The New Trade and Investment Promotion Agency

TABLE OF CONTENTS the new trade and investment promotion agency

PROMÉXICO is the new trade and investment promotion organization of Mexico, which was officially launched by the President of Mexico, Felipe Cal- PROMÉXICO: the new trade and invest- deron, and the Minister of the Economy, Eduardo Sojo, on July 9, 2007. ment promotion agency PROMÉXICO was created to increase Mexico’s export competitiveness and to consolidate the country as a world leader in terms of attracting foreign direct A BIT between Mexico and Australia investment (FDI). The agency has a budget of 800 million pesos (53.3 million enters into force Euros) for 2007.

PROMÉXICO has three main aims: 1. to promote Mexican exports in the international market, Trade Balance 2. to promote FDI in Mexico based on the country’s competitive advantages,

and

3. to integrate into a single entity and to coordinate through it, all Federal Go- Financial and Economic Indicators vernment strategies designed to promote Mexico abroad.

PROMÉXICO is taking over some of the functions of Bancomext, the Mexican Trade fairs and exhibits in Mexico Bank for Foreign Trade, such as promoting the participation of Mexican firms in trade missions and fairs worldwide. The agency will continue to work closely with Bancomext, which will concentrate on the financing of small and medium Mexico’s Official Gazette Notices businesses.

Mexico’s representations abroad, together with the offices of PROMÉXICO, will act as contact points with investors or importers from other countries, with EU Official Journal a clear agenda and strategy to promote what Mexico has to offer to the world.

PROMÉXICO will work to: • diversify the sectors that attract FDI, by promoting investment in those with a higher technological content, • increase its efforts to attract FDI from countries with a high potential for investment, such as Spain, Great Britain, Japan and Germany, which an- nually invest overseas more than $230 billion USD, of which Mexico barely captures 1%, • support the State (local) Governments to identify opportunities for attrac-

August 2007 (Continues on page 3) Year 7, no. 8 A BIT between Mexico and Australia enters into force

he Bilateral Investment Treaty (BIT) between se, the dispute would have to be related to an alleged Australia and Mexico, entered into force on 21 breach of the Agreement entailing a loss or damage to the July 2007. The negotiation of BITs is part of a investor, and in the latter, a question of interpretation or T public policy implemented by Mexico aimed at application of the Agreement. Given the importance and creating a better and more favorable regulatory environ- steady growth of investor-State arbitration cases, the BIT ment for productive foreign direct investment, with respect contains a number of provisions that give clarity and regu- to both inflows and outflows. This goal is facilitated late the arbitration process. through the establishment of international standards for the protection of investments, which diminish the levels of Mexico and Australia are among the main recipients of fo- non-commercial risks perceived by investors and guaran- reign direct investment (FDI), according to the latest OECD tee more stability and predictability on investment rules. report on Trends and Recent Developments in FDI Apart from the investment commitments in its trade agree- (released 21 June 2007). The main net recipients of FDI ments, Mexico has in force 21 BITs. inflows (inflows minus outflows) in the OECD area over the last decade have been Mexico, Poland, the United States, The BIT with Australia guarantees: Czech Republic, Australia, Turkey and Korea. • non-discriminatory treatment due to the investor’s Mexican investment in Australia has been concentrated in nationality, vis-à-vis nationals of the host State (i.e. private real estate and manufacturing. One of Mexico’s lar- National Treatment) or nationals of a third State (i.e. gest companies, Grupo Gruma, bought two Australian Most-Favored-Nation Treatment); companies, Rosita’s and Oz Mex Foods, in 2006. In July • treatment in accordance to customary international 2007, the Mexican giant Cemex, the world’s third largest law, including fair and equitable treatment and full cement producer, took more than 90 per cent stake and protection and security of investments; majority control of Australia’s Rinker Group Ltd. The more • that a host State may not expropriate or nationalize than15 billion dollars deal represents the largest takeover an investment either directly (i.e. formal transfer or in the history of the global building-materials industry. The- outright seizure) or indirectly (i.e. deprivation of the se are clear examples of the investments protected by the value or utility of an investment with effects equivalent agreement.

