oecd-mexico process for strengthening economic competition ... · regulation workshop •legal...

OECD-Mexico

Process for Strengthening Economic

Competition and Regulatory Improvement for

Competitiveness

Jose Antonio Torre Medina

Undersecretary for Competitiveness and Business Regulations

Ministry of Economy, Mexico

November 4, 2011

5th Session of the Regulatory Policy Committee

OECD Conference Centre, Paris

Improve

business

environment

Regulation

simplification

and

modernization

Effective

competition

policies

Cooperation to strengthen competitiveness

2

• Coordination and

cooperation between

Mexico’s Ministry of

Economy and the OECD

based in two pillars:

Regulation and

Competition

• OECD works with national

institutions to provide

recommendations,

strategic advice and

capacity building based

on international best

practices.

Objective: to improve Mexico’s competitiveness through the

reform and modification of the regulatory and institutional

framework.

2007 2008 2009 2010 2011 2012

First Memorandum of Understanding

OECD-Mexico’s Ministry of Economy.

•General cost analysis of

business procedures

•First design of business start-

up one-stop-shop

•Review of CFC’s previous

recommendations, technical

cooperation, capacity

building.

•FDI law review

(digital TV &

radio, public

passengers

transport,

telephony, public

procurement)

Renewal of the MoU.

•Support for the biannual PMR.

• Implementation of multi-level Toolkit

(4 states in 2011).

•Launch of

tuempresa.gob.mx

(business start-up

one-stop-shop)

•Design of zero-

based regulatory

reform. (10 best

practices)

•Standards and

technical

regulations

system review.

•Regulatory

Reform Review

2012.

• tuempresa.gob.mx

2.0.

•Risk Based

Regulation

Workshop

•Legal reform

business start-up.

•9 state-level

regulatory agendas.

•Multi-level toolkit.

•Fiscal simplification

(5 measures)

•Electronic,

agricultural and

medical products

simplification. (12

measures)

•Standards and

technical

regulations.

•Pharmaceutical

products.

•Regressive

effects of

monopolies.

•Credit Institutions

Law Reform.

•Reform of the

Federal Law of

Economic

Competition.

Telecom

interconnection

pricing.

•Pro-competitive

assignation of slots

in Mexico City

Airport.

•Design and recommendation of Tariff simplification program

Regulation projects:

Competition projects:

•Fighting Bid rigging OECD

guidelines (IMSS, CFE, Edomex)

Timeline: reaching 5 years of fruitful work

I. Regulation: Mexico’s Regulatory Reform Strategy

• Build a regulatory framework centered in the

citizen, to increase competitiveness and

promote development.

i. Liberate potential economic value in the

economy eliminating unnecessary

transaction costs and market distortions

generated by the regulation.

ii. Use an approach of economic and business

processes to simplify the normative

framework and regulation formalities.

iii. Facilitate interactions between the citizen

and state’s services by improving certainty,

quality and transparency.

Objective and working premises Action lines

1. Simplification of regulations

with high economic impact:

• Tuempresa.gob.mx

(business start-up one-

stop-shop)

• Zero-based regulation.

• Regulatory Improvement

Program

2. Reduction and simplification

of internal regulations in the

Public Administration.

3. Multi level regulatory

improvement.

4

Mexico’s cooperation with the OECD Regulatory Policy Division has helped

our government to have a clear strategy and implement effective actions.

I. Regulation: main deliverables and key results

tuempresa.gob.mx

(business start-up

one-stop-shop)

Since August 2009

Key results:

Legal Reform: facilitation

of business start-ups

and electronic file.

October 2011

• Launch of tuempresa.gob.mx one-stop-shop.

• Reduction of 65% of average business start-up costs according

to OECD standard cost model.

• Elimination of requirement of minimum capital.

• Consolidation of procedures in the Ministry of Economy.

• Creation of the business electronic file. (inter-operability system)

Zero-based regulation

2009-2010

• Regulatory simplification yield estimated savings for 2.8 billion

USD (5 tax simplification measures and 12 simplification measures

for electronic, agricultural and medical products )

• New RIA improved quality and process efficiency of new

regulations .

• Reduction and simplification of internal regulations (Ministry of

Public Administration):

− >16,000 internal regulations eliminated.

− 9 handbooks replaced more than 7,000 rules.

Biannual Regulatory

Improvement Program

2011-2012

• Raise productivity and accelerate economic growth. Potential to

free resources equivalent to 1.2% of GDP using OECD standard

cost model.

