Great expectations for AMLO: survey reveals strong support

Poll results are nothing for AMLO to be unhappy about.Poll results are nothing for AMLO to be unhappy about.

Great expectations for AMLO: survey reveals strong support

69% expect things to improve during López Obrador’s presidency

The survey conducted by the newspaper El Universal between August 8 and 12 shows that 69% of those polled believe that Mexico will improve when Andrés Manuel López Obrador is president.

In contrast, just 6.5% of respondents said the country will deteriorate during the new government’s six-year term, while 16% said it would stay the same and 7.8% said they didn’t know what would happen.

The poll also shows that support for López Obrador’s performance as president-elect is very strong, with 64.6% of respondents saying that they totally or somewhat approved of his actions since he won the presidential election.

The figure is 11 points higher than the 53% of votes with which the Morena party leader triumphed on July 1 and more than 40 points higher than the approval rating given to President Enrique Peña Nieto in the same poll.

Only 12.1% of respondents said they totally or somewhat disapproved of López Obrador’s performance as president-elect while 12.7% said that they neither approved nor disapproved.

In the six weeks since millions of Mexicans went to the polls to elect a new president and renew both houses of the federal Congress, AMLO, as the political veteran is commonly known, and his nominees for cabinet positions have begun to outline the plans of the incoming government.

They include building new infrastructure such as the Cancún-Palenque trainand a new oil refinery in Tabasco, reestablishing a federal Public Security Secretariat, moving some secretariats to regional cities, cutting salaries and benefits of lawmakers and officials, planting trees, establishing a free zone in the northern border region, increasing the minimum wage and reviewing contracts for the oil sector and finishing the new Mexico City airport.

López Obrador and prospective finance secretary Carlos Urzúa also moved quickly to calm fears surrounding the incoming government’s economic plans, pledging that the nation’s finances will be kept under control and that the independence of the central bank will be respected.

Today, ratings company Standard and Poor’s expressed confidence that the new government would maintain a prudent fiscal policy and would avoid instability, and that even a more active government role in economic terms would not likely be anti-market or populist.

Once he is in office, 64.5% of the 1,200 people polled told El Universal that they believed that the López Obrador-led government would deliver on its campaign promises while 18.5% said that he wouldn’t. A further 16.5% said that they didn’t know.

Almost 30% of respondents predicted that Lopez Obrador’s greatest achievement in office will be to combat poverty while 16.5% said that it would be improving the economy.

Just over 9% anticipated that job creation would be AMLO’s most notable accomplishment and a similar number said that it would be stamping out corruption.

On the other hand, 19.9% of respondents said that government corruption would go down as the incoming administration’s biggest failing, while smaller cohorts said that it would be the relationship with the United States, a failure to combat drug trafficking and other crime, management of the economy and treatment of the structural reforms implemented by the current government.

If the election was held again now, López Obrador would triumph anew with 60.3% of the vote, the poll concluded.

El Universal said that the survey has a confidence level of 95% and a margin of error of +/- 2.9%.

Source: El Universal (sp), La Economista (sp)

Priority given to 7 infrastructure projects costing 500 billion pesos

López Obrador, left, and incoming finance secretary Carlos Manuel Urzúa Macías at yesterday's press conference.López Obrador, left, and incoming finance secretary Carlos Manuel Urzúa Macías at yesterday’s press conference.

Priority given to 7 infrastructure projects costing 500 billion pesos

Mexico City airport, Cancún-Palenque train, isthmus trade corridor, full internet coverage among them

President-elect Andrés Manuel López Obrador announced yesterday that the next government will prioritize seven urgent infrastructure projects with an investment of 500 billion pesos (US $26.5 billion).

The projects are the new Mexico City International Airport; a trade corridor in the Isthmus of Tehuantepec; the Cancún-Palenque train; the paving of 300 rural roads; the provision of internet to the whole country; earthquake reconstruction; and support for residents of marginalized neighborhoods.

