Mexican Ambassador to the U.S. Martha Barcena Coqui on Monday said the U.S.-Mexico-Canada Agreement’s pioneering labor reforms shouldn’t be taken for granted.

The U.S. labor movement should “seize the opportunity” and embrace the U.S.-Mexico-Canada Agreement’s (USMCA’s) groundbreaking labor reforms, which were not even considered until Mexican President Andres Manuel Lopez Obrador was elected on July 1, Mexican Ambassador to the U.S. Martha Barcena Coqui said Monday.

U.S. labor organizations have complained that USMCA labor provisions won’t be enforceable, and the AFL-CIO recently announced its opposition to the agreement absent a renegotiation of labor provisions. House Democrats have expressed similar sentiments.

But NAFTA’s state-to-state dispute settlement mechanism, which would be used to enforce USMCA labor provisions, has failed mainly because the U.S. opted to not submit its roster of arbitrators to serve on dispute panels, Barcena said during an event at Georgetown Law School.

USMCA parties can ensure labor enforcement has teeth if they simply submit their lists of panelists at the same time USMCA is ratified, Barcena said.

“You will never find another partner as [the Mexican] government,” Barcena said in response to a comment by AFL-CIO trade and globalization policy specialist Celeste Drake. “Believe me.”

Drake said the U.S. has been on the receiving end of promises by Mexico for 25 years and by other trading partners that they will protect workers, enforce domestic laws and provide workers with legitimate opportunities to organize, Drake said. “The fact is they haven’t.”

After endorsing Hillary Clinton’s bid for the presidency during the last election cycle, AFL-CIO chief Richard Trumka said on Fox Business on Election Day in 2016 that a NAFTA renegotiation under a Clinton administration would involve organized labor having a seat at the negotiating table, an approach to NAFTA he said he would support.

A report of the Office of the U.S. Trade Representative’s Labor Advisory Committee on Trade Negotiations and Trade Policy at the end of the negotiation noted the Trump administration’s level of engagement with organized labor was an improvement over prior trade agreement negotiations, but criticized the fact that the talks took place behind closed doors.

Barcena said Mexican labor reform legislation expected to pass Mexico’s Congress this week will ensure enforcement of USMCA labor provisions by Mexican domestic bodies, including independent labor courts, as well as labor boards that would resolve disputes and register contracts between workers and companies.

“If there is a violation of the labor laws in Mexico, workers can go to the labor courts and they have a speedy procedure,” she said. “What else do you want for enforcement? What can you ask a country internally to do if you have those enforcements in place?”
The lower house of Mexico’s Congress has approved the labor reform legislation, and the Mexican Senate is expected to approve it later this week, Barcena said.

“There will be free unions and we will ensure union leadership is overhauled,” she said.
Mexico currently has a system of “protection unions,” unions that are company controlled. Barcena said the labor reform legislation would dismantle this system.

The Mexican government is working on a road map to implement the labor legislation, and some of the institutions to be created by the legislation should be in place next year, she said.

After the legislation is passed, Mexico will have to review 700,000 protection contracts in four years, Barcena said.
“We are already preparing what kind of technical cooperation we can work with the U.S. authorities, and maybe with the help of [U.S.] labor unions themselves, because [they] may have more experience in certain areas,” she said. “The reviewing of the contracts will be of extreme importance. It will be very relevant and would hope to have the collaboration of the labor movement in the U.S.”

Trumka on Tuesday said he opposes ratification of USMCA because he doubts Mexico will enforce labor reforms required by the pact, noting that he wants to see Mexico’s ability to amend the 700,000 protection contracts in the four-year time span required by the agreement, AFP reported.

Wait times at the ports of entry along the U.S.-Mexico border have soared as the Trump administration diverts officers to handle an influx of immigrants, leaving trucks backed up for hours and industry leaders warning of possible produce shortages and supply-chain interruptions.

