Volume 5, Number 24, Page 4
Recent Developments
Agriculture, Mines & Cattle Industry
Regional
Agreements Signed
The members of Mercosur agreed on a series of measures for agricultural products, including wheat, rye, barley, and oats among others. Argentina, Brazil, and Uruguay met to define the new rules for pest control and its consequences. Brazil formally had extremely strict requirements even for other members of Mercosur. These requirements are now more flexible for some products. The coordinators of these meetings agreed on a new meeting to be held in Montevideo, Uruguay March 16, 1999 to define common ground in multilateral agricultural negotiations, such as Free Trade Commerce of the Americas (Area de Libre Comercio de las Américas – ALCA) and the World Commerce Organization (Organización Mundial de Comercio – OMC).
Clarin – Argentina
Antitrust/Antidumping Cases
Mexico
Preliminary Decision on Steel Investigation Published
The Department of Commerce and Industrial Development (SECOFI) published a preliminary decision on an antidumping investigation on steel from the Russian Federation, Kazajstan and Bulgaria. On December 16, 1997 two Mexican companies requested the antidumping investigation. SECOFI subsequently imposed preliminary antidumping duties of up to 61 percent on the steel from these countries. Diario Oficial, 11/13/98.
Decision on Russian-Ukraine Steel Investigation Published
SECOFI published its final decision on an antidumping investigation on rolled steel imported from the Russian Federation and Ukraine. On April 4, 1997 AHMSA, S.A. de C.V. requested the antidumping investigation. On March 20, SECOFI published its preliminary decision imposing antidumping duties of up to 67.99 percent. The final decision of SECOFI confirmed the duties imposed on March 20. Diario Oficial, 11/13/98.
Banking & Credit
Brazil
Government to Reduce Interest Rates at Faster Pace
The government offered a public bonds yield rate almost three percentage points below the Tban ceiling of 42.25% a year (fixed by the Central Bank Monetary Policy Committee).
According to the Central Bank former chairman Gustavo Loyola, the government will control interest rates day by day through the so-called overnight rate (Selic). Loyola also said that "the Central Bank is waiting for the IMF accord to be signed to reduce rates at a faster pace". O Estado de S. Paulo/ Jornal da Tarde/Folha de S.Paulo/ Jornal do Brasil/ O Globo.
Credit to Privatize Companies Run by States and Municipalities
The National Monetary Council (CMN) has authorized the National Economic and Social Development Bank (BNDES) and the Federal Savings Bank to offer loans to states and municipalities wishing to privatize their water and basic sanitation companies. Each bank may loan up to R$ 30 million; the resources must be used to hire consulting companies to develop models for the sale process.
The CMN also determined that public debt securities issued by states and municipalities may only be purchased by financial institutions at public auction. The measure, according to Zaghen, is of a preventive nature aimed at stopping illegal operations
Consulate General, Trade Bureau of Miami.
Mexico
Rules for Bond Institutions Amended
The SHCP announced several amendments to capital requirements for bond institutions. The rules set the capital stock requirements for institutions authorized to issue bonds. The original set of rules were published on May 2, 1997. Diario Oficial, 11/17/98.
Regional
Loans to Latin America
Russia’s refusal to continue making its debt payments has affected the developing world. Latin American, East European, South Asian, and some African Nations have all suffered from a very restricted credit line and a near zero tolerance from lenders who see these loans as high risk.
US banks have loaned U$S 87.5 billion to Latin America, with one third of that amount going to Brazil. Latin America showed more stability than the rest of the non-industrial world. Accordingly, US Banks have not retreated from providing loans to this region. The portfolio of emerging markets of the 50 major international banks remains between 5 and 25%.
The possibility of Argentina continuing to receive loans is still quite strong. That is not the case for Brazil and Japan whose markets remain volatile. Citibank said that as a consequence of the market crisis, banks have become much more conservative regarding loans to emerging countries. Citibank believes that Argentina and Chile are in good condition to recover their line of credit. Mexico and Colombia follow with Brazil well behind.