López Obrador, or AMLO as he is widely known, told reporters outside his transition headquarters that the funds to carry out the projects will come from cost-saving measures his administration intends to adopt such as cutting the salaries of high-ranking officials and consolidating government purchases in the Secretariat of Finance as well as through the elimination of corruption.

With regard to the new airport, López Obrador repeated that there are three options: continue the project as a public-private joint venture, auction it off to the private sector or scrap it completely and use the existing airbase in Santa Lucía, México state, for commercial flights.

The president-elect, who was vehemently opposed to the airport project before softening his position, said his transition team will consult with specialists and the public between August 15 and October 15 as part of the incoming administration’s analysis of the three alternatives.

He said the current government has invested 80 billion pesos (US $4.2 billion) in the project, of which 45 billion pesos have been spent and 35 billion pesos remain in a trust.

In the Isthmus region — where the distance between the Gulf of Mexico and the Pacific Ocean is the shortest in the country — López Obrador said the aim is to “connect the countries of Asia with the east coast of the United States and create jobs in that entire strip of national territory.”

Future transportation secretary Javier Jiménez Espriú said earlier this month that the development planned for the Isthmus of Tehuantepec would include the modernization of the railroad between Coatzacoalcos, Veracruz, and Salina Cruz, Oaxaca, as well as the upgrading of the region’s highways.

The third infrastructure priority is the so-called Mayan Train which will run between Quintana Roo and Chiapas and cost 64.9 billion pesos (US $3.4 billion), according to the incoming government’s National Project 2018-2014 document.

Slated to be completed in four stages, the train line will have nine stops and is intended to boost tourism and the economy in the south of Mexico.

López Obrador said the fourth project would focus primarily on ensuring that all rural communities in Oaxaca and Guerrero are accessible via paved roads, adding that construction would require “the intensive use of labor” and consequently generate much-needed employment for local residents.

The president-elect also said his government will prioritize guaranteeing internet access to all Mexicans, pledging that the entire country will be connected.

López Obrador said he will present a national earthquake reconstruction plan on September 19, the first anniversary of the second of last September’s two major quakes.

The plan will prioritize “victims who are still living in camps, [exposed] to the elements and who have not been supported,” he said.

He pledged that monetary assistance will be fully funded by the federal budget and not provided in the form of loans.

Finally, the president-elect said that residents of Mexico’s poorest neighborhoods will also be afforded support with those living in marginalized areas of border cities, the country’s main tourism destinations and the metropolitan area of greater Mexico City set to be the initial priority.

López Obrador, who won the July 1 election in a landslide, will be sworn in on December 1 while the new federal Congress — in which the next president’s three-party coalition will have a majority in both houses — will sit for the first time on September 1.

Source: Sin Embargo (sp), Milenio (sp), El Economista (sp), El Universal (sp)

TEQUILA BOOM ROOTED IN TRADITIONAL FARMING TECHNIQUES

TEQUILA BOOM ROOTED IN TRADITIONAL FARMING TECHNIQUES

A growing thirst for tequila from New York to Tokyo has made the sale of the drink into a multibillion-dollar industry, but its production remains rooted in centuries-old methods of farming using hand tools and packs of mules.

Mexico’s western state of Jalisco is the heartland of the tequila industry, where ‘jimadores,’ the farmers of the agave cactus from which the spirit is distilled, have worked the fields for generations.

“I am so proud to be a jimador, we are the first in the chain of the tequila industry, without us there is no tequila,” said Mario Perez, a 39-year-old jimador.

But the popularity of tequila has driven a worsening shortage of the agave, while some of the younger generation shun what was once a highly respected job.

“In the old days to be a jimador was a respected job, now you are a simple worker,” said Perez. “But it is a work of great tradition.”

Jimadores use a tool called a coa to cut the spiky leaves off the plant, leaving a heart that looks like a giant pineapple.

“We have to cut it in a certain way so that it is perfect for cooking. It’s not an easy job, you can cut your legs,” Perez said.

In the past the agave hearts were cooked below ground, the way mezcal is still produced in other regions of Mexico. But much of the export tequila is now made in industrial distilleries run by Britain’s Diageo, Bacardi and Mexico’s Jose Cuervo.