I. Regulation: main deliverables and key results

Multi-level regulatory

improvement. 2009-2012

Key results:

• Elaboration of 9 Multi-level Regulatory

Improvement agendas2: total of 818 specific

recommendations. (2009)

• Publication of the Multi-level Regulatory

Improvement Toolkit: (2010-2011)

− Help states and municipalities to work on regulatory

simplification.

− COFEMER and OECD in the process of monitoring

and facilitating implementation in 4 specific states.

• Regulatory Improvement of Citizen Councils:

(2011-2012)

− Capacity building for local citizen and business

councils to oversee and promote regulatory reform.

− Plurality, transparency and alignment with the key

areas of work.

• Support of the study Doing Business at

Subnational level (2011-2012, Cofemer)

1/ Baja California, Chiapas, Colima, Jalisco, Michoacán, Puebla, Sinaloa, Tabasco and Tlaxcala.

I. Competition: promotion of efficient markets

7

• Enabling a regulatory and institutional framework to promote competition and

market efficiency.

• Mexico’s cooperation with the OECD Competition Division has helped our

government to have a stronger authority and improve technical capabilities.

i. Discourage infringement of the law, through sanctions

linked to potential damages caused to consumers.

(economic and criminal)

ii. Enable specialized courts in economic and antitrust

matters.

iii. Increase transparency within competition institutions.

Pro-competition culture

promoted by consumers,

businesses and

institutions.

Improved legal and

institutional efficiency and

effectiveness.

i. Promote a consumer-oriented culture.

ii. Offer mechanisms for self-diagnosis in legal topics.

Improve the regulatory

framework with a sectorial

approach.

i. Implementation of high impact recommendations in

horizontal sectors (telecom, financial, transport, energy)

ii. Detect and correct restrictions and barriers to entry in

the regulation.

II. Competition: main deliverables and key results

Key results:

• Standards and technical regulations: (2009)

− Competition issues detected in 15% of a sample of 120 standards.

• Pharmaceutical products (2009):

− Recommendations to promote generic medicines yield potential

yearly savings for consumers of 2.8 US million.

• Regressive effects of monopolies. (2009)

− Study that shows how persistent monopolistic practices affect more

aggressively low income citizens.

Sectorial projects. 2009

Reform of the Federal Law

of Economic Competition. 2010

• More effective antitrust policy.

• Alignment with best international practices.

• Better tools for the competition authority.

• More transparency and accountability.


Key results:

Sectorial studies

with horizontal

impact. 2008-2013

• Review of technical work of the CFC: capacity building. (2007)

• Credit Institutions Law Reform: (2010)

− Improved access to essential financial infrastructure (credit bureau, switches)

− Facilitate financial products choice by consumers.

• Tariff simplification program: (2008-2013)

− Five-year program to eliminate more than 10,000 HTS numbers related with

inputs and capital goods.

− The average tariff is reduced from 9.6% in 2008 to 4.8 in 2011 and 4.3% in 2010.

• Telecom interconnection pricing recommendations: (2010)

− Potential 10 USD billion yearly savings for consumers.

• Pro-competitive assignation of slots in Mexico City Airport: (2011)

− Potential yearly savings estimated of 1 USD Billion.

• implementation of OECD guidelines at IMSS. (social security

institute)

Fighting bid

rigging in public

procurement. 2011

Projects for 2012

Regulation

1. Monitoring and implementation

support for the Regulatory

Improvement Program 2011-2012.

2. Support in the design and launch of

tuempresa.gob.mx 2.0.

3. Institutional Review of:

• Standards and technical

regulations system.

• Regulatory Improvement

Oversight Body.

4. Continuous implementation of the

multi-level regulatory improvement

Toolkit (inclusion of more states).

5. 2nd Risk based regulation workshop.

5. Mexico’s Regulatory Reform Review

2012.

• The following year the cooperation is focused in the consolidation of

successful projects and deal with key remaining challenges.

Competition

1. Fighting bid rigging in public

procurement: implementation of

OECD guidelines:

a. IMSS (social security institute).

b. CFE (electricity state-owned

enterprise)

c. States (OECD template: Estado

de México; other projects include:

Campeche, Zacatecas y Guerrero)

2. Analysis of competition restrictions in

the Law of Foreign Direct Investment:

a. Digital TV and Radio

b. Telephony (other than mobile)

c. Public passenger transport.

d. Public procurement.

Other key activities

• Foreign trade

• Investment

• Innovation and business development

• Sustainable Development

• Consumer protection policy

• Globalization

• Steel

The work between Mexico’s Ministry of Economy and

OECD also includes other areas:

Agenda to strengthen competitiveness

Innovation

Investment

Efficiency

Opportunities

Good jobs

Economic growth

12

Productivity Competition

• Building of a regulatory system that promotes competition

enables innovation and productivity.

