An Aquatic Paradise in Mexico, Pushed to the Edge of Extinction

2/22/2017 New York Times

xochimilcoXOCHIMILCO, Mexico — With their gray-green waters and blue herons, the canals and island farms of Xochimilco in southern Mexico City are all that remain of the extensive network of shimmering waterways that so awed Spanish invaders when they arrived here 500 years ago.

But the fragility of this remnant of pre-Columbian life was revealed last month, when a 20-feet-deep hole opened in the canal bed, draining water and alarming hundreds of tour boat operators and farmers who depend on the waterways for a living.

The hole intensified a simmering conflict over nearby wells, which suck water from Xochimilco’s soil and pump it to other parts of Mexico City. It also revived worries about a process of decline, caused by pollution, urban encroachment and subsidence, that residents and experts fear may destroy the canals in a matter of years.

“This is a warning,” said Sergio Raúl Rodríguez Elizarrarás, a geologist at the National Autonomous University of Mexico. “We are driving the canals towards their extinction.”

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North American Climate Cooperation at a Crossroads

2/17/2017 Center for American Progress

North AmericaOver the past year, there has been significant progress in the North American effort to address climate change. One case in point is the North American Climate, Clean Energy, and Environment Partnership, which the national governments of the United States, Mexico, and Canada created in June 2016. Outside of the European Union, it is the most ambitious attempt yet to integrate environment, energy, and climate priorities and policies at a regional level.

Since the November 2016 U.S. presidential election, however, the North American relationship on climate change—as well as the North American relationship on a range of other issues—has been uncertain at best. This uncertainty came to the fore during Canadian Prime Minister Justin Trudeau’s visit with President Donald Trump on Monday, when climate change was mentioned in neither the leaders’ joint statement nor the joint press conference. Although it is possible that the leaders discussed it behind closed doors, there is so far no indication of this.

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Silver lining in weaker peso for Mexican miners

2/16/2017 Reuters

MiningInvestors are picking up on the benefits for Mexican silver miners of one of the biggest foreign exchange stories since November’s U.S. election, with the slide in the peso pushing costs lower while silver prices are ramping up.

The peso hit a record low last month at 22.03 to the dollar, pressured by concern over a potential trade war between the United States and Mexico in the wake of Donald Trump’s U.S. election victory.

While some say the worst of the currency’s slide may be over, the peso is expected to remain weak throughout this year, a Reuters poll showed this month.

Between 60 percent and 70 percent of silver miners’ costs in Mexico — from labor to power — are priced in pesos, an industry analyst estimates. For a company that sells its output in dollars, that suggests a significant benefit to cost margins.

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Trade With Mexico Is Great

2/16/2017 U.S. News & World Report

Oil barrelsThe most shameful aspect of the U.S.-Mexico trade imbroglio – ignored in analyses of the North American trade agreement and immigrants arriving illegally in the U.S. – is that it’s a big fuss over something that actually generates significant economic benefits and jobs for both countries. This is the economic reality that no protectionist, mercantilist rhetoric about saving some American jobs can disguise.

As much as we might hear politicians, pundits and the media complain about the U.S. trade deficit, we have a lot to be thankful for. When you peel back the rhetoric and get to the data, the numbers tell an important economic story about the substantial benefits of international trade.

It doesn’t seem to matter to those waving the protectionist banner that millions of American jobs are directly tied to trade with Mexico, and that there is evidence that growth in U.S. exports of oil and natural gas to Mexico is driving increased energy production here in the U.S. Trade with Mexico has benefited the U.S. economy and generated a large number of jobs in U.S. oil and gas fields. Mexico is second only to Canada in energy trade with the U.S.

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Mexico’s Pemex launches biggest ever EM corporate eurobond

1/14/2017 Financial Times

Pemex LogoPemex, Mexico’s state oil company, has sold €4.25bn in euro-denominated bonds in the biggest euro deal seen by any emerging market issuer, despite concerns about the sustainability of its debt levels and the outlook for Mexico’s economy with Donald Trump in the White House.

The three-tranche offering, which carried coupons of 2.5 per cent, 3.75 per cent and 4.875 per cent, was more than four times subscribed, Juan Pablo Newman, Pemex’s finance director, told the Financial Times. “This reflects the confidence there is in Pemex,” he added.

“We’re delighted. We went out thinking we’d get €2bn, maybe €3bn, but €4.25bn is a record,” echoed Jean-Marc Mercier, global co-head of debt capital markets at HSBC in London, one of the bookrunners. “I’m sure EM corporates are all looking at this transaction.”

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U.S.-Mexican energy trade a bright spot

2/10/2017 United Press International

energy - oil barrelsU.S. crude oil exported to Mexico is one of the more lucrative commodities for North American energy trade, the U.S. Energy Department reported.

A daily briefing from the Energy Department’s Energy Information Administration reported that total energy exports to Mexico last year was one of the more valued exports in North America.

While the situation could change in the future because of amendments to rules governing U.S. crude oil exports, the EIA said Mexico is currently second only to Canada when it comes to total trade in energy products.

“For 2016, the value of U.S. energy exports to Mexico was $20.2 billion, while the value of U.S. energy imports from that country was $8.7 billion,” the government brief read.

Last year, energy products represented around 9 percent of all U.S. exports to Mexico and 3 percent of all U.S. imports from Mexico. The United States last year sent on average a half million barrels of crude oil per day to Mexico. Meanwhile, Mexico is the fourth-largest exporter or crude oil to the United States, behind Venezuela.

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BofA says proposed U.S. border tax could weigh on natgas prices

2/6/2017 Reuters

natural gas drillBank of America Merrill Lynch said the enactment of a prospective U.S. border adjustment tax could lash U.S. natural gas prices if Mexico retaliates.

A similar border tax scheme, if implemented by Mexico, could spark “a wider trade war,” the investment bank said in a research note on Friday afternoon. “It could severely hurt U.S. natural gas exports and drive down prices at the Henry Hub.”

The Henry Hub, which is located in Louisiana, sets the benchmark price for U.S. natural gas trading.

In Washington, Republican legislators’ proposals include a border adjustment tax, which intends to boost U.S. manufacturing by taxing imports while exempting U.S. business export revenues from corporate taxation.

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