MEXICO CITY (Reuters) – Mexico’s government on Tuesday announced the first phase of an ambitious infrastructure plan underwritten by the private sector, covering a wide range of transportation and other public works projects over five years.

The plan compromises private-sector commitments totaling 859 billion pesos ($44.3 billion) stretched across 147 projects.

The top sectors covered by the plan are transportation, tourism and telecommunications.

The transportation projects alone, including highways, rail, ports and airports, are seen costing nearly 284 billion pesos ($14.7 billion) through 2024, or one third of the plan’s spending target, the government said.

President Andres Manuel Lopez Obrador said a second phase of infrastructure projects will be announced in January and will focus primarily on the energy sector.

“We’ve joined forces to create a mechanism that allows for the acceleration of the private sector’s infrastructure project initiatives,” said Carlos Salazar, the head of Mexico’s main business council CCE, at the event announcing the plan.

Lopez Obrador, who has sought to trim government spending during his first year as president, described the first phase of the infrastructure plan as giving a jolt to Mexico’s economy.

“We’re providing a huge push with this investment program,” he said, while congratulating assembled business leaders for their “civic and social” commitment to Mexico’s future growth.

Mexico’s richest man, Carlos Slim, whose holding company Grupo Carso is involved in the plan, said after the announcement that attractive conditions exist for private-sector driven investments.

“There are healthy public finances with a lot of discipline on the part of the public sector…and I think that gives great confidence for private investment, which is what’s available,” he said.

As growth has cooled, Lopez Obrador’s government has targeted a 1% primary budget surplus this year in an effort to project fiscal responsibility.

Activists recall job losses from NAFTA, say ‘sham’ unions in Mexico sabotage wages on both sides of the border

EL PASO, Texas (Border Report) — Despite some optimism from the White House and the business community, labor union leaders refuse to back the U.S.-Mexico-Canada Agreement.

The USMCA would replace the existing North American Free Trade Agreement, which predates e-commerce and has been criticized for shortcomings in environmental and labor protections.

“The new NAFTA is not a policy we support at this time,” said Liz Shuler, secretary-treasurer of the AFL-CIO, during a visit to El Paso last week. “The lack of enforcement, the lack of resources committed by the country of Mexico are not adequate. … As we stand now, NAFTA 2.0 does not have the assurances we need for fair trade policies that work for the working people.”

Earlier, AFL-CIO President Richard Trumka had been more blunt, saying Mexico maintains cheap wages by using “sham” labor unions that sign off on whatever deal a corporation brings to the table.

“If Mexico cannot enforce its own laws, then this agreement will never work because their wages will be artificially low. They will suck jobs and capital out of the United States,” Trumka told Bloomberg last month. His comments came after President Trump boasted that the USMCA “has become very popular, unions are liking it, farmers are loving it and manufacturers are really liking it.”

The new trade deal will create 167,000 new jobs and incorporates core labor protections, according to the White House. Border labor activists said that’s a song they’ve heard before and don’t believe.

“When NAFTA passed we lost 35,000 jobs in the garment industry. A majority of the workers in that industry were women who were making $13 an hour, buying homes on the Eastside and sending their kids to college. Those are the jobs we lost that never came back,” said Lorena Andrade, executive director of La Mujer Obrera, an El Paso, Texas nonprofit for displaced workers.

Andrade, who keeps in touch with independent union organizers and environmentalists in Mexico, said the new trade agreement will further erode wage potential on both sides of the border and foster a more rapid consumption of natural resources in Mexico.

“Their idea of progress is not good for our communities,” she said. The factories “can just pick up and leave when they want. Women workers are disposable on both sides of the border; our communities are disposable.”

Ildefonso Magana, a representative of the International Union of Painters and Allied Trades in Laveen, Arizona, said the Trump administration is eager to sign a trade agreement with Mexico but turns its back on any talk regarding immigration reform.

“There is a moral double-standard that allows the free flow of trade, merchandise and wealth but prohibits the free transit of those who produce the wealth, of the workers,” he said at a labor union meeting in El Paso last week.

Mexico dropped six places to 60th in the latest edition of a World Bank report that measures the ease of doing business in 190 countries.

