| |
| |
|
VOLUME
4
INTRODUCTION
|
|
|
| |
|
Volume Four -which is the latest volume
of this Mexican Law Treatise and is to be followed by subsequent volumes-
appears as Mexico continues to move towards the goal of constructing
a true and long-lasting democracy under the new administration of
Vicente Fox Quesada, Constitutional President of Mexico. Elected by
a majority of 45 million Mexicans who cast their direct ballots on
July 2, 2000, President Fox assumed office on December 1, 2000 for
a single six-year term at a solemn ceremony at the Legislative Palace
of San Lázaro, the venue of Mexico's Federal Congress (Congreso
de la Unión), as mandated by that country's 1917 Federal Constitution.
|
| |
| This
is the first time in Mexico's political history that an opposition
candidate belonging to the Partido Acción Nacional (National
Action Party, popularly known as PAN), Mexico's oldest and leading
opposition party, was declared victorious over the PRI's (Partido
Revolucionario Institucional) candidate. Seventy one years had to
pass for this political event to happen. President Fox's administration
has been able to instill new hope and a new sense of optimism among
100 million Mexicans who would like to see their country become more
prosperous, better educated, healthier and cleaner and, above all,
more democratic politically and economically.
|
| |
|
At the bilateral level with the United States, President Fox's administration
coincides with the initiation of President George W. Bush Jr.'s presidency.
This significant coincidence will cement not only the personal relationship
between these two new Heads of State but, more importantly, will strengthen
the already close and friendly relations which exist between our two
neighboring countries. |
| |
| Volume
Four is devoted to analyzing three of the most salient developments
which have taken place in Mexico during the last few years in international
trade and foreign investment. First, the Agreement entered into by
Mexico with the European Union to eliminate barriers and promote trade,
signed on February 2, 2000. Second, the unprecedented diplomatic strategy
to negotiate bilateral agreements to protect and promote foreign investments.
And, third, a timely appraisal of NAFTA's effects, and its profound
impact within Mexico, during its first five years of operation. |
| |
| Since
the entering into force of NAFTA on January 1, 1994, Mexico was determined
to diversify and expand its international trade and its foreign investments
in an attempt to reduce its heavy dependency from the United States.
When one considers, on the one hand, that the European Union (EU)
is a strong political and economic group comprised of fifteen countries
embracing a population of 370 million people and, on the other, that
the EU is Mexico's second largest trading partner and second largest
source of direct investment, it is easy to understand why Mexico gave
such a high political priority to negotiating and signing a Free Trade
Agreement with the European Union. |
| |
| During
his visit to Portugal in February of 2000, the then President o Mexico,
Dr. Ernesto Zedillo Ponce de León signed the Free Trade Agreement
(FTA) with the European Union. Pursuant to the entering into force
of this Agreement on July 1, 2000, ninety five percent of Mexican
exports already receive preferential treatment from the EU countries.
Conversely, Mexico agreed to give the EU a "NAFTA parity"
consisting in the complete elimination of tariffs by 2003. In many
respects, Mexico's FTA with the EU closely parallels the substance
and even the format of NAFTA. In addition to the FTA, Mexico also
signed an Agreement on Economic Partnership, Political Coordination
and Cooperation with the European Union on December 8, 1997. |
| |
| Over
the last few years, Mexico has been engaged in a most aggressive and
effective campaign in Europe, Latin America, Asia and the Middle East
which strongly supports and promotes a "globalization" policy.
As of today, Mexico is the only country on a global scale which has
signed Free Trade Agreements with the world's leading economies: United
States and Canada, the European Union, seven Latin American nations
(i.e., Chile, 1992; Colombia and Venezuela, 1995; Bolivia, 1995; Costa
Rica, 1995; Nicaragua, 1998; Uruguay, 1999) and the State of Israel
(2000). |
| |
| Among
those very special areas Mexico has maintained under its exclusive
control and sovereignty is the legal regime governing foreign investment.
