Prosec
Prosec is a program started by the Mexican government after the implementation of the North American Free Trade Agreement

North American Free Trade Agreement

The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement...

 (NAFTA) to overcome the challenges faced by international factories (maquiladora

Maquiladora

A maquiladora or maquila is a concept often referred to as an operation that involves manufacturing in a country that is not the client's and as such has an interesting duty or tariff treatment...

s)) in Mexico

Mexico

The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...

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 to 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.