Volume 6, Number 16, Page 5
RECENT DEVELOPMENTS
Banking & Credit
Mexico
Capital Limits for Foreign Institutions Published
The Department of the Treasury (SHCP) has published capital stock limits for foreign financial institutions operating under NAFTA. The notice published by the SHCP includes individual and collective limitations on capital stock. For example, all foreign banks operating in Mexico as a “multiple” bank may not have a net capital of more than $131,105,459,614.00 pesos.
Additionally, limits were published for brokerage houses and for insurance, leasing and factoring companies. Diario Oficial, 7/13/99.
Rules for IRA’s Amended
Two circulars have been published by the SHCP amending rules related to IRA operators. Circular CONSAR 08-3 amends the rules establishing minimum operational requirements for the entities that administer IRA’s. Circular CONSAR 26-3 amends the rules regarding sanctions established to IRA operators. Diario Oficial, 7/21/99.
Business Organizations
Mexico
Permit Forms Published
Forms for the various permits that must be filed with the Department of Foreign Relations (SRE) have been published by the same Department. Among other forms published, were forms to obtain permits to incorporate, to change the name of a company and to amend the bylaws of the corporation. Diario Oficial, 7/15/99.
Customs
Mexico
Clarifications Published
Several clarifications of annexes to the tax rules related to foreign trade for 1999 have been published by the SHCP. Clarifications to Annexes 1, 18 and 22 were published. The annexes were published on May of this year. Diario Oficial, 7/7/99.
Export & Import Quota Rules Published
Different quota rules for exporting or importing products have been published during the last several days by SECOFI. The following are some of the quota rules published.
- Quotas to import automobiles to be used for tourism purposes under tariff categories 8703.22.01, 8703.23.01, 8703.24.01 and 8704.31.99.
- Exportation quotas of automobiles to Taiwan, Penghy, Kimen and Matsu.
- Import quotas for certain kinds of poultry products from the U.S.
- Import quotas for malt from the U.S. and Canada.
- Export and import quotas for certain kind of textiles receiving preferential treatment under the Costa.
- Export and import quotas for certain kind of textiles receiving preferential treatment under the Colombia-Venezuela-Mexico Free Trade Agreement.
- Import quotas for certain kinds of beans from the U.S. and Canada.
- Export and import quotas for certain kind of textiles receiving preferential treatment under NAFTA.
- Import quotas for forestry products from the U.S. and Canada.
- Import quotas for animal fats and oils from the U.S. and Canada.
- Import quotas for fresh or fertile eggs from the U.S.
- Export quotas to export to the U.S. orange juice from Mexico.
- Import quotas for certain types of corn from the U.S. and Canada.
- Import quotas for certain types of potatoes from the U.S. and Canada.
- Import quotas for certain kinds of turkey and chicken products from the U.S..
- Export quotas for several products with sugar entering the U.S. from Mexico.
- Export quotas for peanuts entering the U.S. from Mexico.
- Export quotas for brooms entering the U.S. from Mexico.
- Import quotas for orange juice from the U.S..
- Export quotas for several types of dairy products entering the U.S. from Mexico.
- Import quotas for products such as cheese, cocoa, cigars, copper and beans.
- Import quotas for cigars from Cuba.
- Export quotas for corn flour.
All of the above quotas were published on the Diario Oficial from 7/15/99, 7/16/99 and 7/19/99.
Regional
US & South American Trade Relations Affected by Steel Trade
The Latin American Economic System (SELA) recently stated that the actions taken by the US against steel from Argentina, Brazil, and Venezuela herald a new wave of trade frictions that could be leveled against oil in the future. The main trade regulation instruments in the US are the anti-dumping actions because of unfair competition prices and those of compensatory rights aimed at government practices. On June 2, eight US steel companies and the sector’s labor union introduced anti-dumping actions against cold laminated steel from Argentina, Brazil and Venezuela, in addition to nine other countries. At the same time, Brazil and Venezuela and another two countries were denounced because of countervailing duties.
In their last bulletin, SELA states that the presentation of the these five requests against South American steel may indicate that such laws will be used again to restrict access to the US market. The SELA publication warned that “the steel industry’s petitions may encourage other US producers to take action” and specified the case of oil.” On 10 May, the US Independent Petroleum Association voted in favor of preparing anti-dumping requests against crude oil from Mexico and Venezuela,” among other countries. The governments of the two Latin American countries have called the action unusual, and claim the accusation is based on an alleged participation in a manoeuvre to lower oil prices, which seriously affected their economies in 1998. (Compiled from various sources by Manuel Mascareñas).
MERCOSUR
Argentina Reverses on Tarrifs
SAO PAULO, BRAZIL – Argentina has retreated from a threat to impose punitive tariffs on Brazilian exports, easing a dispute between the two countries that had threatened the cohesion of the $1.1-trillion MERCOSUR trade bloc.
The conciliatory gesture came during a surprise visit to Brasilia on Thursday night by Argentine President Carlos Saul Menem. Menem dined with President Fernando Henrique Cardoso at the Alvorada Palace in a public display of friendship aimed at defusing weeks of escalating commercial tension.
Although significant differences on trade policy still remain between South America's two largest economies, Menem's conciliatory move is considered the first step in strengthening relations in a trade bloc that has been damaged by a sharp reduction in economic activity among its members.
Brazil had halted all trade talks with Argentina earlier this week after its largest neighbor said it was considering increases in numerous tariffs.
The two countries now turn to more detailed trade issues like a decision by Argentina to restrict imports of Brazilian textiles. Another important subject of discussion will be Brazil's policy of providing incentives to car makers to build factories in poor regions, which Argentina has questioned.
Energy
Mexico
Use of Gas in Engines Subject to Standards
The Department of Energy (SE) published technical standards applicable to the use of L.P. Gas on engines. NOM-005-SEDG-1999 establishes the security and technical requirements for the installation of equipment to use L.P. Gas on automotive vehicles and internal combustion stationary engines. The standards also establish maintenance requirements for such engines. Diario Oficial, 7/9/99.
Standards on Transformers Announced
Technical standards regulating electricity distribution transformers have been published by the SE. NOM-002-SEDE-1999 established minimum security and efficiency requirements for distribution transformers. The standard is applicable for several kinds of transformers such as substation and submersible. Diario Oficial, 7/13/99.
Labor Law
Mexico
Bargaining Agreement for Rubber Industry Published
The Department of Labor and Social Services (STyPS) published a new labor agreement for the rubber industry. Among other aspects, the agreement establishes rules regarding wages, vacations and promotions. The agreement sets the minimum requirements for the industry.
The minimum daily wage for the industry is set at $66.157 pesos. The bargaining agreement will be effective until February 12, 2001. Diario Oficial, 7/16/99.
Securities
Mexico
Information Rules Amended
The SHCP published two different circulars including amendments to disclosure rules in the stock market. Amended by Ciruclars 11-11 BIS 7 and 11-23 BIS 2 were guidelines for information that must be presented to the National Commission of Banking and Securities (CNBV), to the public investors and to the stock exchange. Diario Oficial, 7/14/99.
Taxes
Mexico
Tax Annex Amended
The SHCP published amendments to an annex from the tax rules for 1999. Amended was Annex 8, which includes tables for different tax calculations such as the tariffs applicable to tax withholdings. Diario Oficial, 7/12/99
Transportation
Mexico
Training Programs Announced
The Department of Communications and Transportation (SCT) has published several training programs for drivers. The programs include driver training for certified federal cargo drivers. Also published were programs for those interested in renewing their license as passenger drivers for buses. Diario Oficial, 7/14/99 and 7/15/99.
