Historicity of Conventions

Trade has increased, more and more, to the extent to which countries
and agents are entering in a growing interdependence. Historically, trade
between nations, it has been given because of the need to place the surplus of
goods, services and hybrid, which a region has, in exchange for those which are
lacking.
The economic depression of the early 1870s ended the rapidly
expanding network bilateral trade agreements that had been formed in Europe,
just as the "Great Depression" of early thirties contributed to the creation of
defensive trade blocks and facing each other in the interwar period.

Between the First and Second World War, international trade grew to a
lesser extent to the production. The major industrialized countries increased
tariffs, quantitative restrictions and introduced exchange controls and multiplied
bilateral countertrade agreements.

The Bretton Woods Conference of 1944 the IMF emerged (IMF) and
World Bank (WB) and laid the foundations for the creation of an organization that
strictly regulate the matter trade, in terms of exchange of goods and products, It
would be called "World Trade Organization" (WTO), and which would oversee
and implement the provisions of an agreement international regulations.
In 1946 the United Nations Economic and Social Council convenes an
International Conference on Trade and Employment. Agreements Conference try
to settle in the Havana Charter for an International Trade Organization 106
articles and 16 annexes. On the one hand, the Charter seeks to achieve full
employment and the other foster international trade. To achieve the above
mentioned four means:
Economic development and reconstruction.
Access to all countries on an equal footing, markets, and sources of supply
and the means of production.
Reduction of barriers to trade.
Consultation and cooperation within the International Organization Trade.
Parallel to the Charter, in 1947 it took place the negotiation multilateral
tariff in order to show what they advance tariff negotiations could be provided by
the Charter. In seven months, 23 countries reduced their tariffs on an exchange
volume which it accounted for half of international trade. Therefore, these
countries decide to enter into force of the Charter before the conference ended.
This part of the Charter takes the name of General Agreement on Tariffs
and Trade (GATT), is signed by 23 countries, on October 30th, 1947 and entered
into force on January 1st, 1948 provisionally until December 31st, 1994.
Failing the Havana Charter and the consequent institution, OIC, 2 GATT
(General Agreement on Tariffs and Trade) emerges as the only instrument for
regulating world trade, which pragmatic philosophy is inclined to encourage free
exchanges of obstacles and obstacles. Privileging rates or tariffs are the only
viable for industrial protection. Under these parameters, the GATT began its
activities in 1948 and encloses within it to 23 members, of which highlight United
States North America, Japan and the European Community together with Cuba,
Chile, Uruguay, Australia, India and Yugoslavia.
GATT Rounds:
1. Round in Geneva (April 1947): 23 countries. It puts into effect the GATT
2. Annecy Round (1949): 13 countries.
3. Torquay Round (1951): 38 countries.
4. Round of Geneva (1956): 26 countries. Tariff reduction. The strategy is
set for future policies regarding GATT developing countries, improving its
position as participants of the treaty.
5. Dillon Round (1962): 26 countries. Tariff reduction.
6. Kennedy Round (1967): 62 countries. Tariff reduction. They first gave a
general reduction in tariffs instead of specifying product by product. Anti-
dumping agreement (in the United States was rejected by Congress).
7. Tokyo Round (1973-1979): 102 countries. Reduction of non-tariff
barriers. It also reduced tariffs on manufactured goods. Improvement and
extension of the GATT system.
8. Uruguay Round (1986-1993): 123 countries. WTO was created to replace
GATT. Reduction of tariffs and export subsidies, reduction of import limits
and quotas over the next 20 years, according to strengthen the protection
of intellectual property, international trade law extending the services and
liberalization of the foreign investment sector. There were made changes
to the dispute settlement mechanism of GATT.
 9. Doha: Great negotiation undertaken to free up world trade. Its aim is to
complement an issue that had been pending large previous cycle
(Uruguay Round).

