Nuria Becerril

Dirección de Desarrollo Empresarial y de Negocios

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A light at the end of the tunnel: Intellectual Property safeguards Mexico´s Economy

Becerril, Coca & Becerril, S.C.

Nuria Becerril

Fact: COVID-19 Disease. Consequence: Mexico´s economy is one of the most damaged in the World.  A plurality of factors has shaken the country´s economy to such a degree that the International Monetary Fund (IMF) has predicted that the contraction only of the Mexican economy will be on the order of 10.5% of the Gross Domestic Product (GDP) for the present 2020 exercise. The average contraction calculated for the whole of Latin American economies has been calculated on the order of 9. 4% of the GDP.

This scenario surely seems quite complicated. However, although the economy in Mexico has been inoperative for years, which by the end of 2019 culminated with a 0.2% growth level, today at the finishing line of year 2020, there is light at the end of the tunnel.

This light is international trade. International trade is one of the main elements which has a major potential to contribute to Mexico´s growth. It is a development lever which supports the internal market as well as the external market acceleration in their own specific conditions, creating a synergy between both external and internal markets, with the purpose to make a nation with more economic power. Before entering the pandemic period, external trade contributed with almost an 80% of Mexico’s GDP. Although almost 40% of the economy relied on the former North America Free Trade Agreement (NAFTA). Mexico had been building strategical alliances with other countries aided by other free trade agreements that made it a power in exports. The current Mexico participation status in free trade agreements opens a great door of opportunities to make business strategies abroad. Why? Because free trade agreements look up for harmonization of rules in fiscal matters, labor matters, rules for trading to generate new value chains in digital economy, circular economy, and shared economy, where all these aspects must rely on a legal framework in order to assure the best way a product or service offer is within the requirements of the negotiated agreements. 

Now it is the moment to remember the high value that Intellectual Property (IP) represents in international trade matter. Every product and service to be commercialized is bonded to one or more Intellectual Property rights whether it is a patent, an industrial design or design patent, a utility model, a trademark, a geographical indication, a denomination of origin, a trade secret or a copyright. That is why the IP chapters of the above-mentioned international trade agreements have been deeply and thoroughly revised and negotiated. IP harmonization is vital to give movement and legal certainty to trade negotiations between business, companies and, most of all, to entrepreneurs as individuals who are looking for high value business opportunities.  The higher purpose is that all these actions finally translate in benefits for all individuals.

Free trade agreements are the doors which open alternatives to generate business strategies and participation in global value chains either in exports or in imports. Counting with these treaties as major business tools helps to establish an international trade framework which gives certainty and improves trust to make long term investments. Mexico’s focus must be in diversifying its commercial relations and consolidate itself in the export power global economies circles. The challenge is to provide more aggregated value, and to include more sectors and regions.

One of the strongest challenges Mexico faces is to adequately implement the conditions and commitments established in these agreements in order to provide safe platforms for investment, legal certainty, and therefore, improve the level of trust to increase the country´s value as a safe harbour for foreign investment and, as well, align to these rules when entrepreneurs are making business abroad. In order to comply with the commitments with which it agreed on these treaties, Mexico has, among other strategic actions, abrogated the former Mexican Industrial Property Law in favor of introducing the new Mexican Federal Law on Protection of Industrial Property since November 5th, 2020, and has implemented several substantive reforms to the Mexican Federal Law on Copyright that is in force. Other actions include reforms to the Mexican Official Norms, in order to comply with regulatory harmonization commitments, which have represented a huge challenge to Mexican business entrepreneurs.

When making business abroad, it is important to make an analysis of our IP rights in order to be sure that these are not infringing IP rights of other individuals. This same analysis must be made when relations with an importer to Mexico are going to be established. 

Technology Transfer is also a matter of major impact both in exports and imports. It is one of the vital resources that allow the flow of products and services in the markets.

The export-import cycle is vital to the country, to enterprises, entrepreneurs and individuals, their businesses and homes. This cycle allows to achieve national food supply, the constant flow of material, equipment, and tangible and intangible assets, which are the motor of Mexican economy. This cycle promotes technology transference, which is the major objective for the insertion of IP rights in commercial relations.

This is also a major fact which makes us focus our attention to Intellectual Property. It is vital to sign robust and “iron-clad” contracts for our Intellectual Property rights when making business abroad or when we are in the import business. It is also important to remember that our lack of knowledge of the IP legislation does not exempt a person from committing an IP right infringement locally or abroad. Look for expert legal IP advise to properly protect your business regarding IP rights, regulatory compliance, and custom duties.

Mexico faces a great opportunity. It is time to entrepreneurs to search incorporation in the plurality of economies with which Mexico is allied. We are talking about the Asian, European, and Latin American economies, which have strategic and financial relationships with Mexico. This country must play its cards very cautiously and strategically, since its position as one of the strongest exporter nations allows entrepreneurs to take the maximum advantage of the most important International Treaties recently signed and renegotiated, the USMCA, the modernized Mexico-European Union Free Trade Agreement (TLCUEM) and the Comprehensive and Progressive Treaty of Trans-Pacific Partnership (CPTPP) together with the other 11 international free trade agreements in which Mexico is an active part. This might be the greatest bet. Mexico must make the maximum from these profitable alliances to weave and readjust the utmost negative impact provoked by these historically unprecedented financial crisis.

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