Mexico’s exports on track to break US $600B in 2024

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August 27, 2024

A tanker filled with containers of export goods in Mexico — As tariffs took effect, Mexican exports fell. (Shutterstock)

Mexico remains on track to set a new record for exports in 2024 after the value of goods shipped abroad in July increased almost 15% in annual terms.

The national statistics agency INEGI reported Tuesday that Mexico’s exports were worth US $54.78 billion in July, a 14.7% increase compared to the same month of last year.

A welder works in a warehouse — Mexico’s manufacturing sector accounted for just under 90% of export income in the first seven months of 2024. (Shutterstock)

The value of exports in the first seven months of the year rose to $354.17 billion, a 4.3% increase compared to the same period of 2023.

Mexico’s exports were worth a record high of just over $593 billion last year.

Based on the export revenue earned in the first seven months of the year, the country is on track to break the $600-billion barrier for the first time ever in 2024.

More than 80% of Mexico’s export earnings comes from products sent to the United States.

Mexico became the top exporter to the U.S. in 2023, dethroning China.

Manufacturing: Mexico’s export powerhouse

More than 90% of Mexico’s export revenue in July came from the shipment abroad of manufactured goods.

The manufacturing sector accounted for just under 90% of export income in the first seven months of the year.

INEGI data shows that the value of Mexico’s manufacturing sector exports surged 15.9% in July compared to the same year of 2023 to reach $49.74 billion.

Manufactured goods brought in revenue of $316.14 billion between January and July, a 4.8% increase compared to the first seven months of last year.

A wide range of products are made in Mexico, but the country’s top-earning manufacturing sub-sector is the automotive industry.

Mexico’s auto industry — which includes U.S., Asian and European automakers — generated $17.1 billion in revenue in July and $112.32 billion in the first seven months of the year.

The latter figure — an increase of 6.6% compared to the January-July period of 2023 — accounts for almost one-third of Mexico’s total export revenue so far this year.

Mexico’s other manufacturing sub-sectors, among which are electronics, aerospace, medical devices and textiles, brought in export revenue of $203.82 billion in the first seven months of the year, a 3.8% annual increase.

In total, Mexican-made goods generated export revenue of $316.14 billion between January and June, a 4.8% year-over-year increase.

#TomaNota ✍🏼 Con cifras oportunas, en julio 2024 las exportaciones totales nacionales, que son los bienes que vendemos al exterior 📦🇲🇽, mostraron un crecimiento anual de ⬆️14.7%; resultado de un avance de 16.2% en las exportaciones no petroleras y un retroceso de (-)10.2% en las… pic.twitter.com/EuQXRpvpK6

— México, ¿cómo vamos? (@MexicoComoVamos) August 27, 2024

Mexico is aiming to further bolster its manufacturing sector by attracting foreign companies to nearshore here.

Automakers Tesla and BYD are among the many foreign companies that have recently announced plans to establish plants in Mexico, while steelmaker Ternium is among those that intend to expand their existing operations in the country.

Ag and mining exports also grow, but oil earnings fall

The value of agricultural exports increased 16.9% annually in July to reach $1.75 billion.

Beef exports brought in almost twice as much revenue as the same month last year, while earnings from the shipment abroad of both citrus fruits and avocados increased by more than 30%.

Agricultural products including fruit, vegetables and meat brought in $14.75 billion in export revenue in the first seven months of 2024, a 7.7% annual increase.

Agriculture was Mexico’s third largest export industry between January and July, after manufacturing and oil.

Mexico’s mining sector earned $790.1 million in export revenue in July, a 33.7% annual increase, and $5.93 billion in the first seven months of 2024, a gain of 6.3% compared to the same period of 2023.

Meanwhile, revenue from oil exports — crude and fuel products — declined 10.2% annually in July to $2.49 billion. Oil revenue fell 6.4% in the first seven months of the year to $17.34 billion.

Mexico is aiming to become self-sufficient in fuel and as a result, is sending less crude abroad.

Fuel imports fall, but Mexico still has a trade deficit

Mexico spent $5.88 billion on imports of oil-based “consumer goods” — gasoline, diesel and the like — in the first seven months of the year, a decline of 47.4% compared to the same period of last year.

Imports of oil-based intermediate goods fell 20.5% to $16.65 billion in the same period.

Pemex oil platform off Tabasco coast — Mexico spent 47.4% less on oil-based “consumer goods” — gasoline, diesel and the like — in the first seven months of the year. (Pemex/X)

All told, Mexico spent $22.54 billion on imported oil products between January and July, a 29.9% annual decrease.

In contrast, Mexico’s total outlay on imports increased 3.8% annually in the first seven months of the year to reach $359.74 billion.

Mexico thus recorded a trade deficit of $5.56 billion between January and July. That figure is 22.1% lower than Mexico’s deficit in the same period of last year. Mexico’s trade deficit in July was just $72 million, with the value of imports only narrowly above the value of exports.

Three-quarters of Mexico’s total outlay on imports in the first seven months of the year was spent on intermediate goods: products such as steel, glass and sugar that are used in the production of final or consumer goods.

Intermediate goods imports were worth $271.56 billion between January and July, a 2.3% annual increase.

Spending on consumer goods imports (excluding fuel) increased 23% annually to $46.33 billion in the first seven months of the year, while Mexico’s outlay on capital goods such as machinery and other equipment rose 10.5% to $35.95 billion.

With reports from El Economista and El Universal

What’s a güey, güey? The story behind Mexico’s favorite term of endearment

By

Bethany Platanella

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August 27, 2024

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what does güey mean — It is almost certainly Mexico's favorite word - but when should güey (and when should you not)? (Dall-E)

“Sí güey, sí güey, sí güey, sí güey.” The phrase runs laps around in my head as I respond in the affirmative to a friend’s text, asking me to join her this evening for our favorite pilates class. At this point, I simply can’t help myself. It’s José Ramones’ fault.

