Effects of NAFTA on Mining in Mexico

As in many other areas of the Mexican economy, the legal rules applicable to mining in Mexico have been changing fast. Mexico's mining sector is opening up to levels of international participation that were unforeseeable just a few years ago. Over the last several years, Mexico has made dramatic changes in its trade and investment policies. Many of these changes have their roots in the administrations of Miguel de la Madrid and perhaps even Jose Lopez Portillo. However, the current administration of President Carlos Salinas must be given credit for articulating, advancing, promulgating and implementing these changes. Just a few short years ago, few people believed Mexico would repeal so many of its restrictions on foreign investment and lower its average tariff level from something around 100% to less than 10%, where it is today. NAFTA and mining The North American Free Trade Agreement (NAFTA) is the most comprehensive international expression of Mexico's new policies. Except perhaps for the agreements establishing the European Union, NAFTA is the most detailed trade agreement ever written, consisting of about 2000 pages. The provisions of NAFTA with the greatest relevance to the mining industry include the chapters on investment and government procurement. Many mining companies may also find the temporary work provisions relevant. Finally, no discussion of NAFTA and the mining industry would be complete without some mention of the North American Agreement on Environmental Cooperation, the so-called Environmental Side Agreement.