UPCOMING EVENT | Power Play: Energy and Manufacturing in North America

power playWHEN: Tuesday, May 10, 9:00-10:30 AM

WHERE: 6th Floor Auditorium, Woodrow Wilson Center

Click to RSVP.

The Wilson Center’s Mexico Institute, Canada Institute, and the International Monetary Fund are pleased to invite you to our launch of the book “Power Play: Energy and Manufacturing in North America.” Despite the recent fall in energy prices, fuller development of energy resources in North America has potentially important implications for global energy markets and the competitiveness of North American manufacturing industries. The book “Power Play: Energy and Manufacturing in North America” describes the transformation of the energy landscape in North America due to the upsurge in unconventional energy production since the mid-2000s and tells the story of the energy-manufacturing nexus from the perspective of Canada, Mexico, and the United States, and the region as a whole. Based on the research done at the International Monetary Fund, the book discusses the energy boom and its macroeconomic implications for the three countries individually and for the region overall, exploring also how the changing energy landscape can affect the potential benefits of greater integration across the three North American economies.

Keynote Speaker

Alejandro Werner
Director, Western Hemisphere Department
International Monetary Fund

Additional Speakers

Carlos Hurtado
Alternate Executive Director for Mexico
International Monetary Fund

Jim Prentice
Global Fellow, Canada Institute, Wilson Center
Former Premier of Alberta
Former Minister of the Environment, Canada

Meg Lundsager
Public Policy Fellow, Wilson Center
Former U.S. Executive Director and Alternate Executive Director, International Monetary Fund

Moderator

Duncan Wood
Director, Mexico Institute, Wilson Center

Click to RSVP

U.S. anti-trade shift would hit world economy: Mexico’s Guajardo

5/2/2016 Reuters

us mex flagThe more protectionist trade policy being pushed by U.S. presidential candidates could lead America to renege on global trade agreements and deal a blow to the world economy, Mexico’s economy minister said on Monday.

While not naming candidates, Economy Minister Ildefonso Guajardo referred to a proposal by Republican front runner Donald Trump to levy a 35-percent tariff on many Mexican goods, which Guajardo said would violate World Trade Organization agreements and spark chaos if enacted.

“[It] will mean that you are willing to depart and break with the world trading system,” Guajardo told Reuters in an interview.

Read more…

Mexico Senate Unanimously Approves Prison Reforms

4/29/16 Insight Crime

InSightLogo_main_24bitMexico’s senate has unanimously approved a wide-ranging prison reform bill, but it’s unclear if these measures will be enough to revamp a penitentiary system badly in need of improvement.

On April 27, by a vote of 114 to zero, the senate passedthe National Penal Enforcement Law (Ley Nacional de Ejecución Penal), which will now head to the chamber of deputies for final approval.

The head of the senate justice committee, Fernando Yunes Márquez, said the legislation would ensure that Mexico‘s prisons “will no longer be nests of violations of the rights that our constitution guarantees.”

The bill prohibits the use of torture and other “cruel, inhuman or degrading” disciplinary measures, including confinement in cells without light and ventilation. It also bans the use of solitary confinement for more than 15 continuous days.

In addition, the legislation establishes gender-specific rights for incarcerated women, including the right to receive obstetrical-gynecological and pediatric care, as well as adequate and healthy food for their children if they remain with their mothers in prison.

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Can we eliminate Mexico’s informal economy? Should we?

4/28/2016 El Daily Post

peso by Guanatos GwynIt’s hard to imagine a Mexico without an informal sector. But maybe that’s because we haven’t had a chance to even consider such a thing in living memory. There are sound economic reasons for wanting to bring Mexico’s vast “gray economy” into line. Doing it, however, is another story.

The official goal, at all levels of government in Mexico, is to eliminate the informal economy.It’s a goal not just because of the lost tax revenue that off-the-books employment and unregistered businesses cost the public treasury. Nor is it just because informal vendors are a nuisance.