The clogged checkpoints are frustrating bankers, business leaders, local residents and even Mexico’s foreign minister, who called the reassignment of hundreds of border officers to other parts of the nearly 2,000-mile boundary a “very bad idea.” The shift in enforcement efforts is overwhelming legal checkpoints and impeding the free flow of goods and services, in some cases increasing wait times about fivefold.

Executives described the scene at the southern boundary as a slow-motion facsimile of the border closure that President Trump threatened two weeks ago before backing down amid protests that shutting down the border would hurt the economy. Trump said he would consider closing the border as a punitive measure if Mexico doesn’t take steps to reduce the flow of migrants to the United States within the next year.

Those now suffering the most because of backlogs at understaffed ports of entry are automakers, technology companies and farmers, who say that the slowdown is affecting the $1.7 billion-a-day in goods that crosses the border between the United States and Mexico. Delays at ports in Texas have at times exceeded 10 hours in recent days.

“This is a big, big cost and problem for companies, on top of everything else they’re dealing with,” said Rufus Yerxa, president of the National Foreign Trade Council. “It’s just more uncertainty and more pain.”

On Monday, cargo trucks waited up to two hours to cross the bridge from Mexico into Brownsville, Tex., a city that had no delays at this time last year. On El Paso’s Bridge of the Americas, cars and SUVs idled for 160 minutes, up from 45 minutes a year ago. Southern California’s Otay Mesa cargo processing section took 270 minutes to push trucks through its crossing this week, up from 50 minutes last year.

The lengthy delays are rippling through supply chains, resulting in higher costs and production disruptions. Because the wait times have grown so large, some companies are adding a second driver to their trucks because of government regulations limiting the number of hours a driver can work without resting.

The streets around the Otay Mesa commercial crossing into San Diego were filled with bored and frustrated truckers.

Juan Macareno, a truck driver from Ensenada, Mexico, said he has waited as long as six to eight hours to clear the border checkpoints during the past two weeks, up from the usual two hours. On Wednesday, he chatted on the phone and scrolled through his WhatsApp messages as traffic inched along.

“Just waiting,” he said, after driving a produce-filled truck into California. “You have nothing to do.”

Drivers say they are taking fewer routes, and others have been forced to stay overnight at some checkpoints because there aren’t enough officers to process the long lines of trucks.

Homeland Security officials say they are not intentionally slowing down processing times, but they acknowledge the frustrations the long lines have produced are helping them convey the severity of the border crisis.

With 545 Customs and Border Protection officers reassigned to help the Border Patrol, a negative impact on travel times and cargo inspections is inevitable, one DHS official said, speaking on the condition of anonymity to offer candid views.

“Our intention is not to slow down commerce, it’s to provide some relief to what’s going on at the border,” the official said.

Border Patrol officials have repeatedly warned that immigration holding cells are jammed beyond capacity, with 10,000 to 13,000 in custody, creating dangerous and unsanitary conditions for migrants and officers. Authorities have said they are overwhelmed at the border and need more detention beds, officers and judicial support to process the rush of migrants.

Some executives worry that if short staffing at the border checkpoints causes delays to continue, Mexico could retaliate by slowing southbound traffic. In a rare rebuke of U.S. immigration policy Wednesday, Mexico’s Foreign Minister Marcelo Ebrard tweeted that the border slowdown is “creating costs . . . for both Mexico and the United States.”

High-level officials and business leaders are expected to discuss the delays Thursday and Friday at the U.S.-Mexico CEO Dialogue in Merida, a meeting held twice a year.

The slowdowns at the border have come as the Department of Homeland Security has faced political upheaval amid a record surge of migrants that included apprehensions topping 100,000 last month. The crossings have infuriated the president, leading to the ouster of DHS Secretary Kirstjen Nielsen, who officially resigned effective Wednesday, days after Trump rescinded the nomination of her top immigration enforcement deputy, Ronald Vitiello. He announced his resignation Wednesday. The next acting commissioner of CBP will be John Sanders, the agency’s chief operating officer, a DHS official said Wednesday.