This sovereignty has manifested itself in a strong nationalism which
was reflected in its first Foreign Investment Act of 1973. However,
recent federal enactments - in particular the 1989 Foreign Investment
Regulations, the Foreign Investment Act of 1993 (with its amendments)
and the current Foreign Investment Regulations of 1998- denote a trend
which favors a more modern, flexible and international policy clearly
designed to attract foreign investment, albeit with certain reservations. |
| |
| Until
recently, Mexico's traditional foreign investment policy relied exclusively
on its Federal Constitution and the applicable legislation to formulate
its foreign investment legal regime. In other words, Mexico's rules
in this strategic area were perceived to be so closely related to
its national sovereignty that it was considered unwise to allow these
rules to be defined by international instruments. However, this nationalistic
policy was abandoned when Mexico entered into NAFTA with the United
States and Canada in 1994. |
| |
| The
seminal provisions of NAFTA's Chapter 11 clearly departed from that
country's long standing policy on this delicate question. In stark
contrast to its past, the promotional policies of the Foreign Investment
Act of 1993 (as amended), and its 1998 Regulations, are now being
carried out one step further in the new and unprecedented Investment
Promotion and Protection Agreements - known as IPPAs (or APPRIS in
Spanish)- which Mexico has already signed with sixteen countries in
the short period of time between 1995 and 2000 (i.e., Spain, Switzerland,
Argentina, Germany, The Netherlands, Austria, Belgo-Luxemburg Economic
Union, France, Finland, Uruguay, Portugal, Italy, Denmark, Greece,
Sweden and the Republic of Korea) and is currently negotiating with
Israel, the United Kingdom, Japan and Cuba. |
| |
| Judging
by the high number of IPPAS entered into over the last few years,
it seems that Mexico is not only satisfied with this change of policy
but decidedly supportive of this innovative international approach.
Interestingly, the substance of these international agreements is
highly influenced by the international law principles which have been
consistently advanced by international organizations such as WTO,
OECD and UNCTAD, as reflected in the provisions of, for example, the
ICSID Convention, the UNCITRAL Arbitration Rules and the U.N. Convention
on the Recognition and Enforcement of Foreign Arbitral Awards. In
essence, international law principles and mechanisms are beginning
to find their way into Mexico's legal arena to gradually influence
and "internationalize" its legal regime on foreign investment,
a most welcome development.
|
| |
| In
the area of international trade, Mexico's accomplishments are most
impressive. As expected, NAFTA continues to play a pivotal role in
inducing business, attracting investments and fostering international
trade. The agreement created the second largest free trade area not
only in this hemisphere but on a global scale, affecting the lives
of almost 400 million people, and generating a third of the world's
GNP, estimated in $9.5 trillion dollars. Today, Mexico is the second
largest U.S. trading partner - after having displaced Japan a couple
of years ago- thus becoming the second largest U.S. export market.
In round figures, between 1993 and 1999 the bilateral trade between
Mexico and the United States increased 150 percent. |
| |
| According
to the WTO, Mexico achieved the largest increase in commercial growth
between 1990-1998, 203 percent, followed by the People's Republic
of China (180%); Hong Kong (116.8 percent); Brazil (108.3 percent);
Singapore (86 percent) and the United States (78.4 percent). Moreover,
the WTO reports that in 1998 Mexico was the seventh largest trading
nation in the world with $247 billion dollars (bd) in exports; after
the United States ($1,626); the EU ($1,615); Japan ($669); Canada
($420); Hong Kong ($382); and the People's Republic of China ($325),
in descending order. |
| |
| Direct
foreign investment continues to flow to Mexico. According to the latest
report made public on June 30, 2000 by SECOFI's National Commission
of Foreign Investment, that country received a total of $77.92 billion
between 1994 and 2000, including $6.6 during the first six months
of 2000. By economic sectors, the manufacturing industry received
$38.7 billion (60.8%); commerce $7.64 (12.0%); financial activities
$7.63 (12.0%); transportation and communications $3.27 (5.1%); the
extraction industry $5.3 (0.8%); agriculture, fisheries and livestock