If you’re lucky enough to be exposed to notable Mexican Instagram comedians like Esteban Said and the aforementioned José, you’ve likely heard the word “güey.” Actually, if you’ve walked down a street, any street, in Mexico, you’ve heard the term repeated to a shocking degree. In fact, one sentence can easily be laden with not one, but up to six güeys. It flies from the mouths of children, businessmen and girlfriends brunching on huevos rancheros at a fancy restaurant in Polanco with such ease, one might concur that the speaker isn’t even aware that he or she is saying it.

“Y pues, le dije “güey, que haces güey, no seas así güey.” – every young Mexican guy you’ll ever meet. (Dall-E)

Know what I mean, güey?

Which raises the obvious question: what exactly does the word güey mean? Where does it come from? And why can’t Mexicans seem to stop saying it?

What does güey mean?

In short, güey can be not-too-loosely translated to any of the following, and their respective cultural variants:

Dude
Mate
Bro
Homie
Pal

While some of these words might seem gender-specific, they’re actually not: go to Miami and you’ll find that the daintiest of viejas is subject to the moniker “bro.” “Güey” is the same: it applies to any gender and any age.

When can I use the word güey?

Whenever, wherever and with anyone with whom you have a friendly relationship. Feel free to stuff as many as you can into a conversation, like one might overkill cookie dough with heaps of chocolate chips. Though realistically, it would be respectful to wait until you’ve established a casual friendship with a boss or an in-law before using it.

“Dude, stop it.” Love Quinn, in the series “You,” demonstrates her annoyance by using the word. (Pinterest)

Where did the word güey come from?

Here’s where things get interesting. Similar to the word chilango, güey started out as an insult. The noun from which it’s derived “buey” means ox, and like the English expression “dumb as an ox,” calling someone “buey” conveyed a similar sentiment. If you were a slow, foolish or dull person, you’d likely get quite familiar with the term. And since oxen have long been considered submissive and lacking in masculinity, it worked like a charm if, say, your male lover did something unforgivable and you really wanted to shatter his confidence and cut to the depths of his soul.

That was all pre-20th century, though. Studies by Jean Meyer and Luis H. Pérez show that language shifted significantly during the Mexican Revolution. In the struggle for workers’ rights, migration from rural to urban areas — Mexico City in particular — increased dramatically. New and established city dwellers now intermingled in ways they hadn’t before — peasants, workers, military leaders and intellectuals alike found themselves face to face and blending their regional dialects. Indigenous groups were active participants in the movement and introduced their own words and expressions from Nahuatl, Yucatec Maya and Zapotec into the language.

This infusion sparked a shift in speech patterns from which “güey” could not escape. The “b” softened into a “g.” With the change of letter also came a change in meaning, and the expression lost its sharp edge in favor of a more colloquial and friendly one.

Phrases such as “¡Oye, güey!” saddled their way into Mexican vernacular, and güey’s utility as a descriptor for a person whose name was unknown became apparent. “¿De quién hablas? ¿Ese güey de la gorra roja?”: “Who are you talking about? That guy in the red cap?”

The Revolution is credited to giving rise to other informal Mexicanisms like chido (cool) and órale (expressing approval).

How do I use it?

The versatility of güey is akin to that of the vulgar verb chingar: it fits anywhere. To get started, read and memorize the following phrases:

¿Qué onda, güey?: What’s up, dude?

Eres bien chido, güey: You’re awesome, man.

No manches, güey: No way, dude.

Cálmate, güey: Calm down, dude.

¡Güey, tienes que verlo!: Dude, you have to see it!

¿Neta, güey?: Really, dude?

¡Güey, qué padre!: Dude, how cool!

Vamos, güey: Let’s go, man.

Eres un pendejo, güey: You’re an idiot, dude. This can be insulting if you don’t know the person and you’re not laughing as you say it. When using “pendejo,” proceed with caution.

¡Güey, no te creo!: Dude, I don’t believe you!

¿Estás bien, güey?: You good, man? Be careful with how you say this one: if you say it as an affirmation and stress “güey,” you’ll be calling the other person an idiot.

Where can I hear it in pop culture?

Sofia Reyes - 1, 2, 3 (Lyrics) ft. Jason Derulo, De La Ghetto

Watch this video on YouTube

Everywhere. Singers incorporate it into song lyrics, like like Sofía Reyes does in her hit single “1, 2, 3,” where she sings sings:

“Güey, no sé qué hacer, tú me tienes loca, loca, loca”: Dude, I don’t know what to do, you’re driving me crazy, crazy, crazy.

Gael García Bernal is also known for sprinkling the term into his TV interviews and film characters — you’ll hear it with fervor in “Y Tu Mamá También” and “Amores Perros.”

What other words can you use instead of güey?

“Carnal,” “compa,” “hermano/a” and “vato” are but a handful of amicable alternatives to our new favorite word.

Bethany Platanella is a travel planner and lifestyle writer based in Mexico City. She lives for the dopamine hit that comes directly after booking a plane ticket, exploring local markets, practicing yoga and munching on fresh tortillas. Sign up to receive her Sunday Love Letters to your inbox, peruse her blog or follow her on Instagram.

Tippy-toeing through Tip-land

By

Sarah DeVries

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August 27, 2024

19

Tipping in Mexico — 10%? 20%? None? How are you meant to know how much to tip after your tacos? (Blake Wisz/Unsplash)

I have a local (Mexican) friend with whom I simply cannot go to restaurants anymore.

Why?

Because I get all worked up about how she treats waiters.

I can’t help it. First, I don’t think she behaves nicely and appreciateively enough toward them. She might mutter a disinterested “gracias” when they bring her order, but she’s quick with an eye roll if she thinks they’ve made a mistake or taken too long.

