Transcript ITA-Plus

“ITA - Plus
Program”
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Goals
The “ITA-Plus” Program was published on
September 4th, 2002 in the Diario Oficial
de la Federación (DOF), as the Mexico’s
reaction to the entry in force of the ITA
(“Information Technology Agreement”),
which is an agreement signed under the
WTO among 56 countries that considers
the tariff elimination on diverse goods of
computer and telecommunications sectors,
including their subassemblies.
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Goals
As in the “ITA”, Mexico’s “ITA-Plus”:
• Completely eliminates tariffs by January, 2004
on goods from three sectors: computer
(computers, monitors, printers, scanners),
telecommunications
(modems,
cellular
phones, carrier - current line systems and
telephone centers, broadcasting equipment for
T.V. and radio), and other electronic devices
(calculators, photocopiers, register machines)
to import into Mexico from any country.
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Goals
• This liberalization allows electronic goods
traders to offer larger variety, higher quality
and cheaper products, providing a wide
range of benefits from a restaurant to a
small grocery stores, from banks to
wholesale stores, as well as all modern
manufacturing process and all the office
services, consequently promoting benefits
in productivity and competitiveness in the
whole economy.
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Goals
Additional goals of the ITA-Plus are:
• To promote Mexico’s competitiveness in the
global scenery, not exclusively in the
telecommunications and computer subsectors,
but in all electronics, including consumer
electronics (TVs, stereos, CDs, video
equipments).
• To keep the tariff consistency along the
productive chains, in order to additionally
promote the production of subassemblies and
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components in Mexico.
Advantages
over the ITA
The advantages of the “ITA-Plus” over the ITA are:
1) The ITA-Plus considers backward linkages in
productive chains, by including additionally the
raw materials (steel, plastics) required by the
components producers.
2) It benefits manufacturing in the consumer
electronics subsector, which is now excluded
from the ITA, through the liberalization of the
inputs required in the whole chain of
production, including raw materials.
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Advantages
over the ITA
INPUTS
FINAL GOODS
CONSUMER
ELECTRONICS
ITA
Subassemblies
only
Computer /
Telecommunications
Not
Included
ITA - PLUS
Subassemblies,
Computer /
Telecommunications
Consumer
Electronics
Raw
Materials
Subassemblies and
Components
Subassemblies,
Components and
Raw Materials
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Characteristics
of the ITA-Plus
The “ITA-Plus considers two packages:
1) Tariff elimination for all the imports of
parts, components and final goods in
computer and telecommunications.
2) Tariff elimination on inputs, parts and
components under the PROSEC for the
electronic sector currently in force (only
for use in manufacturing of electronic
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products).
Characteristics
of the ITA-Plus
The tariff elimination for all imports under
290 HTS codes will be applied according to
three “baskets””:
Parts and components for
BASKET 1: telecommunications, computers
(entry into force) consumer electronics and office
equipment.
BASKET 2:
Computer Final Goods.
(2003)
BASKET 3:
(2004)
Telecommunication final goods.
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Characteristics
of the ITA-Plus
• The ITA Plus considers the tariff
elimination on raw materials and inputs
from sectors such as steel, plastics and
chemicals only to be used in the
manufacturing of electronic products.
• Therefore, 278 additional HTS codes
were incorporated into the PROSEC of
the electronic sector currently in force.
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Coverage
The total of HTS Codes liberalized are almost
4,000:
Program
Prior PROSEC
Duty Free
3,309
3-5%
16
15%
Total
2
3,327
ITA-Plus* - MFN
Year 2002
207
207
Year 2003
22
22
Year 2004
61
61
ITA - PROSEC
278
2
3,877
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TOTAL
* Tariff elimination according to three “baskets”.
280
2
3,897
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Program for the Competitiveness
of the Electronics Industry
In order to further promote the
competitiveness of the electronics sector,
the Government of Mexico jointly with the
productive sector, put in place on october
9th, 2002 the “Program for the
Competitiveness of the Electronics
Industry” (PCIE).
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Program for the Competitiveness
of the Electronics Industry
The PCIE considers, among other strategies:
1) Design a competitive fiscal policy.
2) Promote a competitive tariff structure.
3) Make more efficient international transactions.
4) Develop supply chains.
5) Promote technological development in Mexico.
6) Promote the human factor.
7) Generate an adequate infrastructure.
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Conclusions
Through the “ITA-Plus”, Mexico establishes
an aggressive tariff scheme that promotes:
1) Competitiveness in the whole economy.
2)
The e-Economy
Government).
(e-Commerce,
e-
3) The demand for software, as well as for
the skilled labor needed to design and to
operate the software.
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Conclusions
4) Trade of electronic goods.
5) The local manufacturing of electronic
goods, and
6)
The
production
of
electronic
subassemblies and components in
México
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Conclusions
The “ITA-Plus” program, complemented with
the strategies undertaken under the PCIE,
constitute a fundamental factor to promote
the competitiveness of a strategic sector
with influence in the productivity of the entire
economy, while promoting the competitive
development of Mexico towards High
Technology.
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