High Tech Firms to Benefit from Mexico Membership in Wassenaar Arrangement

August 21, 2012

The United Kingdom U.K. is the first country that has liberalized export controls for Mexico, following Mexico’s accession to the Wassenaar Arrangement on January 25, 2012. By joining Wassenaar, Mexico is now one of 41 countries that cooperate and adhere to export controls for conventional arms and dual-use goods and technologies. Until now, American and European firms in the high-tech sector were constrained by Wassenaar guidelines with respect to manufacturing in Mexico.

By instituting export controls, Mexico can benefit from opportunities for manufacturing involving semiconductors, software, aerospace, lasers, sensors and chemical production. The Mexican export control law exempts exports to Wassenaar member countries from Mexico licensing requirements. This favorable treatment relaxes requirements when doing business with the U.S., E.U. member states, Canada, Japan, Australia, New Zealand and all members of the Wassenaar Arrangement.

The U.K. has moved quickly to liberalize export controls with respect to Mexico by amending its Open General License (OGEL). OGEL allows most dual-use goods and technology that previously required a license to be exported to Mexico without a license. With this move, British firms can collaborate freely with Mexican firms on semiconductor technology, provided the technology is not used for weapons.

It is expected that the U.S. will in time relax dual export controls with respect to Mexico, as it has done for Canada and many E.U. countries. Companies with research and development capabilities will be able to consider structuring programs in Mexico and collaborate across borders. This is positive news for companies that are expanding manufacturing in Mexico.