Even the dog has no idea how much they’re meant to be tipping. (Rogelio Morales Ponce/Cuartoscuro)

She also thinks that tips are optional (I’ve noticed that the higher up the economic ladder one goes here, the more prevalent this belief is). I completely disagree, even when the service is sub-par. Working as a waiter is hard, even if you’re not great at it.

This probably has more to do with our different upbringings than much else. She grew up in a family that pretty much always had enough money for their needs and many of their wants. I grew up in a family whose income was much closer to those who depend on tips.

That said, my friend is not unique. My ears perked up terrier-style, for example, when I read Louisa Roger’s article on her experience leading customer service training. On common behavior: “I was pleasantly surprised when they said Americans and Canadians were pretty forgiving when their expectations weren’t met. In their experience, it was Mexicans and Italians who were more likely to get irritated.”

Well, color me not surprised. Or could it be that I just don’t know very many rich and entitled paisanos? Whatever it is, I’ve noticed it over the years: more Mexicans with plenty of money to spend than not seem to feel entitled to free service. If the service is phenomenal, they might leave 10%.

“I won’t tip anymore, let Morena help them.” The tip they left.

That doesn’t mean, of course, that we foreigners should overcompensate as a result. And it’s hard not to sometimes, I know.

We’re gushing with politeness and a broad willingness to help because we’re in love (with Mexico, possibly a Mexican, or both). Calm down.

Yes, it’s a fine line that we good-willed foreigners walk. On the one hand, there’s a sizable portion of Mexicans who believe that overexuberant generosity toward practical strangers makes you not a saint but an idiot. Things around here are corrupt enough, after all, that a certain cynicism can easily seep in.

This means that it can be easy for some to see us as Polyanna suckers who are practically begging to be taken advantage of. And I don’t know about you all, but that’s definitely not my own intention.

What should we do, then? I’ll admit that I’m guilty of sometimes overtipping. That said, I follow my partner’s lead on that, who’s spent much of his working life in restaurants. “I always try to leave at least enough for a taxi.” (In our city, mind you, 40-50 pesos is enough for a taxi; if you live in Los Cabos, I wouldn’t advise that as no one that earns a waiter’s salaries is taking taxis). Tips in restaurants, by the way, are nearly always split among the entire restaurant staff at the end of the night.

For further reading, check out Janet Blaser’s extensive article on how to tip in Mexico for a specific reference, too. I also have a history of fretting about our collective economic footprint. And of course, be sure to take notes on Bethany Platanella’s “Guilt payments and over-tipping” section of her “10 things gringos do that upset Mexicans” list!

Conclusion? Be cool. Be nice. But try to temper your savior complex. People aren’t as impressed as you think they are.

Sarah DeVries is a writer and translator based in Xalapa, Veracruz. She can be reached through her website, sarahedevries.substack.com.

Sheinbaum names Víctor Rodríguez Padilla as the next CEO of Pemex

By

MND Staff

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August 26, 2024

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Pemex CEO Víctor Rodríguez Padilla with President-elect Claudia Sheinbaum. — Pemex CEO Víctor Rodríguez Padilla, an energy engineer and economist, has been tasked with reducing the state oil company's debt. (Graciela López Herrera/Cuartoscuro)

President-elect Claudia Sheinbaum announced Monday that energy economist and engineering academic Víctor Rodríguez Padilla will be the next CEO of Pemex, Mexico’s heavily-indebted state oil company.

Sheinbaum, who will take office Oct. 1, announced the appointment at a press conference in Mexico City.

Olmeca refinery belonging to Pemex in Dos Bocas — Rodríguez acknowledged that leadership of the indebted state oil company would be a challenge and “great responsibility.” (Cuartoscuro)

Besides being “an expert in energy economics and policy,” Sheinbaum said that Rodríguez “… has 42 years of experience in the energy sector and of course he’s been a defender of the energy companies of the nation, of energy sovereignty.”

“… Víctor knows Pemex,” she said after noting that she and the next state oil company CEO have co-authored various academic and newspaper articles about Mexico’s energy sector.

Who is Víctor Rodríguez, the next CEO of Pemex?

Rodríguez, a professor of engineering at the National Autonomous University (UNAM), will succeed Octavio Romero, who has led the state oil company throughout the six-year term of President Andrés Manuel López Obrador.

Pemex CEO Octavio Romero speaks at a podium during an event at the Olmeca Refinery in Dos Bocas. — As Sheinbaum enters office, current Pemex CEO Octavio Romero will transition to a new role.(lopezobrador.org.mx)

He will take the reins of a company with debt of almost US $100 billion, making Pemex — an oil driller and refiner — the world’s most indebted oil firm.

The Bloomberg news agency reported that Sheinbaum tapped Rodríguez for the position “to boost Pemex’s profitability and rescue the company from ballooning debt and recurring accidents as she seeks to jump start Mexico’s green energy transition.”

The president-elect has committed to continuing support for Pemex, which has received enormous financial assistance from the current government.

However, she has also pledged to invest billions of dollars in renewable energy projects.

President-elect Claudia Sheinbaum with her energy minister, Luz Elena González, and future Pemex CEO Víctor Rodríguez. — Rodríguez promised to work closely with Sheinbaum’s energy minister, Luz Elena González Escobar, at right. (Claudia Sheinbaum/X)

In a speech after Sheinbaum announced his appointment, Rodríguez said it was an “honor” to be given “the great opportunity” to lead “the country’s biggest company,” but also “a challenge” and a “great responsibility.”

Despite its large debt, Rodríguez asserted that the current government “has rescued” Pemex over the past six years.

“Petróleos Mexicanos was devastated with the neoliberal policies that were implemented during this whole period of six six-year terms of government,” he said, referring to the period between 1982 and 2018.