It’s because the immense size of the Mexican informal sector is a drag on economic growth.

he numbers tell the story.

As of the end of 2015, Mexicans who work in the informal sector make up more than half the labor force.

In other words, 53.4 percent of Mexicans who earn money do it without paying taxes or even being registered with the tax service (SAT) of the Finance Secretariat. They are not enrolled in the Social Security System. They are not officially employed or registered as a business.

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Weaker Peso Fails to Boost Mexican Exports

4/26/16 Wall Street Journal

peso by Guanatos GwynMEXICO CITY—The steep slide of the Mexican peso has failed to boost the country’s manufacturing exports, primarily because of a sluggish U.S. industrial sector coupled with close integration of supply chains across the U.S.-Mexico border.

Economists say the peso’s 24% depreciation against the U.S. dollar in the past 18 months should make Mexican-made goods more competitive. But the reaction has been slow because of close synchronization of U.S. and Mexican business cycles.

Exports of manufactured goods, which account for 90% of Mexico’s total exports, fell 6.5% in March from the year-earlier month, the government statistics institute said Tuesday. The drop was led by a 10% fall in auto industry exports.

Imports of intermediate goods, equipment and machinery—all key components for manufacturing exports—also fell in March, contributing to a $155 million trade surplus for the month.

Despite Mexico’s free-trade agreements with 46 countries, including the European Union and Japan, about 80% of its $380 billion annual exports go to the U.S.

A recent Bank of Mexico analysis showed that demand for Mexican components in the U.S. export sector has more of a short-term impact on Mexican exports than changes in the peso-dollar exchange rate.

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From Obstacle to Asset: Re-envisioning the U.S.-Mexico Border

4/19/2016 Forbes

By Christopher Wilson and Erik Lee

forbesThe U.S.-Mexico border has yet again made an appearance in the political theater of the U.S. presidential campaign, starring in its traditional supporting role as a stock villain character. Though the political dialogue sounds like a re-reading of a script written in the 1990s or early 2000s when Mexican migration peaked, the discussion on the ground in most—but not all—U.S.-Mexico border communities long ago moved on to regional economic development. It is a largely positive discussion that could not be more different than what we are hearing at the national level.

Throughout the border region, local leaders from the public and private sectors are asking themselves how they can form cross-border partnerships to leverage assets in their sister cities and strengthen their local economies. They are looking to create a border that connects the United States to Mexico at least as much as it divides our two nations. A close look at the economic data, however, reveals divergent local economies and major border barriers. In our recent report, Competitive Border Communities: Mapping and Developing U.S.-Mexico Transborder Industries, we found that while advanced manufacturing industries such as  aerospace, automotive and medical devices often predominate in Mexican border communities, RV parks, retail and freight transportation are often the most concentrated (and often low-paying) industries in U.S. border communities.

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Pemex Isn’t Mexico’s Only Debt Problem as States Owe $28 Billion

4/19/16 Bloomberg Business

14238061995_8018a2dc0e_mMexico’s debt-laden oil producer has largely dominated investors’ attention in recent months because of the threat it poses to the government. But that’s not the only potential debt crisis facing the nation.

States including Veracruz, Nayarit and Zacatecas are drowning in red ink after racking up about $28 billion in obligations, the most in two decades. Their finances are about to deteriorate even further as many governors ratchet up spending to bolster their chances of winning elections in June, according to Moody’s Investors Service analyst Francisco Vazquez. On April 1, the ratings company lowered the outlook for all but one of Mexico’s 31 states to negative.

“A state crisis is coming,” said Rodolfo Navarrete, a Mexico City-based analyst at Vector Casa de Bolsa, and the most accurate Mexico economic forecaster according to data compiled by Bloomberg. “I expect state governments will look for more financing, either by trying to increase transfers from the federal government or by raising bank debt. This will increase public-sector debt,” which could affect the nation’s credit rating.

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