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Statement by U.S. Ambassador to the WTO Michael Punke at the Fifth WTO Trade Policy Review of Mexico

Statement by U.S. Ambassador to the WTO Michael Punke at the Fifth WTO Trade Policy Review of Mexico

World Trade Organization
Geneva, Switzerland
April 17, 2013

*As Prepared for Delivery*

Thank you, Chair. The United States welcomes the participation of the delegation of Mexico, led by Secretary for International Trade, Francisco de Rosenzweig. We would like to thank the Government of Mexico for its opening remarks and the information provided for this review, which highlighted Mexico’s trade and investment regime. As always, we are also appreciative for the WTO Secretariat’s work in preparing the report for this meeting. We thank the discussant, Ambassador Riegert (France) for his contribution to this meeting.

As a neighbor and important FTA partner, Mexico’s trade regime continues to be of deep interest to the United States. Last November when President Obama met with President Peña Nieto, our leaders discussed how to deepen our cooperation across a range of issues, including our economic and trading relationship. The foundation of that long-standing trading relationship has been the North American Free Trade Agreement (NAFTA). Since the United States, Mexico, and Canada began to implement the Agreement in 1994, our trade with our NAFTA partners has soared. Since the entry into force of the NAFTA, U.S. goods exports to Mexico have more than tripled and U.S. goods imports from Mexico have grown by more than six times, from US$39.9 billion in 1993, to US$277.7 in 2012. Two-way trade between the U.S. and Mexico totaled US$494 billion in 2012. Mexico is currently our third largest trading partner, and our second largest market for goods. Today, according to the Secretariat report, 80 percent of all Mexican exports go to the United States, and 49 percent of Mexican imports come from the United States.

We are pleased to note that since Mexico’s last Trade Policy Review in 2008, the United States and Mexico have not only worked together to advance the multilateral trading system, but we have worked closely to address a number of noteworthy bilateral trade issues. The last scheduled NAFTA tariff reductions were implemented in 2008. Since then, we have continued work with Mexico to reduce administrative and other transaction costs in order to boost competitiveness.

For example, in 2010, the United States and Mexico launched the 21st Century Border Initiative, an effort designed to promote economic competitiveness and enhance security through the secure, efficient, rapid, and lawful movement of goods and people.

As Mexico mentioned in its report, in May 2010, the United States and Mexico created the High-Level Regulatory Cooperation Council. The initiative is designed to increase regulatory transparency; provide early warning of regulations with potential bilateral effects; strengthen the analytic basis of regulations; and help make regulations more compatible.

In May 2011, the United States and Mexico signed a mutual recognition agreement for conformity assessment of telecommunications equipment. The agreement provides for recognized U.S. testing laboratories to test equipment for compliance with Mexican technical requirements, and vice-versa.

And most recently, in October 2012, Mexico and Canada joined the negotiations for the Trans-Pacific Partnership (TPP). The TPP is an opportunity to bring two of our largest trading partners into a new, high-standard agreement for the 21st century, and it represents the next step in the evolution of our trading relationship with our North American partners.

Despite these positive achievements, there are some areas in which we would encourage the Government of Mexico to make further improvements. We hope this Trade Policy Review will help draw Mexico’s attention to those areas where we believe additional reforms would enhance its competitiveness.

First, we commend Mexico for its policy of unilateral liberalization efforts, which sets a helpful example within the Latin American region, particularly given the state of the global economy. We would also note that Mexico is currently ranked among the top 10 traders of ITA goods. In light of this, we would urge Mexico to take the steps necessary to join the WTO Information Technology Agreement. Given Mexico’s extensive participation in FTAs and generally open trade regime, joining the ITA would be a natural step and would further demonstrate Mexico’s commitment to strengthening the WTO multilateral trading system.

The Secretariat’s report notes the highly concentrated nature of certain telecommunications subsectors. The dominant carrier holds 72 percent of the fixed line telephony market, and one company controls 68 percent of the free-to-air television market. In light of our concerns on this issue, we would be interested in an update from Mexico on its recent efforts to liberalize the telecommunications sector. We take note of Mexico’s comments on this issue this morning, and we look forward to learning more about potential reforms in this area.

Also of concern is our view that, given the shared border between the U.S. and Mexico, it remains important that Mexican customs officials have the authority to seize counterfeit trademark and pirated copyright goods, on their own authority, without the need for a right holder complaint. We urge Mexico to amend its customs law to enable Mexican Customs to seize shipments where they have reason to believe or suspect that a good is counterfeit or pirated.

While Mexico has already undertaken efforts to simplify customs procedures and reduce import costs, we take note of the Secretariat’s statement that that there is scope to reduce the incidence of non-tariff border measures. In our view, one such area is Mexico’s continued use of reference prices for used cars. We also have concerns about the use of such prices on certain types of yarn and apparel products. As it is unclear how such prices are determined and applied, we would appreciate clarification from Mexico.

Finally, as the Secretariat highlighted, Mexico has already included chapters on government procurement in ten of its free trade agreements. Given that Mexico has already opened its procurement market to a large number of GPA Parties, we encourage Mexico to become an observer to the WTO Committee on Government Procurement.

Mr. Chairman, in conclusion, I would like to praise Mexico’s strong leadership role in many regional and multilateral fora, including in the WTO. We commend Mexico for its commitment to open markets and to a trade policy that focuses on creating a favorable investment climate and trading regime. We look forward to continued work with Mexico, and other WTO Members, to support and strengthen the multilateral trading system.