CBP Commissioner Kevin McAleenan, who ran the agency that apprehends migrants at the border and screens cars and trucks passing through legal checkpoints, took over as acting DHS secretary on Wednesday. McAleenan takes over as the Trump administration seeks a solution for what it considers an illegal migration crisis but also as officers struggle to maintain order over legal trade at the border.

In an informal survey by the Original Equipment Suppliers Association, 42 percent of its members reported suffering delays in their shipments from Mexico to the United States. Of those companies, two-thirds said the delays reached seven to 12 hours, according to Julie Fream, the group’s president.

The association’s members, which include companies such as Johnson Controls, Eaton and Tenneco, produce original equipment for automobiles.

Automakers are perhaps the most vulnerable to a prolonged border slowdown. The industry sends half-finished cars back and forth across the southern border multiple times and relies on Mexican factories to produce critical parts, such as the wire harnesses that organize a vehicle’s electrical cables. Continued disruption of shipping could soon interrupt production at American factories.

“That’s the concern,” said Neil Bradley, executive vice president of the U.S. Chamber of Commerce. “We’re getting closer to that point.”

Companies already are preparing to reroute cargo. Just one more day of backlogs would be enough for one-third of those responding to the survey to switch cargoes from trucks to airfreight, Fream said.

“All of those asked said they would seek alternatives if the delays continue for a week,” Fream said. “These alternatives are very costly.”

The Port of Nogales, Ariz., a chronically understaffed major crossing point for fresh fruit and vegetables, was slated to receive an extra 75 border agents. But those agents have been redeployed to cope with the migrant surge, according to Lance Jungmeyer, president of the Fresh Produce Association of the Americas.

“This is the new normal until they solve the problem at the border,” he said Wednesday.

Though delays in Nogales are not as severe as in Texas, they come after years of improvement in processing time. When Jungmeyer started working in Nogales in 2010, customs waits sometimes stretched to seven hours. Before the current staffing crunch, typical truck processing times were one hour or less, he said.

In an April 4 conference call, CBP officials told shippers they should expect delays to persist “for the foreseeable future.”

If the migration surge continues for 30 more days — as it is predicted to do — the agency plans to strip some agents from airport posts to further reinforce the border deployment, Jungmeyer said he was told. Beyond that, agents will be taken from the northern ports of entry with Canada and shifted to the border.

Jungmeyer said shifting resources away from the ports comes with costs that go beyond shipping delays: “We’re only making our ports of entry less secure. We’re encouraging bad players to take advantage of the ports of entry. We need to get customs officers back on line at the ports.”

U.S. Rep. Vicente Gonzalez (D-Tex.) on Wednesday urged an effort to reduce the wait times at the border, calling on the Trump administration to “listen to the countless industries that rely on cross-border trade.”

The Texas International Produce Association asked McAleenan to dispatch officers and agents from the northern U.S. border and seaports to reduce delays. Their members report that wait times to cross the border have risen from 30 minutes to four-and-a-half hours.

“We haven’t seen issues like this in probably six years,” said Dante Galeazzi, CEO and president of the association, adding that the group is warning supermarkets and restaurants to expect delays and possibly shortages of avocados, mangoes, limes and other goods. “Obviously we think it’s a bad thing.”

Mexican President Andres Manuel Lopez Obrador said Wednesday that talks with White House senior adviser Jared Kushner have led to advances toward an agreement that would have the U.S. government guarantee some $10 billion in development investments for Mexico and Central America.

The previously discussed investments would aim to reduce immigration from Mexico and Central America by providing more opportunities in those countries. Roughly half of the sum would go to Mexico while the remainder would be divided among Honduras, Guatemala and El Salvador, Lopez Obrador said.

“That is investment to create jobs so that the people don’t have the need to abandon their communities, their families, their regions, their customs, their culture,” he said. “That is the dream that we want to convert into a reality.”

He said they were nearing an agreement and that he would consider traveling to the U.S. if there is a solid accord to sign.

Mexico has been under pressure from the U.S. to address the flow of Central American immigrants through the country. Several migrant caravans have drawn the ire of U.S. President Donald Trump.

