Appendix 300-A.2: Mexico
Auto Decree and Auto Decree Implementing Regulations
1. Until January 1, 2004, Mexico may maintain the provisions of
the Decree for Development and Modernization of the Automotive
Industry ("Decreto para el Fomento y Modernización de
la Industria Automotriz"), December 11, 1989, (the "Auto
Decree") and the Resolution that Establishes Rules for
the Implementation of the Auto Decree ("Acuerdo que Determina
Reglas para la Aplicaci n para el Fomento y Modernización de la
Industria Automotriz"), November 30, 1990, (the "Auto
Decree Implementing Regulations") that would otherwise be
inconsistent with this Agreement, subject to the conditions set
out in paragraphs 2 through 18. No later than January 1, 2004,
Mexico shall bring any inconsistent provision of the Auto Decree
and the Auto Decree Implementing Regulations into conformity with
the other provisions of this Agreement.
Autoparts Industry, National Suppliers and Independent Maquiladoras
2. Mexico may not require that an enterprise attain a level of
national value added in excess of 20 percent of its total sales
as one of the conditions to qualify as a national supplier or
enterprise of the autoparts industry.
3. Mexico may require that a national supplier or an enterprise
of the autoparts industry, in calculating its national value added
solely for purposes of paragraph 2, include customs duties in
the value of imports incorporated into the autoparts produced
by such supplier or enterprise.
4. Mexico shall grant national supplier status to an independent
maquiladora that requests such status and meets the requirements
for that status set out in the existing Auto Decree, as modified
by paragraphs 2 and 3. Mexico shall continue to grant to all independent
maquiladoras that request national supplier status all existing
rights and privileges accorded to independent maquiladoras under
the existing Decree for the Promotion and Operation of the
Maquiladora Export Industry ("Decreto para el Fomento
y Operación de la Industria Maquiladora de Exportación"),
December 22, 1989 (the "Maquiladora Decree").
National Value Added
5. Mexico shall provide that a manufacturer ("empresa de
la industria terminal") calculate its required national value
added from suppliers (VANp) as a percentage of:
(a) the manufacturer's reference value as set out in paragraph
8; or
(b) the manufacturer's total national value added (VANt),
whichever is greater, except that Mexico shall provide that a manufacturer
beginning production of motor vehicles in Mexico after model year
1991 calculate its required national value added from suppliers
(VANp) as a percentage of its total national value added (VANt).
6. Mexico may not require that the percentage referred to in paragraph
5 be greater than:
(a) 34 percent for each of the first five years beginning January
1, 1994;
(b) 33 percent for 1999;
(c) 32 percent for 2000;
(d) 31 percent for 2001;
(e) 30 percent for 2002; and
(f) 29 percent for 2003.
7. Notwithstanding paragraph 6, Mexico shall allow a manufacturer
that produced motor vehicles in Mexico before model year 1992
to use as its percentage referred to in paragraph 5 the ratio
of actual national value added from suppliers (VANp) to total
national value added (VANt) that the manufacturer attained in
model year 1992, for so long as that ratio is lower than the applicable
percentage specified under paragraph 6. In determining such ratio
for model year 1992, purchases that the manufacturer made from
independent maquiladoras that would have been eligible to receive
national supplier status had paragraphs 2, 3 and 4 of this Appendix
been in effect at that time, shall be included in the calculation
of the manufacturer's national value added from suppliers (VANp),
in the same manner as autoparts from any other national supplier
or enterprise of the autoparts industry.
8. The annual reference value for a manufacturer ("reference
value") shall be:
(a) for each of the years 1994 through 1997, the base value for
the manufacturer, plus no more than 65 percent of the difference
between the manufacturer's total sales in Mexico in that year
and its base value;
(b) for each of the years 1998 through 2000, the base value for
the manufacturer, plus no more than 60 percent of the difference
between the manufacturer's total sales in Mexico in that year
and its base value; and
(c) for each of the years 2001 through 2003, the base value for
the manufacturer, plus no more than 50 percent of the difference
between the manufacturer's total sales in Mexico in that year
and its base value.
9. Mexico shall provide that where a manufacturer's total sales
in Mexico in a year are lower than its base value, the reference
value for the manufacturer for that year shall be equal to the
manufacturer's total sales in Mexico for the year.
10. In the event an abnormal production disruption affects a manufacturer's
production capability, Mexico shall allow the manufacturer to
seek a reduction in its reference value before the Intersecretariat
Automotive Industry Commission, established under Chapter V of
the Auto Decree. If the Commission finds that the production capability
of the manufacturer has been impaired by such an abnormal production
disruption, the Commission shall reduce the manufacturer's reference
value in an amount commensurate to the event.
11. If, on the request of a manufacturer, the Intersecretariat
Automotive Industry Commission finds that the production capability
of the manufacturer has been significantly disrupted as a result
of a major retooling or plant conversion in the facilities of
the manufacturer, the Commission shall reduce the manufacturer's
reference value for that year in an amount commensurate with the
disruption, provided that any reduction in that manufacturer's
required national value added from suppliers (VANp) that may result
from the Commission's determination to reduce the manufacturer's
reference value shall be fully made up by the manufacturer over
the 24 months after the date on which the retooling or plant conversion
is completed.