Most of the current work comes from WTO negotiations in the period
1986-1994 - the so-called Uruguay Round - and earlier negotiations under the
General Agreement on Tariffs and Trade (GATT). The WTO is currently the
host to new negotiations under the Doha Agenda for Development, launched
in 2001.
Where countries have faced trade barriers and wanted them lowered, the
negotiations have helped to liberalize trade. But the WTO is not just about
liberalizing trade, and in some circumstances its rules support maintaining
trade barriers: for example, to protect consumers or prevent the spread of
disease.

In the historical development of Mexico, foreign investment Direct has

always been: in the colonial era in the nineteenth century and controlled the
priority sectors of the national economy. British investments, for example, they
were earmarked for the purchase of government securities and the exploitation
of natural resources, especially precious metals. At the end of Porfirio Daz
excelled in the country about 170 corporations, therefore their principal amount
and its weight within the sector activity in which they operated. After armed
revolution, State directed its efforts towards recovery of those sectors. This
strategy will be phased out foreign enclaves in agriculture, infrastructure
(railways), oil, banking, electric power and eventually mining.

Customs and habits while doing business

Even when two or more countries, has two or more similarities, there are
also stark contrasts, that are accentuated when doing business and they have to
do mainly with poor separation between professional and personal, and different
conceptions of time between them.
Put aside your prejudices and not compare haggling in a market with a
business negotiations. However , keep this in mind because, where the price of
things depends largely on the personal chemistry between buyer and seller , in
some countries reach an agreement depends on both personal factors as purely
commercial chemical. And to do so, as long as it takes patience.
The same applies to the process of decision making. It is not just that
these are always taken at the highest level, which also involves time and
patience, but what is said at a meeting in front of others may be revoked or
qualified after privately.
To do business, we must first know each other well and to do nothing as
a celebration around the table in a good restaurant or in a private house. Do not
be surprised that they do not talk at all about business and not have the
impression that you have lost the time: it is to meet and see if we can reach
agreement.
Personal chemistry is something you have or what you are lacking, but
one can certainly help or cause arising never appears.
Values permeate all aspects of life in the country and, of course, the
world of business and trade relations with the outside. Also very directly affect
key aspects of trade negotiations, for example, business decision making and
business, very hierarchical and almost always by consensus, in which company
officials met more a labor of coordination between affected departments own
decision making. The process, though slow, guarantees a smooth
implementation.

Foreign Direct Investment in Mexico

Foreign Direct Investment (FDI) is the placement of long-term capital in

some foreign country, for the creation of agricultural, industrial and service
companies, in order to internationalize. Foreign direct investments represent an
extension of the industrial or commercial capital, how to penetrate independently
(TNCs); partnering with private or public capital.
FDI aims to create a lasting interest with economic and long-term business
purposes, by a foreign investor in the host country. It is an important catalyst for
development, as it has the potential to generate employment, increase savings
and foreign exchange earnings, stimulate competition, and encourage the
transfer of new technologies and boost exports. All this having a positive effect
on the productive and competitive environment of a country.
 Agreements for the Promotion and Reciprocal Protection of Investments
(IPRPAs) are international treaties on direct investment, on a reciprocal basis,
that are designed for the promotion and legal protection of productive capital
flows. They are recognized as instruments of confidence for foreign investors,
since they reduce the perceived risks of commercial type, send a positive signal
and generally contribute to a more favorable investment climate.

Why to invest in Mexico?

Due to its geographical position, Mexico is a bridge between North

America (United States and Canada) and South America.
Mexico has a wide variety of natural resources, enabling the development
of all industries at competitive prices.
Mexico is very open to foreign direct investment country.
The cost of labor is not high and, in general, there is skilled labor.
There have been positive structural reforms during the current
administration.
It is the eighth largest tourist destination in the world.

Mexico FTAs with other countries

Investment chapters in FTAs complement the provisions on trade, given

the close relationship between investment and trade, because: a third of
international trade in goods and services is between related companies; and
investment contributes to increased exports of developing countries through
export activities of multinational enterprises.