to a direct expropriation), except for public purposes, The Australia-Mexico bilateral economic and trade rela- on a non-discriminatory basis, in accordance with due tionship is in very good shape. Mexico was Australia’s lar- process of law and upon payment of a fair market gest merchandise trading partner in Latin America in 2006 value compensation; with two-way trade worth 1.3 billion USD. Furthermore, • non-discriminatory treatment in connection to com- Australia and Mexico have created a Joint Experts Group pensations arising from damages caused to invest- to study ways of strengthening bilateral economic relations. ments by armed conflicts or civil disturbances; and The group meetings were held in Adelaide on April 2007 • that all transfers related to an investment are done and in Mexico City on June 2007. freely and without delay.

For more information visit: Additionally, this BIT provides for arbitration rules for the http://www.economia-snci.gob.mx/sic_php/pages/pages_portal/ settlement of disputes between an investor and the host apoyos_inversionista_ing.php State or between the Contracting States. In the former ca-

Mexico’s Total Trade in June Mexico’s Trade with EU and EFTA (billion US$) (million US$)

2006 2007 % January - March 2006 2007 % Total 42.9 46.4 8.1 Exports to the EU 2,444.1 2,826.4 15.6 Exports 21.3 22.8 7.1 Imports from the EU 6,647.7 7,682.7 15.6 Exports (excluding oil) 17.9 19.3 7.7 Exports to the EFTA 27.1 51.0 88.3 Imports 21.7 23.6 9.1 Imports from the EFTA 308.2 356.0 15.5

Source: Banco de México Source: Banco de México 2 PROMÉXICO: the new trade and investment promotion agency

(Continues from page 1) becomes one of the countries with inflows of FDI of more than 20 billion dollars per year. ting FDI, in order to contribute to regional develop- ment, According to Bruno Ferrari, Director General of PRO- MÉXICO, the sectors that present the greatest invest- • intensify promotion in countries with which Mexico ment opportunities are automotive, electronics, informa- already has trade agreements that have not been fully tion technology and aerospace. He also said that PRO- exploited, and in those with a low presence of Mexi- MÉXICO would seek out business opportunities in non- can products, traditional industries and niches. • implement export projects with well-defined objectives and support, and • encourage the implementation of export promotion projects in non-traditional sectors, such as services and those based on innovation and knowledge.

The Decree creating PROMÉXICO was published in Mexico’s Official Gazette on June 13, 2007. On July 13, President Felipe Calderon appointed Bruno Ferrari as Director General of PROMÉXICO.

PROMÉXICO will be managed by a technical committee integrated by the Minister of the Economy (who will presi- de over it) and representatives of the ministries of Fo- reign Affairs, Finance, Environment and Natural Resour- ces, Agriculture, and Tourism, as well as of Bancomext. Four independent counselors named by the technical committee will also be part of the technical committee, three of which will be from the following private sector During the presentation of this new agency, President organizations: the Mexican Business Council for Foreign Calderon expressed his satisfaction with the creation of Trade, Investment and Technology (COMCE), the Busi- the new agency. He stated that PROMÉXICO will trans- ness Coordinating Council (CCE), and the National Asso- form the promotion of foreign trade and investment in ciation of Importers and Exporters of Mexico (ANIERM). Mexico, and that it will help to position the country in the world as one of the best destinations for investment. In PROMÉXICO led its first mission to Brazil and the se- short, concluded the President, the program will guaran- cond one to China last July. The third international trade tee that there is more of the world in Mexico and more of and investment mission will take place in India next Sep- Mexico in the world. tember.