Trade Balance
12. Mexico may not require a manufacturer to include in the calculation
of its trade balance (S) a percentage of the value of direct and
indirect imports of autoparts that the manufacturer incorporated
into that manufacturer's production in Mexico for sale in Mexico
(VTVd) in the corresponding year, greater than the following:
(a) 80 percent for 1994;
(b) 77.2 percent for 1995;
(c) 74.4 percent for 1996;
(d) 71.6 percent for 1997;
(e) 68.9 percent for 1998;
(f) 66.1 percent for 1999;
(g) 63.3 percent for 2000;
(h) 60.5 percent for 2001;
(i) 57.7 percent for 2002; and
(j) 55.0 percent for 2003.
13. Mexico shall provide that, for purposes of determining a manufacturer's
total national value added (VANt), paragraph 12 shall not apply
to the calculation of the manufacturer's trade balance (S).
14. Mexico shall allow a manufacturer with a surplus in its extended
trade balance to divide its extended trade balance by the applicable
percentages in paragraph 12 to determine the total value of new
motor vehicles that it may import.
15. Mexico shall provide that a manufacturer's adjustment factor
(Y), included in the calculation of such manufacturer's extended
trade balance, shall be equal to:
(a) for a manufacturer that produced motor vehicles prior to model
year 1992
(i) the greater of the manufacturer's reference value or the manufacturer's
total national value added (VANt), minus
(ii) the manufacturer's actual national value added from suppliers
(VANp) divided by the appropriate percentage specified under paragraph
6 or 7 as appropriate;
(b) for all other manufacturers
(i) the manufacturer's total national value added (VANt), minus
(ii) the manufacturer's actual national value added from suppliers
(VANp) divided by the appropriate percentage specified under paragraph
6,
except that the adjustment factor (Y) shall be zero if the amount
resulting from subtracting (ii) from (i), under (a) or (b), is
negative.
16. In determining the annual amount that a manufacturer may apply
to its extended trade balance from unused surpluses earned prior
to model year 1991, Mexico shall in any year allow the manufacturer
to elect:
(a) to use the procedures of the existing Auto Decree Implementing
Regulations; or
(b) to apply up to the Mexican peso equivalent of US$150 million,
adjusted annually for cumulative inflation, from the date of entry
into force of this Agreement, based on the implicit price deflator
for U.S. Gross Domestic Product (GDP) or any successor index published
by the Council of Economic Advisers in its "Economic Indicators"
(hereinafter "U.S. GDP price deflator"). To adjust the
US$150 million ceiling for cumulative inflation up to a certain
month of a year following 1994, the $150 million shall be multiplied
by the ratio of
(i) the U.S. GDP price deflator current as of the month of that
year, to
(ii) the U.S. GDP price deflator current as of the date of entry
into force of this Agreement,
provided that the price deflators under subparagraphs (i) and
(ii) have the same base year.
The resulting adjusted amount shall be rounded to the nearest
million dollars.
17. Mexico shall eliminate any restriction that limits the number
of motor vehicles that a manufacturer may import into Mexico in
relation to the total number of motor vehicles that such manufacturer
sells in Mexico.
18. For greater certainty, the differences in treatment required
under paragraphs 5, 7 and 15 shall not be considered to be inconsistent
with Article 1103 (Investment - Most - Favored - Nation Treatment).
Other Restrictions
19. For the first 10 years after the date of entry into force
of this Agreement, Mexico may maintain prohibitions or restrictions
on the importation of new automotive products provided for in
existing items 8407.34.02 (gasoline engines larger than 1000 cm³
but smaller than or equal to 2000cm³. except for motorcycles),
and 8407.34.99 (gasoline engines larger than 2000cm³, except
for motorcycles) and 8703.10.99 (other special vehicles)
in the Tariff Schedule of the General Import Duty Act ("Tarifa
de la Ley del Impuesto General de Importación"), except that
Mexico may not prohibit or restrict the importation of automotive
products provided for in item 8407.34.02 (gasoline engines larger than
1000 cm³ but smaller than or equal to 2000cm³. except
for motorcycles), 8407.34.99 (gasoline engines larger than 2000 cm³,
except for motorcycles), or 8703.10.99 (other special vehicles) by
manufacturers that comply with the Auto Decree and the Auto Decree
Implementing Regulations, as modified by this Appendix.
