Prosec (Program of Sectoral Promotion) is a program started by the Mexican government after the implementation of the
North American Free Trade Agreement
The North American Free Trade Agreement (, TLCAN; , ALÉNA), referred to colloquially in the Anglosphere as NAFTA, ( ) was an agreement signed by Canada, Mexico, and the United States that created a trilateral trade bloc in North America. The ...
(NAFTA) to overcome the challenges faced by international factories (
maquiladora
A (), or (), is a factory that is largely duty (economics), duty free and tariff free. These factories take raw materials and assemble, manufacture, or process them and export the finished product. These factories and systems are present thro ...
s)) in
Mexico
Mexico, officially the United Mexican States, is a country in North America. It is the northernmost country in Latin America, and borders the United States to the north, and Guatemala and Belize to the southeast; while having maritime boundar ...
resulting from NAFTA article 3. Article 3 states that no NAFTA member can waive or reduce import tariffs conditioned upon the export of the finished good to another NAFTA country. The result was that after Mexico joined NAFTA the tariff rates for many of the raw materials used by maquiladora manufacturing companies would have risen significantly, particularly for goods of Chinese origin.
Prosec is a tariff-reduction measure that avoids running into problems with NAFTA article 3 by allowing either foreign or domestic producers, irrespective of whether the finished good is intended for exportation or domestic sale, to petition the government for a reduction or elimination of a tariff rate.
Applicable sectors
Prosec only applies to certain sectors of the Mexican economy including automotive, textile and electronics.
References
External links
*{{in lang, es}
Secretaria de Economica
Free trade agreements of Mexico
Foreign trade of Mexico
Customs duties
North American Free Trade Agreement