WTO Touts Mexico's Progress on Tariffs, Customs Issues in 2013 Trade Policy Review
Mexico has made substantial progress in simplifying customs procedures and lowering tariff barriers, said the World Trade Organization in its 2013 Trade Policy Review of the country. In fact, Mexico was one of the only countries in the world to carry out tariff reductions in the aftermath of the global financial crisis, the WTO said. But Mexico still has room to reduce non-tariff barriers, particularly in the area of sanitary and phytosanitary measures, the report said.
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According to the report, Mexico’s trade growth decelerated between 2007 and 2011, despite the country’s recovery from the financial crisis and resulting recession. Exports and imports of goods grew over the period by 28.6 percent and 24.4 percent, respectively, but imports and exports had both expanded by about 50 percent between 2002 and 2006. The U.S. remains Mexico’s most important trading partner -- 80.4 percent of Mexican exports go to the U.S., and 49.9 percent of imports originate there. Trade with China increased sharply over the period, the WTO said.
Already one of the countries in Latin America with the most free trade agreements, Mexico signed three more over the period covered by the report with Peru, Bolivia, and Central America, said the report. The Central America agreement, which will replace individual FTAs with Central American countries with a single agreement to simplify customs procedures, was only in effect among Mexico, El Salvador, and Nicaragua at the time the WTO report was written.
Beyond these free trade agreements, Mexico heavily reduced tariffs on its own during the period, the report said. The duty reduction scheme was instituted in 2009, with the biggest gains coming in 2010 -- that year, tariffs on 3,852 headings were eliminated. By the beginning of 2012, 7,064 headings (58.3 percent of the total) were duty free, the WTO said. Because of these reductions, the simple average of Mexican tariffs fell from 11.2 percent in 2007 to 6.2 percent in 2012.
Mexico also embarked on an effort to simplify customs procedures during the review period, the WTO said. A 2008 law eliminated provisions for enrollment in the Register of Importers for all sectors except for goods that involve public health or national security risks, as well as some bond and documentation requirements. In June 2012, Mexico launched its single window for foreign trade transactions. For imports, procedures that can be conducted include applications for import permits and enrollment of companies in the IMMEX program or a PROSEC program, said the WTO.
Data provided by Mexico showed that, during the period from Jan. 1, 2011, to Sept. 30, 2012, 9 percent of import transactions were subject to customs inspection, the WTO said. Of this percentage, 0.2 percent led to a preventive embargo of the goods. The estimated average time required for customs clearance was approximately two hours for goods subject to customs inspection and eight minutes for those with free customs clearance, the report said.
Despite glowing reviews of Mexico’s progress in tariff reduction and customs rationalization over the past four years, the WTO said “there is scope to reduce the incidence of non-tariff border measures, particularly sanitary and phytosanitary measures.” The group also noted that, although Mexico eliminated reference prices on a wide range of products for valuation purposes, it still maintains its “estimated prices” for used cars, and still requires import permits for oil products, used tires, and used cars.