“They handed over a devastated company, a company in ruins with refineries falling to pieces,” Rodríguez said.

“Fortunately, [the refineries] have been restored and we’re in the process of increasing their capacity,” he said.

“… We’ve limited [fuel] imports and we’re close to reaching self-sufficiency. It’s been a very big effort in terms of the rescue of this company,” said Rodríguez, who will be responsible for seven Pemex refineries in Mexico, including the new one on the Tabasco coast, as well as the state oil company’s refinery in Texas.

He later declared that “Pemex is not a dead company,” nor is it as bad off as people think.

“The media exaggerates a little bit or a lot,” Rodríguez said before conceding that the company faces a “financial situation” that the government is attempting to resolve. He pledged to work closely on that issue with incoming energy minister Luz Elena González Escobar and Finance Minister Rogelio Ramírez de la O, who will stay in the same position after Sheinbaum takes office.

Pemex, he subsequently asserted, has been “very responsible” in paying back what it owes.

Pemex Deer Park refinery near Houston, Texas. — Rodríguez will be in charge of seven Pemex refineries in Mexico as well as the Deer Park refinery in Texas. (File photo)

In terms of the “punctuality” of payments, the company’s conduct has been “impeccable,” Rodríguez said.

“Some rating agencies haven’t recognized that. Not all of them — some have and some haven’t,” he said.

Pemex’s oil production target

Rodríguez said that “a significant challenge” for Pemex will be to “maintain” crude production at 1.8 million barrels per day (bpd) in order to have enough oil to supply the state oil company’s refineries.

Production is currently less than half what it was 20 years ago, falling to around 1.5 million bpd from more than 3 million bpd in 2004.

Rodríguez attributed the decline to “geological maturity [of oil fields], lack of investment, carelessness, negligence and a cunning plan to privatize the company” during the so-called neoliberal period.

Pemex will play a ‘fundamental role’ in energy transition

“It’s important to highlight the Pemex of the future,” Rodríguez told reporters. “What are we going to do?”

The soon-to-be Pemex CEO said that the vast majority of energy used in Mexico — almost 90% — comes from fossil fuels: “basically gas, which is the main energy source we use in the country, and oil.”

“We need to maintain the base of energy supply in the economy … while we carry out the energy transition,” Rodríguez said.

Renewable sources will satisfy increasing demand for energy, he said, adding that the incoming government will make a “big effort” to develop those sources.

“Pemex will play a fundamental role. Pemex won’t limit itself to making oil and gas condensate as it has always done,” Rodríguez said.

Modern windmills along a mountainous backdrop in Oaxaca, Mexico — Rodríguez said under his leadership, Pemex will branch out into renewable energy projects while maintaining the country’s “base energy supply.” (Shutterstock)

“Now we’re going to do new projects. We’re going to have partnerships with society, with universities, with business people, to do the projects of the future. We’re going to produce wind energy, solar energy, offshore wind energy. We’re going to produce strategic materials including lithium,” he said.

Rodolfo Ramos, head of Mexico research at the Brazilian financial services company Bradesco, said that Rodríguez’s willingness to partner with the private sector could help the bottom line of Pemex, which recorded its worst loss in four years last quarter.

Damian Fraser, CEO of Mexico City-based business consultancy Miranda Partners, said on LinkedIn that “Rodriguez Padilla has been given one of the most difficult jobs in Mexico — CEO of Pemex, the heavily indebted, loss-making state-owned oil and refining company.”

“A respected professor in energy engineering at the UNAM, he has limited administrative experience. Still, he at least enjoys a close relationship with incoming President Claudia Sheinbaum, with whom he has co-authored several academic papers,” he wrote.

The new CEO’s CV

Sheinbaum, a physicist and climate scientist before entering politics, said Monday that she has known Rodríguez “for many years.”

“We have the same degree, … he also studied physics in the Faculty of Sciences at UNAM,” she said.

Sheinbaum also noted that Rodríguez has a master’s degree in energy engineering from UNAM and a PhD in energy economics from the Grenoble Alps University in France.

In addition, he has completed postdoctoral studies in France and Canada.

Future Pemex CEO Víctor Rodríguez gives a lecture. — Rodríguez is a UNAM professor who has been an advisor to a range of government offices. (UNAM)

Sheinbaum highlighted that Rodríguez is currently a professor in UNAM’s postgraduate engineering program and a member of the National System of Researchers. She also noted that he has been an advisor to both houses of Congress, the Federal Auditor’s Office, the Supreme Court and other government departments.

In addition, Rodríguez has worked as a consultant for the United Nations Economic Commission for Latin America and the Caribbean, the Latin American Energy Organization, Oxfam and the Climate Initiative of Mexico.

“He’s a founding member of an organization that I was in some time ago as well,” Sheinbaum said, referring to the Observatorio Ciudadano de la Energía, or Citizens Energy Observatory.

“We always fought for the defense of the public organizations of Pemex and the Federal Electricity Commission, and against privatization,” she said.

Sheinbaum said that current Pemex CEO Octavio Romero will continue to work with the government, but didn’t specify the area. The business news website El CEO reported Friday that he will head up the national housing fund Infonavit during the next six-year period of government.

With reports from El Financiero, Reforma and Bloomberg

Opinion: How would AMLO’s reforms impact the USMCA and nearshoring?

By

Mexico Institute/Wilson Center

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August 26, 2024

15

AMLO at the morning press conference discussing reforms — Analyst Diego Marroquín discusses how AMLO's constitutional reforms could impact the USMCA and nearshoring in Mexico. (Cuartoscuro)

Following the decisive electoral victory by Claudia Sheinbaum and the Morena party on June 2, 2024, her mentor, President Andrés Manuel López Obrador (AMLO) and allies are likely to secure a two-thirds majority in Congress, providing him the power to unilaterally amend Mexico’s constitution.

