Investment promotional agency ProMéxico looks set to get the axe

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September 24, 2018

ProMéxico has been active in the promotion in China of products such as avocados. — ProMéxico has been active in China, promoting products such as avocados.

International trade and investment agency ProMéxico could be axed by the incoming federal government as part of its austerity push.

All 46 offices of the organization, located in international financial centers including New York, London and Tokyo, are on the chopping block with president-elect Andrés Manuel López Obrador’s transition team taking the view that they generate significant expenses yet do nothing that can’t be achieved through traditional diplomacy.

Under the new government, which will be sworn in on December 1, Mexico’s ambassadors and consuls will be in charge of trade and investment promotion in key business capitals around the world, where trade representatives already work in the country’s diplomatic missions.

At least 10 ProMéxico offices are located within Mexican embassies and a further 10 are in consulates, while the remainder operate out of their own separate premises.

According to the newspaper Milenio, the incoming administration is close to defining the strategy it will adopt to attract new foreign investment including guidelines that will be given to Mexico’s diplomatic representatives.

ProMéxico functions as a trust fund of the federal government and is a subdivision of the Secretariat of Economy (SE).

It was created by decree in 2007 by then-president Felipe Calderón with the aim of coordinating and implementing actions to promote foreign trade and attract foreign direct investment (FDI). It was also intended to provide advice about the benefits in international trade treaties and help Mexican companies export to and establish themselves in foreign markets.

ProMéxico has supported the automotive, aerospace, chemical, food, electronics and metallurgy sectors among other industries.

One example of its work is the promotion of Mexican avocados in China, where sales of the product have skyrocketed this year.

During current President Enrique Peña Nieto’s administration, 40% of US $193 billion of FDI that has come into Mexico is thanks to the work of ProMéxico, according to Economy Secretary Ildefonso Guajardo.

Between 2007 and 2017, the agency attracted 1,126 projects backed by foreign investment, creating 411,000 jobs, including 300,000 over the past six years, SE data shows.

Guajardo said there is not a single developed or OECD member country in the world that doesn’t have a trade and foreign investment agency.

But for the incoming administration, which has already announced a range of austerity measures and appears intent on living within its means, the costs of running ProMéxico are seen as an unnecessary burden.

The agency was allocated a budget of almost 1.1 billion pesos (US $58.3 million) this year of which over 48.2 million pesos (US $2.55 million) went to paying just 20 high-level officials, all of whom received salaries higher than the 108,000 pesos (US $5,725) per month López Obrador has said he will take home as president.

The agency’s chief, Paulo Carreño King, is paid over 277,000 pesos (US $14,700) per month, or two and a half times the president-elect’s proposed salary, which will also serve as a limit for high-ranking officials and lawmakers.

The other ProMéxico offices set to close under the new government’s plan are located in Beijing, Dubai, Shanghai, Madrid and Moscow as well as the most important capitals of South America and the Caribbean and 15 cities in the United States, including Chicago, Los Angeles, Miami and San Francisco.

Source: Milenio (sp)

Energy regulator proposes new entity to develop gas production

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MND Staff

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September 22, 2018

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More natural gas is flowing south from the US.

Mexico’s energy regulator has recommended the creation of a new state-owned entity to focus exclusively on gas production.

The National Hydrocarbons Commission (CNH) said in a technical document made public Thursday that the move would help to recover Mexico’s natural gas production.

CNH chief Héctor Moreira said the new upstream company would take control of all non-associated gas areas that are currently managed by the state oil company Pemex.

Speaking at a release event for the technical document, he said gas gathering infrastructure and gas processing facilities would also be controlled by the new entity.

“The oil and gas businesses are very different. If Pemex is told it has to focus on profitability, it is going to invest its resources on higher-profit oil projects rather than gas areas,” Moreira said.

However, a new company dedicated solely to gas would only be judged on its capacity to produce natural gas.

“It must be a different company with a different culture than Pemex. We are going to preserve the state component but with two companies,” Moreira said.

The CNH chief cited the success BP has had after creating a gas-only subsidiary as an example for the Mexican government to follow, but neither he nor the technical document spoke about how the new entity would be funded.

However, the CNH has in recent months advocated for Pemex to create and list subsidiaries in equity markets in order to raise capital from private investors.

