Call us: +52 444-825-0550
Mexcentrix – Shelter Services Mexico Outsourcing Mexcentrix – Shelter Services Mexico Outsourcing
  • Home
  • About
  • Services
    • All of our Services
    • Site Selection
    • Startup & Shelter
    • Human Resources
    • Foreign Trade
    • Tax & Accounting
    • Legal
  • Cases
  • Contact
    • Contact Us
    • Careers
  • Resources
    • Blog & News
    • Newsletter
    • FAQ
Mexcentrix – Shelter Services Mexico Outsourcing

Jesus Aguirre

13Jun

Mexico Turns Trade Attention to Japan With Nafta Talks at Risk

junio 13, 2018 Jesus Aguirre NEWS

Mexico’s top trade official is traveling to Japan this week as the Latin American nation seeks to diversify exports and investment amid an impasse in Nafta talks.

Economy Minister Ildefonso Guajardo said he still sees a high chance of a deal to update the North American Free Trade Agreement, but that the U.S., Canada and Mexico will need to show flexibility. The three sides will strongly engage next month, Guajardo was quoted by Reuters as saying on Monday in Tokyo, where he will meet Japanese officials and business leaders.

Nafta talks are on the back burner ahead of Mexico’s election on July 1, according to a person familiar with their timing, who asked not to be named citing private conversations. Uncertainty about the future of the trade deal increased this weekend after President Donald Trump clashed with Canadian Prime Minister Justin Trudeau just after a Group of Seven meeting ended in Canada.

Japan Ties

Guajardo will meet with Japan’s foreign minister as well as the minister of trade and commerce, his press office said in an emailed statement.

The world’s third-largest economy is the biggest market in the trade pact that succeeded the Trans-Pacific Partnership, which the U.S. abandoned a few days after Trump took office last year. The new deal, known as Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, was agreed on by 11 nations in March and approved by the Mexican Senate in April.

Deepening ties with Japan and the other nations in the Pacific deal is part of Mexico’s push to diversify exports. Currently, 72 percent of the nation’s $435 billion in goods sold abroad every year go to the U.S. The nation also reached a deal in April to update its almost two-decade-old free-trade agreement with the European Union and is working to make inroads to China, Brazil and Argentina.

Japanese automakers including Nissan Motor Co., Honda Motor Co. and Toyota Motor Corp. have plants across Mexico, and the nation has received more than $14 billion in foreign direct investment from Japan over the past two decades. That makes Japan the biggest Asian investor in Mexico, according to data from Mexico’s economy ministry. Still, Japan bought only 1.3 percent of Mexican exports in 2017, about half as much as China and trailing the U.S, Canada and the European Union, according to data from the International Monetary Fund.

Read more
05Jun

Trump thinks he’s saving trade. The rest of the world thinks he’s blowing it up.

junio 5, 2018 Jesus Aguirre NEWS

President Trump appears prepared to unravel 70 years of pain­staking effort that the United States has led to build an inter­national system of trade based on mutually accepted rules and principles.

Ever since an agreement on trade emerged in 1947 from the ashes of World War II, presidents of both parties have pushed this system as a way to strengthen alliances and promote the expansion of democracy and prosperity in Europe and Asia.

But with Trump’s decision last week to enact aluminum and steel tariffs against U.S. allies in Europe and North America, he is subverting previously agreed-­upon trade pacts. The result is a brewing trade war with Canada, Mexico and Europe, which are expressing shock and bitter frustration while enacting tariffs of their own on a bevy of American products.

The measures announced last week went beyond Trump’s previous actions, such as pulling out of the Trans-Pacific Partnership, a recently forged trade agreement among 12 nations, and his efforts to renegotiate the North American Free Trade Agreement with Mexico and Canada.

Now, he has imposed restrictions on aluminum and steel imports in the name of national security, even though almost all trade and national security analysts agree that it strains credulity to say it is risky to source metals from allies with whom the United States routinely shares sensitive intelligence information.

Veterans of trade policy worry that tensions will further escalate, putting existing trade agreements in peril and the future of the World Trade Organization, the group that the United States helped establish in 1995 to adjudicate the rules of global trade, in doubt.

