The Italian-Argentinean multi-national Grupo Techint pitched to Mexican President Enrique Peña Nieto an investment project of more than US$ 1 billion to develop a hot-rolled steel mill in the industrial center that Techint launched in 2013.

Paolo Rocca, Techint’s chairman, said that the development should take the steel company Ternium into operations in the second half of 2020. The plant’s annual output capacity is estimated at 3.7 million metric tons.

According to the company, the plant is intended to meet the demand of both the automotive industry and the sectors of household appliances, machinery, energy and construction.

Almost a year ago, after heavy criticism from President-elect Donald J. Trump, Ford Motor Company canceled plans to build a $1.6 billion car plant in Mexico and announced that it would instead equip a Michigan factory to make electric and hybrid models.

Now the automaker is changing its plans again, saying it intends to assemble new battery-powered cars in Mexico, not Michigan. But the Michigan location will get an even larger investment than previously planned and will focus on making a range of self-driving cars.

The switch comes as the Trump administration has been pushing to renegotiate the North American Free Trade Agreement with Canada and Mexico. Few industries are more heavily affected by the accord than the auto sector, which has rushed to build plants in Mexico over the last several years to take advantage of lower labor costs and that country’s extensive network of trade agreements.

Late last month, Vice President Mike Pence met with top executives from Ford, General Motors and Fiat Chrysler to discuss trade and the renegotiation effort.

Automakers have been concerned that changes to the trade accord, such as rules requiring the use of more American-made parts, could raise the cost of vehicles produced in Mexican plants and hurt the value of the plants they have built.

Sherif Marakby, Ford’s vice president for autonomous vehicles and electrification, said Thursday that the company had altered its plans for the Michigan plant — in Flat Rock, 25 miles southwest of Detroit — because it now expected the market for self-driving cars for taxis and delivery fleets to grow rapidly after it rolls out its first model in 2021.

“We want to make sure we have the capacity at Flat Rock when we launch,” he said in an interview. “We are very optimistic that we will grow the volume in the autonomous business.”

Ford now plans to invest $900 million in the Flat Rock location, up from $700 million. The company said the retooling for autonomous vehicles would create 850 jobs there, 150 more than it previously expected.

Producing electric cars in Mexico will enable Ford to take advantage of lower labor costs and improve the “fitness” of that business, Mr. Marakby said.

Ford’s change in plans was reported by The Wall Street Journal and later confirmed by the automaker.

Electric vehicles tend to be expensive to build and generate thin profit margins or even lose money because batteries remain costly and sales volume low. Auto wages in Mexico rarely exceed $10 an hour, compared with about $29 an hour in the United States.

“If you’re worried about your margins on your E.V., moving production to Mexico is not a bad idea,” said Mike Ramsey, an automotive analyst at Gartner.

Ford plans to begin assembling a small, battery-powered sport-utility vehicle in a plant in Cuautitlán, north of Mexico City, in 2020. The vehicle is supposed to go 300 miles before needing to recharge its battery, giving it a greater range than any electric cars now on the market.

Ford plans to follow that model with at least 12 electric vehicles as part of a broader, global strategy. Ford and other automakers expect sales of electric cars to take off in the years ahead as China, European Union countries and others push automakers to cut tailpipe emissions.

Ford’s shift drew no immediate public comment from President Trump. While campaigning last year, he criticized the company repeatedly for its plan to build a small-car plant in Mexico. He also criticized G.M. for importing Chevrolet hatchbacks from a Mexican plant.

In January, in the days leading up to Mr. Trump’s inauguration, Ford announced that it was canceling the new plant and investing in Flat Rock instead. That drew compliments from the president-elect.

In May, however, Ford ousted its chief executive, Mark Fields, and replaced him with Jim Hackett. Under Mr. Hackett, Ford seems to have taken a different tack. In one of his first moves, he set a plan to import Focus compacts into the United States from a plant in China.

German manufacturer Leoni AG opened its fifth plant in Mexico yesterday in the Yucatán port city of Progreso de Castro.

The new wiring systems division plant will manufacture cabling and harnessing for automotive assembly plants in Mexico and for export to General Motors, BMW and Volvo plants located on the Asian continent and in the United States.