The Doing Business report awards each country a score out of 10 in 10 different areas: starting a business; dealing with construction permits; getting electricity; registering property; getting credit; protecting minority investors; paying taxes; trading across borders; enforcing contracts; and resolving insolvency.

Mexico’s score of 72.4 is slightly better than the 72.09 it obtained last year but couldn’t prevent the country from taking a tumble in the rankings.

Mexico’s ranking only improved in one area – protecting minority investors (up to 61st from 72nd) – and held steady in two others: enforcing contracts (43rd) and dealing with construction permits (93rd).

The country’s ranking went backwards in the other seven areas. It is no longer among the top 10 countries in any of the areas, dropping three places in “getting credit” to 11th.

Mexico has fallen 15 places in the Doing Business rankings since 2016 and this year lost the top spot in Latin America to Chile, which ranked 59th.

Speaking at his regular news conference on Thursday, President López Obrador was incredulous that Chile – where protests have virtually paralyzed the country in recent days – has surpassed Mexico as the easiest place to do business in Latin America.

“Yesterday, something to do with the World Bank came out about Mexico’s [business] rating and, listen to this, Mexico supposedly occupied first place [in Latin America] for foreign investment confidence but now we’ve fallen to second place,” he said.

“And who do you think now occupies first place?” the president, with a wry grin on his face, asked reporters. “Chile, so they’re not infallible.”

New Zealand took out the top spot in this year’s Doing Business rankings with a score of 86.8. Singapore was second followed by Hong Kong, Denmark, South Korea, the United States, Georgia, the United Kingdom, Norway and Sweden.

Somalia is the hardest country in which to do business, followed by Eritrea, Venezuela, Yemen and Libya.

SAO PAULO (Reuters) – Brazil and Mexico have begun talks on a free trade deal, officials said on Monday, seeking to deepen commercial ties between the two largest economies in Latin America as trade tensions threaten to undermine global growth.

Marcos Troyjo, Brazil’s deputy economy minister for foreign trade, said Brazil had formally started free trade talks with Mexico, which in June ratified a trade pact with the United States and Canada to replace the North American Free Trade Agreement (NAFTA).

Troyjo said that Mexico had traditionally focused on trading with its NAFTA partners but wanted to diversify. He believed Brazil would be able to export more agricultural products to Mexico, Latin America’s No. 2 economy.

Mexico’s economy ministry confirmed there had been talks.

“We have had conversations to see how we can advance toward a liberalization, but we still haven’t defined the path to take,” the ministry said in a statement. “But we’re working on it.”

Trade between Brazil and Mexico has been less than desired, Troyjo said at a conference hosted by the Brazil-China Business Council in Sao Paulo.

The U.S.-Mexico-Canada Agreement has changed things, he said, and “Brazil has a more immediate interest in increasing its exports of agricultural commodities to Mexico.”

Lawmakers in the United States and Canada have yet to ratify the agreement.

The talks between Brazil and Mexico represent the latest chapter in Brazil’s efforts to open up its hidebound economy and trade more with the rest of the world.

Under far-right President Jair Bolsonaro, Brazil has begun talks on a trade treaty with the United States and is hoping a hard-won pact between the European Union and the Mercosur bloc of South American countries will be ratified.

However, Brazil’s efforts to broaden commercial ties coincide with a trade war between the United States and China that has ignited fears of recession globally.

In July, U.S. President Donald Trump said he would pursue a trade agreement with Brazil, suggesting a friendly relationship with Bolsonaro could help lower trade barriers between the two countries.

WASHINGTON (AP) — U.S. tariffs on Chinese goods are going up. Wait, President Donald Trump says he’s having second thoughts. No, no, Trump may actually raise tariffs even higher. He’s also demanding that U.S. companies leave China. Well, maybe not.

The communications on China from Trump and his administration since late last week — erratic, sometimes contradictory — are complicating their high-stakes talks with Beijing and elevating the risks to the fragile global economy.

The messaging has been confusing not just for Chinese officials as they formulate a response to whatever stance the administration is taking. It’s also a problem for American businesses. Trump alarmed U.S. companies on Friday by threatening to invoke his presidential authority to order them out of China — a market of 1.4 billion where many American companies have spent decades establishing operations and building relationships with suppliers and customers.