Most of the agave harvest is collected by workers using mules in the rocky terrain. Jose Luis Flores, 41, inherited a team of seven mules when his father died late last year.

“I helped my dad for 20 years and I love it,” Flores said. “No one can replace us, not even a machine. My mules can get past any cliff or difficult path.”

He hopes to pass down his trade to his four children. “I think I’m going to buy more mules. This is a family business now,” he said.

Each spiky-leaved plant requires seven to eight years to mature, but demand is pushing producers to use younger plants.

Nearly 18 million blue agaves were planted in 2011 in Mexico for harvest this year, well below an estimated demand for 42 million to supply 140 registered companies.

Shortages are likely through 2021 until improved planting strategies bear fruit.

“Tequila is a good business but there is so much demand for it. I hope the agave lasts for a long time,” said J. Cruz Reinoso, the owner of the Don Blanco distillery, a family business he has been building up for 30 years.

Jimadores worry machines could eventually replace them but harvesting agave by machine would be complex, since it is difficult to predict the size of the heart from the size of the plant.

“This is my life and I am very proud of it. I know how to do it well. I hope technology does not replace us, it will be devastating,” said Francisco Quiroz, a 57-year-old jimador.

Click on “Tequila is a good business but there is so much demand for it. I hope the agave lasts for a long time,” said J. Cruz Reinoso, the owner of the Don Blanco distillery, a family business he has been building up for 30 years.

Jimadores worry machines could eventually replace them but harvesting agave by machine would be complex, since it is difficult to predict the size of the heart from the size of the plant.

“This is my life and I am very proud of it. I know how to do it well. I hope technology does not replace us, it will be devastating,” said Francisco Quiroz, a 57-year-old jimador.

Click on reut.rs/2I4rLFL to see a related photo essay.

Chancellor Merkel, Mexico’s new Amiga.

Chancellor Merkel, Mexico’s new Amiga

Some say her visit to Mexico today is to show political muscle to Donald Trump
Merkel and Peña Nieto in Berlin last year.
Merkel and Peña Nieto in Berlin last year.

 

German Chancellor Angela Merkel will arrive in Mexico today on her second stop of a three-day Latin America trip with trade and investment set to take center stage in talks with her counterpart, Enrique Peña Nieto.

Analysts, however, believe the opportunity to demonstrate her political muscle to United States President Donald Trump and shore up support on key issues such as climate change, trade and migration ahead of next month’s G-20 leaders summit are of at least equal importance to the German leader.

Merkel will host the July summit in Hamburg.

Tension has intensified between Trump and Merkel after Trump’s controversial decision to withdraw from the Paris Climate Agreement, which she called “extremely regrettable.”

According to experts she is seeking to build unity among other G-20 nations, including Mexico, in order to make a consolidated stance against Trump.

Given that Mexico has also had well-known differences with the U.S. president it is likely her messages will be favorably received.

Dámaso Morales, the coordinator of the European Studies Center at the National Autonomous University, believes Germany will find a trustworthy partner in Mexico.

Merkel “is isolating [Trump] so that he sees that the whole world is on the same side. Mexico is a reliable ally because it has a history of multilateralism. The message that Angela Merkel gives Mexico is that the world remains open.”

Jacob Kirkegaard, a senior fellow with the Peterson Institute for International Economics, concurs, telling Bloomberg, “She’s essentially trying to arrive at a 19-1 outcome on these issues.”

The German government has downplayed any suggestion that the trip represents some kind of provocation to the U.S. or challenge to its long established hegemony in the region.

Germany’s ambassador in Mexico, Viktor Elbling, said Merkel’s visit was “a very clear sign of solidarity towards Mexico that demonstrates how important it is [for Germany].”

Germany is Mexico’s biggest trading partner in Europe — overtaking Spain — and fifth overall with two-way trade between the exceeding US $17.8 billion in 2016, while Mexico is Germany’s largest trade partner in Latin America.