“Trump’s actions create a feeling of chaos and lawlessness. America is no longer abiding by basic due process and commitments made to other nations,” said Jennifer Hillman, a former commissioner at the U.S. International Trade Commission.

Trump administration officials say the reaction from the rest of the world has been overblown. They say they are still eager to negotiate and they are just trying to stop a flood of cheap Chinese steel on the world market that has harmed American jobs and industry. Commerce Secretary Wilbur Ross is heading a delegation in Beijing this weekend to “discuss rebalancing” trade relations between China and the United States.

Trump has argued that he’s trying to get other countries, especially China, to play by the rules, and the president’s advisers say trade agreements negotiated in the 1990s are past due for an update that better reflects the current realities of the global economy.

“When you’re almost 800 Billion Dollars a year down on Trade, you can’t lose a Trade War!” the president tweeted Saturday, referring to the U.S. trade deficit in goods. (The overall trade deficit, which includes services, was $566 billion last year.) “The U.S. has been ripped off by other countries for years on Trade, time to get smart!” the tweet continued.

“We are the ones trying to save the rules-based trading system,” a senior administration official, who spoke on the condition of anonymity because they were not authorized to speak publicly, said in an interview Saturday. “Europe and Canada are cheating. They are giving subsidies to some of their industries and putting U.S. companies at an unfair disadvantage.”

The sudden U.S. hostility toward existing trade agreements comes at a fragile time. While the world economy has been chugging along, multiple countries are recoiling from the trend toward economic integration that has been continuing for decades.

Britain is in the process of exiting the European Union. With newly elected populists in power, Italy is dancing close to leaving the euro currency zone. And a leading candidate to be Mexico’s next president, Andrés Manuel López Obrador, is also a trade skeptic and may take an even more confrontational approach with Trump than the current president, Enrique Peña Nieto.

“The door is open to the system unraveling,” said Douglas Irwin, an economics professor at Dartmouth and author of “Clashing over Commerce: A History of U.S. Trade Policy.”

One reason for worry about things spinning out of control, trade experts say, is Trump’s apparent belief that he can use threats to coax concessions out of allies. While South Korea, Brazil and Australia have been more acquiescent, most of the world’s major powers have rejected his demands.

For example, last week Canadian Prime Minister Justin Trudeau revealed that he had rebuffed a request by Vice President Pence to resolve NAFTA negotiations with an agreement to revisit the terms of the pact every five years. That shattered hopes of Trump securing victory any time soon on NAFTA, and led the president to declare on Friday that he is considering abandoning the agreement altogether.

In the case of steel and aluminum, U.S. allies have refused to agree to quotas limiting their metals exports, thus forcing Trump to enact tariffs. Trump is acting more aggressively in part because a stable of cautious advisers has fallen away in recent months, and he has been emboldened by hard-line trade skeptics who have cast aside warnings about the economic pandemonium that could result from his confrontational behavior.

As a result, the United Kingdom, France, Germany, Mexico, Canada, Turkey and Japan have either begun or announced plans to launch countermeasures. They are also forging ahead with their own trade agreements without the United States, a situation that could put American companies at a disadvantage for years to come.

Numerous U.S. firms — and entire industries — are worried they could be caught in the crossfire of this escalating economic spat. Actions taken to fortify the steel industry could backfire by hurting other sectors dependent on inexpensive raw materials — possibly causing more job losses than jobs saved, economists say. And prices of many American goods — from cars to beer cans — could rise.

The cost of steel and aluminum tariffs for the average American family will be $210, estimates Mark Zandi, chief economist at Moody’s Analytics.

“This is basically a welfare scheme. You are taxing everyone in America to help a small number of people in the steel industry,” said Bart Oosterveld, director of the global business and economics program at the Atlantic Council.

Not every economist agrees, however, that the effect of the tariffs will be substantial.

“I don’t see a big risk to the global trading system. It’s not going to blow up the system,” said Peter Morici, a former chief economist at the U.S. International Trade Commission. “Trump wanted to send the Europeans a message on trade to get more concessions.”

Indeed, Trump’s tariffs so far are on a relatively small scale, hitting about $41 billion worth of steel and aluminum imports. But he has threatened to go after European-made autos next.

The bigger issue is a political one: the aggressive imposition of tariffs on an unprecedentedly wide variety of U.S. allies, and the use of national security as the justification for doing it.