Before leaving office on Oct. 1, AMLO’s supermajority is planning to implement 18 constitutional reforms that would weaken Mexico’s economic regulatory landscape, degrade its investment climate, dissolve checks and balances, and undermine the country’s ability to fulfill international commitments, including the US-Mexico-Canada Agreement (USMCA).

If approved, these legal shifts could seriously challenge North America’s long-term competitiveness and nearshoring potential, jeopardize billions in US and Canadian investments in Mexico, and complicate the 2026 review of USMCA.

Constitutional amendments

Judicial reform

Mexico’s Supreme Court has found several of AMLO’s actions unconstitutional, including efforts to undermine private investment in the energy sector and place civilian public security forces under military control. If approved, the judicial reform would gradually remove all Supreme Court justices and federal judges, replacing them through popular elections without clear professional qualifications. As presented, this reform would severely weaken the judiciary’s role as an independent check on presidential power, leaving judicial decisions vulnerable to political influence and donor interests.

Rather than addressing long-standing issues of corruption and impunity within Mexico’s judiciary, this overhaul could lead to significant delays, pauses, or even retrials in cases involving human rights and private investments in sectors not covered by the USMCA. Under the USMCA, U.S. and Canadian investors in Mexico can only pursue claims in the oil and gas, power generation, infrastructure and telecommunications sectors. Disputes in other sectors require investors to go through Mexico’s domestic court system before seeking arbitration under the USMCA.

Elimination of oversight and regulatory agencies

Other proposed reform would dismantle Mexico’s antitrust agency, along with the Federal Economic Competition Commission (Cofece), the Federal Telecommunications Institute (IFT), and the Energy Regulatory Commission (CRE), transferring their functions to Executive Branch agencies like the Economy Ministry and the Energy Ministry.

These changes would remove critical checks on presidential power and directly conflict with Mexico’s commitments under the USMCA regarding market access, competition policy, and state-owned enterprises (see table below).

By eroding legal certainty, the reform would severely hamper Mexico’s nearshoring potential, driving investment elsewhere and weakening North America’s position in the global supply chain.

State energy industries

One proposal would restrict Mexico’s state-owned utility, the Federal Electricity Commission (CFE), from partnering with private companies for electrical transmission and distribution, while prioritizing CFE market dominance over private firms. By imposing additional restrictions on private investment, this reform conflicts with the USMCA’s ratchet clause, which prevents countries from rolling back market liberalization measures once they’ve been implemented (see table below).

USMCA Compliance Table — The author compiled this table to show how Mexico’s constitutional reforms could potentially violate the USMCA. (Diego Marroquín Bitar/USMCA)

This policy would undermine U.S. and Canadian economic interests and any energy they produce in favor of Mexico’s CFE and its state-owned oil and gas company, Pemex. Canadian and U.S. firms have invested a combined US $34 billion in Mexico’s energy sector, including significant investments in renewable energy projects.

Ban on GM corn and restrictions on water concessions

This proposed reform aims to ban genetically modified (GM) corn for both harvest and human consumption. By introducing trade restrictions without scientific evidence, this reform conflicts with the USMCA market access and sanitary and phytosanitary provisions (see table above). Mexico, the U.S.’s second-largest agricultural export market, imports over $5 billion worth of corn annually. Such a ban could lead to the loss of thousands of US agricultural jobs and threaten food security in Mexico, as domestic production would likely be unable to meet the country’s corn demand.

Another proposed amendment seeks to limit water concessions to firms in regions with scarce water resources, reserving allocations to public entities exclusively for personal and domestic use. By favoring Mexican entities over U.S. and Canadian firms, this proposal would appear to violate USMCA’s National Treatment and Most-Favored Nation provisions (see table above).

Ban of fracking and open-pit mining concessions

Constitutional reform proposals to end concessions for open-pit mining and permanently ban oil extraction through fracking conflicts with Mexico’s commitment under USMCA to maintain agreed-upon market openness in these sectors, potentially affecting the operations and ownership of US and Canadian firms (see table above). This could lead to millions of dollars in losses, arbitration claims, or trade sanctions from Canada or the United States. Canadian companies, representing 70% of all foreign mining firms in Mexico, are the largest foreign investors in the country’s mining sector.

Risks

If approved, these changes would appear to severely limit Mexico’s growth prospects and its ability to create well-paying jobs in the medium and long-term. The resulting legal issues and business uncertainty could trigger billions of dollars in tariffs if U.S. and Canadian authorities or firms request formal dispute settlement under USMCA, as well as significant economic losses for consumers and workers across North America.

In other words, Mexico risks undermining the very conditions that foster job creation and investment growth. Additionally, the potential for trade disputes and economic disruptions could deter new investors and negatively impact nearshoring opportunities.

Furthermore, these reforms pose a serious risk to the USMCA’s upcoming review, potentially stalling negotiations with Canadian and U.S. authorities and triggering demands for changes from stakeholders in 2026.

This heightened scrutiny could complicate negotiations and result in unsuccessful outcomes in subsequent years. Ultimately, the reforms could jeopardize the agreement’s renewal and increase the risk of its expiration in 2026, undermining the long-term stability and benefits of the USMCA.

Conclusion

AMLO’s reforms represent a turning point that undermines Mexico’s trade and investment commitments under the USMCA, making Mexico a less reliable partner for the U.S. and Canada.

The proposed legal and institutional overhaul threatens to undermine Mexico’s investment climate for decades, disrupt regional economic integration, and weaken supply chain resiliency at a crucial moment of global economic realignment.

This article was originally published by the Mexico Institute at the Wilson Center.

