Mexico

In 2008, Mexico and the OECD launched a project to improve the competitiveness of the Mexican economy by reforming and modifying the regulatory and institutional framework. This multi-year project will support higher levels of investment, employment and growth.

The Mexico-OECD Co-operation to Strengthen Competitiveness in Mexico is constructed around 2 pillars: competition and regulatory improvement. This resumé provides an introduction to the competition pillar.

 

The competition pillar focuses on increasing competition in product markets. The 2008 OECD Economic Survey of Mexico states that lack of competition is an important determinant of weak growth performance. Restrictions on competition are common and important. 31% of total household spending is in markets that are monopolised or suffer from limited competition while Mexican businesses face high input prices. 

 

This process identifies regulations and policies that unnecessarily restrict competition, and develops alternatives to make regulation more pro-competitive, using the framework of the Competition Assessment Toolkit.  The competition work is done in cooperation with the Mexican Federal Competition Commission (CFC) and the Ministry of Economy of Mexico.

 

KEY DOCUMENTS Angel Gurría presents the Competition Assessment Toolkit / presentación del Paquete de Evaluación de Competencia, Angel Gurría, OECD  The OECD's Competition Assessment Toolkit in Mexico, Eduardo Perez Motta, CFC  Efectos distributivos y espaciales de las empresas, Carlos Urzúa  Australia's national competition policy / Política nacional de competencia de Australia, Simon Corden, OECD Competition assessment, Sean Ennis, OECD Competencia en el crédito bancario al consumo, Eduardo Perez Motta, CFC Competencia en el mercado farmacéutico Competencia en la interconexión entre redes de telecomunicaciones Competition screening of normas, Craig Conrath, OECD Domestic airline sector in Mexico, Agustín Ros, OECD  - Airline report - working paper - presentation Regulación y competencia en el autotransporte foráneo de pasajeros

 

Achievements

Banking Reform.  In April 2009, the Senate approved pro-competitive banking reforms proposed by the CFC based on Toolkit studies of credit cards and deposit accounts. In March 2010, the Chamber of Deputies passed the final legislation.  The legislation was much more pro-competitive than earlier proposals thanks to the Toolkit project proposals.  The reforms include:

• ensuring customer mobility by establishing standards for the customer switching process
• guaranteeing competitive access to essential banking network infrastructure
• promoting competitive interchange fees by making clear the Bank of Mexico's role in setting the interchange fee
• eliminating excessive requirements for branch banking

 

Next steps

Numerous reform proposals are now ready or in the pipeline. Reports on airlines, pharmaceutical and telecom reforms are already complete. Reports are forthcoming on intercity bus transportation, retail competition/supermarkets and government standard setting.

 

Using the Competition Assessment Toolkit   The Toolkit contains a checklist that signals when there is a potential competition problem that should be investigated in more depth (along the lines of those regularly conducted by Competition Authorities). The checklist identifies potential problems if the policy, law or regulation will: Limit the number or range of suppliers, e.g. establishes a license process as an operation requirement Limit the ability of suppliers to compete, e.g. significantly raises production costs of new entrants relative to incumbents Reduce the incentive of suppliers to compete vigorously; reduce mobility of consumers between suppliers If a more in-depth investigation reveals that there is an undue restriction on competition, the Toolkit contains advice on alternatives that may offset or mitigate potential harm to competition while still achieving the policy objective of the original law/regulation.

 

Project management

The project is coordinated by the Vice-Ministry for Competitiveness and Standardisation of the Ministry of Economy of Mexico. Toolkit project proposals are developed by a technical group overseen by CFC in cooperation with the Competition Division of the OECD.

 

Documents and links

• Mexican Federal Commission for Economic Competition (CFC)
• Vice-Ministry for Competitiveness and Standardisation of the Ministry of Economy of Mexico
• Competition Assessment Toolkit
• OECD Recommendation on Competition Assessment

 

For further information, please send an email to : Comp.Toolkit@oecd.org.