Such a move would follow in the footsteps of major state-owned oil companies such as China’s CNOOC and Brazil’s Petrobras.

The position president-elect Andrés Manuel López Obrador will take on the CNH recommendation remains to be seen.

He has opposed privatization in the energy sector and said that all contracts awarded by the current government to foreign and private companies for oil and gas exploration will be subject to review.

However, future finance secretary Carlos Urzúa said that if no irregularities are detected, the contracts will be honored. The incoming administration has also recognized that the private sector must play an important role in growing the economy.

Javier Jiménez Espriú, López Obrador’s nominee for secretary of communications and transportation, said last month that he will seek a 20-peso contribution from the private sector for every peso that the new government allocates to new infrastructure projects.

Mexico’s gas production has decreased drastically over the past decade from 6.5 billion cubic feet per day (Bcf/d) in 2009 to 3.9 Bcf/d this year.

The lower production is related to a cut in Pemex’s investment budget for gas projects, financial information company S & P Global said.

This year, Pemex’s board of directors only approved an investment budget of US $9.1 million for the company’s Burgos unit —Mexico’s largest non-associated gas-producing asset — compared to US $1.2 billion in 2009.

The decrease in domestic output has significantly increased Mexico’s reliance on United States gas, with imports averaging 5.1 Bcf/d this year.

“We are in a paradox where we are an importing nation when we have the potential to be a major gas producer,” Moreira said.

“By having a gas-focused state company, Mexico could better evaluate and develop its gas reserves and potential resources,” he added.

Under an optimal scenario including the implementation of structural changes to boost gas production, investment of US $32.2 billion annually will be needed to produce 16.2 Bcf/d by 2030, which would allow Mexico to be self-sufficient, Moreira said.

Source: S & P Global (en)

Border communities serve as bridges between two nations: San Antonio mayor

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MND Staff

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September 22, 2018

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Former Mexican ambassador Sarukhan, left, and Tony Wayne, ex-US ambassador to Mexico. san antonio express news

Mayors of Mexican and United States border cities agree that saving NAFTA is crucial to maintaining cross-border trade and economic development in the border region.

The mayors have been meeting in San Antonio, Texas, for the U.S.-Mexico Border Mayors Association’s seventh binational summit, which concludes today.

Efforts to save NAFTA have dominated the discussions, according to a report published by San Antonio news website The Rivard Report, although other issues such as immigration have also been on the agenda.

Mexico and the United States announced they had reached a separate agreement on August 27 that could exclude Canada. Now, three weeks later, whether NAFTA will remain a trilateral agreement remains uncertain.

While trade negotiations have been contentious, San Antonio Mayor Ron Nirenberg said that border communities represent the most positive aspects of the relationship between Mexico and the United States, particularly on trade.

“Not only do they dot the map as important points of prosperity and opportunity, but they serve as bridges between our two nations,” he said.

“Our binational communities thrive on our dynamic cross-border opportunities centered on commerce, culture, and personal connections.”

Tijuana Mayor Juan Manuel Gastelum echoed that sentiment.

“We do have a history of success in working together,” he said. “The United States is [Mexico’s] main trading partner, with 80% of our exports and 50% of our imports.”

Gastelum also agreed with San Diego Mayor Kevin Faulconer’s view that it makes sense for both Mexico and the United States to cooperate on developing mutually beneficial policies in the areas of trade, immigration and environment.

“As [Faulconer] said, we share the land, the water, the air, the culture,” he said. “Thousands of people cross the border every day, making millions of dollars in trade.”

Gastelum and Faulconer, who are the co-chairs of the mayors’ association, signed two resolutions to support international trade and border infrastructure programs.

“By working together, this group of mayors plays a critical role in building bridges between our two countries and showing how collaboration can lead to economic prosperity for the border region,” Faulconer said.

Arturo Sarukhan, a former Mexican ambassador to the United States, said that mayors and other community leaders on both sides of the border have the opportunity to help redefine the Mexico-U.S. relationship.

Mexico-U.S. relations have suffered since United States President Donald Trump took office due to tensions created by his proposed border wall and hardline rhetoric towards Mexico on other issues such as trade, immigration and binational crime.

“It’s being driven not by a disagreement on substance of policy or the mechanics of the relationship, it’s being driven by one man – one man, one narrative, and one decision that originates as a personal beef with Mexico,” Sarukhan told mayors.