Mexico has stepped up its offering of visas that would allow Central Americans to stay and work in Mexico and also agreed to a U.S. program that forces some who seek asylum in the U.S. to wait in Mexico while their cases are processed.

Some have criticized Mexico for efforts to slow the migration flow to the U.S. even while Trump continues to demand funding to extend a barrier along the entire U.S.-Mexico border.

Lopez Obrador, a leftist, had campaigned on the idea of improving economic and security conditions in Mexico sufficiently so that Mexicans would not have to migrate.

“We have the conviction that with the programs that are being implemented in our country there is going to be zero migration of Mexicans,” he said Wednesday. “Mexicans aren’t going to need to go to work in the United States because there is going to be work.”

Lopez Obrador and Trump’s son-in-law dined Tuesday in the Mexico City home of Bernardo Gomez, co-executive president of Grupo Televisa.

Lopez Obrador said there is a “very good relationship with the U.S. government.”

The civil relationship between Lopez Obrador and Trump has surprised some who expected the two strong personalities to clash. Lopez Obrador’s predecessor Enrique Pena Nieto was harshly criticized for not standing up more strongly to Trump’s verbal attacks on Mexico and one of his final acts as president was giving Kushner the Order of the Aztec Eagle, the highest honor the country gives to foreigners.

But Lopez Obrador has been careful to maintain a relationship of “mutual respect” and members of his Cabinet were involved in the renegotiation of the free trade agreement before he had even taken office.

The Mexican leader said he and Kushner also discussed the pending ratification of the new trade agreement, dubbed the U.S.-Mexico-Canada Agreement.

Mexico’s Foreign Minister Marcelo Ebrard and John Creamer, the charge d’affaires at the U.S. Embassy, also attended the dinner.

President Donald Trump is escalating his pressure on General Motors, as he calls for the company to reopen an Ohio manufacturing plant.

Trump tweeted Monday that GM should: “Close a plant in China or Mexico, where you invested so heavily pre-Trump,” and “Bring jobs home!”

Trump travels to politically important Ohio this week. Over the weekend, Trump tweeted that officials should start talks with the United Auto Workers immediately so that the Lordstown plant could be reopened or sold.

General Motors said in a statement Sunday that the future of plants scheduled to be closed “will be resolved between GM and the UAW.” The automaker said that they had “opportunities available for virtually all impacted employees.”

While a chorus of business and industry leaders is fighting for Congressional approval of the United States-Mexico-Canada Agreement, some sources believe the near-term outlook appears cloudy at best for the deal.

On March 11, the Pass USMCA Coalition, an alliance of business groups advocating for the swift passage of the United States-Mexico-Canada Agreement, began its first major advertising campaign.

The television and digital advertisements highlight the benefits of the modernized North American trade pact and encourage voters to urge their Congressional representatives to ratify the deal, according to the release.

“The United States-Mexico-Canada Agreement will propel American trade into the 21st century,” Gary Locke, honorary co-chairman of Pass USMCA, said in the release. “Millions of Americans who see this first commercial will know it benefits workers and the economy.”

The TV ad can be seen at PassUSMCAnow.org.

The White House also has been lobbying Congress for action, but with little success so far.

House lawmakers have told media that the agreement may not be presented for approval until late summer at the earliest, said Richard Owen, vice president of global business development at the Newark, Del.-based Produce Marketing Association.

While the discord between the U.S. and Mexico on tomato trade issues could complicate consideration of the North American trade deal, overall trade politics are present more of an obstacle, Owen said.

House Democratic leaders may want concessions before they take the agreement up, Owen said.

While the agreement can’t be renegotiated, there could be side letters or implementation language that could help one industry or another.

Whether that type of “side deal” could include tomatoes is unknown, Owen said.

If there was some kind of special treatment for tomatoes, however, Owen said lawmakers representing other industries would also want a chance help their constituents, which could tangle the process.

“So there will certainly be a push within the (tomato) industry to do that (but) whether they’re successful is probably unknown right now.”

In terms of other trade issues, Owen said it was good news that President Trump has indefinitely postponed his previous plan to increase or add new tariffs on Chinese goods on March 1.

