Mexico foreign direct investment races ahead as Brazil sputters

8/25/15 Financial Times

social classMexico and Brazil dominate foreign direct investment flows into Latin America, but their FDI prospects could be heading in opposite directions. While Mexico is making hay with China’s declining cost competitiveness in manufacturing, Brazil is slipping behind.

In 2014, Mexico attracted 366 greenfield investment projects totalling an estimated $33bn and Brazil 322 projects at $18bn, according to fDi Markets, an FT data service. Together they mopped up nearly 60 per cent of capital expenditure on new projects or expansions of existing facilities in Latin America and the Caribbean last year.

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Brazil cleans up its act, so should Mexico

8/21/15 Financial Times

Flag-Pins-Mexico-BrazilNobody here can do the maths!” Alberto Youssef despaired in an expletive-filled phone conversation wiretapped by Brazilian prosecutors three years ago. Mr Youssef, since convicted of helping to move $444m to offshore bank accounts in thousands of separate transactions, is a money launderer-turned-whistleblower in Brazil’s so-called Petrolão — the sprawling corruption scandal that has hit the highest levels of government.

The scandal, which saw billions of dollars skimmed from construction contracts taken out by Petrobras, the state-controlled energy company, to be used as kickbacks for politicians, has filled Brazil’s streets with protesters and led to calls for the impeachment of Dilma Rousseff, the most unpopular president in Brazilian history. Quite some maths.

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A false war fades: the end of Brazil-Mexico rivalry?

6/10/15 Financial Times – beyondbrics

Flag-Pins-Mexico-BrazilFor much of the past two decades, Brazil and Mexico seemed at times to be on a collision course. Diplomats from Latin America’s two largest nations were often preoccupied, if not obsessed, with a competition for an elusive role as regional leaders and players in the post-Cold War shifting global scene. The 2013 battle for the post of director general at the World Trade Organization, won by Brazilian diplomat Roberto Azevêdo over Mexican Herminio Blanco, a former trade minister, left plenty of hurt feelings. Ironically, the dispute for influence also led to convergence. The 2011 creation of the Community of Latin American and Caribbean Nations (CELAC), proposed by Mexico to affirm its Latin American identity and counter a perceived Brazilian effort to separate it from the region, was warmly embraced in Brasília as a way project leadership by promoting formats that excluded the US.

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Why does HSBC like Mexico, but want to quit Brazil?

6/9/15 CNBC

Flag-Pins-Mexico-BrazilRecent headlines about Mexico have been dominated by gang violence, corruption and weak economic growth. However, the country looks set to revive its fortunes, with investors and organizations like global bank HSBC keen to tap its potential.

On Tuesday, Stuart Gulliver, the chief executive of HSBC, described the country as a “logical” place for Europe’s biggest bank by assets to be present, even as he revealed plans to sell operations in rival emerging markets Brazil and Turkey and cut as many as 25,000 staff.

He told investors on a conference call that Mexico was “on the cusp of a major take-off” thanks to energy reforms introduced by controversial President Enrique Pena Nieto.

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Mixing tequila and caipirinha

06/4/15 The Economist

Flag-Pins-Mexico-BrazilIf only Latin America’s two giants co-operated more…

YOU can tell that a relationship is dire when one of the parties trumpets that it is being “reinvented” while the other urges that the couple shouldn’t “turn their backs on each other”. The first declaration came from Enrique Peña Nieto, Mexico’s president. The second was made by Dilma Rousseff, his Brazilian counterpart, who was paying her first state visit to Mexico on May 25th-27th. The two promised a new start. They pledged to boost trade and signed agreements to facilitate investment and expand air links. And they toasted each other with Mexican tequila and Brazilian cachaça, the cane liquor use in caipirinhas.

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Brazil to Seek Lower Auto Quota with Mexico to Shield Industry – Sources

By Alonso Soto, 2/19/2015

cars in trafficBrazil will seek to reduce the dollar amount of vehicles that Mexico sells duty-free to the South American nation, two sources familiar with the matter said on Thursday, raising tensions in upcoming trade negotiations between Latin America’s largest economies.

Mexican and Brazilian officials will start talks on Friday over an automotive treaty due to expire on March 19. Mexico is pushing to upon up trade as its auto industry booms, while Brazil wants to renew a quota on light vehicles that protects its struggling factories.

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Mexico’s Auto Industry Overtakes Brazil’s

08/08/14 The Wall Street Journal

cars in trafficBolstered by a recovering North American market, the output of Mexico’s booming automotive industry is cementing a slight lead over Brazil, its stumbling regional rival.

Mexico’s export-driven production of cars and light trucks jumped 7.5% in the first seven months of 2014 to nearly 1.86 million vehicles, compared to the same period a year earlier, according to data released by Mexico´s automotive-producers chamber.

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