But he added that thanks to positive interactions between border communities, the two countries are becoming more, not less, connected and intertwined.

“Our economies, our cultures, our gastronomies – these are two countries that are converging . . . This convergence is our great strength and resilience. That is what we need to continue to build.”

Source: The Rivard Report (en), Fox 5 (en)

Mexican cliff divers are high in rankings after first day of championship

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Tony Richards

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September 22, 2018

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A diver leaves one of the two platforms in Polignano a Mare.

Mexican divers are once again showing their prowess by scoring high marks on the first day of the final event of the 2018 Red Bull Cliff Diving World Series in Polignano a Mare, Italy.

Jonathan Paredes, who is reigning champion in the men’s competition, is in first place today with 165 points, five ahead of second-place Michal Navratil of the Czech Republic.

In the women’s event, Adriana Jiménez of Mexico is in second place with 144 points, 31 points behind first-place Rhiannan Iffland of Australia. Jiménez finished in third place in 2017.

Gold medals will be awarded based on points scored in all seven diving events in the men’s division, and five in the women’s.

Paredes is in third place in the overall standings, while Jiménez is in first place. The series kicked off in June in Texas.

There are 23 divers participating in this weekend’s event at Polignano a Mare, known both as the home of European cliff diving and for its unique take-off point.

Divers enter the platforms through the living room of a private home. The platforms are mounted on a rooftop terrace, 27 and 21 meters above the Adriatic Sea in southern Italy.

Red Bull describes Paredes, 29, as the most graceful athlete in the air and one of the most technically proficient divers. The 33-year-old Jiménez is a passionate dancer and also one of the world’s best cliff divers.

Mexico News Daily

New iPhone sells out in a few hours at Apple store in Mexico City

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César Hernández

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September 22, 2018

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Despite its hefty price, the most expensive of Apple’s new iPhones sold out in just a few hours after it went on sale yesterday at the Apple store in Santa Fe, Mexico City.

The 512-GB iPhone XS Max retails for 35,499 pesos (just over US $1,880) but the price didn’t stop 100 people from snapping them up and cleaning out the store’s stock.

Among the buyers was Antonio Hueto Gómez, who traveled from the southern Veracruz town of Saltabarranca to be the first in line at the store on Thursday for presales. The phones were available for pickup yesterday morning.

Hueto bought the 256 GB model of the XS Max to use in his work as a photographer, but he’s a big Apple fan. “All my devices are Apple. The only thing I’m missing is the apple tattooed on my forehead!”

The new phones are the XS Max, the XS and the XR, ranging in price from 18,499 to 35,499 pesos (US $980 to $1,880). Only the first two are currently available; the XR is to be released in late October.

Source: El Financiero (sp), Reforma (sp)

Money laundering investigated after Pemex employee assassinated

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MND Staff

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September 22, 2018

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The vehicle in which a Pemex engineer was assassinated on Thursday. — The vehicle in which a Pemex engineer was assassinated on Thursday in Guanajuato.

Money laundering at the state oil company Pemex is being investigated in connection with the murder Thursday of a company engineer in Salamanca, Guanajuato, officials with knowledge of the case told the newspaper Milenio.

The Guanajuato Attorney General’s office is pursuing that line of investigation due to the position the homicide victim held at the Antonio M. Amor refinery in Salamanca, Milenio said.

Gabriel Alejandro Aguilar Mancera worked in the refinery’s department of public works and acquisitions, a position from which he allegedly could have facilitated the laundering of illicitly-gained funds from organized crime groups through the awarding of Pemex contracts.

Aguilar was attacked at 8:00am Thursday by a group of armed men in a pickup truck as he drove his eight-year-old son to school.

In addition to collecting spent bullet casings found at the crime scene in the neighborhood of El Vergel, authorities also recovered evidence allegedly linking the slain official to organized crime, Milenio said.

Aguilar’s son was not shot but received treatment for injuries caused by glass splinters. He is reported to be in stable condition.

The murder is the second of a Pemex employee this year after the oil company’s former chief of security in Salamanca, Tadeo Lineol Alfonzo Rojas, was shot and killed in January. He was also taking his children to school when he was attacked.

In May, the newspaper Reforma reported that Pemex personnel at the Salamanca refinery were under investigation by federal authorities for fuel theft, but the Interior Secretariat said later the same month that the practice had been interrupted.