OECD-Mexico

Process for Strengthening Economic

Competition and Regulatory Improvement for

Competitiveness

Jose Antonio Torre Medina

Undersecretary for Competitiveness and Business Regulations

Ministry of Economy, Mexico

November 4, 2011

5th Session of the Regulatory Policy Committee

OECD Conference Centre, Paris

I. Regulation: main deliverables and key results.

• Programa de Medición del Costo Administrativo

Empresarial en México: Informe de resultados del

costeo de tuempresa.gob.mx.

• Medición del costo administrativo utilizando la

metodología completa del Modelo de Costeo

Estándar con encuestas a empresarios.

• Recomendaciones de diseño del sistema

tuempresa y de simplificación de los trámites a

incluir.

• Medición de los ahorros en costos administrativos

generados por el portal tuempresa.gob.mx.

• Evaluación que refleja un de 65% de ahorros

generados por el portal.

• Conferencias telefónicas con servidores públicos

internacionales encargados de diseñar,

implementar, y operar sistemas similares a

tuempresa.gob.mx

• Reportes de llamadas con oficiales de Portugal,

España, y Brasil.

tuempresa.gob.mx (business start-up

one-stop-shop) Since August 2009

Main deliverables: Key results:

Legal Reform:

facilitation of

business start-ups

and electronic file. October 2011

• Launch of tuempresa.gob.mx

one-stop-shop.

• Reduction of 65% of average

business start-up costs

according to OECD standard

cost model.

• Recomendaciones de reformas legales para

facilitar la creación de negocios y simplificar los

trámites para constituir una sociedad mercantil.

• Elimination of requirement of

minimum capital.

• Consolidation of procedures

in the Ministry of Economy.

• Creation of the business

electronic file.


• Organización conjunta, contribución con oradores

internacionales y financiamiento de la conferencia de

lanzamiento del programa base cero.

• Reporte de la conferencia disponible en la página web

de la OCDE.

• 10 puntos clave de las experiencias internacionales para

revisar las regulaciones existentes.

• Resultado de conferencias telefónicas con servidores

públicos internacionales (Canadá, Italia, Corea y

Croacia) encargados de diseñar, implementar, y operar

sistemas ejercicios similares al programa “Base Cero”.

• Lista de criterios para la evaluación regulatoria y su

manual.

• Instrumento basado en mejores prácticas

internacionales que permite evaluar la calidad

regulatoria de regulaciones en aplicación, para su

eliminación o simplificación.

• Plan operacional para la segunda fase de la revisión del

acervo regulatorio.

• Utilizando la experiencia internacional de mejores

prácticas, el plan recomendó líneas de acción sobre la

organización y ejecución de la segunda etapa del

programa “Base Cero”.

• Costeo de trámites incluidos en el Registro Federal de

Trámites y Servicios.

Zero-based

regulation 2009-2010


Ministry of Economy:

• Regulatory simplification yield estimated

savings for 2.8 billion USD (5 tax

simplification measures and 12

simplification measures for electronic,

agricultural and medical products )

• Regulatory Impact Assessment improved

for higher quality of new regulations and

improved process efficiency.

Ministry of Public Administration:

• Reduction and simplification of internal

regulations in the Public Administration:

− >16,000 internal regulations

eliminated.

− 9 handbooks replaced more than 7,000

rules.

Biannual

Regulatory

Improvement

Program 2011-2012

• Tranferencia de conocimientos y desarrollo de

capacidades. • Raise productivity and accelerate economic

growth. Potential to free resources

equivalent to 1% of GDP using OECD

standard cost model.


Medidas de corto plazo para mejorar la

competitividad de las entidades federativas de

México:

• El objetivo fue dar a nueve entidades federativas una

agenda de recomendaciones puntuales, concretas,

priorizadas y viables de implementarse en el corto

plazo para mejorar los trámites de alto impacto en la

actividad empresarial. Se elaboraron un total de 818

recomendaciones.

Prácticas y Políticas Exitosas para Promover la

Mejora Regulatoria y el Emprendimiento a Nivel

Subnacional:

• El estudio identifica 34 mejores prácticas nacionales

e internacionales implementadas por gobiernos

regionales, que fortalecen la mejora regulatoria y

facilitan la actividad empresarial.

• Fue el resultado de un estudio a profundidad de las

políticas e instituciones de mejora regulatoria en Baja

California, Jalisco y Puebla, en México, Cataluña en

España, Columbia Británica en Canadá, y Piemonte

en Italia.