There are around 1,900 German companies operating in Mexico such as Siemens, BMW and Volkswagen, generating 120,000 jobs.

At a time when Mexico is looking to diversify its export markets and given the chancellor’s influence in Europe, the visit might provide an opportunity to move towards a modernization of its free trade agreement with the European Union (EU), implemented in 2000.

Just 5% of Mexican exports reach Europe compared with 70% to the U.S.

Soledad Loaeza, a researcher at the College of Mexico, believes that Merkel “will do her part to accelerate” a renegotiation of the EU agreement.

Loaeza added, “Merkel [visiting] this country compensates in a certain way for the mistreatment we have suffered from the North American government, which above all has been very rude.”

Merkel’s visit coincides with the conclusion of the Mexico-Germany Dual Year, which has celebrated and promoted the relationship between the two countries.

She will be guest of honor tonight at a show in Mexico City that will close the Pop-Up Festival, a celebration of German business, culture and technology.

“The contrast between Germany’s Tour and Donald Trump’s Wall is striking and probably intentional: mobility rather than stasis, mingling not division, soft power instead of hard barriers,” wrote Brian Hanrahan today in Handelsblatt, a German business publication.

To many Mexicans, he wrote, Germany and Merkel represent “a new beacon of the liberal, free-trade global order, against a rude and reckless United States,” and it makes sense to work more closely.

Mexico, the U.S. and Canada used to be known as the Three Amigos. These days, Mexico has a new Amiga.

Source: El Sol de México (sp), Bloomberg (en), Handelsblatt (en)

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Supply chains mean cars not foreign-made.

Supply chains mean cars not foreign-made

BMW's South Carolina plant: isolated.

BMW’s South Carolina plant: isolated.

They have saved the American automotive industry

 

 

One of the first foreign companies to rush into United States production when the North American Free Trade Agreement (NAFTA) took effect on January 1, 1994 was Germany’s BMW Group. They constructed and opened a gigantic factory in South Carolina that employs thousands and is responsible for thousands of U.S. tangential jobs.

The object was to build cars in the U.S./NAFTA geographic for the NAFTA market area without the duties and taxes applied to foreign-made cars imported into the U.S.

BMW is currently building a new factory in the NAFTA geographic area —  in San Luis Potosi, Mexico. It will commence production in 2019 and its goal is to build 150,000 cars a year. Another NAFTA triumph. Another Mexican industrial triumph. So reports Mexico News Daily.

Unlike the South Carolina BMW factory’s isolation from the entire auto industry, the new Mexican BMW plant is joining a rapidly expanding auto industry that nurtures and depends on a North American supply chain that stretches from Canada in the north to Puebla, Mexico, in the south where Volkswagens are made.

“Supply chain” are the two most important and relative words in the auto industry. Suffice it to say that without the existing supply chains of parts, engine blocks, transmissions and thousands of other parts in NAFTA’s tri-patriate auto industry (Canada, the U.S. and Mexico), the American car industry might have disappeared for lack of global competitiveness.

Supply chains are as important as wage levels in car manufacturing. So are markets.

Most of Mexico’s car production is built for the U.S. market, thus one would think that BMW’s business model would target the U.S. market, but that is wrong.

From Mexico News Daily: “Part of (BMW’s) confidence in the future stems from the fact that while other automotive manufacturers set up shop in Mexico to cater to the United States market, BMW planned for its San Luis Potosí plant to produce for the global market.”

The crux of the matter is that Mexico has 45 trade agreements, almost double that of the U.S. In other words, BMW will be able to export to over 100 countries that it cannot do under German or American trade agreements with other countries.

Apparently, historically protective Mexico is more free trade-oriented by treaties and trade agreements than Germany or the United States.

BMW is spending 22 million American dollars to train 700 Mexican workers today; when the plant is functioning BMW expects to employ 1,500 employees and have employment effects on 10,000 employees indirectly as far away as Canada.

BMW has agreements with 180 Mexican suppliers, 45 in the state of San Luis Potosi. Supplies have been contracted for with 20 international firms building facilities in Mexico. The newest is the Chinese firm Minghua, a bumper manufacturer.

