JUMP TO:   Business | Immigrants & Border | Politics | Other

BUSINESS
Energy
• Mexico Plans to Boost Oil Exports
• Electricity Rates Expected to Rise
• Surpluses to be Invested in Pemex: Energy Ministry
• Duty on Imported Gasoline Eliminated
• Senate Opposes Energy Reform the Most: Calderón
• Energy Permits Taken to Court
• 20% of Energy Endangered if Private Sector Plants are Closed


Banking
• Mexican Bank to Expand in Southland; Bancomer Agrees to Pay US$16.7 million for Inland Empire's Valley Bank and Its Four Branches
• Bankers Demand Reform to Legal System


Trade: Agricultural
• U.S. Beef Producers to Lower Their Prices for Mexico
• Agreement on Sweeteners Still Pending
• Candy Producers Present Access Formula to Fructose




Tourism
• South of the Border Looking Sunnier; Mexico's Resort Havens Beginning to Cash in on Travelers' Unabated Anxiety About Terrorism


Tourism
• Maquila Sector Recovers at a Fast Pace


Investment
• Foreign Investment at US$7.4 billion for the First Quarter
• FEMSA Breaks With Its U.S. Partner


Finance
• Markets In Order and Inflation Under Control
• Agricultural Sector contributes 3.6% to GDP




Immigrants & Border
• Mexico-U.S. Border Towns Share Security Threat
• Support for Housing
• DEA Favors Fighting Mexican Cartels




Politics

• Rodriguez Zapatero to Come to Mexico on His Own Terms and Not as Bush’s “Messenger”
• Dangers Seen in U.S. Distancing from LA
• III Latin American, Carribean & European Union Summit
• Agreement to Strengthen the UN
• Mexico and Cuba Come to an Agreement




Other

• Rebels Claim Responsibility for Blasts at Banks In Central Mexico; Three unoccupied foreign-owned institutions are hit

    Gabriela Roldan
  +011-5255-5281-8297

    Juan Casillas
  +011-5255-5281-8297

   Susana Cervantes
  202-463-4329

Mexico, the world's No. 8 oil exporter, plans to boost crude oil exports to 1.95 million barrels a day this year, up from the current level of 1.88 million barrels, Energy Minister Felipe Calderon said Tuesday.

The move would take oil exports up to the level fixed by Mexico's congress for 2004, helping to ease some of the pressure on oil markets as the OPEC oil cartel keeps the world guessing about whether it will increase output at a June 3 meeting.

The increase in exports also will mean more money for the Mexican government, which depends on oil sales for a third of its revenue. Robust oil revenue is bolstering Mexico's foreign reserves and economic growth but also is stoking inflation.

Mexico, whose chief customer is the United States, isn't a member of the Organization of the Petroleum Exporting Countries. But Mexico has kept its crude oil exports at about 1.88 million barrels a day since Feb. 1, 2003, under a price-stabilization deal with the cartel.

High fuel process world wide along with inflation and drops in the exchange rate will drive up electricity, natural gas and LP gas rates, according to separate announcements by officials at the Federal Electricity Commission (CFE), the Energy Ministry and the Banco de Mexico.

Oil sale surpluses that the Ministry of Finance will reimburse PEMEX will significantly revamp the company’s finances. The funds will finance projects under the Pidiregas scheme (deferred debt), according to Energy Minister, Felipe Calderón.

The Minister indicated that these funds could put a brake to the drop of PEMEX’s patrimony, which has declined 75 % in the last 4 years.

PEMEX Refining will stop paying about US$200 million annually in import duties on oil products from the U.S., following the approval by the Senate of changes in the origin regulation for these products. Carlos Pani, PEMEX Commercial Sub-Director, pointed out that legislators modified Attachment 401 relative to NAFTA’s regulations of origin, thus, there will be no duty payment on gasoline, airplane fuel, diesel, fuel oil and other fuel imports.

After admitting that the current political environment is not propitious, and that the energy reforms proposed by President Vicente Fox face greater opposition in Mexico’s Senate, Energy Minister, Felipe Calderon Hinojosa, indicated that Mexico will achieve its production goal of 1’950, 000 barrels of export crude oil in the second half of this year. Therefore, the federal government has changed its lobbying strategy for driving an energy reform by aiming most of its efforts in the House of Representatives. Speaking to members of the American Chamber Mexico, Felipe Calderon stated that the current political environment is not propitious for promoting an electric reform, and thus, given the importance of public opinion, the Ministry will focus on convincing the population of the advantages of greater participation of private investment in this sector.