Diego Marroquín Bitar is the Inaugural Bersin-Foster North America Scholar at the Woodrow Wilson Center and the driving force behind their North America research agenda. He co-founded the North America Project at the US-Mexico Foundation and the non-profit North America 3.0. His insights are frequently featured in publications such as The Hill, The New York Times, Foreign Affairs, Letras Libres, and El Universal. Before joining the Wilson Center, Diego worked as a Senior Researcher at the Brookings Institution, a Fellow at the US-Mexico Foundation, and a Consultant at The Economist Intelligence Unit.

Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the views of Mexico News Daily, its owner or its employees.

Next week’s American Society of Mexico summit to cover nearshoring, energy policy and more

By

MND Staff

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August 26, 2024

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A litany of speakers including U.S. Ambassador Ken Salazar are ready to speak the the 3rd AmSoc Binational Convention in Mexico City next week. (AmSoc/Facebook)

On Sept. 3-4, The American Society of Mexico (AmSoc) will hold its third Binational Convention, an event that has rapidly grown into an essential forum for business, political, and social leaders from both Mexico and the United States. The convention, building on the success of previous years, aims to facilitate dialogue and forge strategic alliances to promote shared development between the two nations.

Founded in 1942, AmSoc is a vibrant non-profit, non-partisan organization dedicated to advocating for the interests of over two million U.S. citizens living in Mexico. Beyond individuals, it also supports hundreds of American corporations, businesses and philanthropic associations that have made Mexico their home. For decades, this organization has been a bridge between the two nations, fostering connections and strengthening the community with a deep commitment to its mission.

The theme for this year’s convention, “A New Shared Future,” comes at a critical time for both countries. As Mexico and the United States navigate significant political transitions, the event will bring together influential figures to discuss the unique challenges and opportunities facing the bilateral relationship. With economic and social landscapes rapidly evolving, this gathering will offer insights into how both nations can collaborate to secure a prosperous future.

The event is open to the public. Topics on the agenda include:

Political collaboration: With new leadership emerging in both countries, how can Mexico and the U.S. censure continued success in their partnership?
Nearshoring potential: Foreign direct investment in Mexico continues unabated, emphasizing the country’s potential as a key player in global supply chains. While the money pours in, what challenges lie ahead as Mexico continues to fulfill its mighty economic potential?
USMCA benefits: As always, the USMCA will be a central topic, with discussions focused on leveraging the agreement to create mutual economic opportunities.
Sustainability and energy transition: How can the U.S. and Mexico collaborate on environmental and economic initiatives?

Who will be there?

Hosts Larry Rubin, Francisco Garza and Patricia González will guide guests ranging from key international business leaders, academics, and cultural figures, as well as diplomatic, political, and government officials from both sides of the border. The discussions will delve into public finance, bilateral policy and innovation, underscoring the importance of cooperation between Mexico and the United States.

Lila Abed, AmSoc Binational Convention — Wilson Center director Lila Abed is scheduled to speak at the Convention. (Lila Abed/Instagram)

Given the high profile nature of the event, the conference will feature expert speakers from both Mexico and the U.S. These include U.S. Ambassador to Mexico Ken Salazar and his opposite number, Esteban Moctezuma, Grupo Salinas vice president Benjamín Salinas, Mexican politicians Rogelio Ramírez, Ricardo Monreal and Adán Agusto López, and Wilson Center director Lila Abed.

A chance to network with some of Mexico’s biggest movers

For those looking to attend, the convention presents a unique opportunity to engage with key players and participate in discussions that could shape the near future of U.S.-Mexico relations. More than just a gathering; the convention is a strategic forum where dialogues can transform into meaningful alliances and shared progress. Even better, Mexico News Daily readers can get 15% entry with an exclusive discount code.

If you’re thinking about attending, register directly with AmSoc to confirm your participation at the convention.

BYD weighs 3 states for electric vehicle plant

By

MND Staff

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August 26, 2024

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A BYD electric vehicle — The new facility will build EVs for the Mexican market, not for the export market, according to BYD Americas CEO Stella Li. (BYD Latam/X)

Chinese electric vehicle manufacturer BYD is considering locations in three Mexican states for its proposed plant, according to the company’s general director for Mexico.

The Shenzhen-based company confirmed in February that it would open a plant in Mexico to manufacture electric vehicles (EVs) to be sold within the country.

BYD Americas CEO Stella Li said earlier this year that the plant in Mexico will be located centrally in the country. (BYD Costa Rica)

Jorge Vallejo, BYD’s top executive in Mexico, told Reuters last week that the firm — the world’s biggest EV maker — has narrowed the list of potential locations for the plant to three states.

He said that BYD is reviewing incentives proposed by each of the three states, but didn’t reveal the states he was referring to. BYD Americas CEO Stella Li said earlier this year that the plant in Mexico will be located centrally in the country.

Vallejo told Reuters that the three states under consideration have offered “many benefits” including fiscal, land, management and preferential pricing incentives.

“A plant is not only about having the space, but the logistics, all the development, urban infrastructure that is generated, water, gas, everything that is needed for an automotive plant,” the general director said.

“There are many elements, even logistical, that we are analyzing together with them,” Vallejo said.

He said that BYD is aiming to settle on a location by the end of the year. The company hasn’t disclosed how much money it plans to invest in the facility.

Vallejo told Reuters that BYD executives hoped to meet soon with the team of President-elect Claudia Sheinbaum and Economy Ministry officials to share the company’s plans for the plant.

He said the company would “specifically present the manufacturing and marketing scheme,” and also “show what BYD can develop at a national level.”

Vallejo said in June that BYD’s operations in Mexico will create around 10,000 jobs.

However, he didn’t specify how many of the approximately 10,000 workers would be directly employed by the BYD plant in Mexico and how many would work for the automaker’s contractors and suppliers.