The state-of-the-art plant has a 71,000-square-meter solar farm that will supply 100% of the plant’s electricity needs. In 2017 language, this solar capability makes the plant BMW’s most technologically advanced in the world.

The goal of 150,000 units per year will make this factory BMW’s third largest in the world.

Obviously some of those new BMWs will make it to the U.S. market and if so, any taxes and duties applied to them under proposals in Congress or threats out of the White House might impact BMW as it might impact other firms building cars in Mexico.

That, perhaps, might frighten car companies that have plants in Mexico, all 22 of them that build cars for the American market, if talk in the House of Representatives or the White House of punishment by tariff or a BAT (Border Adjustment Tax) were true threats. But they aren’t.

Most U.S. Senators that have commented on these threats have openly disrespected such talk and predict that the proposed BAT will not be considered by the Senate. As to a presidentially-proposed punishing duty of 30 or more per cent, it probably would never make it through the courts as being unlawful and discriminatory.

Renegotiation of NAFTA, one of President Donald Trump’s primary campaign issues, could very well be critical to the North American car manufacturing industry. Any such negotiation, however, will not make the American car industry bigger or better.

The best symbol of the current state of the American car industry is not several years of record sales or the growth of the Mexican car industry, it is the lament of an American labor leader who was actively objecting to the closing of a General Electric small appliance factory that was moving its product line to Singapore.

He counted the cars in the employee parking lot and concluded that over 60% of the cars were Japanese brands. So much for “Made in America.”

NAFTA and its homegrown auto supply chains have saved the American car industry by keeping it globally competitive. President Trump and Secretary of Commerce Wilbur Ross will hopefully know that when they “renegotiate” NAFTA.

Contreras is the author of “The Mexican Border: Immigration, War and a Trillion Dollars in Trade” and “Murder in the Mountains: War Crime at Khojaly.”

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Mexico BMW Plant set for 2019, with NAFTA or no.

Artist's rendering of BMW's new plant.
Artist’s rendering of BMW’s new plant.

BMW set for 2019, with NAFTA or no

Construction of San Luis Potosí factory between 40% and 60% complete

Construction of German auto maker BMW Group’s San Luis Potosí assembly plant is on schedule and is expected to begin production in April 2019, with or without NAFTA — the North American Free Trade Agreement.

Plant manager Hermann Bohrer told CNN Expansión that “while there’s uncertainty around the renegotiation and the possibility of a tax [on Mexican imports to the United States], we expect it won’t affect our business model.”

Part of Bohrer’s confidence in the future stems from the fact that while other automotive manufacturers set up shop in Mexico to cater to the United States market, BMW planned since the beginning for its San Luis Potosí plant to produce for the global market.

Project vice-president Raymond Wittmann reported that construction fn the different buildings that make up the plant is currently between 40% and 60% complete.

Bohrer said US $22 million is being invested this year in training 700 employees, a figure that will double by next year.

Once it’s operational the plant is expected to employ 1,500 people directly and 10,000 indirectly.

The manufacturer has signed agreements with 180 Mexican suppliers, 45 of which operate in the state, and with 20 international firms that are also investing in Mexican plants, including the Chinese firm Minghua, a bumper manufacturer.

Wittmann also explained that a 71,000-square-meter solar farm will satisfy 100% of the plant’s electricity needs.

The solar array is part of an innovation plan that will make the San Luis Potosí plant its most technologically advanced in the world, the company said.

With an estimated production of 150,000 units per year, the new plant will be the firm’s third largest in the world.

Source: CNN Expansión (sp), El Financiero (sp)

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Reshaping NAFTA could be good for Mexico.

Reshaping NAFTA could be good for MX

Around 98% of the corn that Mexicans use to make tortillas and other staples of their diet comes from the US.

Donald Trump’s trade stand may end up hurting US agriculture

 

Among other threats targeting Mexico during his election campaign, U.S. President Donald Trump harshly criticized the North American Free Trade Agreement (NAFTA), a 23-year-old tripartite deal that removed tariffs and significantly increased commerce between Canada, the United States and Mexico.

