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dragon mart cancun Artist's conception of the trade center project.

Profepa shuts down Cancún Dragon Mart

Agency cites environmental damage in stopping the $180-million project

A US $180-million trade center development in Cancún has been shut down by federal environment authorities, another move that threatens to hurt relations with China.

Profepa, the environmental agency, ordered yesterday that construction stop on Dragon Mart Cancún, a development consisting of 722 housing units and 22 commercial centers on wetlands in the municipality of Benito Juárez. If it is ever built it will be the second-largest Chinese commercial development outside China; the largest is Dragon Mart Dubai.

Presidential spokesman Eduardo Sánchez explained that the project had caused environmental damage and that land use changes had been made without authorization. Profepa prosecutor Guillermo Haro explained that the ecological balance of the forest ecosystem had been damaged, negatively affecting biodiversity in the area.

It’s not the first time Dragon Mart has fallen afoul of environmental rules. Approved by Quintana Roo environment authorities in 2013, the project was fined over $1 million for environmental damage by Profepa in August and September of last year.

Environmental groups have also opposed the 204-hectare development for the threat they say it poses to forested areas, and a national business association has been critical as well.

The focus of the trade center is supposed to be international goods, but it is seen as a showcase for exports from China. Concamin, the Confederation of Industrial Chambers, has charged that Dragon Mart represents unfair competition.

It welcomed the shutdown, describing it as a positive move, not just for Mexican industry but for the country as a whole. A spokesman said 300,000 tonnes of Chinese merchandise would have swamped Mexico every month at prices below their true value, putting thousands of jobs at risk.

Leftist politicians in the Chamber of Deputies have taken a similar view, charging that Dragon Mart would be dumping those goods on the Mexican market.

Another concern is the effect the closure will have on relations with a country that has a great deal of money to invest. Mexico has been courting China vigorously in this respect but has little to show for it so far.

Relations were not improved when President Peña Nieto ordered that the Mexico City-Querétaro high-speed train project be reopened for tenders after conflict-of-interest concerns. The winning bidder, China Railway Construction Corp. had among its Mexican partners a firm that had a personal relationship with the president.

The coordinator of China-Mexico studies at the National Autonomous University said Profepa was late in taking action, and suggested the issues should have been addressed in a more timely fashion through discussion among those involved.

Enrique Dussel Peters said the move goes against the intentions of the federal government to improve relations with China and attract more investment.

It is not clear whether the Dragon Mart closure is permanent.

Sources: CNNExpansion (sp), El Financiero (sp)

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