The federal government presented a constitutional controversy in order to defend its granting of permits for electric energy generation for consumption by private companies, about which the Superior Federation Audit (ASF) issued observations and recommendations. The ASF and the Chamber’s Evaluation and Control Unit of the Monitoring Commission determined that groundless permissions were granted in 2002 which did not meet environmental impact norms relative to land use, and allow individuals to sell electricity to their associates, an attribute exclusive to the State.

Eduardo Andrade, President of the Mexican Electric Energy Association, indicated that if Mexico’s Supreme Court backs the Superior Federation Audit (ASF) opinion relative to the alleged illegality of 77 permits for private electric generation, it will put at risk the plants which currently produce 20% of the national consumption.

Valley Bank of Moreno Valley, a four-branch Inland Empire financial institution, agreed Tuesday to be acquired by BBVA Bancomer, Mexico's largest bank, for about US$16.7 million in cash.

The purchase, expected to close in the third quarter, "is a pilot program" as Bancomer looks to expand in the U.S., said Bancomer spokeswoman Julissa Bonfante.

Bancomer, a subsidiary of Banco Bilbao Vizcaya Argentaria, Spain's second-largest bank, will pay US$5.48 per share for Valley stock, which trades over the counter. That's a 19% premium over the last time the shares changed hands, at US$4.60 on May 13.

Bancomer was attracted by Valley's mix of mortgage, construction and small-business lending, its many Latino customers, and its location.

U.S. banks such as Bank of America Corp., Wells Fargo & Co. and Citigroup Inc. have been battling to provide services to Latino immigrants.

In 2001, Citigroup bought Grupo Financiero Banamex-Accival, parent of Banamex, Mexico's largest bank.

back to articles list

Mexico’s bankers demand structural reform to the legal system, given the persistence in the perception of a "lack of legal protection" caused by distrust in the (judicial) institutions.

An analyst from BBVA-Bancomer assures that adjustments to the rule of Law are as important as the pending changes in the labor, fiscal, energy and educational sectors.

The document emphasizes that improving the legal system is a necessary condition for promoting economic and social development in Mexico. The report adds that it is imperative to have a legal framework that matches the current situation that will lead to an efficient administration of justice.

back to articles list

In view of the fact that Japan and Korea have closed their borders to U.S. beef, American producers have set their sights on Mexico and plan an aggressive strategy with price reductions at large super-market chains like Costco. Japan and Korea are the main markets for U.S. producers, where 65% of their total export sales are placed. Mexico only represents 6%; however, under the current situation, it now taken on new importance.

back to articles list

Representatives of the Mexican and the U.S. sugar industry will meet in Mexico today for the thirteenth time. They will be joined by delegates of fructose producers in search of a solution to the "sweeteners conflict” between both countries’ governments. The agreement, between sugar and fructose producers from Mexico and the U.S., has not been signed because the U.S. producers intend to allow only brown sugar to enter the U.S., whereas Mexicans also want to send refined sugar.

back to articles list

Rodolfo Cruz Miramontes, Attorney to Mexican sugar industrialists indicated that the establishment of formulas that would avoid the Special Tax on Products and Services applied to American fructose would be unacceptable as long as the U.S. government does not entirely meet NAFTA stipulations obliging the U.S. to accept all the sugarcane that Mexico decides to export.

back to articles list

Richard Henkel, a retired teacher from Los Angeles, speaks wistfully about his travels through small villages in Italy and elsewhere in Europe.

He had the chance to return this summer, to watch his son's friends on the Greek national volleyball team play in the Athens Olympics. But the well-traveled educator declined because of fears of terrorism.

"Now we're looking for the safe place, the place where we're not going to get hurt," Henkel, 68, said during a visit to this Baja California resort town known for its golf courses and marlin fishing. "I think we're going to get to know Mexico better."

Henkel's new travel criteria help explain the renewed optimism of government officials, hotel investors and tourism operators in Mexico.

