendations to the parties involved in the dispute, proposing a solution to the disagreement. The GMC has 30 days to make its recommendation. If there is no solution to the conflict, it goes to the third step. In this instance, any of the parties involved can express their intention to appeal to the Court of Arbitration to the Secretaría Administrativa del Mercosur (Mercosur Administrative Department). This Department then communicates the appeal to the other part involved, and the GMC. The Countries of the Mercosur are obligated to accept the jurisdiction of the Court of Arbitration. The Court will be composed of three officials included on the lists presented by each government. Each part will assign an official, while the third official, who presides over the Court, would be assigned by the parties common agreement (if not the Department would do it). The officials will be appointed for 15 days, and each of them will have a replacement. The parties involved in the dispute will brief the Court on the previous petitions, and will present their grounds and positions. The Court will announce its decision in writing within 60 days, which may be extended for no more than 30 days. The Court's judgement will be decided in confidence, by a simple majority, established and signed by the three officials. The judgement cannot be appealed, must be adhered to by the parties involved, and the parties must comply within 15 days, unless the Court states a different term. If one of the parties does not comply with the judgement within 30 days, the Countries involved may adopt temporary compensatory measures, such as the suspension of concessions, until the Court judgement takes place.
Mexico
Standards Published
Twenty new standards were published by SECOFI. The standards apply to a variety of products and involve several issues including testing methods for electrical equipment and computer security. Diario Oficial, 11/2/98.
Customs
Argentina
Brazilian Licenses Threat Sales
The combination of Brazilian measures to reduce their trade deficit and the possibility of regional recession may jeopardize 4 billion dollars of Argentinean exports and threaten to deepen the decrease in local economic activity created by the world financing crisis.
If Brazil does not implement higher tarriffs, non-tariff barriers and the recession may still end up aversely affecting the Argentinean commercial balance.
At the same time, the Argentinean Industrial Union (Union Industrial Argentina) asked the Chancellery to take the conflict with Brazil to arbitration court for the application of previous import licenses.
The Brazilian government through the Chancellery confirmed that there will not be a re- negotiation for the previous licenses and that they are willing to discuss the conflict before an arbitration court.
The new regulations arranged by Cardoso's administration concerns previous import and embarkation licenses.
Brazil is the main buyer of Argentinean products. Many Argentinean businesses will not find it difficult to locate substitute buyers with the same volume of purchases. Complicating things further, the international crisis has lowered prices on raw materials and goods which has subsequently increased the prices of many products in Argentina.
Chile
Exports to Asia Fall
In July of this year, Chilean export products experienced a significant drop in the Asian market, falling 26% compared to 36% in July of 1997.
This decline in the demand for national products is seen by some international analysts as Chile's inability to retain the Asian economic market as a strong consumer of its national products.
During the first seven months, shipments to Asia totaled $2.315,8 million registering a decrease of 36.1% compared to the same time last year. The largest individual decrease was seen in exports to Hong Kong (68.2%) and South Korea (59%), while the Otros group showed a variation of -75.6%. Sales to Japan fell 27.1%.
The only Asian country in which Chilean exports continued to increase is China, with sales of $241.1 million in the January - July period, registering a gain of 42.1 in 12 months. With regard to American countries, exports to Mercosur fell 9.8% with the most substantial drop in shipments to Brazil (17.9%) and Uruguay (10.6%). Shipments to NAFTA dropped 1.3%.
The only economic market with increased demand was the European market which witnessed an increase of 1.9% (a total of $2.441 million).
Energy
Argentina
Date Announced for YPF Sale
An official of Argentina's Ministry of Economy acknowledged that shares of YPF (Yacimientos Petroliferos Fiscales) the national petroleum company, will be sold on the international market from January 11 to 15 of the coming year. Although the timing of the sale is inopportune for the internal market due to the holiday season, it should attract investors from the Northern Hemisphere. Interest payments on the shares will coincide with the end of fiscal 1998, helping Argentina fulfill the terms of its agreement with the IMF.
A block of 14.9% of the governments 20.4% ownership of shares in YPF is to be sold. The Ministry of the Treasury states that there appears to be a large amount of interest in the shares and expects that they will be split among only a few investors.
The Spanish oil company Repsol has said it would pay US$38 per share, but Perez Companc, which currently holds 3% of the shares in the private sector, appears prepared to outbid Repsol. Government officials are expecting the sale to bring in more revenue than initially anticipated.
President Carlos Menem, during his recent visit to London, said that between US$2.0 and US$2.7 billion will be obtained from the sale of YPF shares, 15% of which will go to reinforce the solvency of the Argentine social security system. El Cronista - Argentina, 11/03/98
Mexico
Standard Related to Natural Gas Proposed
The Department of Energy (SE) proposed a standard for adding odor to natural gas. NOM-006-SECRE-1998 establishes the minimum technical specifications for the systems used to add odor to natural gas. The proposed standard also establishes requirements regarding the substances utilized to create the odor and also the safety measures to be followed when handling the odor substances. Diario Oficial, 11/5/98.
Environment
Mexico
Annex to Maritime Treaty Promulgated
The Department of Foreign Relations (SRE) published a promulgation of an annex to a treaty related to the prevention of maritime pollution. Annex 5 of the 1978 Protocol relative to the International Agreement for the Prevention of Maritime Pollution was approved by the International Maritime Organization. The Mexican Senate approved the Annex and other amendments on April 22, 1997. Diario Oficial, 10/29/98.
Rules regarding Hazardous Materials Recycling Published
The Department of Environment, Natural Resources and Fisheries (SEMARNAP) published rules for recycling hazardous waste. The rules give step by step instructions for acquiring the relevant documents and following proper procedures for the recycling of hazardous wastes. The rules also include the official form and instructions for its completion. Diario Oficial, 11/4/98.
Labor Law
Mexico
Textile Labor Agreement Revised
A labor agreement establishing the minimum standards for portions of the textile industry was published by the Department of Labor and Social Services (STEPS). The new agreement establishes a minimum daily wage of $61.16 pesos as of October 11. Diario Oficial, 10/30/98.
Medicine & Health
Mexico
Needles Standards Published
The Department of Health (SSA) published technical standards applicable to disposable hypodermic needles. NOM-133-SSA1-1995 establishes sanitary requirements and testing methods for disposable hypodermic needles. Diario Oficial, 10/29/98.