The plant currently employs over 2,000 people, 65% of whom are women. Division vice-president Ralf Maus explained that once the new facility reaches its full capacity sometime next year, over 2,600 people will be directly employed by it.

The 25,000-square-meter factory, an investment of 350 million pesos (nearly US $19 million) produces about one-third of its energy needs with 1,500 solar panels and employs a water recycling system that saves 100,000 liters of water per year, the federal Economy Secretariat said in a statement.

Maus was joined at a dedication ceremony by Yucatán Governor Rolando Zapata Bello and federal Economy Secretary Ildefonso Guajardo Villarreal.

Zapata recalled that Leoni’s presence in the state was the result of a business trip he took to Germany last year.

The new plant, he said, offers “new horizons [and] confirms that Yucatán can aim higher and progress.”

The governor pointed out that the state has everything it needs to become a strategic and innovative link in the automotive industry supply chain.

The creation of new and modern infrastructure, he continued, is the way of closing gaps and to continue consolidating the state as a logistics and business platform for the benefit of citizens.

Maus said Leoni chose Yucatán for its newest Mexico plant for its logistics infrastructure, security, education, the high qualifications of its human capital and the professionalism of its administration.

Secretary Guajardo said the automotive industry has changed drastically over the last decade.

“Six of every 10 auto industry jobs will cease to exist and will become different kinds of jobs over the next decade. For this reason, we must be on the front lines of innovation,” he said.

MEXICO CITY 

MEXICO CITY: Canada and Mexico will rebuff the United States over its demand for tougher NAFTA automotive content rules, top officials said on Monday as negotiations to renew the treaty bogged down with only a few months to go.

U.S. President Donald Trump is threatening to quit NAFTA, which has reshaped the continent’s auto sector over the past 23 years, unless major changes can be made to return manufacturing jobs to the United States.

Canadian and Mexican negotiators will address the U.S. auto demands on Tuesday, the final day of the fifth round of talks to update the North American Free Trade Agreement, chief Mexican negotiator Ken Smith told reporters.

Although the talks are due to wrap up in March 2018 after a seventh and final round, they are deadlocked over a series of hard-line proposals the United States unveiled at the fourth round last month.

“It’s definitely slowed down from the previous round,” said a Canadian source with direct knowledge of the talks. “There has been no progress in the contentious chapters.”

Canadian and Mexican officials have complained repeatedly about what they see as U.S. inflexibility. A spokeswoman for the U.S. Trade Representative declined to comment.

Negotiators say they need to finish their work before campaigning for Mexico’s presidential election formally begins at the end of March.

The campaign team for the leftist former mayor of Mexico City and early front-runner, Andres Manuel Lopez Obrador, on Monday repeated calls for the NAFTA talks to be postponed until after the July presidential vote.

The Canadian source said the sixth round would be held in Montreal at the end of January 2018.

Mexico and Canada fear Trump will follow through on a promise to pull out of NAFTA, causing disruption and economic damage. The Canadian dollar edged lower against its U.S. counterpart on Monday, in part because of concerns about the negotiations.

Alarmed U.S. politicians and industry groups have started to put concerted pressure on the White House not to take drastic moves they say would cause job losses.

“Support for NAFTA from the American private sector, and also members of Congress, and even Republican governors, is starting to get very vocal, which we view very positively,” said Moises Kalach, head of the international negotiating arm of Mexico’s CCE business lobby.

Jeff Leal, farm minister for the powerful Canadian province of Ontario, said in an interview he believed the increasingly vocal U.S. protests would help those who wanted to keep NAFTA.

FRICTION OVER AUTO CONTENT STANDARDS

Canada and Mexico are particularly unhappy about the U.S. push for tougher autos content. Vehicles and auto parts account for most of the US$64 billion U.S. trade deficit with Mexico, a sore spot for Trump.

The Trump administration wants half of the content of all North American-built autos be produced in the United States and that the regional vehicle content requirement be increased to 85 percent from 62.5 percent.

Canada and Mexico dismiss the idea as unworkable and plan to respond with presentations on how such a move would damage the North American auto industry, people briefed on the talks said.

A Mexican auto industry representative with knowledge of the talks called the U.S. proposal “insane” on Sunday.