Guanajuato was Mexico’s most violent state in the first eight months of the year in terms of homicide numbers, with 1,671 victims.

A significant number of the deaths in the state are believed to be related to pipeline petroleum theft and the Jalisco New Generation Cartel (CJNG), considered Mexico’s most dangerous and powerful criminal organization, is reportedly involved in a turf war in Guanajuato with the crime gang known as Santa Rosa de Lima.

Source: Milenio (sp)

Chiapas journalist assassinated; threats had been made two years ago

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César Hernández

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September 22, 2018

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A Chiapas journalist yesterday became the 13th reporter to be assassinated this year in Mexico.

Mario Leonel Gómez Sánchez, 40, was leaving his home in the municipality of Yajalón early yesterday afternoon when two men on a motorcycle approached him and opened fire.

He was taken to a nearby hospital but died soon after.

Gómez had worked at the newspaper El Heraldo de Chiapas for the last eight years, covering politics, justice and social causes in the Lacandon jungle region, and this year had covered the state and federal elections held July 1.

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Local social organizations said Gómez had filed a formal complaint of threats against him in 2016 after he published a story on corruption. Protective measures were provided to him but were later withdrawn.

The state attorney general said Gómez’s family has requested a round-the-clock police presence at their home.

It said in a statement that it was “conscious of the importance of free journalism,” pledging to bring those responsible to justice.

El Heraldo de Chiapas later published an editorial signed by all of its staff, condemning the aggression against their colleague and demanding that authorities punish his assassination.

Source: El Universal (sp), Animal Político (sp)

AMLO: if NAFTA fails Mexico will seek second trade accord with Canada

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MND Staff

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September 22, 2018

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Mexico will seek a bilateral trade agreement with Canada if NAFTA talks fail, president-elect Andrés Manuel López Obrador said yesterday.

Mexico and the United States reached a separate accord late last month but so far negotiations aimed at bringing Canada into the deal have failed amid U.S. threats to impose tariffs on auto imports from its northern neighbor.

“We would like the government of the United States and the government of Canada to come to an agreement so that the treaty can be trilateral, as it was originally signed,” López Obrador told reporters in Sonora.

“But in the event that the governments of the United States and Canada do not come to an agreement . . . we would have to maintain the bilateral deal with the United States and seek a similar deal with Canada,” he added.

“Obviously we can’t cut ties with either.”

The United States and Canada concluded another round of talks in Washington D.C. Thursday without reaching agreement, although Canadian Foreign Minister Chrystia Freeland described the dialogue as “constructive.”

White House economic advisor Kevin Hassett told Fox News yesterday that the United States was “getting very close” to having to advance its separate deal with Mexico, leaving Canada out of the agreement. U.S. President Donald Trump had suggested that was a possibility when he first announced the two-way pact.

A United States-imposed October 1 deadline to publish the text of a deal is closing fast.

Trilateral negotiations began in August last year and were expected to be finished before the end of 2017 but dragged on due to a failure of consensus on a range of issues such as rules of origin for the auto sector and a so-called sunset clause, pushed by the United States, that would have terminated the agreement after five years if it was not renegotiated.

After five weeks of bilateral negotiations in Washington D.C., Mexico and the United States announced August 27 that they had reached a bilateral deal.

López Obrador’s future chief negotiator Jesús Seade participated in the talks and was said to have played a key role in convincing the United States to drop its sunset clause demand and agree instead to a six-year review.

Mexico, in turn, agreed that 40% to 45% of auto content would have to be made in high-wage areas where workers earn at least US $16 per hour.

Some observers said that Mexico betrayed Canada by making a separate deal with the United States, although Economy Secretary Ildefonso Guajardo denied the claim and it was later revealed that Canada had attempted to blindside Mexico by pursuing its own separate deal with its neighbor.

López Obrador, who will be sworn in on December 1, also said yesterday that he has had a good relationship so far with the Trump administration.

“I hope with all my heart it stays that way.”

He told reporters in San Luis Río Colorado, Sonora, he had spoken with Trump by telephone about free trade and immigration “and some agreements are being reached,” observing that the U.S. president had been respectful. “It was a very good conversation.”

“We’re neighbors. We can’t be distant neighbors. We have to achieve a relationship of respect and cooperation.”