As a result, America’s longtime partners are starting to view Trump’s move as a sea change in U.S. policy. Trudeau called the action “totally unacceptable.”

Cecilia Malmström, the European Union’s trade commissioner, said, “I would not use the term ‘trade war’ because it has a psychological effect.” But she added: “The U.S. is playing a dangerous game here.”

“This will have an economic bite, and it will last a long time,” said Adam Posen, president of the Peterson Institute for International Economics. “It will be hard to establish trust in the U.S. again, and all the uncertainty will drive down investment and productivity.”

Under WTO rules, the national security tariff is supposed to be wielded only in times of war or when there is a direct threat to a country. Trump’s team is arguing that any nation should be able to determine on its own when its national security is at risk and impose tariffs when it wants, a major shift that opens the door to any country erecting trade barriers whenever it wants.

“To me, it’s unequivocal that these U.S. tariffs are a violation of America’s WTO obligations,” said Hillman, a Georgetown Law professor. “Under the WTO, the U.S. committed to not discriminating among members of the WTO, so the U.S. can’t charge a 10 percent tariff on Canada but not Argentina.”

Past presidents from both parties worked hard to get other nations to join the WTO and adhere to a system that barred the arbitrary use of tariffs. Now the United States is facing multiple challenges at the WTO for inappropriate conduct.

If the United States loses such cases, Trump might simply ignore the rulings or even pull out of the organization. His administration has already blocked new appointments to the WTO’s appellate body, creating a backlog of trade disputes.

Some economists say that Trump is correct that trade has had some downsides that policymakers should address. But his explosive approach is misguided, they say.

“It is possible to address the negative consequences of liberalizing trade without destroying the global trade system, which has brought so much prosperity to the world,” said Minouche Shafik, director of the London School of Economics and recently deputy governor of the Bank of England.

 

Read more
31May

Mexico willing to wait on NAFTA

mayo 31, 2018 Jesus Aguirre NEWS

While the lead negotiators for Canada and the U.S. were in intense meetings in Washington trying to find a breakthrough in the vexing NAFTA auto industry regulations, Mexico’s ambassador to Canada, Dionisio Pérez Jácome, was holding a series of meetings in Winnipeg spreading the word that Mexico is committed to free trade now and in the future.

In a speech to the Manitoba Chambers of Commerce on Tuesday morning, Jácome did his best to make the point that Mexico believes that a renegotiated NAFTA has to be one that should be truly trilateral that benefits each of the countries.

“We will continue to engage in negotiations in a constructive manner always keeping in mind that it should benefit all three countries,” Jácome said.

In addition to the auto sector, top of the agenda for Canada’s foreign affairs minister, Chrystia Freeland, on Tuesday was negotiating a further reprieve from potentially crippling U.S. tariffs on imports of steel and aluminum that expires on Friday, an issue she says is separate from the NAFTA talks.

That’s just one more deadline for trade negotiators to deal with on top of the looming national election in Mexico on July 1 and mid-term elections in the U.S. in November adding to the sense that negotiators are on the clock to complete the new NAFTA deal fast.

But Jácome stressed that it was more important for Mexico to achieve a good deal rather than a quick one.

Last week Mexican Economy Minister Ildefonso Guajardo said he believes there is a 40 per cent chance of the deal getting done before his country’s election.

“We are in no position to exchange quality for speed,” Jácome said.

There is no doubt that the NAFTA era has had a significant impact on Mexican-Canadian trade. Jácome pointed out that since the deal was signed in 1994 trade between the two North American countries has increased nine-fold.

In his first visit to Winnipeg — which Jácome said was at least partly to bestow the Order of the Aztec Eagle, the highest Mexican order awarded to foreigners, to Jim Downey, the long-time honorary consul to Mexico — he met with the premier, the mayor and several business groups.

“They were very productive meetings,” he said. “The business community in Mexico and Canada have been getting to know each other better. They are doing more trade and there are good opportunities to compliment each other. I believe we are on track to continue increasing trade.”

Imports from Mexico to Manitoba are almost triple the size of exports from here to there, but the pork sector has perhaps made the strongest inroads. This province is a major producer of Canadian pork and Mexico is an enthusiastic importer. It’s now Canada’s fourth largest export destination for pork and last year Manitoba represented about 43 per cent of the total, worth about $83 million.