Jorge Vallejo, director of BYD México, speaks at a press event — Jorge Vallejo, the general director of BYD México, told Reuters, “A plant is not only about having the space, but the logistics, all the development, urban infrastructure … everything that is needed for an automotive plant.” (BYD México)

The Mexican government is keen to attract foreign investment, announcing tax incentives late last year that aim to encourage nearshoring to Mexico.

But Chinese-owned automotive plants don’t appear to be at the top of its wish list.

Mexican officials who spoke to Reuters in April said that pressure from United States authorities had led the Mexican government to refuse to offer incentives to Chinese EV manufacturers planning to invest in Mexico.

The United States government is determined to protect the U.S. EV industry from comparatively cheap imports, and has concerns about the capacity of Chinese “smart cars” to collect data and thus compromise national security.

Last December, Mexico and the United States reached an agreement to cooperate on foreign investment screening as a measure to better protect the national security of both countries. The agreement was widely interpreted as a means to stop “problematic” Chinese investment in Mexico.

While Li said in February that BYD’s plan was to “build the facility for the Mexican market, not for the export market,” a plant in Mexico could allow the company to avoid heavy tariffs if it seeks to send cars to the United States at some time in the future.

U.S. President Joe Biden announced in May that tariffs on Chinese EVs would increase from 25% to 100% this year. However, that duty wouldn’t apply to vehicles made in Mexico by Chinese companies because Mexican-made cars qualify for tariff-free trade in North America provided they meet regional content requirements.

United States Trade Representative Katherine Tai said in May that measures aimed at made-in-Mexico Chinese EVs “will require a separate pathway.”

“… I would just ask you to stay tuned,” she told reporters.

For his part, former United States president Donald Trump has threatened to impose 100% — or even 200% — tariffs on vehicles made by Chinese companies in Mexico if he returns to the White House next January.

As things stand, JAC is the only Chinese automaker making cars in Mexico. Its plant in Hidalgo “builds inexpensive vehicles from kits” for sale in Mexico, the Associated Press reported last month.

BYD is not the only Chinese automaker to have announced plans to open a plant in Mexico. Among the others are Solarever Electric Vehicles and Jaecoo.

With reports from Reuters

Over 30,000 participate in 41st annual Mexico City marathon

By

MND Staff

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August 26, 2024

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Runners compete in the 41st Mexico City marathon — Long-distance runners from around the world participated in the Mexico City marathon on Sunday. (Mexico City Government)

The 41st Mexico City marathon attracted more than 30,000 long-distance runners on Sunday, with Kenyans taking five of the six podium spots.

The African runners finished 1-2-3 in the men’s competition, with Edwin Kiprop Kiptoo outracing countrymen Leonard Langat and Francis Cheruiyot.

Edwin Kiprop Kiptoo runs in the 41st CDMX marathon. — Kenyan runner Edwin Kiprop Kiptoo (right) took first place in the men’s marathon. (Maratón CDMX/X)

On the women’s side, Kenyan Fancy Chemutai claimed first place ahead of Bahrain’s Shitaye Eshete and Janet Ruguru, also of Kenya.

The 42.2-kilometer race began at the southern end of the capital in Ciudad Universitaria adjacent to the university’s Olympic Stadium, ending in the heart of the Centro Histórico with the finish line in the Zócalo in front of the National Palace.

The runners traversed several of Mexico City’s most iconic boulevards, including Insurgentes Avenue, Ejército Nacional, Presidente Masaryk, Paseo de la Reforma, Avenida Juárez and Avenida Madero, while also crossing Chapultepec Park and running alongside the Alameda Park.

Kiptoo, the 2022 Mexico City Marathon winner, completed his run in 2 hours, 10 minutes and 36 seconds, a personal best. The 31-year-old returned to the winner’s circle after finishing third last year. The 2023 winner — Bolivia’s Héctor Garibay — will hold onto his record (2:08:23) at least another year.

The race for second place was a close one, with Langat finishing in 2:11:30 and Cheruiyot following 5 seconds later.

An embarrassing mix-up for marathon organizers

Chemutai earned first place on the women’s side by holding off Eshete down the stretch, though the exciting finish was marred by race organizers who thought Chemutai, who was wearing her hair short, was a man.

As the 29-year-old Kenyan approached the finish line, race organizers tried to redirect her away from the women’s finish line where the victory tape was stretched across the path. Chemutai ignored the instructions but as she crossed the line, the organizers lifted up the banner so she did not get the thrill of breaking the tape in triumph, Chemutai did raise her arms, however, managing to pull the banner out of the hands of the misguided attendants.

Chemutai finished in 2:29:19 with Eshete close behind at 2:29:22. Ruguru clocked in at 2:30:58 to earn third place.

Women's winner of the Mexico City marathon, Fancy Chetumai. — Women’s winner Fancy Chemutai managed to snag the finish line banner despite an error by marathon staff. (Maratón CDMX/X)

Ethiopia’s Amare Berise set the women’s Mexico City Marathon record in 2022, posting an impressive time of 2:25:04.

The winners Kiptoo and Chemutai earned 550,000 pesos and a Garmin watch while the second-place finishers took home 245,000 pesos and a Garmin watch. Third-place finishers also received a Garmin watch, along with 180,000 pesos.

Runners finishing fourth through eighth also received monetary prizes.

Mexicans finished 1-2-3 in both the men’s and women’s wheelchair categories. In the men’s race, Fernando Sánchez (1:34:14) was first; Gonzalo Valdovinos (1:35:39) came second; and Marco Antonio Caballero (1:36:08) was third. On the women’s side,: first place went to Yeni Aide Hernández (1:59:14); second place to Ivonne Reyes (2:01:50); and Leticia Sánchez (2:38:45) came in third.