Renegotiation of the deal is likely to start late this year.

As Trump has pointed out, NAFTA contributed to a U.S. trade deficit with Mexico reaching US$63.2 billion last year. This is the country’s fourth-largest trade deficit, after China, Japan and Germany. America’s deficit with the other NAFTA nation, Canada, was slightly over US $11 billion in 2016.

But that’s only part of the story. Remove cars and auto part imports, for example, and the U.S. deficit with Mexico virtually disappears.

Overall, NAFTA has been beneficial to Mexico, Canada and the U.S. alike. Since it was signed in 1994, foreign direct investments (FDI) in Mexico have averaged 2.6% of GDP (compared to 1% for two decades before NAFTA). At present, annual bilateral trade between the U.S. and Mexico is running at $580 billion.

Much of Trump’s outdated protectionist rhetoric hinges on manufacturing, outsourcing of jobs to Mexico and immigration. Agriculture – a key link between the two nations – does not seem to have entered his calculations.

Globalization may have contributed to manufacturing job losses in the U.S., but it has had significant benefits for the American agricultural sector. U.S. exports of agricultural products to Mexico have increased nearly fivefold since NAFTA was signed.

For the 2014-15 crop marketing year, U.S. corn production was 360 million tonnes, 13% of which was exported. Mexico accounted for 23% of these exports.

In 2016, Mexico imported $17.9 billion in American agricultural products: $2.6 billion in corn, $1.5 billion in soybeans, $1.3 billion in pork and $1.2 billion in dairy products.

Around 98% of the corn that forms a staple of the Mexican diet comes from the U.S. Mexico also buys 7.8% of all U.S. pork production.

What has been good for U.S. farmers has actually hurt Mexican agriculture. Lulled by a steady supply of cheap U.S. farm products and low transportation costs, and assuming that the good times will continue, Mexico has not diversified its agricultural imports. It depends heavily on U.S. farmers to feed its people, endangering Mexico’s long-term food security.

The U.S. is the world’s top exporter of agricultural products, but there are other global breadbaskets, including Brazil, Australia, Russia, Argentina and Ukraine. As these rivals have adopted more modern farming and agricultural practices and improved their transport and product-handling infrastructure in recent years, America’s global export share has been steadily declining.

Political decisions have at times accelerated this decline. In 1979, the U.S. banned grain sales to the then-Soviet Union because of its invasion of Afghanistan. This forced the U.S.S.R. to improve its own grain production, and, in 2016, Russia surpassed the U.S. for the first time in wheat exports.

Might Donald Trump’s administration be facing a similar watershed moment for American agriculture?

As America threatens to close its agricultural export door, it has damaged Mexico’s confidence in the reliability of its major supplier – perhaps permanently. In a January 2017 Washington Post opinion piece, former Mexican president Ernesto Zedillo wrote that it was a “waste of time” to play “NAFTA tweaking games with the Trump administration.”

Though Mexico currently has free trade agreements with 45 countries (more than any other country in the world), agriculture has consistently been the most sensitive issue in Mexico’s free trade agreements. Trump has changed that.

Today, the country is accelerating its search for new partners to meet its national agricultural needs. Sensing long-term opportunities, Brazil and Argentina – both major exporters of beef, wheat, soybeans and other prized U.S. agricultural products – are elbowing their way to the front of the queue. Neither currently has a free trade agreement with Mexico.

Mexico’s Economy Undersecretary, Juan Carlos Baker, has said that the country is “pretty far advanced with Brazil. Argentina is a few steps behind,” confirming that Mexico could offer South American producers terms similar to those currently enjoyed by American farmers “if it suits us.”

As Brazil’s Agriculture Minister Blairo Maggi has announced, that the country is “back in the game.”

Mexico is also discussing bilateral deals with Australia and New Zealand, two other main food-exporting countries.