Guía para mejorar la calidad regulatoria de trámites

estatales y municipales e impulsar la competitividad

de México.

• La Guía recopila las 24 recomendaciones de más alto

impacto para mejorar los procesos de trámites de

apertura de empresas, permiso de construcción,

registro de propiedad, licitaciones, así como para

mejorar la transparencia regulatoria y la eficiencia en

la gestión de los trámites. Las 24 recomendaciones

son una selección de las 818 recomendaciones de

Medidas de corto plazo – las cuales no son públicas –

y de las 34 mejores acciones de Prácticas y políticas

exitosas.

Multi-level

regulatory

improvement. 2009-2012


• Elaboration of 9 Multi-level Regulatory

Improvement agendas2: total of 818

specific recommendations. (2009)

• Publication of the Multi-level

Regulatory Improvement Toolkit:

(2010-2011)

− Help states and municipalities to work

on regulatory simplification.

− COFEMER and OECD in the process of

monitoring and facilitating

implementation in 4 specific states.

• Regulatory Improvement Councils:

(2011-2012)

− Capacity building for local business

councils to oversee and promote

regulatory reform.

− Plurality, transparency and alignment

with the key areas of work.

• Support of the study Doing Business

Subnational. (2011-2012, Cofemer) 1/ Baja California, Chiapas, Colima, Jalisco, Michoacán, Puebla, Sinaloa, Tabasco and Tlaxcala.



Reform of the

Federal Law of

Economic

Competition. 2010

• Review and proposals to improve the economic

competition federal law in order to improve legal and

institutional efficiency and effectiveness (discourage

infringement of the law, through sanctions linked to

potential damages caused to consumers. (economic

and criminal), enable specialized courts in economic

and antitrust matters, increase transparency within

competition institutions.

• OECD specialists support in the Mexican Congress.

• Media articles supporting the reform package.

• More effective antitrust policy.

• Alignment with best international

practices.

• Better tools for the competition

authority.

• More transparency and

accountability.


Sectorial

studies with

horizontal

impact.

(1/2) 2008-2013


• Review of technical work of the

competition: strengthening of the

technical capacity. (2007)

• Credit Institutions Law Reform

(2010):

− Improved access to essential financial

infrastructure (credit bureau, switches)

− Facilitate financial products choice by

consumers.

• Tariff simplification program: (2008-

2013)

− Five-year program to eliminate more than

10,000 HTS numbers related with inputs

and capital goods.

− The average tariff is reduced from 9.6% in

2008 to 4.8 in 2011 and 4.3% in 2010.

• Telecom interconnection pricing

recommendations: (2010)

− Potential 10 US billion yearly savings for

consumers.

• El proyecto inició con el análisis de las recomendaciones

incluidas en las opiniones existentes de la CFC:

• Telecom: convergencia tecnológica del 31 de octubre de 2005;

y contenidos audiovisuales del 28 de noviembre de 2006.

• Servicios financieros: Sobre el sistema de ahorra para el retiro

del 22 de noviembre de 2006; y servicios bancarios al menudeo

del 24 de abril de 2007.

• Energía: Sobre el reglamento de gas LP del 27 de julio de 2007.

• Transporte: Sobre aeropuertos del 1 de octubre de 2007.

• Comercio exterior: Sobre la regulación de comercio exterior del

19 de mayo de 2008.

• Sectores con impacto horizontal en la competitividad; de

sectores con alta participación en el gasto de los consumidores;

así como regulación horizontal con alto impacto en la

competitividad.

• Banca al menudeo (2 estudios): las propuestas formuladas

sirvieron de base para un paquete de reformas a la Ley de

Transparencia y Ordenamiento de los Servicios Financieros y a

la Ley de Instituciones de Crédito, orientadas a dar acceso a

infraestructura esencial (switches, burós de crédito) y a facilitar

la elección de productos financieros por los usuarios. Este

paquete fue aprobado por el Senado en junio de 2009 y

aprobado por la Cámara de Diputados en marzo de 2010.

• Comercio exterior: Se propuso la simplificación del régimen

aduanero y de estructura arancelaria. Estas medidas dieron

origen a un ambicioso programa de desgravación por parte de

la Secretaría de Economía en diciembre 2008. Las propuestas

en materia aduanera han sido adoptadas parcialmente por

SHCP.

• Telecomunicaciones (tres estudios): la CFC trabaja con la SCT

para asegurar la inclusión de las recomendaciones en la

determinación de tarifas de interconexión en servicios de

telefonía. La implementación de las recomendaciones arrojaría

beneficios estimados por diez mil millones de dólares anuales

para los consumidores. Adicionalmente, las recomendaciones

en materia de espectro radioeléctrico se incluyeron en las bases

de la licitación prevista para el primer semestre de 2010.