Both Maple Leaf Foods and HyLife Foods, the province’s two largest pork processors, export to Mexico. HyLife has a plant with 200 workers north of Mexico City where it makes sausage for the Mexican market using Manitoba-produced pork products.

“The big thing about NAFTA, as the ambassador spoke about, is that it opened up the Mexican market for Canadian produced pork so that now Mexico is a major market for Canadian pork,” said Andrew Dickson, general manager of Manitoba Pork. “They are currently getting most of their pork from the U.S. But they wanted to diversify the sources of supply.”

Jácome spoke about how free trade — and not just with Canada and the U.S. but with more than 48 other countries as well — has transformed the Mexican economy and allowed it to diversify.

Mariette Mulaire, the CEO of World Trade Centre Winnipeg, said the desire to expand its trading perspective is one of the many examples of how the two countries share similar goals.

“There is absolutely an opportunity for Canada and Mexico to work together to develop even stronger links,” she said. “With the uncertainties around NAFTA (created by U.S. President Donald Trump’s repeated references to it being “the worst deal”)… we share the same kind of concerns.”

Read more
25May

Trump officials weigh 25% tariff on imported cars to force concessions in NAFTA talks

mayo 25, 2018 Jesus Aguirre NEWS

The Trump administration is considering new tariffs on imported cars in a move that trade analysts said was designed to put pressure on Mexico during the final stages of negotiations for a new North American trade deal.

Officials may cite national security grounds to justify a 25% tariff on imported vehicles, a senior administration official said, speaking on the condition of anonymity to discuss internal deliberations. President Trump used the same provision of U.S. trade law in March when he called for tariffs on foreign-made steel and aluminum.

An announcement of a formal investigation into the purported need for such industrial protection could come as soon as Wednesday evening, one industry executive said. Shares of European carmakers fell more than 1% on the news.

Negotiators for the United States, Mexico and Canada remain deadlocked over rules for granting duty-free status to vehicles under a new North American trade deal.The talks have been underway for more than nine months and appear likely to continue into 2019, Treasury Secretary Steven T. Mnuchin said this week.

The threat to impose an import tax on cars was seen as an attempt to press Mexican officials to accept a U.S. demand for a higher percentage of auto content to be made in American factories.

Talks over a replacement for the 1994 North American Free Trade Agreement among the United States, Mexico and Canada have made limited progress.

Negotiators remain divided on a host of contentious U.S. proposals, including a provision that would require the deal to be formally renewed every five years.

The proposed import tax was seen as an additional pressure point in the negotiations, with Mexico and Canada already scheduled to lose their exemption from Trump’s metals tariffs in little more than a week.

“This has been discussed for some time, which makes me suspect that this is being leaked to put pressure on Mexico during NAFTA and on other parties seeking steel and aluminum exemptions,” said attorney Dan Ujczo of Dickinson Wright.

Initial reaction to the idea of an import tax on cars based on national security needs was unfriendly, with one veteran trade lawyer saying it would prompt “pant-wetting laughter — followed by retaliation” among U.S. trading partners.

Mexico in the past has threatened to retaliate against U.S. trade actions by curtailing purchases of American farm products. Mexicans last year purchased almost $19 billion of American corn, dairy and soybean products.

The provisions of a 1962 trade law, known as Section 232, allow the president to restrict imports that threaten “to impair the national security.”

Under the law, the Commerce Department conducts a months-long review and reports its conclusions to the president. He then determines the final tariff figure, if any.

William Reinsch, a former Clinton administration trade official, said the proposal broke with traditional legal interpretations and would disrupt industry supply chains and probably lead to job losses in the United States and elsewhere.

“Arguing that passenger cars are a national security issue doesn’t pass the laugh test,” he said. “We don’t have a shortage; our companies are not currently in trouble; and there are plenty of alternative sources from reliable allied suppliers. Pursuing that case would make a mockery of the provision.”

A vehicles tariff also would hurt U.S. automakers with operations in Mexico and Canada and other places. The United States imported $192 billion in passenger vehicles last year, with Mexico being the leading source, followed by Canada, Japan and Germany.
An industry group representing several foreign carmakers said the domestic industry did not need protection from competition.
“If these reports are true, it’s a bad day for American consumers,” said John Bozzella, chief executive of Global Automakers, which represents several foreign carmakers.

