Engagement and Pragmatism: Towards an Enduring Canadian Strategy in Latin America

Paper by Eric Miller, Canadian Global Affairs Institute Fellow
Canadian Global Affairs Institute, January 2016

canada mexicoExecutive Summary

With a majority government and a different world view than his predecessor, Prime Minister Justin Trudeau is re-making Canada’s foreign policy priorities and approaches. This paper offers some suggested approaches for engagement with Latin America. In the area of trade, the paper recommends seeking associate membership in the Pacific Alliance while continuing to strengthen linkages with Mexico within the North American commercial policy framework. It also suggests exploring the scope of what is possible with countries with which Canada does not have free trade agreements, especially Brazil and Ecuador. On the security front, the paper suggests that Canada needs a strategy for the Colombian peace process and to step up support to Mexico in strengthening the integrity of the southern border of North America. With regards to foreign policy, Canada needs a serious strategy for the new Cuba and needs to expand its diplomatic representation, namely in Paraguay and Bolivia. Finally, on the institution-building front Canada needs to secure senior positions at the Inter-American Development Bank and Organization of American States in order to help to drive institutional reform. Canada further needs a coherent strategy to attract in-bound foreign investment from Latin America. The region is rich with possibilities and a coherent engagement strategy can deliver much.

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Gamesa Awarded 200 MW Wind Turbine Supply In Mexico

2/3/2016 Clean Technica

energy -wind_energySpanish wind energy giant Gamesa has announced that it will supply 200 MW worth of wind turbines to a project being developed in Mexico.

In a brief announcement made on the company’s website, Gamesa revealed that it has been awarded a contract to supply 200 MW to a wind project that is being developed in the northern Mexican state of Coahuila. Gamesa will supply 95 of its G114-2.1 MW turbines to the project, and has also been contracted to install and commission the turbines.

Gamesa expects delivery to be during the first half of 2016, with completion of the facility expected to be toward the end of the year.

The company was recently awarded a 130 MW order in December, to supply 65 of its G114-2.0 MW wind turbines to developers Mexico Power Group and First Reserve for the construction of La Bufa, set to be located in the Mexican state of Zacatecas, in Central Mexico.

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Pemex seeks partners to boost Mexico refinery, logistics margins

1/27/2016 Reuters

Pemex LogoJan 27 Mexican state-owned oil company Pemex is seeking private partners to improve margins at its refineries and logistical services, a top company executive said on Wednesday.

Alejandro Martinez, head of the newly created Industrial Transformation division, which groups together much of the company’s activities beyond exploration and production of crude oil, said Pemex is evaluating the monetization of existing assets by selling them and then leasing them back.

Pemex, like all oil companies, is grappling with a severe cash crunch due to a more than 70 percent decline in crude prices since 2014.

Speaking at an energy forum, Martinez specifically pointed to projects covering waste water treatment, hydrogen supply, nitrogen separation and crude conditioning as areas in which the company will seek out new private partners.

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Mexico finance minister says ready to support Pemex

1/27/2016 Reuters

pemex2Mexico’s finance minister on Wednesday said the government is considering injecting more capital into state-owned oil company Pemex, though any decision is not “imminent” and will depend on oil prices and the company’s situation.

Crude oil prices have fallen more than 70 percent since 2014, battering Pemex’s balance sheet.

“The federal government, as the 100 percent owner of Pemex, naturally cannot be indifferent to this situation, and we are ready to support it (the firm),” Luis Videgaray told reporters, adding that no concrete decisions have been made yet.

The government is also working with the firm to analyze specific cases where taxes may inhibit Pemex from making investments, Videgaray said in response to a question about whether Mexico could lower Pemex’s tax burden.

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Little Relief For Mexico’s Pemex In 2016: Teneo

1/27/2016 Barron’s

energy - oil_rigMexico’s state-run oil giant Petróleos Mexicanos, or Pemex, has been making some progressin recent months, but 2016 still looks challenging, according to Teneo Intelligence.

Analyst Nicholas Watson writes that the firm’s internal restructuring could hardly come at a worse time, as last week saw Mexican crude prices fall to 2002 levels. Like other energy companies, it faces hard decisions as it struggles to cut costs without crippling its future potential—not always an easy balance to strike.

That said, Watson points to three major ways that Pemex could improve its situation: farming out some of its fields, cutting costs and headcounts, and monetizing non-core assets. However, each of these strategies come with their own challenges.

While the company will cut 10,000 jobs this year, that would still leave it with a payroll of 125,000—high but an improvement, and its November agreement should alleviate some pension problems. As for the other two options, bureaucracy and regulation are hurdles:

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From Narcos to Natural Gas, a Solar Developer Considers the Risks of Mexico’s Solar Market

1/26/2016 Greentech Media
Nellis_AFB_Solar_panelsHaving established a presence in Turkey and Dubai, British solar developer Hive Energy continues its international expansion into Mexico, where the newly created wholesale energy market and upcoming electric-power auctions offer new opportunities for growth.

The company is considering 300 megawatts’ worth of projects in the country. But obstacles remain, said Bernardo Fernandez, Hive Energy’s director of Mexico operations.

“The energy reform still needs to iron out a few wrinkles; they’ve been running a little fast,” he told GTM in an interview. “But the foundations are there, and as time goes on, we will see some minor modifications to the legislation to address minor issues.”

Mexico’s energy reform puts an end to the monopoly of state utility CFE by opening up the market to outside bidders. CFE will participate in auctions both as supplier and offtaker, while remaining in control of the country’s transmission infrastructure. The first electric power auction is slated for March 31.

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Mexico eyes natural gas exports to Cuba

1/14/2016 Financial Times

Innovation2Mexico is exploring the prospect of exporting natural gas to Cuba as the Caribbean island advances in its reindustrialisation following rapprochement with Washington.

Ildefonso Guajardo, Mexico’s economy minister, told reporters that a shallow-water gas pipeline down the coast of the Gulf of Mexico from Texas to Tuxtla in Mexico, which is due to be tendered soon, could supply the gas, writes Jude Webber in Mexico City.

This would then be shipped to Cuba as the short distance from Mexico meant it would not have to be sent as liquefied natural gas, obviating the need for a plant, the minister said.

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