The shifting positions and threats could eventually weaken the U.S. and world economies by leaving businesses paralyzed by uncertainty over whether and where to situate factories, buy supplies and sell products.

“We are on Mr. Trump’s Wild Ride,” said Jay Foreman, CEO of Basic Fun!, a toy company in Boca Raton, Florida, that imports from China. “Never have we ever experienced such an unhinged practice of governance. It’s out of control and outrageous.”

Speaking Monday at the Group of Seven summit in Biarritz, France, Trump was unapologetic.

“Sorry — it’s the way I negotiate,” he said, adding, “It has done very well for me over the years, and it is going very well for the country.”

Negotiating a trade deal with China was always bound to be contentious and subject to fits and starts. The administration has accused Beijing of stealing trade secrets, extracting technology from U.S. companies and unfairly subsidizing its own businesses, and has demanded that it stop. What makes a resolution so elusive is that the administration’s demands would undercut China’s drive to achieve prosperity as the global leader in such transformative technologies as artificial intelligence and quantum computing.

Trump’s negotiators are also seeking a way to enforce any deal — arguing, as many independent analysts have, that China frequently violated commitments it made to previous U.S. administrations.

The world’s two biggest economies have imposed tariffs on hundreds of billions of dollars of each other’s goods in the biggest trade conflict since the 1930s. The hostilities have hurt global trade and investment and strained the decelerating world economy.

“Trump’s contradictory statements and erratic decision-making reflect the fact that he is an undisciplined, tactical thinker who deals with issues and events one-by-one and is guided by no fixed principles or long-term strategic vision,” said Jeff Moon, a former U.S. diplomat and trade official specializing in China who is now president of the China Moon Strategies consultancy.

Beijing’s negotiators are reluctant to make commitments in the face of what they see as Trump’s shifting demands, say economists and businesspeople.

After talks between the two sides collapsed in May, Trump accused Beijing of backtracking on its offers of regulatory changes and market-opening steps. Analysts suggested that Beijing was loath to make commitments without knowing whether the administration would soon make new demands.

“This constant flip-flop definitely makes it very hard for the other side to figure out what the American government actually wants,” said Joerg Wuttke, president of the European Union Chamber of Commerce in China, which represents 1,600 companies.

Wuttke suggested that Beijing’s approach is better coordinated, “whereas I see, Trump has a good day, bad day and, again, no strategy behind it.”

He said Trump’s approach to decision-making reminds him of Mao Zedong, whose impulsive policies kept China in chaos for much of the ’60s and ’70s. Like Mao, Wuttke said, “Donald Trump is disruptive. The Chinese cannot figure out what he wants. … It causes uncertainties. Uncertainty causes investment delay. It causes supply chain rearrangement.”

Chinese negotiators might be losing faith in Trump’s willingness to make a deal and stick to it, agreed Tu Xinquan, director of the China Institute for WTO Studies at the University of International Business and Economics in Beijing.

“We used to have expectations for Trump,” Tu said. “We hoped he was a businessman, more rational and less entangled in political issues. But now it seems his degree of rationality is far below our expectations. Constantly changing. The overall situation is getting worse. Simply put, we have no expectations now and don’t expect him to make the right responses and decisions.”

Chinese negotiators might have taken note, too, of Trump’s trade talks with Mexico. Pressured by U.S. tariffs, the Mexican government yielded last year to Trump’s demand to renegotiate a North American free-trade agreement. Yet just as trade between the two seemed to be normalizing, Trump suddenly threatened to impose new taxes on all Mexican goods. He was frustrated, he said, that Central American migrants were crossing Mexico en route to the U.S. (Trump dropped the tariff threat once Mexico agreed to do more to stop the migrants.)

In the meantime, Trump’s tariffs against Beijing and the uncertainty surrounding them are troubling U.S. businesses that have built complex supply chains in China or that rely on Chinese imports. Their worries are one reason U.S. businesses’ capital investment fell in the April-June quarter for the first time in three years.