“To our knowledge, no one is asking for this protection. This path leads inevitably to fewer choices and higher prices for cars and trucks in America.”

The auto industry has been a focus of the president’s. He has complained about the difficulties American carmakers face selling their products abroad, raising the subject with Asian and European allies.

In March, he threatened to hit European carmakers with tariffs if the European Union did not lower barriers to U.S. vehicles. The EU adds 10% to the cost of imported American models, while the United States imposes a levy of 2.5% on most imported cars and 25% on most pickups.

German officials have grown frustrated trying to convince Trump that Germans don’t want to buy from American companies, which specialize in large sport-utility vehicles rather than smaller cars more suited to European lifestyles.

Trump has obsessed over German cars above all others, according to a senior White House official familiar with the talks. Though the president is now driven in an armored black Cadillac limousine known as “the beast,” he has owned various foreign models, including Maybach, Rolls Royce, Mercedes-Benz and McLaren.

The president appears to have previewed the internal debate with an early-morning tweet: “There will be big news coming soon for our great American ­Autoworkers. After many decades of losing your jobs to other countries, you have waited long enough!”
The proposal was first reported by the Wall Street Journal.

 

Read more
17May

With stakes high for auto industry, experts doubt NAFTA deal this week

mayo 17, 2018 Jesus Aguirre NEWS

Efforts to reach agreement on a revamped North American Free Trade Agreement by Thursday might be a bit overly optimistic.

U.S. House Speaker Paul Ryan said last week that the details of a deal would need to get to Congress by then for a vote to happen this year, but it’s not clear that time frame is realistic.

Experts note that the negotiators for the United States, Canada and Mexico remain far apart on key issues, particularly involving the automotive industry.

The logistics become even more complicated because, as Bloomberg reported, those officials are not scheduled to meet in person this week. The effect is to add uncertainty to one of President Donald Trump’s key pledges — to remake NAFTA.

During an automotive roundtable with automakers at the White House last week, Trump mentioned the effort to renegotiate the deal, saying, according to a copy of his remarks, that “NAFTA has been a horrible, horrible disaster for this country. And we’ll see if we can make it reasonable.” 

But the stakes are high, with estimates that tens of thousands of U.S. automotive-related jobs could be at risk if NAFTA implodes.

Jeff Schott, a senior fellow at the Peterson Institute for International Economics, however, said getting a deal done quickly is not the most important consideration.

“There’s an interest in having the current Congress vote on it because there’s uncertainty about the composition of the next Congress and the leadership of the next Congress, but you know, when push comes to shove, what’s important is you get the right agreement … and if that means you have to work a little more, then you take your chances with the Congress,” Schott said. “If it’s a better agreement, you should have a better chance of getting congressional approval.”

Schott said it appears Ryan and others are trying “to just basically give a kick in the pants to the negotiators to try to get them to accept some of the U.S. proposals.”

Ryan’s push for a deal this week relies on a timeline laid out under so-called fast-track trade requirements, which allow for a vote in Congress without amendments.

One of the more contentious issues in the negotiations involves a U.S. push to require a certain amount of vehicle content be made by higher-wage workers, which effectively excludes Mexico.

But Kristin Dziczek, director of the Industry, Labor and Economics Group at the Center for Automotive Research in Ann Arbor, said every automotive-producing region has a low-cost area. It’s part of being competitive. It’s also what makes vehicles affordable in this country.

“Our exports would be much more expensive if we didn’t have that low-cost content. Our consumer prices will be much more expensive,” she said.

Dziczek said NAFTA, which has been in place since 1994, does need to be updated. Vehicle content now includes extensive use of software and electronics, areas that have changed substantially in the ensuing years, for instance. But a deal that simply makes it “more difficult to make things in Mexico does not necessarily bring manufacturing back to the U.S.”

Read more
14May

Mexico Says Possible Bank Hack Led to Large Cash Withdrawals

mayo 14, 2018 Jesus Aguirre NEWS

Several Mexican banks experienced large cash withdrawals in recent weeks after possible cyber attackers infiltrated some financial institutions, triggering unauthorized money transfers, the central bank said in an interview with Bloomberg.