“The hope in doing that is to give some more room for negotiators to reach agreement on the current tariffs,” he said. “This is some breathing room now for negotiations to continue to take place,” Owen said.

There is no apparent quick path for current retaliatory tariffs on U.S. produce to exports to China to be lifted soon, he said.
With the U.S. still enforcing a tariff on Mexican steel and aluminum imports, Mexico’s retaliatory tariffs on apples and other goods also remain in place, Owen said. There is no indication when they will be lifted.

Some lawmakers may ask for Trump to lift U.S. steel and aluminum tariffs on Mexico before they consider the U.S. Canada Mexico Agreement, Owen said.

The U.S. and the United Kingdom are talking about trade issues, but Owen said the U.S. produce industry is most interested in getting current trade problems solved.

“Getting the U.S. (Canada) Mexico trade agreement approved and in place and getting the China tariffs removed are probably the highest priorities, and the ones that would affect the greatest parts of the industry,” he said

Desmond O’Rourke, economist and president of Pullman, Wash.based Belrose Inc., said Trump’s trade ambitions have been difficult to achieve.

“Trump took on too many trade battles at one time and is having a hard time getting any of them wound up,” he said.

While Trump had earlier threatened to terminate the existing North American Free Trade Agreement if the new trade deal doesn’t pass, some media commentators speculate that is likely only a bluff.

O’Rourke believes continuing the existing deal wouldn’t find any objections in the Northwest tree fruit industry.

“The current agreement didn’t seem to be causing problems to anybody except Trump,” he said.

OTTAWA — Mexico’s Congress will be asked to approve a major labour-reform bill this spring as a necessary step to ratifying the new North American free-trade pact later this autumn, say Mexican officials.

But unless the Trump administration lifts the punishing tariffs it has imposed on Mexican steel and aluminum imports — duties it also imposed on Canada — Mexico is prepared to keep the status quo with the 25-year-old North American Free Trade Agreement.

The push to improve workers’ rights in Mexico was a key priority for Canada and the United States during the rocky NAFTA renegotiation because they wanted to level the playing field between their workers and lower-paid Mexican workers, especially in the auto sector.

When Mexico and the U.S. reached their surprise bilateral agreement last August, forcing the Trudeau government to quickly forge a deal with the Trump administration, Foreign Affairs Minister Chrystia Freeland lauded Mexico for making labour concessions.

But a senior trade official in the new government of socialist reformer Andres Manuel Lopez Obrador suggested in an interview it wasn’t a huge sacrifice because elevating the status of country’s workers was a key plank in the platform that brought their Morena party to power.

Lopez Obrador made it clear in his election campaign that he wanted to strengthen the rights of workers and labour unions, which made a good fit with Canada’s bargaining position, Luz Maria de la Mora, Mexico’s deputy trade minister, said in an interview.

“With the agreement or without the agreement, this is something central to President Lopez Obrador — strengthening workers’ rights and strengthening trade deals in Mexico,” said de la Mora.

She said the new government wants a package of labour reform ratified in Mexico’s Congress before its April 30 adjournment “so we can reflect the commitments that we’ve made under the new U.S.-Mexico-Canada agreement in domestic legislation.”

That means the new agreement will be sent to the Mexican Congress for ratification after it reconvenes in Sept. 1, she said.

But that won’t happen unless the United States lifts its so-called section 232 tariffs on steel and aluminum exports, said de la Mora.

U.S. President Donald Trump imposed tariffs of 25 per cent on steel and 10 per cent on aluminum from Mexico and Canada, using the controversial national-security clause in U.S. trade law — “Section 232,” as it’s called in shorthand — that both countries say was illegal.

Canadian Transport Minister Marc Garneau recently told Trump’s top economic adviser, Larry Kudlow, during a public panel in Washington that the tariffs are “a serious impediment to us moving forward on what is the best trade deal in the world.”

