The WTO is concerned about the investment climate in Mexico

Concerns were expressed related to the growing legal uncertainty regarding investment, and regarding some measures adopted, in particular in the energy sector”

Clare Kelly, New Zealand Representative to the WTO

Members of the World Trade Organization (WTO) raised concerns about energy policies as part of their “observations” presented in the Review of Mexico’s Trade Policies, a five-year evaluation carried out by that multilateral organization.

According to New Zealand Ambassador Clare Kelly, who chaired the review meeting, WTO members took note of the Mexican representative’s remarks on the importance of Foreign Direct Investment (FDI) for the Mexican economy and the commitment to an open, stable and rules-based FDI regime.

“However, they expressed their concern about the deterioration of the investment climate. Concerns were raised regarding the growing legal uncertainty regarding investment, and regarding some measures taken, particularly in the energy sector,” said Kelly.

Members urged Mexico to apply its laws transparently so as not to undermine confidence in its business environment, and to continue liberalizing the FDI regime.

They also stressed that improving the legal and administrative environment could further unlock business potential and increase the competitiveness of the Mexican economy.

Members noted that Mexico had undertaken extensive structural reforms in the last five years, covering several sectors, such as energy, financial services and telecommunications.

“During the course of this review, several members raised concerns about changes in the investment environment, particularly in the energy sector, which in their view limited competition. In general, the members urged Mexico to further open its market to foreign investment, particularly in the area of ​​services”, said Kelly.

She disseminated the observations in a general way, without specifying the comments by each member of the WTO. She reported, however, that the United States asked Mexico to address “international” concerns about its new energy law and its approach to approving agricultural biotechnology.

Praise legal change

At the same time, the review commended Mexico for having introduced important changes to its IPR legislation, which have improved protection and transparency, and invited it to further strengthen IPR enforcement.

Regarding sectoral policies, members noted the objective of Mexico’s agricultural policy to ensure food security through increased productivity and the application of sustainable environmental practices.

Kelly said that they specifically referred to the fact that tariffs on agricultural products are substantially higher than those on non-agricultural products, as well as the various support programs, their scope and effectiveness.

Mexican merchandise trade continues to be dominated by manufactured products, which account for more than 85% of merchandise trade.

As in the last review, members noted that Mexico remains highly dependent on a single market, and again advised Mexico to diversify its markets using its large number of preferential agreements.

Finally, members welcomed Mexico’s active role in the WTO and highlighted the importance it attaches to a well-functioning rules-based international trading system.

They highlighted that Mexico’s commitment to advancing the WTO is evident in its active contribution to all aspects of its work, for example, through participation in the Joint Declaration Initiatives on National Regulation of Services, Electronic Commerce and Investment Facilitation, as well as in the Structured Debates on Trade and Environmental Sustainability.

roberto.morales@eleconomista.mx