Clarin – Argentina
Subsidiaries in Argentina, Peru & Uruguay
Banco Santiago will be the flagship for OHCH financial holdings in Latin America. Its board discussed approval of the deal to be sent to the Superintendent’s Office. Banco Central Hispano and the Lupsky group have decided to start property transfer from subsidiary OHCH banks in Argentina (Tornquist), Peru (Bancosur) y Paraguay (Asuncion) to Banco Santiago. After formally submitting the deal to the Superintendents Office for approval the next step is to form a shareholders board to submit an increase in capital to allow the acquisition of the new banks. The idea is for Santiago's board to manage & execute strategic planning while OHCH serves as the parent company. Both Luksic and BCH believe the transfer will increase earnings, develop better financing, minimize risk and share management network.
Consumer Law
Mexico
Standards Verification Entities Named
A list of several entities authorized to verify compliance with different technical standards was published by SECOFI. The list includes the name of one entity authorized to verify compliance with standard NOM-141-SSA1-1995, which deals with the labeling requirements for perfumes and beauty products. Also published was the name of several entities to verifying compliance with standard NOM-142-SSA1-1995 which relates to labeling requirements for alcoholic beverages.
Additionally, SECOFI published lists of other standard verification agencies including some for verifying compliance with standard NOM-020-SCFI-1997 which deals with leather and related products labeling. Diario Oficial, 11/12/98 and 11/13/98.
Standards Published
SECOFI announced the implementation of several new standards applying to testing methods for electronic equipment and components. Additionally, standards for the definitions and terms used in telegraphs were published. At the same time SECOFI announced the implementation of a standard which gives the guidelines for the commercial EDI. Diario Oficial, 11/12/98.
Standards on Light Bulbs Proposed
A standard applicable to different kinds of light bulbs was published by SECOFI. NOM-064-SCFI-1998 proposes security and testing requirements to light bulbs for industrial, commercial and street use. The proposed standard does not apply to light bulbs meant for residential use. Diario Oficial, 11/16/98.
Customs
Mexico
Safeguards Announced
SECOFI announced the application of tariffs to the importation of pork from the United States. The 20 percent duty applies to meat imported under tariff category 0203.11.01. The application of the tariff is a result of the fact that quotas for the importation of meat has already been exceeded. Diario Oficial, 11/10/98.
Regional
Mexico wants trade agreement with Mercosur
Mexico insists it is serious about signing a free trade agreement with Mercosur, similar to the one Chile maintains with the trading bloc. Discussions between Mexico and Mercosur nations have hit a roadblock due to differences regarding the computer industry. Brazil fears that US software and computer manufacturers could flood the region by going through Mexico. If Mexico were to succeed in joining Mercosur, the block would represent 82% of the Latin American Gross Domestic Product and a market of 300 million consumers.
Consulate General, Trade Bureau of Miami.
CARICOM To Expand
The Dominican Republic and 14 other countries of the Caribbean Community (which totals 14 million habitants) have taken a step forward towards the expansion of economic exchange in the area by signing the Free Trade Agreement (Acuerdo de Libre Comercio) which to begin January 1999.
This document foresees an area of free trade among the Caribbean States, free access to markets, progressive deregulation of trade of services and capital movements, and protection for investors.
El Colombiano - Colombia
Energy
Mexico
Energy Related Regulations Published
The Department of Energy (SE) published the Regulations of the Law of Public Service of Electricity Related to Contributions. The regulations refer to contributions as the resources, either cash or in goods, that a requesting party may grant to the provider of electricity to conduct specific work, with the understanding that the provider perform the service the requesting party requires. Diario Oficial, 11/10/98.
Pipelines Standards Proposed
The SE has proposed standards for the design, installation, operation, maintenance and security of special protection systems for underground and submerged pipelines. NOM -008-SECRE-1998 applies to pipelines used for the distribution and transportation of natural gas and L.P. gas. Diario Oficial, 11/12/98.