On Nov. 30, Prime Minister Justin Trudeau, Trump and former Mexican president Enrique Pena Nieto, who was on his last day in office, signed the new trade agreement. It now faces ratification by the legislatures of all three countries.

Trudeau spoke to Trump on Thursday and “raised the issue of steel and aluminum tariffs and expressed the need for the removal of tariffs,” the Prime Minister’s Office said.

Canada has been clear from the outset that the tariffs “are illegal and unjustified,” said Adam Austen, a spokesman for Freeland.

“Now that we have concluded our NAFTA negotiation with the United States, we believe it is all the more reason for the U.S. administration to lift its tariffs,” Austen said Sunday, although he did not say specifically whether the issue would lead to a delay in ratification.

If the tariffs aren’t lifted, de la Mora suggested Mexico is fine with the current version of NAFTA that remains in force.

“We hope to have this new agreement in place. But in the absence of the new agreement, we know that NAFTA is good enough,” she said.

Mexico would prefer the updated agreement “for the relations we have with the U.S. and Canada but we are OK with the current NAFTA.”

Mexican senators, who were in Ottawa the past week to conference with their Canadian parliamentary counterparts, echoed de la Mora’s assessment.

“We are going to approve it, but right now our government is trying to deal with this (the tariffs),” Sen. Antares Guadalupe said in an interview.

“We’re not in a rush. Trade right now, it’s working,” she added. “We have many things to do but we want to take it slowly because it is very important to have it in a very good way for Mexico.”

Sen. Hector Vasconcelos, the head of the Mexican Senate’s foreign-affairs committee, said the ratification of the new agreement is also subject to the domestic political situations in all three countries. That includes the ongoing turmoil in the Trump administration and Canada’s legislative clock, which will see the House of Commons adjourn in June until after the October federal election.

Asked what happens if the new agreement is not ratified, Vasconcelos laughed.

“Life goes on, I assure you,” he said, referring to the current NAFTA. “It’s good enough and we will try to get it better. That’s what we are going to do. We have to discuss a lot in Mexico.”

Wall Street is rising today on optimism a trade deal between China and the US is close. The US President is feeding that optimism. The S&P500 is up +0.4% in afternoon trade. This follows Shanghai yesterday that was up +5.6% and Hong Kong, up +0.5%. That Shanghai rise is eye-popping and since the start of 2019, their index is up a remarkable +20.1%. Remember however, that index dropped more than -25% in 2018 so even after today’s big rise it is still -10% in the hole.

The final sticking points in the trade deal seem to be ‘enforcement’ mechanisms.

In the US, February car sales are expected to be about -1% lower than the same month a year ago.

US wholesale trade disappointed with sales levels in December up only +1.0% year on year, but giving up some of that gain from November. Further, wholesale inventories rose and at a quickening pace and are up +7.3% from December 2017. This is not a good sign.

Bucking the trend on a regional basis, the overall Dallas Fed activity index was up even as new order data halved.

In Mexico, their economy slowed sharply in the fourth quarter of 2018 as a drop in industrial production largely cancelled out good gains in services and rural production. Full year 2018 growth was +2.0% with little contributed in the final quarter.

In China, in something of a double-take Kafka moment, their banking regulator is saying they have achieved their structural deleveraging targets.

In Australia, according to CoreLogic there are 115,000 houses currently listed for sale across the country, a level +15% higher than this time last year. But sale volumes are down -15% nationwide, but that figure increase to more than -20% in the big markets of Sydney and Melbourne.

And staying in Australia, their opposition Labor Party has said it will follow New Zealand and require real estate agents, accountants and lawyers to be subject to anti money laundering laws – if they win in the May general election.

The UST 10yr yield is at 2.68% and a rise of +3 bps. Their 2-10 curve has held at just under +17 bps. The Aussie Govt 10yr is up +1 bp to 2.11%, the China Govt 10yr is up +3 bps to 3.18%, while the NZ Govt 10 yr is down -3 bps at 2.18%.

Gold is a little softer, down -US$2 at US$1,326/oz.

US oil prices are sharply lower today, now just over US$55/bbl while the Brent benchmark is down to just under US$65/bbl.