Mexico has a network of ten free trade agreements with 45 countries,

thirty agreements for the promotion and reciprocal protection of investments and
nine agreements of limited scope (Economic Complementation Agreements and
Partial Scope Agreements) under the Latin American Integration Association
(ALADI). (See Exhibit 1 for Mexico FTAs)
Exhibit 1
MEXICO FREE TRADE AGREEMENTS
 AGREEMENT COUNTRIES PUBLICATION ENTRY INTO
IN DOF FORCE
NAFTA United States of December 20th, January 1st, 1994
America and 1993
Canada
FTA G3 Colombia January 9th, 1995 January 1st, 1995.
Colombia
FTA Costa Rica Costa Rica January 10th, January 1st,1995
1995
FTA - Nicaragua Nicaragua July 1st, 1998 July 1st, 1998
FTA - Chile Chile July 28th,1999 August 1st,1999
FTA EU-M European Union June 26th, 2000 July 1st, 2000
(TLCUEM)
FTA - Israel Israel June 28th, 2000 July 1st, 2000
FTA - TN Guatemala, March 14th, 2001 El Salvador :
Honduras and El March 15th, 2001
Salvador Guatemala and
Honduras: June
1st, 2001
FTA - EFTA Iceland, Norway, June 29th, 2001 July 1st, 2001
Liechtenstein and
Switzerland
FTA - Uruguay Uruguay July 14th, 2004 July 15th, 2004
EPA - Japan Japan March 31st, 2005 April 1st ,2005
FTA - Peru Peru February 1st, February 1st,
2012 2012
FTA - Panama Panama April 20th, 2015 July 1st, 2015

In addition , Mexico actively participates in multilateral and regional

organizations and forums such as the World Trade Organization (WTO), the Asia
- Pacific Mechanism (APEC) Economic Cooperation, the Organization for
Economic Cooperation and Development (OECD) and the ALADI .

Investors Countries in Mexico in recent years

Thanks to its various free trade agreements with other countries, Mexico
has allowed to significantly increase its share of business in the world in the last
20 years.
According to data from the Ministry of Economy of Mexico, we analyze
the changes in FDI flows in the years. (Exhibit 2)
Exhibit 2

COMPOSITION OF FDI COMPOSITION OF FDI

FLOWS BY COUNTRY OF FLOWS BY COUNTRY OF
ORIGIN, 2013 ORIGIN, 2014
(PERCENTAGE SHARE) (PERCENTAGE SHARE)
Belgium. United States Netherlands United States Spain Canada
Canada Germany Others Germany Netherlands Japan
Others

14%
4%
30%
22%
29%
10%
6%
12%
7% 18%
30%
11%
7%

As you can see in Exhibit 2, in 2013, Belgium was an important investor

in our country with 30% of inversions. Between January 1999 and September
2013 the accumulated amount was $ 14,723.5 million. This figure highlights that
only in the second quarter of 2013 entered the country 13,256.8, which is
attributed to the purchase of AB InBev of Grupo Modelo. (See Exhibit 3)
In 2014, FDI came from the United States, 6516.4 million dollars (28.9 %); Spain,
4092.9 million dollars (18.1 %); Canada, 2421.4 (10.7 %); Germany, 1546.2
million dollars (6.9 %) Netherlands, 1489.6 million dollars (6.6 %); and Japan,
1433.7 million dollars (6.4 %). Other countries contributed 79 5068.2 MDD (22.4
%).

Exhibit 3
 Percentage share of Mexico on receiving
global FDI flows 2008-2013
2008 2009 2010 2011 2012 2013

3
, 2.6
2.5

2
, 1.6 , 1.6
, 1.4 , 1.4
1.5 , 1.3

0.5

The amount of registered FDI in 2014, amounted to 22,568.4 million, an

amount 35.9 % lower than the preliminary figure for the same period of 2013 (
35,188.4 million dollars ) .
The number was affected by two atypical transactions: the first is a
decrease of 5,496 million dollars FDI due to the withdrawal of AT&T shareholder
America Movil; the second is an inward FDI by 2,051 million dollars, from the sale
of shares in the Mexican company to a foreign company Comex. These
transactions have an impact on FDI breakdowns by type of investment, country,
economic sector, and by state of destination as described herein.

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