$0.181 (0.3%); electricity and water $0.239 (0.4%), and other services
$4.9 (7.7%). Mexico is the third largest receiver of direct foreign
investment among all the developing countries, only surpassed by the
People's Republic of China and Brazil. |
| |
| By
country of origin, according to SECOFI, in the period of 1994-2000
(June 30), North America accumulated a total of $5.37 billion (75.4%),
divided between the United States with $5.1 (72.6%) and Canada with
$1.92 (2.8%). The European Union with $1.26 (17.8%), including the
Netherlands with $911.7 million (12.8%); the UK with $87.8 million
(1.2%); Finland with $58.9 million (0.8%); France with $58.4 million
(0.8%); and Germany with $48.4 million (0.7%), as the largest EU individual
investors. Among a group of seventeen "Selected countries,"
Japan invested $315.1 million (4.45); Switzerland $44.2 million (0.6%);
Singapore $36.8 million (0.5%); the Republic of Korea $25.3 million
(0.4%); and Cayman Islands $17.8 million (0.2%), as prominent investors. |
| |
| Volume
Four is formed by these three chapters: Chapter 1 describes and analyzes
Mexico's Free Trade Agreement with the European Union. This is the
very first work that appears in print on this topic. Lic. Fernando
de Mateo, SECOFI's leading specialist and negotiator of the FTA contributed
this valuable work, assisted by ..............................., who
serves as .................., also at SECOFI. Chapter 2 offers a comprehensive
discussion of The Mexican Model of the International Investment and
Protection Agreement, authored by Lic. Carlos García Fernández,
the legal architect and main negotiator of these innovative international
instruments and SECOFI's Director of Foreign Investments. Chapter
3, written by Dr. Luz María de la Mora, SECOFI's representative
at the Mexican Embassy in Washington, D.C., contains Mexico's Appraisal
of NAFTA; Its Progress, Problems and Potential. |
| |
| Volume
Four includes, as Appendix One, the official English text of Mexico's
Free Trade Agreement with the European Union; Appendix Two, the Interim
Agreement on Trade and Trade-Related Matters between Mexico and the
European Union, as well as the texts of the Final Act, Joint Declaration
and Unilateral Declarations; and, Appendix Three, the Model Mexican
Bilateral Agreement on the Promotion and Reciprocal Protection of
Investments. |
| |
| The
Editor and General Coordinator of Volume Four of this Mexican Law
Treatise is most honored by the Introduction to this volume, written
by Dr. Herminio Blanco Mendoza, Mexico's Secretariat of Commerce and
Industrial Development (SECOFI). The Editor would also like to express
his profound gratitude to the contributors to this volume who, without
a doubt, are Mexico's leading specialists in the legal areas discussed
in their respective and valuable works. Special thanks are also extended
to his Research Assistants: Gustavo Enrique Bravo (Class of 2001),
Valisa Anne Carney (Class of 2001), Lara Anthinea Clinton (Class of
2001), Laurie Lee De Armand (Class of 2000), Carlos Guzman (Class
of 2001), Gregory James Matus (Class of 2000), David Stanton Moynihan
(Class of 2000), Angela Teresa Mullings (Class of 2001), Martin Ramey
(Class of 2002), and Sarah Schaffer Talbot (Class of 2001) all of
them University of San Diego School of Law students who revised, supplemented
and edited the chapters, appendices and the English translations.
My sincere personal thanks are also given to Ms. Magali Garcia Bisogno,
Law faculty Administrative Assistant, who so diligently provided her
outstanding computer skills and efficiently assisted throughout the
preparation and publication of this volume. |
| |
| I
would also like to express my deep gratitude to Professor Daniel B.
Rodriguez, Dean of the University of San Diego School of Law, and
to the University of San Diego at large, for their most generous financial
and administrative support during the research and preparation of
this book. Volume Four would have not been possible without their
support and encouragement. |
| |
| As
always, all my love and deep gratitude go to Lynda Grace, my enlightened
teacher, dear friend and sweet companion of almost thirty three years,
and to our children Alex, Lisa and Cathy, for their wonderful and
generous support. |
| |
|
|
Author
& General Coordinator:
JORGE A. VARGAS
Professor of Law,
University of San Diego School of Law
Published by ©West
Group (1998)
To Purchase this book
Call (in US)1-800 -344-5009
In Mexico 011-800-998-2266
Special Package Price: $410 US Dollars
Special Package Includes Volumes 1, 2, 3 & 4
|
|
|
| |
|
|
| |
|
|
|