Banco de Mexico has zeroed in on five financial institutions whose external connection to the central bank’s electronic payment system was compromised, Lorenza Martinez, the central bank’s head of operations said. The vulnerability let money be illegally siphoned from “fake accounts” at those firms and led to several large cash withdrawals from other banks, she said.

The five banks and brokers are working with Mexico’s attorney general to determine whether organized criminals helped orchestrate a possible attack, but Banxico is not involved in those investigations, Martinez said. She declined to name the affected companies and said it’s too early to tell how many actors are behind the incidents. A representative for the attorney general didn’t immediately comment to a request made outside of normal business hours.

It’s been two weeks since the monetary authority asked some lenders to connect to its payment transfer network using a back-up scheme after a suspected cyber attack disrupted some transfers. The measures have caused slowness in transfers for many consumers. Now, more than 20 Mexican financial institutions have enacted back-up plans.

Bloomberg reported last week that Grupo Financiero Banorte, Banco del Bajio SA and Banco del Ejercito were banks that had been directly targeted in the suspected cyber attack.
The payment system, known as the SPEI, was established in 2004 and lets users electronically transfer money between deposit accounts through a private, encrypted network operated by Mexico’s central bank.

While vulnerabilities were discovered at the end of last month, at least one bank experienced an incident as recently as this week, Martinez said. Some of the cash was withdrawn from accounts that had just recently been opened, she said.

The central bank is also probing whether the affected banks and brokerages were complying with security regulations and will ask banks to undergo more frequent stress tests in the future to ensure they can more quickly connect to the SPEI through its back-up network the next time there’s an attack.

Read more
10May

NAFTA talks drag on as U.S., Mexico spar over autos

mayo 10, 2018 Jesus Aguirre NEWS

WASHINGTON (Reuters) – Top-level talks to update the North American Free Trade Agreement made little headway on Wednesday as the United States and Mexico sought to settle differences over the key issue of automobiles, three well-placed sources said.

With time fast running out to reach a deal, the two NAFTA members are discussing a U.S. demand that a certain percentage of auto production happen in higher-wage areas of the region, a clear jab at lower-cost Mexico, said the sources, who requested anonymity given the sensitivity of the situation.

The two nations are also discussing a U.S. demand to boost the North American content of vehicles.

“Until that is settled one way or another, there is not much chance of broad progress,” said one of the sources.

The future of the North American auto industry in a renewed NAFTA is one of the toughest issues facing U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo.

Freeland met Lighthizer on Wednesday and deflected questions about the slow pace of the talks, saying Canada would take the time needed to get a good deal.

“We’ve been having productive conversations this week,” she told reporters.

Lighthizer says there are only weeks left to reach an agreement before negotiators start running into political challenges caused by a Mexican presidential election on July 1 and mid-term elections in the United States in November.

“We are still engaged. We are trying to really make sure we can ensure progress,” Guajardo told reporters.

The three ministers, who together are in charge of the talks, have not all met together since convening in Washington on Monday and officials said they were not aware of any scheduled trilateral gatherings this week.

“We are meeting as we need to meet,” said Freeland.

Mexico has launched a counterproposal to U.S. demands to toughen automotive industry content rules and boost wages. [L1N1SF0XQ]

U.S. President Donald Trump, who blames NAFTA for job losses in the manufacturing sector, has frequently threatened to walk away from the 1994 pact unless major changes are made.

Many other major issues crucial to a deal are still unresolved, including U.S. demands for a five-year sunset clause, and elimination of settlement panels for trade disputes.

The chapter on intellectual property, seen by some as less-problematic, is also far from resolved.

A biopharmaceuticals official said that the sector was pressing Lighthizer to insist on the 12-year period of patent and data exclusivity enshrined in U.S. law, while Canada was pushing for eight years.

Read more
05May

Mexico’s Presidential Frontrunner Accuses Mexican Billionaires Of Plotting To Defeat Him

mayo 5, 2018 Jesus Aguirre Uncategorized

Upping the ante in his ongoing showdown with Mexico’s business elite, leading presidential candidate Andrés Manuel López Obrador accused billionaires German Larrea and Alberto Bailleres of being part of an alleged plot to prevent him from winning the country’s July 1 presidential election, the Mexican online site SinEmbargo.com has reported.