The Minister of the Economy, Eduardo Sojo, has expres- For more information visit: sed that one of the goals of PROMÉXICO is that Mexico http://www.promexico.gob.mx

Mexico’s Economic Indicators Mexico’s Financial Indicators

Inflation rate: 0.42% (July 2007); Foreign exchange rate: 11.05 peso/dollar (15-August-2007) 1.01% (January - July 2007) Internacional reserves: $71,678 million dollars (10-Aug-2007) Industrial Product:ion 1.1% (Jun 2007 / Jun 2006) Mexican stock market index (IPC): 28,141 (15-August-2007) Manufacturing: -0.3%; Construction: 1.1%, Mining: 1.9% General Index of Economic Activity: 2.90% (May 2007 / May 2006) Interest rate treasury bonds CETES 28 days: 7.19% Consumer Confidence Index: 104.8 pts. (July 2007) (7-August-2007) -4.6% (Jul 2007 / Jul 2006) Open unemployment rate: 3.26% (Jun 2007) Source: INEGI Source: Banco de México

Trade Fairs and exhibits in Mexico Mexico’s Official Gazette Notices

EXPO CAFE • 02/07/2007 02/07/2007 First Resolution containing the modifica- September 6-8, 2007 tions to the Fiscal Resolution for 2007 and its Annexes 7 and 11 World Trade Center, Mexico City • 02/07/2007 Agreement notifying the explicative notes of the tariff The most important coffee trade show in code Mexico • 09/07/2007 Agreement determining the quota for imports in 2007 Event Management: under the tariff quota of food preparations of milk products containing Tradex Exposiciones Internacionales more than 50% by weight of milk’s solids except those classified under Phone: (52) 55 / 56 04 49 00 ext 122 Tariff Item 1901.90.04 E-mail: [email protected] • 09/07/2007 Listing of approved people as verification units on com- Website: mercial information, to evaluate the conformity of the Mexican Official http://www.tradex.com.mx/Cafe- Standard (NOM), under competence of the Ministry of the Economy. 06/index.html • 18/07/2007 Agreement notifying the preferential export quota between July 2007 and June 30, 2008 for natural honey, asparagus, avo- Chemspec Latin America cado, melons, processed tuna (except loins) gum, orange juice September 12-13, 2007 (expect concentrated or frozen) and pineapple juice, from Mexico into World Trade Center, Mexico City the European Community (EC) Latin America's only dedicated fine and • 23/07/2007 Agreement notifying the quota to import certain goods speciality chemicals event listed under chapter 95 of the General Imports and Exports Tariff law Event Management: (TIGIE) Chemspec Latin America • 30/07/2007 Fifth Agreement notifying the program numbers for the Phone: (52) 55 / 566 21198 manufacturing maquiladora and export services industries

Fax: (52) 55 566 12391 E-mail: [email protected] Website: EU Official Journal http://www.chemspeclatinamerica.com • 07/07/2007 L179 Information relating to the entry into force of an Agreement between the European Community and the Government of LAS AMERICAS SECURITY SHOW Canada on the conclusion of GATT Article XXIV:6 negotiations September 18-20, 2007 •14/07/2007 L184 Directive 2007/36/EC of the European Parliament Centro Banamex, Mexico City and of the Council of 11 July 2007 on the exercise of certain rights of Security trade show shareholders in listed companies Event Management: Las Americas Se- •20/07/2007 L189 Council Regulation (EC) No 834/2007 of 28 June curity Show 2007 on organic production and labelling of organic products and re- Phone: (52) 55 5250 4337 pealing Regulation (EEC) No 2092/91 Fax (52) 55 5531 2455 •27/07/2007 L195 Commission Regulation (EC) No 884/2007 of 26 E-mail: mbmanri- July 2007 on emergency measures suspending the use of E 128 Red [email protected] 2G as food colour Website: http://www.lasamericassecurityshow.co m.mx To access text visit: http://www.economia-bruselas.gob.mx

Mexico-EU Trade Links is a monthly informational newsletter published by the Mexican Mission to the EU, Representati- ve office of the Ministry of the Economy. Av. Franklin Roosevelt 94, 1050, Brussels, Belgium. For more detailed information or questions regarding this issue please contact us: e-mail [email protected], fax: 32 (02) 644 04 45, or visit our website at: http://www.economia-bruselas.gob.mx