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Mexico Given High Marks for Trade Reform

WTO review said the country has lowered trade barriers substantially.

GENEVA — Trading partners in a global forum praised Mexico for ushering in an ambitious liberalization program to slash industrial tariffs, including textiles and apparel, that brought down average duties for manufactured goods to 4.6 percent in 2012 from 9.9 percent in 2007.

“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,” Michael Punke, deputy U.S. Trade Representative, told a two-day World Trade Organization review session of Mexico’s trade regime late last month.

Punke said two-way trade between the U.S. and Mexico totaled $494 billion and noted the southern neighbor “is our third-largest trading partner and our second-largest market for goods.”

A report by the WTO concludes that Mexico was “one of the few countries to carry out substantial tariff reductions in the aftermath of the global financial crisis, which hit the Mexican economy relatively hard.”

“This is most noteworthy,” said the European Union’s top envoy to the WTO, Angelos Pangratis, while China said the action was “particularly commendable.”

India and Pakistan, both major exporters of textiles and apparel, also welcomed the move that was initiated in 2009 and scheduled to be completed at the end of 2013, but also noted that in some sectors high tariffs still prevail.

“Many products of export interest to India, like man-made fabrics, ready-made garments, carpets, precious metal jewelry, footwear and leather products, attract high import duties ranging between 15 percent and 30 percent, lowering their competitiveness,” said the Indian delegation.

The WTO report shows that in 2012, for more than 900 textile lines, tariffs averaged 9.2 percent, down from 11.6 percent in 2007, and for 355 apparel lines, tariffs last year averaged 21.6 percent, down from 35 percent in 2007, but still higher than the average for all industrial goods.

In the proceedings, the U.S., the EU, Norway and Turkey welcomed measures by Mexico to simplify its Customs clearance procedures, but noted there is room to further simplify operations. On Customs valuation, Turkey welcomed the elimination by Mexico of reference or “estimated prices” for a range of products. But the WTO report notes that Mexico still requires a prior import permit for some goods, such as used apparel, used tires and petroleum products. Mexico also requires import quotas for certain manufactured goods, such as polyester filament textured yarn.

The U.S.’ Punke urged 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.”

Mexico’s undersecretary for international trade, Francisco de Rosenzweig, told WTO delegates the economy is estimated to grow 3.5 percent in 2013 and 2014. In 2012, Mexico’s merchandise exports reached $371 billion, up 6 percent from a year earlier, and its imports were valued at $380 billion, up 5 percent, according to WTO estimates.

Last year, exports of textiles increased by 4.9 percent to $2.2 billion, but export shipments of apparel declined by 4 percent to $4.4 billion. Imports in the sector were also up, with the value of apparel shipments increasing 8 percent to $2.96 billion and textiles growing 2.6 percent to $6 billion.