Lopez Obrador, who holds a double-digit lead in almost all polls, said Tuesday that mining tycoons Larrea and Bailleres, Mexico’s second and third richest people, plus cinema mogul Alejandro Ramírez, who is president of the Mexican Business Council, among other top businessmen, met last month with Ricardo Anaya, the pro-business PAN presidential candidate. He claimed that the purpose of the secret meeting was to discuss support for a “single candidacy” that could defeat López Obrador.

The usually reclusive Mexican Business Council, comprise of Mexico’s ten richest magnates, pushed back in an extraordinary ad in Mexican papers in which it accused López Obrador of “insulting and slandering” them. “It is concerning that someone who aspires to be President of Mexico insults those who do not share his ideas,” the group said on Thursday. “We condemn that a presidential candidate resorts to personal attacks and unfounded accusations.” The Council offered to talk with all political forces, but with “respect.”

At his daily press conference on Tuesday in Mexico City, Anaya denied that such a meeting took place “in the terms that López Obrador described,” a spokesperson for Anaya told me. “It’s false. What happens is that López Obrador is resorting again to his old conspiracy theories,” Anaya said, according to the audio of the press conference provided by the Anaya spokesperson.

Last Friday, Anaya told a meeting of bankers sponsored by Citibanamex, Citigroup’s Mexican unit, that he is open t

A “single candidacy” implies that José Antonio Meade, the PRI presidential candidate who has failed to connect with voters and is running a distant third, would withdraw in favor of Anaya. Meade has rejected outright the idea, pledging to stay in the campaign until the end.

The country’s private sector has been uneasy with many of López Obrador’s economic proposals and confrontational style. Last month, telecom tycoon Carlos Slim Helú called on López Obrador to reconsider his pledge to cancel a $13 billion airport project for Mexico City in which Slim’s companies are top investors.

A May 2 survey by the newspaper Reforma showed López Obrador with 48 percent support, an 18-point lead over second-place Ricardo Anaya and 31 points ahead of ruling party candidate José Antonio Meade.

o collaborating with the ruling PRI party to beat López Obrador, according to a video that Mexican magazine Proceso says it obtained from the Anaya campaign.

Read more
03May

Major issues still outstanding in NAFTA talks: Mexico

mayo 3, 2018 Jesus Aguirre NEWS

Mexico’s economy secretary has said here that much remains to be done before negotiations with the US and Canada on updating the 1994 North American Free Trade Agreement can be deemed a success.

Among the “very important” matters that remain to be settled are dispute-resolution mechanisms, rules of origin in the automotive sector and rules for agricultural trade, Ildefonso Guajardo told a press conference in Mexico City on Tuesday, Efe news reported.

“We are still at the negotiating table discussing a series of issues that have to be accommodated in a way that is positive for the three countries,” he said. “A negotiation cannot be declared successful until all of its issues are resolved.”

The next round of talks is scheduled for May 7.

US President Donald Trump took office in 2017 vowing to scrap NAFTA if the accord could not be amended to his satisfaction and the process of revision began last summer.

The original idea was to conclude the negotiations by the end of 2017 to avoid NAFTA’s becoming an issue in this year’s Mexican presidential campaign or the mid-term congressional elections in the US.

But the talks have turned out to be more difficult than expected.

Regarding automotive rules of origin, Guajardo said that he has been meeting with executives from Mexico’s auto sector to draft an alternative to the latest US proposal, which is seen as likely to harm Mexican assembly plants and part-makers.

Read more
01May

Mexican companies hedge, delay deals as NAFTA, elections loom

mayo 1, 2018 Jesus Aguirre NEWS

MEXICO CITY (Reuters) – Mexican companies are delaying investment, bringing forward imports to protect against currency swings and warning the next few months could be volatile as the NAFTA trade talks reach a climax and July’s presidential election nears.MEXICO CITY (Reuters) – Mexican companies are delaying investment, bringing forward imports to protect against currency swings and warning the next few months could be volatile as the NAFTA trade talks reach a climax and July’s presidential election nears.