“U.S. businesses will have to deal with his unique and what we believe to be consciously disruptive style of policy making for at least another 17 months,” Nomura’s economists wrote in a research note Sunday. “During this period we think U.S. businesses will, at the margin, hesitate to make major strategic decisions. … We expect this uncertainty to be a further drag on investment, hiring, and growth in coming quarters.”

As the United States and China continue to increase tariffs on one another, China has been dethroned by Mexico as the U.S.’s No. 1 trading partner.

Arizona’s southern neighbor found its way to the top amid continued uncertainty about our trade policy with China. Trade-in goods with the Asian nation fell sharply in the first half of the year as U.S. imports from China decreased by 12 percent compared to a year earlier. Exports to China were also down by 18 percent, according to data released by the Commerce Department.

Mexico ranks first in terms of the total overall value of goods traded with the United States, with Canada coming in at number two and China in third. In recent months, President Trump has wanted to limit the trade deficit the U.S. has with China. That deficit shrunk by about 10 percent to $180 billion from $200 billion.

The top imports from Mexico include computers, motor vehicle parts, commercial vehicles, oil, produce, and commuter vehicles. Mexico recorded $557 billion in trade with the U.S. in the latest annual figures.

Representatives from Washington and Shanghai went through another round of trade talks in July to no avail as President Trump said he would impose 10 percent tariffs on another $300 billion in Chinese imports starting on September 1. New talks are scheduled for September in Washington. Until then, Mexico will be sure to enjoy its reign as the biggest trading partner with the U.S.

“Businesses keep doing the right thing for the most part, and executives on both sides are looking more at the markets than the politicians for guidance. That said, politicians are both helping and hurting,” Doug Bruhnke, CEO/founder of the Global Chamber said. “We can withstand lots of hot air from the politicians, and we’ll navigate the world because we have to. Eighty-five percent of new business is outside the U.S. in the next 5 years and so companies recognizing the opportunity are reaching new markets all over the world to capture opportunity.”

The Trump administration added tariffs on $250 billion worth of Chinese imports this year and in addition to the new tariffs set to begin September 1st. In response, China has placed tariffs on $110 billion worth of U.S. goods.

“China will leverage some of the world against U.S. manufacturers, and so this is extremely troubling for the U.S. in the long term,” Bruhnke said. “The pain has only just begun. U.S. exporters are already scrambling in agriculture and other industries to find alternative markets for export.”

Mexico, on the other hand, has steadily increased trade with the United States. Trade with the U.S. rose to $257.72 billion through the first five months of this year, which represents 3.6 percent above its total trade during the same period last year. Exports from the U.S. to Mexico decreased by .42 percent while imports from Mexico ticked up 6.74 percent, according to data from the U.S. Census Bureau.

WASHINGTON (AP) — Congressional Democrats appear to be moving from “no way” to “maybe” on President Donald Trump’s rewrite of a trade pact with Canada and Mexico.

House Democrats have met four times with U.S. Trade Representative Robert Lighthizer, most recently on Friday, and both sides say they are making progress toward a deal that would clear the way for Congress to approve Trump’s U.S.-Mexico-Canada Agreement, or USMCA.

Democratic Rep. Earl Blumenauer of Oregon, who heads a House subcommittee on trade, declared a couple of months ago that there was “no way” Democrats and the administration could bridge their differences. Lately, he’s reconsidered. “In the course of the last two months, we have seen significant progress,” Blumenauer said.

Negotiators so far have not offered details on where they’re making progress. Democrats want the agreement to include stronger protections for workers and the environment. They also are seeking to jettison a provision they see as a giveaway to big pharmaceutical companies.

Talks could still fall apart. Meetings between congressional staffers and officials from Lighthizer’s office during Congress’ August recess could prove critical. House Democrats working on USMCA will submit text next week to the administration “memorializing the concrete and detailed proposals that we have made.”

They called on the administration to do the same.

“It is time for the administration to present its proposals and to show its commitment to passing the new NAFTA and delivering on its own promises,” the Democratic lawmakers said.

Supporters of USMCA are pushing for a deal before the 2020 election campaign heats up, which could make it harder for Democrats and Republicans to compromise.

A senior administration official, who spoke on condition of anonymity to discuss internal deliberations, said there was growing optimism within the administration about USMCA’s prospects amid signs that House Speaker Nancy Pelosi was willing to work toward a compromise.

