Mexican President Signs Law for Special Economic Zones

5/31/16 Wall Street Journal 

Mexico's President Enrique Pena Nieto and first lady Angelica Rivera salute during the military parade celebrating Independence Day at the Zocalo square in downtown Mexico CityMEXICO CITY—Mexican President Enrique Peña Nieto on Tuesday signed a new law for the creation of special economic zones that will offer tax breaks together with trade and other benefits to attract investment into areas with undeveloped economic potential in poor southern states of the country.

In an event in the Pacific port city of Lázaro Cárdenas, Mr. Peña Nieto said the government would draw up regulations in the next month and decree the first special economic zones by the end of this year.

The first three are Lázaro Cárdenas, Puerto Chiapas in Mexico’s southernmost state of Chiapas, and the Isthmus of Tehuantepec, joining the Gulf port of Coatzacoalcos with Salinas Cruz on the Pacific Coast. Another zone in the oil-belt states of Tabasco and Campeche, which has been hit hard by the downturn in the oil industry, is planned for 2017.

An anchor tenant, such as an industrial company that can attract suppliers and others, should be in place for each zone in 2018 at the latest, he said.

Mr. Peña Nieto illustrated the regional inequality of Mexico’s $1 trillion economy, where northern and central states have raced ahead of the south.
Two of every three people in extreme poverty in Mexico live in southern and southeastern states, he said. The three poorest states—Chiapas, Oaxaca and Guerrero—are home to one in 10 Mexicans but receive just $1 of every $36 in foreign direct investment, and their exports are equivalent to just 2% of those in the six states that border the U.S.

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