“There is no product made in North America that meets this rule of origin requirement,” said Matt Blunt, president of the American Automotive Policy Council, which represents Ford Motor Co , General Motors Co and Fiat Chrysler.

In San Antonio, Texas, a senior U.S. official told a Senate panel that the administration wanted to rebalance the large automotive trade deficit with Mexico.

U.S. business groups are pinballing between despair and panic as negotiations over a new North American Free Trade Agreement resume, with the Trump administration’s hard-line demands risking a worsening standoff and perhaps the eventual collapse of the talks.

Corporate concerns were only inflamed by President Trump’s Asia trip, which showcased his “America First” trade policy and left the United States isolated as 11 other nations agreed to new trade liberalization measures.

On the eve of this week’s NAFTA talks, the fifth of seven scheduled rounds, the uncompromising U.S. stance now risks scuppering a 23-year-old treaty that helped knit together a colossal continental economy, business groups said.

“Everybody I talk to is very gloomy,” said Bill Reinsch, a distinguished fellow with the Stimson Center and a former head of the National Foreign Trade Council. “People are expecting very little out of this round.”

In a belated mobilization to save the deal, the U.S. Chamber of Commerce in recent weeks flooded Capitol Hill with executives from companies that stand to lose lucrative trade preferences if Trump fulfills his threat to withdraw from the treaty.

The Trade Leadership Coalition, a separate industry-funded group headed by a former Caterpillar lobbyist, last week began airing pro-NAFTA advertisements in nine states that Trump won in 2016.

The 60-second television ads — running in Texas, Tennessee, Nebraska, South Dakota, Mississippi, Michigan, Ohio, Iowa and Indiana — highlight economic gains in manufacturing and agriculture before concluding: “The United States is stronger than ever before . . . NAFTA works, but President Trump is threatening to withdraw from NAFTA.”

The conjunction of the NAFTA talks in Mexico City this week and the president’s return from his five-nation Asia swing have underscored Trump’s continued difficulty translating his populist trade instincts into tangible achievements.

The last NAFTA round, in Washington, ended on a sour notewith Mexico, Canada and U.S. business groups expressing alarm over several U.S. proposals.

“NAFTA is in a very difficult place because the U.S. has put a series of demands on the table that are unlike demands that have been seen in any other trade agreement,” said Robert Holleyman, deputy U.S. trade representative under President Barack Obama. “Canada and Mexico are completely unclear about how to respond.”

LONDON — BP helped Mexico execute its 2018 oil hedge, the biggest in the industry, becoming the second major after Shell to participate in the highly coveted programme and challenging the traditional role of banks in the operation.

Three industry sources said BP has become a participant of the 2018 programme on which Mexico spent some $1.26 billion (£959.5 million) to hedge its 2018 oil exports against oil price falls as part of government’s efforts to stabilise its budget.

BP declined to comment.

BP joins rival Royal Dutch Shell, which made a first foray last year to become the first major to challenge years of dominance of big Wall Street banks in the programme.

Shell declined to comment.

Banks such as Goldman Sachs, Citi and JPMorgan have dominated Mexico’s programme for years but their role has diminished with tighter regulations on bank commodity trading, including a near total ban on proprietary trading.

Commodities-related revenue across Wall Street banks broadly tumbled in the first half of 2017 to its lowest level since at least 2006, consultancy Coalition said in a report.

This was due mainly to a drop in client activity and a slump in trading performance in the energy sector.

Mexico did not disclose the volumes of oil hedged nor detail of the average price per barrel of put options that the government has purchased.

In September, the finance ministry proposed a 2018 budget that based expected oil export revenue on an estimate of $46 per barrel. In October, members of Congress increased that estimate to $48.5 per barrel as global oil prices rose.

On Tuesday, Brent oil prices stood at $64 per barrel [O/R]

For more than a decade, Mexico’s government has paid for a hedge every year in a bid to guarantee its revenues from oil exports by state company Pemex. The programme is seen as the world’s top sovereign derivatives trade.

Last year, the government bought put options at an average price of $38 per barrel to cover 250 million barrels of crude at a cost of $1.03 billion and underpin the 2017 budget, which was based on an average price of $42 per barrel.