“The smart money in Washington is that USMCA will pass this fall following a bargain,” said Daniel Ujczo, a lawyer with Dickinson Wright in Columbus, Ohio, who specializes in North American trade. “However, it is just as likely that we will be in a ‘bump and blame’ scenario where the president can blame Speaker Pelosi and Speaker Pelosi can blame the president.”

By ratifying the agreement, Congress could lift uncertainty over the future of U.S. commerce with its No. 2 (Canada) and No. 3 (Mexico) trading partners last year and give the U.S. economy a modest boost. U.S. farmers are especially eager to make sure their exports to Canada and Mexico continue uninterrupted.

Rep. Cheri Bustos of Illinois, who oversees efforts to get Democrats elected to the House, said Pelosi “understands the sense of urgency” about USMCA among some lawmakers who represent rural districts.

“The hope is that we can get to a yes,” Bustos said. “But first and foremost, it has to look out for working men and women in our country.”

The USMCA is meant to replace the 25-year-old North American Free Trade Agreement, which eliminated most tariffs and other trade barriers between the U.S., Mexico and Canada. Critics — including Trump, labor unions and many Democratic lawmakers — called NAFTA a job killer for America because it encouraged factories to move south of the border, take advantage of low-wage Mexican workers and ship products back to the U.S. duty free.

Lighthizer last year negotiated a do-over with Canada and Mexico. But it requires congressional approval.

He sought to reach a deal that would win over Democrats. It includes provisions designed to nudge manufacturing back to the United States. For example, it requires that 40% to 45% of cars eventually be made in countries that pay autoworkers at least $16 an hour — that is, in the United States and Canada and not in Mexico.

Vice President Mike Pence highlighted the carmaker provisions during a speech Tuesday in Lancaster, Ohio, where officials are beginning construction of a car seat manufacturing plant. He’s been traveling to states the Trump administration believes would most benefit from a new agreement.

I mean, this state has so much to gain from the USMCA,” Pence said. “And so, for Ohio, for the automotive industry, and for America, we’ve got to get the USMCA done. And we got to get it done this year. ”

But Democrats say it still doesn’t go far enough.

Democrats are also lined up against a provision of USMCA that gives pharmaceutical companies 10 years’ protection from cheaper competition in a category of ultra-expensive drugs called biologics, which are made from living cells. Shielded from competition, critics warn, the drug companies could charge exorbitant prices for biologics.

Congress is supposed to give trade agreements an up-or-down vote, no amendments allowed.

The reality is different. Despite those so-called fast-track provisions, Congress has managed to pressure past administrations into making changes to the last four U.S. free-trade agreements before approving them.

The trade pact picked up some momentum after Mexico in April passed a labor-law overhaul required by USMCA. The reforms are meant to make it easier for Mexican workers to form independent unions and bargain for better pay and working conditions, narrowing the gap with the United States.

Mexico ratified USMCA in June. But Democrats are also watching whether Mexico budgets enough money later this year to provide the resources needed for labor reform.

In Washington, lawmakers are getting pressure from all sides. Business and farm groups want the new deal approved as soon as possible.

Meanwhile, labor, environmental and other activist groups last month declared a “No Vote Until NAFTA 2.0 is Fixed” day and collected 300,000 signatures on petitions demanding changes to the trade pact.

“The only way forward is making the fixes,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

Trump has repeatedly threatened to withdraw from the existing NAFTA — it remains in effect — if Congress won’t OK his version. But analysts say that pulling out of NAFTA would squeeze automakers and farmers.

“The president knows that his voters here in the heartland and manufacturing Midwest cannot take another hit — we hope,” Ujczo said.

Charger Logistics’ new state-of-the-art facility in Laredo is up and running. The company aims to double its business in Mexico and grow overall capacity by 200 trucks and manage 600 trailers at the location.

Charger Logistics, which has its United States headquarters in Indiana, will use the new Laredo facility to serve as the company’s headquarters in the south, officials said.

“The new facility is the foundation for our growth in the Mexico market,” said Andy Khera, the company’s president and chief executive officer. “We really want to see our operations double here in the next year – it is a direction we are going to go in, a direction we are going to work hard towards.”