Foreign Investment
Brazil
U.S. recommends Mercosur
The United States Department of Commerce recommends that American companies take advantage of opportunities in Latin America, particularly Mercosur, as an alternative to Asian countries still suffering from the world financial crisis.
"We recommend investing and making business where the trading climate is good, and our data indicates that Latin America currently is good", said Awilda Marquez, number two in the US Department of Commerce, on her first visit to the region.
"The object of my trip is double: on the one hand to promote bilateral trade relations and secondly, to develop closer links with Mercosur Secretariat, a trade block that has become so significant for the United States", emphasized Ms. Marquez.
During a meeting with the Uruguay-United States Chamber of Commerce, the American official said that Uruguay is an excellent access door for American companies that wish to invest and trade in Mercosur and pointed out that during 1997 the area was the fastest-growing market for US exports with a 50% increase.
"Contrary to popular belief we have a regional focus towards Mercosur and encourage trade and investments in the area", remarked Ms. Marquez, who added that she expected American companies to participate in the one billion US dollar Colonia-Buenos Aires bridge across the River Plate.
The US trade official also revealed that Mercosur was the only block with which the US had a trade surplus. (MercoPress)
Mexico
Forms Approved
SECOFI published updated forms to be used on procedures handled by the National Commission of Foreign Investment and the National Registry of Foreign Investment. Authorized were the following forms:
Authorization of the Commission for foreign investment participation superior to 49 percent in corporations, acquisitions or activities with specific regulations according to the Foreign Investment Law;
Request for registration, cancellation of registration, notice of modification of the information provided to the First Section of the Registry, presentation of the report on income and expenses and presentation of the economic report;
Request for registration, cancellation of registration, notice of modification of the information provided to the Second Section of the Registry, presentation of the report on income and expenses that do not affect the capital stock and presentation of the economic report;
Request for registration, cancellation of registration, notice of modification of the information provided to the Third Section of the Registry
Notice of public officials with respect to article 34 of the Foreign Investment Law. Diario Oficial, 11/6/98.
Government Administration
Mexico
Bylaws of SRE Amended
The Department of Foreign Relations (SRE) announced amendments to their own bylaws. The amendments incorporate new attributions to the General Directotiate of Real Estate and Material Resources. Diario Oficial, 11/13/98.
Government Procurement
Mexico
Paper Company to be Sold
The Department of the Interior (SG) published a call for bids to those interested in acquiring Pipsa, a state owned company. Four companies comprise the group which the government is to sell. Several permits are required for participating in the bidding process. Diario Oficial, 11/17/98.
Labor Law
Mexico
Labor Risks Insurance Rules Published
The Mexican Institute of Social Security (IMSS) has published rules for the classification of companies and the determination of deductibles for labor risk insurance. The rules set the quotas for Labor Risk Insurance as well as the annual deductible that companies must pay. The IMSS has also published its organizational manual. Diario Oficial, 11/11/98.
Transportation
Mexico
Airport Privatization
The Department of Communications and Transportation announced recent developments in the the privatization of the Grupo Aeroportuario del Sureste, S.A. de C.V. The privatization package includes the airports of Cancún, Huatulco, Merida, Minatitlan, Tapachula, Villahermos and Veracruz.
The notice lists the different companies that are interested in the bidding process. Included in the list are companies like Aeroports de Paris, Grupo Constructoras ICA, S.A. de C.V., Schiphol International B.V., Grupo Tranportación Marítima Mexicana, S.A. de C.V., Copenhagen Airports A/S and Groupe GTM, S.A.
Diario Oficial, 11/6/98 and 11/12/98.
Navigation Regulations Published
The SCT published the new regulations of the Navigation Law. The regulations set different rules applicable to maritime authorities and individuals. Several regulations, including the one for Interior Navigation were repealed by the new regulation. Diario Oficial, 11/16/98.