Autotransportation Decree and Autotransportation Implementing
Regulations
20. Mexico shall eliminate the Mexican Decree for Development
and Modernization of the Autotransportation Vehicle Manufacturing
Industry, ("Decreto para el Fomento y Modernización
de la Industria Manufacturera de Vehículos de Autotransporte"),
December 1989, and the Resolution that Establishes Rules for
the Implementation of the Autotransportation Decree ("Acuerdo
que Establece Reglas de Aplicación del Decreto para el
Fomento y Modernización de la Industria Manufacturera de
Vehículos de Autotransporte"), November 1990. Mexico
may adopt or maintain any measure respecting autotransportation
vehicles, autotransportation parts or manufacturers of autotransportation
vehicles provided that the measure is not inconsistent with this
Agreement.
Importation of Autotransportation Vehicles
21. Mexico may adopt or maintain a prohibition or restriction
on the importation of autotransportation vehicles of another Party
until January 1, 1999, except with respect to the importation
of autotransportation vehicles pursuant to paragraphs 22 and 23.
22. For each of the years 1994 through 1998, Mexico shall allow
any manufacturer of autotransportation vehicles to import, for
each type of autotransportation vehicle, a quantity of originating
autotransportation vehicles equal to at least 50 percent of the
number of vehicles of such type that the manufacturer produced
in Mexico in that year.
23. For each of the years 1994 through 1998, Mexico shall allow
persons other than manufacturers of autotransportation vehicles
to import, in a quantity to be allocated among such persons, originating
autotransportation vehicles of each type as follows:
(a) for each of the years 1994 and 1995, no less than 15 percent
of the total number of vehicles of each type of autotransportation
vehicle produced in Mexico;
(b) for 1996, no less than 20 percent of the total number of vehicles
of each type of autotransportation vehicle produced in Mexico;
and
(c) for each of the years 1997 and 1998, no less than 30 percent
of the total number of vehicles of each type of autotransportation
vehicle produced in Mexico.
Mexico shall allocate such quantity through a non-discriminatory
auction.
Used Vehicles
24. Mexico may adopt or maintain prohibitions or restrictions
on imports of used vehicles from the territory of another Party,
except as follows:
(a) beginning January 1, 2009, Mexico may not adopt or maintain
a prohibition or restriction on imports from the territories of
Canada or the United States of originating used vehicles that
are at least 10 years old;
(b) beginning January 1, 2011, Mexico may not adopt or maintain
a prohibition or restriction on imports from the territories of
Canada or the United States of originating used vehicles that
are at least eight years old;
(c) beginning January 1, 2013, Mexico may not adopt or maintain
a prohibition or restriction on imports from the territories of
Canada or the United States of originating used vehicles that
are at least six years old;
(d) beginning January 1, 2015, Mexico may not adopt or maintain
a prohibition or restriction on imports from the territories of
Canada or the United States of originating used vehicles that
are at least four years old;
(e) beginning January 1, 2017, Mexico may not adopt or maintain
a prohibition or restriction on imports from the territories of
Canada or the United States of originating used vehicles that
are at least two years old; and
(f) beginning January 1, 2019, Mexico may not adopt or maintain
a prohibition or restriction on imports from the territories of
Canada or the United States of originating used vehicles.
25. (a) Paragraph 24 shall not apply to the importation on a temporary
basis of a used vehicle provided for in item 8705.20.01 (mobile
drilling derricks), 8705.20.99 (other mobile drilling derricks)
or 8705.90.01 (street sweepers) of the Tariff Schedule of the
General Import Duty Act. Such importation shall be subject to
the conditions set out in Section 4(b) of Annex 301.3 for
such time as Mexico may adopt or maintain a prohibition or restriction
on the importation of the vehicle under paragraph 24.
(b) Paragraph 24 shall not be construed to allow Mexico to derogate
from its obligations in respect of land transportation services
under Chapter Twelve (Cross- Border Trade in Services), including
its Schedule to Annex I.
Import Licensing Measures
26. Mexico may adopt or maintain import licensing measures to
the extent necessary to administer restrictions pursuant to:
(a) the Auto Decree and the Auto Decree Implementing Regulations,
as modified by this Appendix, on the importation of motor vehicles;
(b) paragraph 19 of this Appendix on the importation of new automotive
products provided for in item 8407.34.02 (gasoline engines larger than 1000cm3,
but smaller than or equal to 2000 cm³, except for motorcycles) or 8703.10.99 (other special vehicles) in the Tariff Schedule of the General Import
Duty Act;
(c) paragraphs 22 and 23 of this Appendix on the importation of
autotransportation vehicles; and
(d) paragraph 24 (a) through (f) of this Appendix on the importation
of used vehicles that are motor vehicles or autotransportation
vehicles or of other used vehicles provided for in existing items
8702.90.01 (trolley buses), 8705.10.01 (mobile cranes), 8705.20.99
(other mobile drilling derricks), 8705.90.01 (street sweepers)
or 8705.90.99 (other special purpose vehicles, nes) in the Tariff
Schedule of the General Import Duty Act;
provided that such measures shall not have trade restrictive effects
on the importation of such goods additional to those due to restrictions
imposed in accordance with this Appendix, and that a license shall
be granted to any person that fulfills Mexico's legal requirements
for the importation of the goods.
Continue on to Annex 302.2: Mexico - Definitions
