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PROSEC: tariff advantages in Mexico

The most common preferential tariff rates granted under PROSEC in 2021 were 0 and 5%, which applied to 76.2% and 19.1% of beneficiary tariff lines, respectively, according to World Trade Organization (WTO) data.

Through PROSEC (Sector Promotion Programs), inputs and machinery needed to produce specific goods are allowed to be imported at a preferential tariff, regardless of whether the final product is consumed in the domestic market or exported.

Each PROSEC lists the inputs with their corresponding preferential tariff, by tariff line.

Likewise, the PROSEC that contain the highest number of inputs with preferential tariffs are those that benefit the main exporting sectors, i.e. the automotive and auto parts, electronics and electrical industries.

Mexico continues to implement PROSEC to promote competitiveness.

PROSEC

Through these programs, which have not changed substantially since their inception, Mexico promotes the export sector.

The only change in the last five years, in terms of the sectors covered by PROSEC, was the incorporation of a program for the fertilizer sector.

However, the PROSEC benefit for this sector is limited, since it only includes two tariff lines.

The total number of tariff lines covered by PROSEC as of May 2021 was 2,487.

Other instruments will need to be updated in order to maintain current regulations, according to the Ministry of Economy.

Among the instruments to be updated are the IMMEX Decree, the PROSEC Decree, the Border Decree, the Chetumal Decree, the Decree for the competitiveness of the automotive terminal industry, the Decree for used cars and various tariff-quotas that Mexico has.

The Rules Agreement, which was in force, had 135 rules and had been subject to 45 modifications, so it was necessary to issue a publication that included all the updates that have been carried out for the last 10 years.

In order to provide legal certainty to both individuals and other authorities, this publication also promoted the use of technological systems in procedures, formalities and services to make public administration more efficient, facilitate compliance with obligations by individuals and reduce the transaction costs they incur.

By way of example, the procedures related to the IMMEX and PROSEC programs were simplified, some procedures were changed from face-to-face to electronic means and procedures were defined to provide legal certainty to individuals.

 

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