INTERNATIONAL COOPERATION

ON COMPETITION POLICY:

MEXICO´S EXPERIENCE

Presentation by Mr. Martín Moguel Gloria

May, 2002

I Introduction

II Competition Policy

III Legal Framework

IV Pre-Merger Review

V International Cooperation

VI Conclusions

I Introduction

• Post-War Industrialization

• Import Substitution Model

• 1980´s Towards a free market economy

• 1990´s New economic model:

»Privatization

»Deregulation

»Free trade and investment regimes

»Market forces

II The need for a competition policy

• Proliferation of Monopolies

• Economic Democracy

• Competition Culture

• New Legal Framework

III Legal Framework

• Article 28 of the Mexican Constitution

• Federal Law on Economic Competition

December 1992-June 1993

• Creates the Federal Competition

Commission

• Prohibition of monopolistic practices

Mandatory Pre-Merger Review

IV Pre-Merger Review

• From 1993-2001

1300 Notifications

95% Approved

4% Conditioned

1% Prohibited

• About 80% related to international

transactions

Pre-Merger Review

• Advanced notification is required for transactions to be concluded

• Applicable Thresholds

• No notification is required if foreign entities do not acquire control of a Mexican entity

V. International Cooperation• Treaties:

NAFTA (Chapter 15) Mexico- USA-Canada

G-3 (Chapter 16) Mexico- Colombia-Venezuela

EUMFTA (Chapter 39 y annex 15) Mexico-

European Community

Free Trade Agreements: Bolivia. Chile. Costa

Rica. Israel. Nicaragua. Salvador-Honduras-

Guatemala

International Cooperation

• Objectives:

Measures to proscribe

anticompetitive practices

Cooperation and Coordination for competition law enforcement:

»Notification

»Consultation

»Exchange of information

»Technical assistance

Multilateral Organizations

• Organization for Economic Co-operation and Development (OECD)

• World Trade Organization (WTO)

• United Nations Conference on Trade and Development (UNCTAD)

• Asia-Pacific Economic Cooperation (APEC)

• Free Trade Area of the Americas (ALCA)

International Cooperation

International Cooperation

• Objectives:

Promotion of competition policy

Multilateral rules

International Cooperation

• International Competition NetworkJoint initiative of 14 competition agenciesAnnual Conferences

• Objetives:Non-binding general guidelines or “best practice”

recommendations

• Issues:Mergers notifications in a multi-jurisdiction contextAdvocacy and enforcement policy

• Private Participation

VI Conclusions

• Mexico´s Competition Policy and Legislation

• Mixed Results: Positive Balance

• Constant ChallengesInter-agency FeudsNatural Business ResistanceJudicial Review

• Active Participation in International Fora:Bilateral Cooperation AgreementsPromotion of Multilateral Rules