Sectorial

studies with

horizontal

impact .

(2/2) 2008-2009


• Pro-competitive assignation of slots in

Mexico City Airport: (2011)

− Potential yearly savings estimated of 1 US

Billion..

• Standards and technical regulations:

(2009)

− Competition issues detected in 15% of a

sample of 120 standards.

• Pharmaceutical products:

− Recommendations to promote generic

medicines yield potential yearly savings for

consumers of 2.8 US million.

• Regressive effects of monopolies.

(2009)

− Study that shows how persistent

monopolistic practices affect more

aggressively low income citizens.

• Normas técnicas: Se diseñó un método de análisis ágil de los

efectos en competencia de las normas, con el fin de detectar

necesidades de modificación. La metodología permitió

encontrar problemas en 15% de una muestra de 120 normas.

Se trabajó con la Dirección General de Normas en la

implementación del esquema.

• Mercado farmacéutico: Se hicieron recomendaciones

orientadas a acelerar la adopción de medicamentos genéricos,

que podrían generar beneficios para los consumidores de 2.8

mil millones de dólares anuales. Las recomendaciones se han

validado a nivel técnico con las dependencias involucradas;

está pendiente la implementación a nivel político.

• Regulación estatal: A partir de la experiencia exitosa de

Australia, se formularon recomendaciones para la

implementación de reformas pro-competitivas a los marcos

regulatorios estatales. Pendiente de implementación.

• Competencia y distribución del ingreso (dos estudios): Se

calculó el efecto de la falta de competencia en el ingreso de los

consumidores y, específicamente, la regresividad de este

efecto.

• Electricidad (en proceso de validación): Se analizaron las

barreras regulatorias a la penetración de esquemas eficientes

de autogeneración y se formularon recomendaciones para

facilitar esta penetración.

• Aerolíneas: Se analizó el efecto sobre los precios de la entrada

de nuevos competidores, así como las barreras a esta entrada.

Se hicieron recomendaciones sobre la asignación pro-

competitiva de slots en el Aeropuerto Internacional de la Ciudad

de México, cuya implementación podría arrojar beneficios a los

consumidores por mil millones de dólares anuales.

• Transporte foráneo de pasajeros (dos estudios, en proceso de

formulación de recomendaciones): Se detectó que el acceso a

las terminales como principal barrera a la entrada.

I. The monthly declaration of IETU is now made once a year.

II. Regarding VAT, duplicity and the obligation of presenting an

aggregated annual declaration are eliminated and the monthly

declaration is kept.

III. The obligation of presenting the financial state for tax regulations as

well as for the obligations before the IMSS are eliminated.

IV. Tax Payers that have a positive balance in the Cash Deposit Tax are

allowed to get a refund with out the need of a rule by a public

accountant.

V. The validity of the Advanced Electronic Firm is extend from two to

four years.

5 tax simplification measures announced last June 30, 2010:

Tax simplification results:

12 measures announced last August 17, 2010:

I. The process to obtain the certificate of origin required when exporting Mexican products to

Europe and Latin America was simplified.

II. The system for the Conciliation of Clarification CONCILIANET was established for Federal

Energy Commission clients.

III. The National Registry of Foreign Investment was automatized.

IV. The services provided by tuempresa.gob.mx were expanded.

V. Equivalence agreements of US and Canada regulations and conformity assessment

procedures with Mexican regulations and procedures for electronic products.

VI. The registry for allopathic drugs sales is now electronic.

VII. The process to obtain the sanitary registry for medical devices was simplified.

VIII.Over The Counter drugs that already have a valid license issued either by FDA or Health

Canada can now enter into a fast track process to obtain the sanitary registry.

IX. A direct interconnection between SAT and COFEPRIS was established for the grant of

sanity permissions for imports.

X. The expedition of the Phytosanitary and Zoosanitary Certificate for National Mobilization

was automatized.

XI. The registry for animal use and consumption products was automatized.

XII. The process for meat, grains, oleaginous and other agricultural products imports was

automatized.

22

1. Audit

2. Acquisitions

3. Internal Control rules

4. Public Works

5. Financial resources

6. Material resources

7. Human resources

8. Information and Communications Technology

9. Transparency and Accountability

Legal instruments that simplify and standardize

processes in 279 Federal Agencies

• This 9 Administrative handbooks are compulsory and applicable to all

The Federal Public Administration

oecd-mexico process for strengthening economic competition ... · regulation workshop •legal...

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