In addition to government-to-government agreements, companies that produce and trade agricultural products are also seeing Mexico’s vast import market with new eyes. One of them is Adecoagro, which owns and leases some 434,000 hectares of farmlands in Brazil, Argentina and Uruguay and harvests two million tons of agricultural products annually.

The New York-traded Buenos Aires-based firm, whose major shareholders include the Hungarian-American investor George Soros, the Dutch Pension Fund PGGM and the Qatar Investment Authority, currently exports agricultural products such as corn, wheat, soybean and cotton to Africa, Asia and Middle East.

It sees NAFTA-related uncertainties as an opportunity to penetrate the Mexican market, especially if Brazilian and Argentinian products are granted favorable U.S.-style export arrangements.

In addition to diversifying its trading partners, Mexico is also seeking to stimulate its domestic agricultural production, according to several government officials and advisers.

New policies currently under consideration would incentivize farmers to produce more, modernize their farms, increase crop yields and expand cultivable areas. The country is also looking to improve its transportation and storage infrastructure, including ports that could be used for bulk grain imports.

All of these efforts will help put Mexico on more equal footing with the United States in future NAFTA negotiations. So, too, would retaliatory measures against a threatened U.S. border tax. (And, anyway, if the U.S. does decide to implement one, the market is likely to sell off Mexican pesos aggressively, making Mexican products cheaper even with new tariffs.)

Like the 1979 U.S. grain ban that helped Russia improve its agriculture, Trump’s vituperation may prove beneficial to Mexico (and bad for the U.S.) in the decades to come.

In the meantime, Mexico is facing a tough political and social landscape. President Enrique Peña Nieto’s approval rating is nearing single digits and the the economy is performing anaemically, with 2017 economic growth predicted to be a paltry 1%.

With a presidential election approaching in 2018, Peña Nieto is unlikely to hard sell to his people a new NAFTA that does not appeal to Mexicans. So it would be good politics, too, to play hardball with Trump.

Mexico has more policy options than it thinks. And it may have less to lose than its northern neighbor.

If ending NAFTA hurts farmers in America’s Corn Belt, who voted overwhelmingly for Trump, there goes the Republican’s reelection.The Conversation

Cecilia Tortajada is a senior research fellow at Lee Kuan Yew School of Public Policy at the National University of SingaporeAsit Biswas, a distinguished visiting professor at Lee Kuan Yew School of Public Policy, contributed to the article, which was originally published on The Conversation.

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Costa Canuva Lays Cornerstone In The Riviera Nayarit.

Costa Canuva Lays Cornerstone In The Riviera Nayarit

On Tuesday, March 7, 2017, the cornerstone of the Costa Canuva project was laid; this is the newest Integrally Planned Resorts (CIP by its acronym in Spanish) in the Riviera Nayarit, which spurred the urbanization of this development located in Compostela that will be administered by the Fondo Nacional de Fomento al Turismo (Fonatur), Mexico’s national trust for tourism promotion.

Roberto Sandoval, Governor of the state of Nayarit, led the event, along with Rafael Lang, Managing Director of Mota-Engil Turismo; Miguel Reyes, Managing Director of Fonatur; and Alicia Monroy, Mayor of Compostela. Also present, representatives of the three levels of government and several tourism industry special guests.


During his speech the State Governor explained this was the result of important negotiations that brought an investment into what he called the largest and most important tourism complex in all of Mexico.
The capital investment by Mota-Engil will be 36 billion pesos, and the project will generate over eight thousand direct and indirect jobs within the first two years.

The Portuguese company chose Costa Canuva from among the different projects they have throughout 22 countries around the world thanks to its natural bounty and the national and international positioning of the Riviera Nayarit, but also due to the support of the three levels of government, which was key.

Costa Canuva will encompass 556 acres and over four miles of beach and coastline; the first of five hotels will be opened by Fairmont; it will also have the first golf course co-designed by Lorena Ochoa and Greg Norman; Cristian Ronald himself will own a home within the development.

The total construction for the development is expected to generate over seven thousand new rooms for the Riviera Nayarit with an expected total investment of 1.8 billion dollars.