Source: AFP (sp)

Up to 300,000 homes affected by flooding in Sinaloa; Los Mochis hardest hit

By

MND Staff

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September 22, 2018

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Los Mochis, Sinaloa, is facing a massive clean-up after torrential rain brought on by tropical depression 19-E left much of the city under water.

Sinaloa Civil Protection chief Francisco Vega Meza said that preliminary reports indicate that 70,000 homes in the city were damaged and 230,000 people were affected in the municipality of Ahome, of which Los Mochis is the municipal seat.

“Seventy per cent of people in Los Mochis suffered because water got into their homes. In the area of El Carrizo, several towns were cut off and there are still some that are suffering from high water levels, such as Chihuahuita, the water hasn’t finished receding there yet,” he said.

Across Sinaloa, Civil Protection services estimate that as many as 300,000 homes were affected by flooding including many in the state capital Culiacán.

Flooding also caused damaged to 160 public schools, three highways, 14,000 hectares of agricultural fields and hydro-agricultural infrastructure.

State Agriculture Secretary Jesús Antonio Valdés Palazuelos said the extent of the damage to farm land is being assessed via air and land with a view to providing compensation to farmers through insurance policies held by the Sinaloa government.

The death toll in the state still stands at four while three people are missing.

The state government said that at least 3,504 people had to be evacuated from their homes in six municipalities, mostly in Los Mochis and rural areas of Sinaloa.

An air force helicopter yesterday delivered one and a half tonnes of provisions as well as clothing and air mattresses to affected indigenous communities in the municipality of El Fuerte and cut-off areas of Ahome.

Roberto Ramírez de la Parra, director of the National Water Commission (Conagua), said the priority is to attend to the basic needs of the affected population, adding that the full cost of the damage will be assessed later.

The risk posed by overflowing dams has been controlled, he said.

As much as 359 millimeters of rain fell in parts of Sinaloa in a 24-hour period starting Thursday morning and emergency situations were declared in 11 municipalities.

The heavy rains also caused flooding in parts of Sonora and Chihuahua, and at least three people drowned in flood waters in the latter state.

Source: Reforma (sp), El Universal (sp)

Suspected gangster freed after judge finds arrest didn’t occur as described

By

MND Staff

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September 21, 2018

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A federal judge today ordered the immediate release from custody of an alleged gangster dubbed the “totoaba tzar,” ruling that his arrest was illegal.

Óscar Parra Aispuro was arrested by state police last week in Baja California, allegedly while traveling on the Mexicali-San Felipe highway with two bodyguards, who were also detained.

But the accused’s defense team presented evidence that the judge said proved his arrest didn’t occur as authorities said.

Federal authorities had identified Parra as the regional leader of a gang dedicated to trafficking drugs and the prized totoaba, an endangered fish whose swim bladder is considered a delicacy in some Asian countries and can fetch prices per kilogram in the thousands of dollars. He is also suspected to be a member of the Sinaloa Cartel.

At a hearing at the Federal Criminal Justice Center in Almoloya, México state, the presiding judge also ordered that Parra’s bodyguards, Alejandro Bastidas González and Carlos Bastidas Moreno, be freed and all three men later left the Altiplano maximum security prison.

According to Baja California authorities, the men were stopped by police at 6:50am on September 13 and detained after officers found seven firearms, 53.6 grams of methamphetamine, radios, cartridges and a bulletproof vest in their two vehicles.

However, the judge said that based on evidence presented by the defense “it was evident that the people were not detained in the terms reported by the state police, given that apparently three hours before they were violently removed from [Parra’s] home.”

That was proven, the judge said, “because it was shown that the property had damage to its doors and entrances as well as footprints from military-style boots in various parts of the house.”

Five witnesses testified that an armed group had entered Parra’s home by breaking down doors, claiming also that the men were beaten.

The wife of one of the men and a baby were allegedly at the address when the arrests occurred. The two vehicles in which state police said the men were traveling when they were arrested were also removed, witnesses said.

Lawyers presented video and audio evidence to substantiate their case.

In footage recorded by a business, the wife of one of the arrested men can be seen carrying her baby and asking the owners to borrow a telephone, allegedly so that she could locate her husband.

Other footage showed a convoy of state police cars chaperoning the two seized vehicles three hours before state police said the men were arrested.

Source: Milenio (sp)