With U.S. travelers concerned about terrorism, anti-Americanism surrounding the Iraq war and such things as the SARS outbreak, many are choosing destinations that are closer to home and are perceived to be safer. They are planning shorter trips, scheduling them closer to departure dates, and taking along the family, travel analysts say.

The number of Europeans visiting Mexico also has rebounded, from a steep drop to 362,000 in 2001 back to 443,000 last year.

Travel analysts say the overwhelming concern of tourists now is security, with affordability close behind.

In Cabo San Lucas, a 90-minute flight from Los Angeles, hotel and time-share operators believe they have the right mix of sun, sport and security to keep attracting wary U.S. travelers. At least four new hotels are under construction.

back to articles list

The absence of a fiscal reform in Mexico is not a problem for all sectors. In fact, there have been beneficiaries in spite of the lack of change, such as the maquiladoras, which assure that "tax stability" has boosted investment in the sector and increased productive activity in 2004, allowing them to generate more jobs.

It seems that there is less uncertainty surrounding the income of capital flows to the productive sector, at least in that industry, which, under the current fiscal framework, received around US$2.5 billion as fixed-asset imports during the first quarter of this year. That amount turned out to be 25% higher than the total received in 2003.


back to articles list

Worldwide economic recovery has influenced foreign capital flows and, as in better years, Foreign Direct Investment (FDI) received by Mexico during the first quarter 2004 reached high levels. During the first quarter, capital inflows came close to US$7.4 billion, a figure that represents 75% of the US$10.73 billion received during 2003. The trend in recent years has been that most investment came to Mexico mainly from the U.S. and from European Union countries such as Spain, Germany, the United Kingdom and Holland.

back to articles list

FEMSA, a leading beverage company, announced the recovery of 30% of stock it had sold ten years ago to Labatt, after paying US$1.2 billion. Labatt, a commercial partner distributed FEMSA’s beer in the U.S.

FEMSA, which controls 42% of the Mexican beer market, has not announced a substitute alliance with other large brewers, like Heineken or Miller, as some analysts had assumed would happen.

FEMSA collected the amount needed for the operation by using US$295 million from its disposable cash flow, US$150 million from an unsecured credit, $300 million from a stock-exchange certificate issue and $500 million from a stock issue in Mexico and New York.

back to articles list

Inflationary control and the prudent handling of public finances are the best stimuli for productive investment and growth promotion, according to President Vicente Fox and the Banco de Mexico Governing Board.

Due to this, the National Consumer Price Index registered a 0.37% drop during the first half of May due to reduced electricity rates in some northern cities of the country, where summer season energy pricing is being applied.

back to articles list

Reports by the National Institute of Statistics, Geography and Information (INEGI) indicate that the contribution of the agricultural sector to the generation of wealth in Mexico dropped 32% during the 10 years the NAFTA has been in force.

This sector’s contribution to GDP has gone from 5.3% in the first quarter of 1994 to 3.6% in the same period of 2004, following a downward trend, aggravated by constitutional changes in land holdings introduced during the administration of former president Carlos Salinas de Gortari. In 1990, primary activities still contributed 6.6% of GDP.

back to articles list

NUEVO LAREDO, Mexico - This Mexican border city and its Texas sister, Laredo, share 250-year-old roots, family bloodlines and a set of bridges over the Rio Grande River linking their people and economies.

Since Sept, 11, 2001, they also face a common threat: the potential for Mexican territory to be used by extremist groups as a launch pad to attack the United States.

Meeting the threat has become a top priority for law enforcement along the porous 2,000-mile border.

The border supports $250 billion in trade annually. Carrying more than 4,000 trucks a day northward, the World Trade Bridge between Nuevo Laredo and Laredo is the border's busiest commercial crossing.

Shutting it down would halt the flow of imports essential to U.S. businesses and consumers, from new Fords to insulated wire cable and Corona beer.

