Global Trade Alert

On 25 February 2009, the Commissions for Trade and Industrial Production and for Legislative Studies cancelled a legislative project aimed at amending the Law on Foreign Trade. The project was first introduced on 26 March 2008 by a group of Senators from the Party of Democratic Revolution (PRD) in order to clarify ambiguity about the powers of the President of the Republic to impose emergency tariff measures on imports, exports and goods transiting through Mexico.
 
Under Article 131 of the Mexican Constitution,

The Executive will be facilitated by the Congress of the Union to increase, decrease or supress export and import tariff rates issued by Congress, and to create others, in order to restrict and to prohibit the importation, exportation and the transit of products, articles and effects when deemed necessary, in order to regulate foreign trade, the economy of the country, the stability of national production, or to realize any other project for the benefit of the nation. The Executive, in notifying Congress of the fiscal accounts for the year, will submit for its approval the use that it has made of the this faculty.

 
The Law on Foreign Commerce, which was passed in 1993, fails to mention the need for the Executive to notify Congress of tariff measures adopted under Article 131 of the Constitution, or for Congress to approve adopted measures. The Senators, therefore, wished to amend the Law on Foreign Trade in order to bring it in line with the Constitution and to include an additional stipulation that the measures introduced by the Executive are of a temporary nature and that they require the approval of Congress (as provided by Article 131) to remain in force after the submission of fiscal accounts. Such an amendment, according to the Senators, would allow for Congress to control the changes made by the Executive and to introduce modifications in the form of new tariffs and non-tariff measures.
 
In reviewing the proposed amendments to Paragraph 4 of the Law on Foreign Trade, the Supreme Court of Mexico ruled that the Senators' proposal did not, in fact, conform to Article 131 of the Constitution (please see attached document). Rather, it held the opinion that the validity of measures introduced by the Executive did not depend on the approval of Congress and the requirement for notification was intended solely to ensure that information was shared between the appropriate branches of government. Furthermore, the Justices believed that allowing Congress to approve and/or modify measures introduced by the Executive would defeat the intention of the Article, which was to allow for the Executive to issue quickly and efficiently tariff changes required in light of grave monetary or financial circumstances. The requirement that such measures be approved by Congress "would distort the sense of said attributes and would render them useless."
 
After the announcement of the Supreme Court's opinion, the two Commissions issued the cited decree, revoking proposed amendments to the Law on Foreign Trade. In the opinion of the Commissions, the changes sought by the Senators who introduced the legislative project require a Constitutional amendment, rather than changes to existing statutes. As of July 2009, no new projects targeted at amending Article 131 of the Mexican Constitution have been published in the Official Gazette of the Federation.