MEXICO CITY (Reuters) – Mexico’s state-oil company Pemex burned through $665 million at its fertilizer unit, ignored consultants and made high-risk investments with no discernible business strategy, according to a devastating government audit of its 2017 operations.

The report, published late on Wednesday, offers insight into how Pemex ended up creaking under $106 billion of debt during the six-year term of former President Enrique Pena Nieto.

Mexico’s Federal Audit Office (ASF) used unusually frank language in its assessment of Pemex’s use of public resources, particularly with regard to the company’s fertilizer subsidiary and a failed power generation unit.

The fertilizer company suffered net losses of $665 million in 2017, and its assets were worth $1.1 billion less over the course of the year.

“It destroyed value,” read the assessment, the last of three reports by the audit office on the state of government finances in 2017.

Pemex did not immediately respond to a request for comment.

President Andres Manuel Lopez Obrador has vowed to revive Pemex by clamping down on over-spending, rampant fuel-theft and corruption, but ratings agencies and investors are wary that expansive plans to revamp Mexico’s refineries could further weigh on finances.

Fitch downgraded the company’s credit rating to one notch above junk last month.

David Colmenares, who has headed the ASF since before last year’s election, told Reuters the results showed Pemex needed to be “re-engineered” to revive its finances.

“We believe that if we resolve many of these points, we will be able to recover (Pemex’s) finances,” he said.

He acknowledged corruption in the company, citing examples of contracts given to recently-created companies with no energy experience.

BAD BUSINESS

Many of the problems at Pemex Fertilizers, a subsidiary created under Pena Nieto’s liberalization of the energy sector, stem from its purchase of two fertilizer plants in 2013 and 2016, the report said.

Both plants had previously belonged to Pemex before being privatized in the 1990s by Pena Nieto’s Institutional Revolutionary Party (PRI).

The first plant, ProAgro, was not operational when Pemex bought it back for $475 million. Despite three attempts to revive it, the plant was still not up and running this year, the report said. The second plant, Fertinal, operated well below capacity, the report said.

Before the purchase, international auditors including PWC, warned Pemex’s board of directors of the parlous state of the two plants, but the company went ahead and bought them anyway, the report said.

Similarly, Pemex created a new power generation unit, called Pemex Cogeneration and Services, in 2015, without the board of directors being presented any evidence or studies to show it could be a profitable business, or seeing a business or operation strategy, the report said.

Without any infrastructure to generate electricity, the company lost $19 million in 2017. Pemex closed the unit the following year.

Wilbur Matthews, founder of Texas-based Vaquero Global Investment, called Pemex’s business decisions during the 2013-18 period “completely incongruous.”

“The way that they were conducting business in the past six years did not make any sense at all,” Matthews said.

During Pena Nieto’s term, Pemex took on an additional $47 billion in debt, citing the deterioration in finances and commitments to keep up investment levels at a time when the oil prices collapsed.

Shamaila Khan, director of emerging market debt strategies at AllianceBernstein, which has $550 billion of assets under management and owns Pemex bonds, blamed the company’s problems on the federal government charging it too much in taxes.

“The real issue is that the sovereign has taken a lot of money out of Pemex,” she said.

Khan said the company’s management had improved in the last years of Pena Nieto’s government.

“The decision to do energy reform, to reduce the burden of expenditures for the company and to try and stabilize the company were actually good decisions from a management perspective.”

A union declared total victory in a mass strike by about 25,000 workers at 48 assembly plants in a Mexican border city, but the movement spawned a storm of wildcat walkouts Monday at other businesses.

The Industrial Workers and Laborers’ Union won 20 percent wage increases at all 48 “maquiladora” factories in Matamoros, across the border from Brownsville, Texas. It also won a one-time bonus of about 32,000 pesos, about $1,685 at current exchange rates.

Now workers at about a dozen non-union businesses as well as factories organized by other unions have started wildcat walkouts to demand the same increases, known colloquially as “20/32.”