"The bridges are strategic security points," said Nuevo Laredo police chief Martin Landa. "There is a dependency between the two countries, for food, fuel, clothes, everything,"

back to articles list

Hipotecaria Nacional has now set up two offices in the U.S., New York City and San Diego California, in order to grant housing credits to immigrants and allow them to acquire housing in Mexico.

back to articles list

Larry Holyfield, regional director of the U.S. Drug Enforcement Administration (DEA), affirmed in Panama, that the agency is to favor fighting Mexican drug traffickers. "I think Mexico has the most powerful groups in the world, more organized, more dangerous, with life meaning nothing to them", he said. Holyfield stated that the so-called drug capos in Mexico handle around US$ 65 billion annually in illegal business, the U.S. market being the recipient.

back to articles list

The head of the Spanish government, Socialist Jose Luis Rodriguez Zapatero, will attend the Third Latin America & Caribbean European Union Summit to be held in Guadalajara, as well as the bilateral meeting with the president of Mexico, Vicente Fox, "on his own terms and not as a messenger for other countries". This was a clear reference to the policy adopted by former Spain president, Jose Maria Aznar. During his last visit to Mexico, Mr. Aznar pressed the Mexican government on behalf of President George W. Bush for support of the war against Iraq in the UN Security Council.

back to articles list

Former civil service employee and writer, Ron Scheman, said that the situation in Iraq and American arrogance have contributed to a dangerous distancing of the United States from Latin America. "The worst about the war in Iraq issue has been arrogance", when he recalled that the only foreign intervention that has concerned Latin Americans has been that of the U.S. He also indicated "problems with Mexico are unique..." Mexico is almost a domestic issue", and pointed out that president Bush "started in the right direction but later (after 9-11) became distant". Scheman insisted that Mexico is a "very special" topic for the U.S., particularly now that many Mexicans are beginning to vote in that country.

back to articles list

Only three days away from the arrival of Government and Chiefs of State from Latin America, the Caribbean and the European Union in Guadalajara in order to take part in the III ALCUE Summit, the final statement continued to be on hold due to 38 issues regarding market access, agricultural subsidies and the possible beginning of negotiations by Brussels with Central America and the Andean Community.

Europeans have voted against including a paragraph in the Summit’s final statement, where the abuse and torture of Iraqi war prisoners by U.S. soldiers has been censored.

back to articles list

Spanish President Jose Luis Rodriguez Zapatero said that the Mexican and Spanish governments have re established their shared foreign policy vision that aims to strengthen the United Nations and that he would seek a democratic solution for Iraq in the coming days. At Los Pinos, Zapatero referred to the resolution that will emerge from the III Latin American, Caribbean & European Union Summit where there shall be a statement condemning all types of torture. President Vicente Fox answered questions regarding a possible new terrorist attack on the U.S. and assured that his administration takes all threats seriously and will intensify safety and protection measures as needed.

back to articles list

Yesterday, almost a month after diplomatic relations between Mexico and Cuba grew cold, the Chancellors of both governments agreed to reestablish their respective Ambassadors. Jorge Bolaños and Roberta Lajous, Ambassador of Cuba in Mexico and the Mexican Representative on the island, respectively, will be reestablished in the coming weeks.

back to articles list

A little-known rebel group, denouncing government corruption and free-market economic policies, claimed responsibility for explosions that damaged three foreign-owned banks in a central Mexican city early Sunday, officials said. No one was injured in the explosions in Jiutepec in Morelos state, about 35 miles south of Mexico City. State officials said they were still investigating the blasts, which tore through the closed branch offices of BBVA-Bancomer, Banamex and Santander Serfin just after midnight. Authorities retrieved explosives that did not detonate outside a fourth bank, a branch office of HSBC. Officials confirmed that a note found near the blast sites came from a group calling itself the "Comando Jaramillista Morelense 23 de Mayo." According to a report the note criticized "neo-liberal counter-reforms" that have seen Mexico embrace privatization and globalization, but that many Mexicans believe have done little to address economic inequality. The group lashed out at Mexican President Vicente Fox, accusing him of failing to keep campaign promises to generate millions of new jobs. The note also accused the governor of Morelos, Sergio Estrada Cajigal, of protecting drug traffickers. Estrada Cajigal, a member of Fox's National Action Party, has been rocked by allegations that officials in his administration allowed drug lords to use Morelos as a base for narcotics trafficking. An investigation has already resulted in the resignations of Morelos' attorney general and secretary of state. The explosions came as Mexico prepares for a summit that will bring European and Latin American leaders to Guadalajara this week.

back to articles list

Subscribe    Unsubscribe   Technical Support   

Los Angeles | Mexico City | New York | Palo Alto | Washington, D.C.
ManattJones Global Strategies, LLC