Investment of $1.5 B USD in farming this year in Mexico.

Investment of $1.5bn in farming this year

Industry association expects to maintain double-digit growth

Agricultural firms are set to invest US $1.5 billion this year in modernization and development, says the president of the National Agricultural Council (CNA).

In an interview with the newspaper Milenio, Bosco de la Vega Valladolid said the investment would focus on boosting protected farming, such as greenhouses, pressurized irrigation systems, revamping of storage facilities and logistics and certification strategies.

De la Vega said the boom being experienced by the industry — with exports worth almost US $30 billion a year — has attracted entrepreneurs from other industries who are eager to capitalize on it.

Commenting on international trade issues, he said it was more important than ever to complete a favorable renegotiation of the North American Free Trade Agreement (NAFTA) given the failure of the Trans-Pacific Partnership Agreement (TPPA).

“We want a good NAFTA, as well as having options in other markets, but if the U.S. imposes tariffs on Mexican products, [Mexico] has to do the same,” said de la Vega, giving corn as an example: “. . . if we have to pay tariffs on it, it would be more expensive than bringing it from South America.”

The CNA president stressed that Mexico must diversify its exports toward the Asian market. A nation such as South Korea, for example, imports $29 billion worth of produce, of which only $900 million comes from Mexico.

That figure could easily be doubled in a couple of years, he continued, with an adequate strategy, fewer tariffs or even by signing a free trade agreement with that nation.

The CNA’s goal is to maintain the sector’s double-digit annual growth, a target that can be reached if Mexico can develop new markets, de la Vega said.

The CNA is urging the federal government in general and the Agriculture Secretariat (Sagarpa) in particular to abstain from using Mexico’s “very successful” agricultural sector as a bargaining chip in the renegotiation of NAFTA.

Source: Milenio (sp)

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Avocado growers not sweating over NAFTA.

Avocado growers not sweating over NAFTA

Avocado exports generated a trade surplus of US $2 billion last year

 

If there is one sector of the Mexican economy that’s not worried about a renegotiation of the North American Free Trade Agreement, or NAFTA, it’s the avocado industry.

The fruit, also known as “green gold,” has become a huge export crop, with 77% going to the United States. Those exports hit a record 1.022 billion tonnes last year, and went to 31 countries.

The avocado has become so big that its export value has now surpassed oil in importance, according to Economy Secretariat data.

While exports of “black gold” — petroleum and petroleum products — left Mexico with a trade deficit of US $13 billion, the green variety generated a $2.22-billion surplus.

For the current harvest cycle, June 2016 to July 2017, the association representing the country’s avocado producers, packers and exporters forecasts it will send more than 900,000 tonnes to the U.S., compared to last year’s 860,000. Japan will get 52,000 tonnes and China, 20,000.

Meanwhile, new markets are being opened in Europe and Asia. Exports to Germany and Holland last year soared by 237% and 283%, respectively.

The Arabian Peninsula is another target market. A Mexican delegation traveled there recently to try to establish an air freight connection. Shipping by sea takes more than 40 days and the fruit won’t last that long, said one producer.

For growers, the avocado produces a very attractive financial return compared to corn, but they must wait at least five years before they see it.

A hectare of avocados can generate up to 600,000 pesos (US $30,000) a year, far more than a hectare of corn, which will bring in just 24,000 pesos, according to the Agriculture Secretariat.

But the producer won’t see any fruit from the avocado trees until about the fifth year, at which time the harvest will be about 50 fruit. The number rises to 150 in year six and 300 in year seven.

The trees can be grown at sea level and up to 2,500 meters but do best at the higher elevations, between 800 and 2,500 meters.

The wait to harvest hasn’t deterred producers, who are now clearing more land for avocado orchards. A study by the National Autonomous University found that 45,000 hectares of Michoacán forest land was logged and converted to orchards between 1974 and 2011.

Now there are worries that the lure of the avocado will trigger more illegal logging of monarch butterfly habitat in Michoacán and the State of México.

Source: El Financiero (sp)

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