U.S. Congress and AMLO may finally force labor reform in Mexico

4/26/2019 – Bloomberg

aerial-aerial-shot-agriculture-1595108By Nacha Cattan

Mrs. Martínez earns $79 for a six-day week working in the produce section of a Walmart in Mexico City. A labor union bargained with the retail giant to get her that salary, but she’s never met a representative. She didn’t want to be named for fear of reprisals, but she says she hasn’t even heard of the union.

“Bargaining” is a stretch to describe what the union actually did, which is more like rubber-stamping. The collective contract that covers Martínez’s store allows starting salaries around the minimum wage, which has fallen so far behind inflation that few in the capital actually work for it. Walmart Inc. pays dues on workers’ behalf.

That’s not how unions are meant to work. But in Mexico they do, and not by accident. Low pay has been central to the country’s economic strategy in the quarter-century since Nafta began, boosting its appeal as a cheap base for exports to the giant consumer market up north. Many businesses that took advantage of cheap Mexican labor were American, turning the wage gap into a bone of contention between the two countries. The United States-Mexico-Canada Agreement, negotiated last year to replace Nafta, has more worker protections. But U.S. lawmakers—particularly House Democrats—insist on proof that Mexico is finally serious about boosting wages and threaten to block ratification of the deal until they get it. Mexico’s new labor-friendly president, Andrés Manuel López Obrador, says he wants an economy that’s more driven by domestic demand anyway, which puts the unions in a political vise.

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Mayan Train’s fast track raising concerns in Mexico

4/17/2019 – The Washington Post

MEXICO CITY — Maps, renderings and charts paper the walls of a government conference room. They lay out in detail the plans for a rail line that could be Mexico’s biggest infrastructure project in a century.

President Andrés Manuel López Obrador has put the multibillion-dollar Mayan Train project on a fast track. He says it will provide an economic boon for the poor communities of Mexico’s long neglected southeast by bringing in more tourists and the hotels, restaurants and other businesses needed to serve them.

Yet, among the papers on that wall at Mexico’s tourism development agency is a chart showing that the Mayan Train is being pursued at a pace that outside observers say could threaten its feasibility, the environment and the people the president wants to help.

The chart in the Fonatur offices outlines planning, contracting and building times for 45 recent train projects in Canada, Australia, Britain and France. Those projects, which do not approach the Mayan Train’s length, averaged seven to 10 years to complete.

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‘Confidence in Mexico’: U.S. and Mexican Top Brass to Talk Business, Border

4/11/2019 – The New York Times

photo-1503428593586-e225b39bddfe.jpgMERIDA, Mexico — A meeting of U.S. and Mexican government and business leaders on Thursday aims to shore up investor confidence in Mexico and defuse U.S. President Donald Trump’s threats to close their shared border if illegal immigration is not halted.

Part of regular business forum the U.S.-Mexico CEO Dialogue, the talks in Mexico coincide with renewed tensions over trade and the border after two years of uncertainty sparked by Trump’s push to rework the North American Free Trade Agreement (NAFTA).

They also give Mexico an opportunity to address investor concerns about how President Andres Manuel Lopez Obrador has run Latin America’s No. 2 economy since taking office in December.

“We want the American investors that visit our country to go back home feeling confident about their investments here,” said Moises Kalach, a top executive in the CCE business lobby, which represented Mexico’s private sector at the NAFTA talks.

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Mexico Plans to Tax Digital Platforms: Deputy Finance Minister

4/9/2019 – The New York Times


MEXICO CITY — Mexico’s finance ministry aims to tax digital platforms such as video streaming service Netflix in its budget plan for next year, a senior government official said on Monday.

Deputy Finance Minister Arturo Herrera said Mexico’s total tax take was too low relative to other Latin American countries and that it needed to increase public revenues.

Mentioning Netflix as one example, Herrera said there so far was no international agreement on how to tax digital services, given that their servers may be based in countries such as the United States, but there are customers in other parts of the world.

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WTO chief sees difficult road for trade liberalization

4/4/2019 – Associated Press

photo-1535379453347-1ffd615e2e08The World Trade Organization sees a “challenging” and “difficult” road ahead for international trade liberalization due to the current political climate.

WTO director-general Roberto Azevedo said Thursday he’s confident Mexico and the United States can sort out their current trade difficulties, which include a border-crossing slowdown, U.S. threats to close the border and the still-pending ratification of the U.S.-Mexico-Canada trade agreement.

But the fight to expand free trade “is going to be challenging, is going to be difficult, above all because of the political conditions we have in the world today.”

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Mexico Keeps Key Interest Rate Steady

3/29/2019 – Bloomberg

Susana Gonzalez/Bloomberg

By Nacha Cattan

Mexico kept borrowing costs unchanged as mounting debt at the state oil company threatens to undermine confidence in the government’s finances even as the consensus sees inflation moderating.

The central bank, led by Governor Alejandro Diaz de Leon, kept the benchmark rate at a decade-high 8.25 percent, in line with all 26 economists in a Bloomberg survey. Analysts had also unanimously forecast a hold last month. More recently, the U.S. Federal Reserve this week slashed its projected interest-rate increases for this year to zero from two.

Slowing inflation, a stronger currency, a dovish Fed and forecasts for weaker growth now have economists and investors pricing in Mexico’s first rate cut since 2014 for as soon as mid-year. However, in the statement accompanying its decision, the central bank said inflation risks persist while market uncertainty has been prevalent, pointing to a more hawkish stance than some in the market expected.

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AMLO Says Billionaire Carlos Slim Is Looking to Retire Soon

3/27/2019 – Bloomberg

Susana Gonzalez/Bloomberg

By Andrea Navarro

Mexico’s richest man is looking to retire within the next five years, President Andres Manuel Lopez Obrador said Carlos Slim told him.

Billionaire Slim, 79, “wants to end his business life by contributing to economic growth and well-being during this administration”, the president said, adding he might be committing an “indiscretion” by revealing his plans, he said during his morning presser Tuesday.

Slim spokesman Arturo Elias Ayub said in a tweet that the billionaire and the president talked about how they both have nearly six years of intense work ahead of them to boost the country due to Lopez Obrador’s term and Slim’s age.

Slim’s $56.6 billion empire includes America Movil SAB, the largest mobile-phone operator in Latin America, and holdings in banking and mining. He also has stakes in publicly traded companies like The New York Times. Through Grupo Carso, he also has interests in the Mexican construction company and was heavily invested in the now-canceled $13 billion Mexico City airport.

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