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 Editorials | Issues | November 2006 
Anti-Monopoly Bill to be Sent to Senate
 Kelly Arthur Garrett - The Herald Mexico
Mexico´s chief opposition organization unveiled its first legislative proposal Wednesday, an anti-monopoly strategy aimed directly at the population´s pocketbooks.
The Competitive Pricing Law, introduced by Andrés Manuel López Obrador and two of his top economic advisors, seeks to reduce the "exaggerated costs" of key basic commodities and services, such as cement, electricity, cellular phone service and Internet connections.
The bill should find support within the incoming administration. In interviews on Tuesday, Luis Téllez - President-elect Felipe Calderón´s choice to be the next communications and transportation secretary - said his mandate was to take on monopolies.
"We will strive to improve the quality of services, make prices affordable and control monopolies in the communications sector," he said, according to EL UNIVERSAL.
According to López Obrador, the presidential runner-up who has set up an elaborate alternative government with himself as "legitimate president," Mexican prices are inordinately high because of de facto monopolistic practices resulting from ill- planned privatizations in the last two decades.
"It´s an unfair situation that hits all Mexican families, but most of all the popular (lower) and middle classes," he said. "Excessive prices reduce everybody´s purchasing power."
López Obrador, accompanied by parallel Cabinet members José Agustín Ortiz Pinchetti and Mario Di Constanzo, trotted out price comparisons indicating that Mexicans are paying considerably more for basic goods and services than those in the United States.
Mexicans, he said, pay twice as much for electricity and cable service, three times more for long-distance calls and cement, four times more in cellular phone rates, and 35 times more for some bank charges.
"This is in spite of the fact that the average salary in that country (the United States) is almost 10 times higher than in Mexico," he said, putting the minimum daily wage in the United States at 445 pesos compared to just more than 47 in Mexico. "What we´ve found is that the prices (in Mexico) in these sectors are much higher than in almost any other country in the world."
The former Mexico City mayor said it was no coincidence that the companies providing those goods and services enjoy a higher profit margin in Mexico than in other countries where they do business.
For example, he said, América Móvil (a cell phone provider) has a 50-percent profit margin in Mexico but in Brazil it barely reaches 25 percent and in Argentina 9 percent. Cemex, the Mexican cement leader, has 40 percent profit nationally but only 31 percent in the United States. Banamex has profits of 33 percent in Mexico but its parent company, Citigroup, has 24 percent profits in the United States.
"Monopolies are prohibited by the Constitution, but in practice many companies behave like monopolies because of the great economic power they enjoy," López Obrador said.
The Competitive Pricing Law will be introduced in the Senate by legislators from to the United Progressive Front (FAP), a political coalition allied with López Obrador´s parallel government. The second largest force in Congress, the FAP consists of the same three parties under which López Obrador ran for president - the Democratic Revolution Party (PRD), the Labor Party, and Convergence.
The proposed legislation would create a Competitive Pricing Commission to operate independently of the existing Federal Competition Commission. |
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