The Tridonex auto parts company said in posts on its Facebook page Monday that pickets had prevented employees from entering its Matamoros plant and it cancelled some shifts. Video showed workers outside the plant chanting “20/32!”

The local maquiladora association, known as Index, said that all the plants in the association had signed labor contracts as of last week and that none of the businesses affected by the wildcat strikes are members.

Javier Guerrero, a Matamoros public relations specialist who has been active in strike support work, said the example set by the first round of strikes has spread to local businesses, many of which are not maquiladoras, which assemble products for export to the United States.

Supermarkets, bottlers and a milk company in Matamoros were reportedly hit by walkouts.

“In the past week, the strike wave has spread beyond the factories to supermarkets and other employers, with all the workers demanding “20/32,” said the AFL-CIO, which has sent a delegation to support the striking workers.

The mass strike erupted after President Andres Manuel Lopez Obrador decreed a doubling of the minimum wage in Mexico’s border zones, apparently unaware that some union contracts at the maquiladora plants are indexed to minimum wage increases.

While other Mexican cities don’t have the same contract clauses, for workers often making less than $1 an hour, the appeal of a pay raise and bonus has proved irresistible.

“Just as happened in Matamoros, it (the walkouts) spread to other companies and unions. It is very probable that it will spread to other cities, at least within the border area,” Guerrero said.

There has been a generalized upsurge in Mexico’s long-dormant labor movement since Lopez Obrador took office Dec. 1, something the president doesn’t appear to have planned on or encouraged. Lopez Obrador has simply promised to keep the government out of unions’ internal affairs and allow for free and fair union elections.

For a union movement kept in check for decades by pro-company union bosses allied with the former ruling Institutional Revolutionary Party, the promise of union democracy has been enough to spark a revival.

But there has already been a backlash.

“In the past week, as many as 2,000 strike leaders have been fired and blacklisted, despite legal prohibitions and non-reprisal agreements signed by the employers,” said the U.S. union delegation, which included representatives from the AFL-CIO, United Auto Workers and United Steelworkers.

“The Mexican and U.S. governments must both demand that these U.S. companies honor their agreements and stop firing and blacklisting these courageous workers,” said Texas AFL-CIO Secretary-Treasurer Montserrat Garibay.

Meanwhile, Lopez Obrador has been struggling with the most radical and intractable union in Mexico, the CNTE teachers’ union, which has blocked railroad lines in the western state of Michoacan on and off for the last month.

The teachers lifted most blockades last week but on Monday they briefly re-established a protest camp on a line operated by Kansas City Southern de Mexico.

KCSM reported that by late Monday, the camp had been removed and the line re-opened. But the company said that during 28 days of blockages, 414 trains were prevented from running and 3.5 million tons of freight was stalled.

The teachers initially started the blockages to demand back pay, but they kept blocking rail lines even after they were paid.

Mexico City – More than 25,000 Mexican workers at dozens of factories south of Brownsville, Texas, went on strike Friday after owners of the plants that assemble for export refused union demands for a 20 percent pay hike and an annual bonus.

The Union of Maquiladora Industry Industrial Workers of Matamoros, the SJOIIM, said that by late Saturday nine companies had agreed to meet the salary and bonus demands.

Union leader Juan Villafuerte thanked union members who had stood outside in the rain and cold, noting “we hope to soon conclude this labor action.”

The government of Tamaulipas state said at least one company announced plans to leave the city of Matamoros. The state’s development office said other companies had halted expansion projects.

The strikes affect factories that make auto parts, medical equipment, plastics and other goods.

The labor strife comes on the heels of President Andres Manuel Lopez Obrador’s promise to double the minimum wage in communities along the U.S. border to 176.2 pesos a day, the equivalent of $9.28 at current exchange rates.

However, workers who were making more than minimum wage in Matamoros factories would not have benefited from the hike in the minimum wage, sparking discontent.

The workers are also demanding a one-time bonus of about $1,685.

The new border minimum wage is higher than the prevailing minimum in the rest of the country, about $5.35 per day. However, the cost of living along the border is much higher than in the rest of the country.