This year, Mexico is on track to not see any income from its oil hedge as prices for Mexican crude trade well above $50 per barrel. In 2016, Mexico saw a $2.65 billion payout from its oil hedge.

Mexico used to receive about one-third of federal revenues from oil sales, but it now funds less than one-fifth of the budget with oil sales after the collapse of crude prices in late 2014 and a decline in production.

Talks to renegotiate NAFTA have stalled, and for those in favor of the United States’ continued participation in the U.S.-Mexico-Canada trade agreement, maybe that’s a good thing.

Antonio Garza, former U.S ambassador to Mexico and now counsel to White & Case law firm in Mexico City, said the negotiating parties have pressed the pause button after four rounds of negotiations in which the United States has insisted on changes the other countries consider nonstarters.

These “poison pill” proposals include a sunset clause that would let the North American Free Trade Agreement expire in five years unless all three countries vote to continue it, a move U.S. business leaders argue would torpedo companies’ ability to make long-term foreign-investment decisions.

Critics inside the industry argue that such “rules of origin” restrictions probably would compel automakers to move production out of the United States, then pay a tariff to import their own products — essentially a tax on the industry that would decrease its global competitiveness.

Garza said the U.S. agricultural industry also fears a withdrawal from NAFTA since Canada and Mexico are huge markets for U.S. agriculture exports. Texas is the largest U.S. exporter of agricultural products to Mexico, with more than $3.7 billion worth exported in 2016.

An Oct. 25 letter to U.S. Commerce Secretary Wilbur Ross signed by 87 food and agricultural organizations spelled out the impact of pulling out of NAFTA, including the loss of 50,000 jobs in food and agriculture and a $13 billion decrease in gross domestic product in the farm sector alone.

The letter also disputed Ross’ assertion that the predicted blow to U.S. agriculture from a NAFTA pullout constitutes an “empty threat.” Garza, who writes regularly about U.S.-Mexico relations, wrote recently that after four rounds of talks among the three countries, “the hopes of bringing the 25-year-old agreement into the 21st century are looking increasingly slim.”

“I’m not terribly encouraged right now,” he said. “I’m glad to see the parties have taken a pause. This pause can act as a bit of a cooling period.”

The fifth round of negotiations is scheduled to start Nov. 17. Before that date, the U.S. private sector — including the energy sector — needs to step up and convincingly make the case for America’s continued involvement in NAFTA, Garza said.

“If a broad coalition of U.S. interests don’t step up aggressively and set the table for ‘18, then I think it’s going to be tough to get an agreement,” he said. “It’s got to come from the U.S. private sector.”

On Oct. 24, according to the New York Times, more than 130 representatives from an array of industries met with lawmakers on Capitol Hill to try to preclude a pullout. Historically, Republicans and pro-trade groups like the U.S. Chamber of Commerce see eye-to-eye — not so with President Donald Trump, who has labeled the trade pact the “worst deal ever” for the United States.

“Essentially, the administration has made their sole metric of success the reduction of (trade) deficit, but trade agreements are a lot more than a single metric,” Garza said. “It’s like flying a plane and looking at only one gauge on your dashboard.”

Most economists and trade analysts agree that NAFTA should be updated, but also tout the agreement’s positives, including higher U.S. exports, lower prices for consumers and the 14 million jobs NAFTA supports, he said. Recent surveys show Americans strongly support trade, Garza said.

If Trump does pull out of NAFTA, Texas and the Rio GrandeValley have plenty to lose, Garza said, citing the fact that the state trades $178 billion worth of goods per year with Mexico, more than the United States trades with any single European country.

Texas exports $92 billion per year to Mexico, which constitutes nearly 40 percent of all the state’s international exports, with computers and electronics, transportation equipment and petroleum products accounting for the lion’s share.

“The single biggest beneficiary in terms of trade with Mexico has been Texas and the border, not only in terms of economic impact,” Garza said. “It would have a detrimental impact, more generally, on the nature of the relationship and cooperation we have with Mexico on issues as disparate as immigration, counternarcotics efforts and counterterrorism efforts.

“We talk about NAFTA as an economic platform and that’s true, but the relation we enjoy with Mexico is far broader than simply economic,” he said. “No doubt we’d feel it on trade first, but I think we’d start to feel it in our relationship generally.”