From bakers to retailers and construction firms, more than a dozen of Mexico’s biggest companies cited concerns over NAFTA and the election when issuing conservative guidance in recent weeks, despite economic data pointing to an uptick in Latin America’s second-largest economy.

Grupo Bimbo (BIMBOA.MX), the world’s largest breadmaker, said it was delaying capital expenditure and tightening costs due to a volatile economic environment amid the presidential campaign.

Though no major company mentioned him by name, the prospect of a government led by left-winger Andes Manuel Lopez Obrador is beginning to unsettle markets. Lopez Obrador is ahead by double digits in all major polls and the peso fell 2 percent in just one day in April, hit by political risk.

“These are not ‘business as usual’ times: there’s much at stake for Mexico in this election,” Bimbo’s Chief Executive Daniel Servitje told an earnings call. “The current situation…demands a cautious stance.”

Exchange rate uncertainty pushed retailer Liverpool (LIVEPOLC1.MX) to order all the imported products needed for its discount clothing stores Suburbia for the second half of the year.

Its Liverpool department stores have covered 50 percent of imported merchandise needed for the second half of 2018 and even the first half of 2019, the company said.

Juan Fonseca, head of investor relations at bottler and retailer Femsa (FMSAUBD.MX), one of Mexico’s largest companies, said encouraging signs from falling inflation and wage growth were being overshadowed by the fragility of the peso due to political risk.
“Between now and the election, clearly things are going to be volatile,” he told an analyst call. “There are more data points that would support a cautious case.”

Preliminary gross domestic product (GDP) data for the first quarter on Monday showed year on year growth of 1.2 percent, driven by a jump in the service sector.

Analysts predict Mexico’s gross domestic product will grow 2.3 percent this year as manufacturing activity improves.
However, Scotiabank analysts warned in a recent report that NAFTA and the election could have a significant impact on economic performance.

TOUGH END TO THE YEAR

Political leaders from the United States, Mexico and Canada say an initial deal to renew the North American Free Trade Agreement (NAFTA) is close but issues remain. Negotiations in Washington have been paused until May 7.

Mexican companies fear that scrapping the trade pact, as U.S. President Donald Trump has threatened to do, or renegotiating the deal in a way that hinders the Mexican economy would hit their earnings. Around 80 percent of Mexican exports go to the United States.

Executives at Unifin (UNIFINA.MX) – which leases equipment and vehicles to mid-sized manufacturing, services and construction companies – said clients postponed business decisions every time they saw news suggesting cancellation of NAFTA.

Mexican cement companies Grupo Cementos Chihuahua (GCC.MX) and Elementia (ELEMENT.MX) both warned of a tough second half of the year.

Elementia said government spending on projects was “practically nonexistent” and the private sector was nervous.
“Consumption might stay, but personally, I don’t think it will grow in the second semester,” CEO Fernando Benjamin Ruiz said.

Several companies, including GCC and Mexican bank Banregio (RA.MX), linked their guidance to the outcome of NAFTA and the election.Several companies, including GCC and Mexican bank Banregio (RA.MX), linked their guidance to the outcome of NAFTA and the election.

Paper maker Kimberley Clark de Mexico (KIMBERA.MX) warned that volumes could be hit by the uncertainty, while airlines Volaris (VOLARA.MX) and Aeromexico (AEROMEX.MX) said it could change customers’ behavior.

The chief executive of Monterrey-based bottler Arca (AC.MX) said that while the economy remained very robust in northern Mexico, a good year depended partly on the fate of the trade pact.

“If NAFTA is finally agreed…we definitely will see a good year in volume,” Francisco Rogelio Garza said.
Analysts at MRB Research and Barclays suggested, however, that markets may not yet be pricing the risks of Lopez Obrador winning the presidency.

The former Mexico City mayor, running on an anti-corruption platform, has threatened to cancel a project for a $13 billion airport in the capital and review a major energy reform.

A victory by Lopez Obrador, known as AMLO, would spell volatility in equities and the peso, Barclays said, adding it would be worrying for sectors from infrastructure and banks to construction.

“The assumption that AMLO’s bark is worse than his bite has been drifting into an even more complacent argument: that a populist leader is no bad outcome in the short term, implying fiscal thrust and more growth,” MRB Research said.

 

Read more
  • 1…1617181920…32
in

Privacy Policy and Terms of Use