Mexico informed that it will establish reference prices for new sectors, including sporting goods.

What are reference prices? These prices are used to facilitate the comparison of product values in international trade. They are applied, for example, in anti-dumping measures, subsidies or agricultural agreements to determine whether trade distortion has occurred.

Reference prices in Mexico

At a press conference at the National Palace, the Secretary of Economy, Marcelo Ebrard, informed that reference prices will be established for new products, such as sporting goods, paper, cardboard and goods from other activities.

Already the Mexican government uses reference prices in products such as cars, textiles, footwear and games, among others.

“Reference prices are going to be adjusted to avoid tax evasion and of course protect businesses and employment in Mexico,” Ebrard said.

Hypothetical example

Mexico detected that some imports of sports balls were arriving at very low prices. These products came from a specific country. As a result, the authorities initiated an anti-dumping investigation.

During the process, a reference price was set at US$15.00 per ball. This value was based on average international and exporting country prices. However, the balls were entering Mexico at only US$9. This was evidence of dumping.

In response, Mexico can apply an anti-dumping duty. This duty is imposed on products sold below the reference price.

This measure is legal under WTO rules. It is only applied if it is demonstrated that there is injury to the domestic industry.

According to the WTO, dumping occurs when a company exports at a price lower than that of its own market. The Anti-Dumping Agreement does not punish companies. Rather, it regulates how governments can react.

In addition, there are already established dates for updating reference prices:

• Furniture and lighting fixtures: May 12.
• Toys, games and guitars: May 26.
• Sporting goods: June 16.
• Paper and cardboard: July 16.

These actions seek to curb unfair competition and protect Mexican industry.