Fed’s Kaplan says U.S. benefits from trade ties with Mexico, Canada

5/24/2017 Reuters

map north americaDallas Federal Reserve Bank President Robert Kaplan said on Wednesday that he feels “very strongly” that U.S. trade relationships with Canada and Mexico help U.S. competitiveness, in remarks that come as President Donald Trump looks at renegotiating the North American Free Trade Agreement.

“I don’t want to see us to jeopardize those relationships: it would cost U.S. jobs,” Kaplan said in Toronto during a dinner sponsored by the C.D. Howe Institute.

“I am hopeful these agreements will be addressed in a constructive way.”

Kaplan, otherwise, avoided directly commenting on policies favored by Trump, who has criticized U.S. trade agreements with Canada and Mexico, among others, saying they hurt U.S. workers.

Turning to interest rates, Kaplan said he sees two more rate hikes as a base case. The Fed has signaled that it may raise rates two more times this year, although most analysts expect only one more rate hike.

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Mexico says 1st-qtr foreign direct investment rises to $7.9 bln

5/23/2017 Reuters

corruptionMexican foreign direct investment (FDI) rose to $7.9 billion in the first quarter of the year, 0.6 percent above the preliminary figure for the same period a year ago, Mexico’s Economy Ministry said on Tuesday.

The figure was also nearly 40 percent above the FDI recorded in the fourth quarter, when Donald Trump won election as U.S. president and began threatening to impose steep taxes on American companies that move jobs to Mexico.

Still, central bank data show the final data for the first quarter ended considerably higher during the last four years, and the 2016 final figure totaled $10.4 billion – almost a third higher than the preliminary figure.

Growth data this week showed the Mexican economy has so far shrugged off fears that Trump’s policies would wreak havoc on exports and investment, prompting the government to raise its full-year growth forecast.

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Key Mexico-US Border Crossing Remains Closed After Damage

5/23/2017 New York Times

border2MEXICO CITY — A major commercial border crossing between the U.S. and Mexico will remain closed this week as a result of damaging winds and rain.

U.S. Customs and Border Protection says in a statement that the World Trade Bridge connecting Nuevo Laredo, Mexico, and Laredo, Texas, will hopefully reopen on May 29.

Strong winds Sunday afternoon ripped roofing off port-of-entry buildings, flipped over tractor-trailers, knocked out power and soaked computers on the Mexican side. Downed power poles and billboards block access to the bridge. Facilities on the U.S. side suffered similar roof damage and experienced flooding in offices.

The statement Tuesday said here were no reported injuries.

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Mexico warns on NAFTA sourcing: ‘Don’t shoot ourselves in the foot’

5/23/2017 Reuters

27424865601_1ff00195fd_kMexico’s economy minister on Tuesday sounded a note of caution to the three countries involved in NAFTA trade negotiations, saying they should be careful not to adjust rules on local sourcing of parts too much, or risk driving business elsewhere.

Speaking at an event in Mexico City with Canada’s Minster of Foreign Affairs Chrystia Freeland, Mexican Economy Minister Ildefonso Guajardo said Mexico was not opposed to revising so-called rules of origin – which stipulate that products must meet minimum NAFTA-wide content requirements to be tariff-free.

But he warned that Mexico, the United States and Canada could “shoot ourselves in the foot” if they tweak rules too much and drive investment elsewhere.

Under these rules, manufacturers must obtain a minimum percentage of components for their products from Canada, Mexico or the United States.

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Mexico says supports OPEC cuts as way to stabilize oil market

5/23/2017 Reuters

opecMexico supports an extension of OPEC’s supply cuts as a way to stabilize oil markets and bring fresh investment into the country’s growing energy sector, the Mexican deputy secretary for hydrocarbons said on Tuesday.

Aldo Flores-Quiroga said he believed members of the Organization of the Petroleum Exporting Countries should and would continue plans to coordinate oil production cuts into at least 2018. He did not say whether he preferred a six- or nine-month extension, which OPEC members are debating.

“Stable markets help provide a stable framework for investment, and that helps Mexico,” said Flores-Quiroga, who assumed his post last summer.

Oil ministers from OPEC and non-member producers meet on Thursday in Vienna.

Mexico, which is not in OPEC, has seen its oil industry atrophy in the past 50 years due to underinvestment and hostile regulation of foreign partners.

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Mexico growth outlook brightens on exports, tone on NAFTA: official

5/22/2017 Reuters

Export Or Import DirectionsThe outlook for Mexico’s economy is improving after stronger factory exports in the first quarter and a more optimistic tone on trade talks with the United States, a top finance ministry official said on Monday.

Finance Ministry Chief Economist Luis Madrazo said Mexico’s exports, excluding oil which has been hit by lower production by state-run oil company Pemex, grew 9.2 percent in the first quarter from a year earlier, the strongest pace in more than two years.

“(Factory) exports are now firing on all cylinders, and that is very good for Mexico,” Madrazo told Reuters in a telephone interview.

Mexico exports mostly manufacturing goods, compared to other Latin American economies that produce more raw materials, and it sends nearly 80 percent of its exports to the United States.

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Exclusive: North American carmakers want rules of origin in NAFTA left untouched – Mexico lobby

5/22/2017 Reuters

automobileThe auto industries of the United States, Canada and Mexico agree there should be no changes to rules of origin in the North American Free Trade Agreement (NAFTA), the president of the Mexican automakers’ association said on Monday.

Under the trade deal between the United States, Mexico and Canada, rules of origin stipulate that products must meet minimum regional, or NAFTA-wide, content requirements to be tariff-free.

“Our position is that the trade agreement has been a success, and we shouldn’t be touching something as important as the rules of origin,” Eduardo Solis, president of Mexican automakers’ industry group AMIA, told Reuters in an interview.

NAFTA’s rules of origin, said Solis, have been key in creating value and integrating the auto industry in North America.

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