The Charger Logistics facility is located on 30 acres at 13620 Evolution Loop, just off Interstate 35 in Laredo. It includes a 15,000-square foot repair and maintenance bay, a 24,000 square-foot cold storage warehouse and an 80,000-square foot dry-freight warehouse. Charger Logistics does all the repairs and maintenance on its truck fleet in-house, officials said.

Khera said the company averages around 150 shipments daily in and out of Mexico, but seeks to double that number within a year. Charger Logistics moves a diversified service offering of goods into and out of the Mexico cross-border market, everything from produce to manufactured goods, to chocolate.

“We do a lot of dry van work, but the need for refrigeration is also big in Laredo. That is why the new facility has the 24,000 square-foot cold storage warehouse,” Khera said.

Charger Logistics also plans to employ up to 150 people at the site, including operations managers, warehouse workers, drivers and mechanics.

Khera said the tariff threats against Mexico and President Donald Trump’s trade negotiations with Canada and China have created challenges in the past year, but Charger Logistics remains committed to growing its Mexico operations.

“Our company started around 2003, but we have had shipments in and out of Mexico since 2008,” Khera said. “The overall vision of the new facility is to provide better facilities for our drivers and increase our ability to work with our partners in Mexico and really take advantage of the growth in the market.”

Port Laredo’s trade totaled $20.66 billion for the month of May, $96.71 billion through May of 2019 and $234.66 billion for all of 2018, the latest annual data available, according to U.S. Census Bureau data analyzed by WorldCity. Laredo’s World Trade and Colombia Solidarity bridges carry around 12,000 trucks across the border every day.

Laredo Mayor Pete Saenz called Charger Logistics’ new facility a “North American Free Trade Agreement (NAFTA) success” and a “United States-Mexico-Canada Agreement (USMCA) success.”

The United States-Mexico-Canada Agreement is an updated version of NAFTA. The USMCA still needs to be ratified by the U.S. and Canadian legislatures.

“We’re proud to say that [Charger Logistics] chose Laredo as a hub for its business. This means employment and a great deal of prosperity for many people in Laredo,” Saenz said.

MEXICO CITY (Reuters) – The U.S. Chamber of Commerce on Monday criticized the Mexican state-owned power utility CFE’s filing with an international court to begin arbitration with several infrastructure companies over pipeline contracts, saying the move could undermine investor confidence.

The CFE [COMFEL.UL] said last week it would aim to negotiate a “fairer” outcome to contract disputes with several companies through a mediation process overseen by the London Court of International Arbitration.

The infrastructure firms include Mexican companies Fermaca, Grupo Carso and IEnova, a subsidiary of U.S.-based Sempra Energy, as well as Canada’s TC Energy Corp.

The London arbitration court could not immediately be reached for comment.

The U.S. Chamber of Commerce said in a statement on Monday that it was concerned by the move, stressing the importance of legal certainty to secure foreign investment.

“This action risks sending a negative signal to U.S. and other international investors about the business and investment climate in Mexico,” the group said. “We therefore urge CFE and the Government of Mexico to reconsider this decision and to observe the president’s pledge to honor the sanctity of existing contracts.”

The group did not detail what action it wanted CFE to take.

CFE began talks with pipeline builder Fermaca on Monday as part of a push to negotiate independently with the companies, CFE spokesman Luis Bravo said.

“All the companies have agreed to talk about the contracts. Today we met with Fermaca to determine how to negotiate,” CFE spokesman Luis Bravo said. The talks will take place in parallel to the process in international arbitration court, he added.

Fermaca could not be reached for comment.

Mexican President Andres Manuel Lopez Obrador has pushed back against criticism of the arbitration request, saying the terms of the agreements were “abusive” toward the state.

The U.S. chamber has repeatedly come to Mexico’s defense during U.S. President Donald Trump’s administration, defending the North American Free Trade Agreement when Trump threatened to kill the deal and urging the United States to exempt Mexico and Canada from steel and aluminum tariffs.

The CFE’s pursuit of arbitration has sparked criticism from others in the international community. Canada raised concerns about the dispute, and Moody’s said the spat was “credit-negative” for the utility, the companies involved and the sector as a whole.