With reports from La Jornada, Animal Político, Infobae and El Financiero

Savor the Yucatán with this apple melipona honey upside-down cake

By

Deborah McCoy

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August 26, 2024

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Melipona honey recipe — A splash of Yucatán magic takes this upside-down cake to the next level. Serve with whipped cream and wash down with a melipona honey cocktail to really make the most of Mexico's greatest natural miracle. (Shutterstock)

A great way to enjoy dessert in Mexico is by combining two contrasting flavors: the sweet, tart freshness of apples and the indulgent, ambrosia-like taste of pure, natural Mexican Melipona honey! Put them together in this recipe and you’ve got one luscious apple melipona honey upside-down cake!

Mexico may not be known for a fruit that one associates with Fall, but apples grow in abundance in the higher elevations of Central Mexico, originally brought here by the Spaniards in the Colonial Period (1521-1821). Ever wonder why they’re so red and so appealing? It’s because they’re a member of the rose family as are pears, plums, peaches, cherries and blackberries, all grown in Mexico.

a Melipona beecheii bee on a flower — The stingless melipona bee, which creates delicious – and very special – honey. (Government of Mexico)

When it comes to baking, Golden Supreme and Gala are considered tops and both are grown here, coming to market about mid-August. You might want to combine them in this cake for added flavor and texture. Watch for them.

Magical melipona honey

Honey on the other hand, has a deep history rooted with the Mayans, who thousands of years ago produced honey from a “sting-less” bee found in the Yucatan. They used their honey as an antibiotic, a sweetener, and to make an alcoholic drink called balché (like mead). It was only about 50 years ago that African bees, a stinging, more aggressive variety were introduced to Mexico and threatened the existence of the Mayan bee (called Melipona), who are essential to the pollination of tropical forest plants. They also produce some very special honey!

NOTE: In the U.S. it is estimated that 50%-70% of all honey is fake or adulterated, diluted with sugars or syrups, or by feeding corn syrup to bees rather than letting them pollinate. To ensure that your honey is pure (no matter what its origin), fill a glass with water and add a spoonful of honey. If the honey dissolves or the water becomes cloudy, it’s likely fake. Real honey will settle at the bottom of the glass, in a lump or sink to the bottom, maintaining its thickness

Melipona honey is different because it contains more fructose than glucose, which gives it its unique flavor that is a little acidic, as if one added lime. And these bees don’t make honeycombs, but rather store it in sack-like structures they create in their nests. This honey is also very high in antioxidants and is still managed by bee-makers who follow Mayan tradition, and it is rare. It is prized by international chefs who value its distinctiveness on all levels. It also makes for a great cocktail (recipe included).

The apple honey upside-down cake that’s featured is a traditional Jewish holiday favorite for the Jewish New Year, Rosh Hashanah, but that doesn’t mean you can’t enjoy it anytime, especially with the succulent goodness of Mexican apples and the exceptional quality of its honey! And why not enjoy a Honey-Bee Cocktail to go along?

Apple honey upside-down cake (with tequila whipped cream):

Recipe adapted from Cinnamonschtick. (Cinnamonschtick)

Equipment:

9-inch springform pan (Be sure to place foil-lined baking tray on oven rack beneath pan to catch drippings.)

Ingredients:

Apple Topping (for bottom of pan):

4 Tbs. (55 grams) refined coconut oil; vegan butter; or butter (aceite de coco refinado (Use only refined to avoid coconut flavor.); mantequilla vegana; o mantequilla)

½ cup (110 grams) light brown sugar (azúcar moreno)
1 tsp. vanilla extract (extracto de vanilla)
⅕ tsp. salt (sal)

2 apples (manzanas), cored and cut into ¼-inch wedges. Do NOT cut thinner, or they will float in the batter.
2 cups (240 grams) all-purpose flour. All-purpose flour is not found in Mexico. Buy at amazon.com.mx

½ tsp. salt (sal)
2 tsp. baking powder (polvo para hornear)
½ teaspoon baking soda (bicarbonato)
¾ tsp. cinnamon (canela)
¾ teaspoon allspice. Allspice is not available in Mexico, so make your own:

4 tsp. ground cinnamon (canela)
2 tsp. ground nutmeg (nuez moscada)
2 tsp. ground cloves (clavo)

Mix together and store in an air-tight container.

2 large eggs (huevos)
¼ cup (50 grams) sugar (azúcar)
1 cup plus 2½ Tbs. (396 grams) Melipona honey (miel Melipona)
½ cup 110 neutral vegetable oil**: coconut oil (aceite de coco); avocado oil (aceite de aguacate). You can substitute butter for oil in baking using a 1:1 ratio. Melt butter and cool before adding it to recipe.
2/3 cup (156 grams) strong coffee (café), at room temperature

1 tsp. vanilla extract (extracto de vainilla)
Optional: Sliced, toasted pecans (nueces pecanas)

Instructions:

- Preheat oven to 350° F (177 C).
- Spray a 9-inch springform pan with non-stick spray. Line the bottom with parchment paper.
- In a small bowl, whisk together coconut oil, brown sugar, salt and vanilla. Spread evenly in prepared pan.
- Place apples in circular, decorative fashion over the brown sugar mixture. Press them into the brown-sugar mixture.
- In a small bowl, whisk together the flour, salt, baking powder, baking soda, cinnamon and allspice. Set aside.
- In a large mixing bowl, using the same whisk, whisk together the eggs and the sugar until fully combined. Next, whisk in the honey, oil, coffee, and vanilla.

Whisk dry ingredients into the wet ingredients just until fully combined. Do not overmix.
Slowly pour batter over apples. (Pouring the batter too quickly may cause apples to float.) Bake for 55-60 minutes, until a toothpick pressed in the center comes out clean and the sides of the cake start to pull away from the pan.
Cool on a wire rack for 20 minutes. Use a metal spatula or knife to release the cake from the sides of the pan. Then remove the outer portion of the springform pan. Holding a serving dish over the cake, carefully invert the cake onto the serving dish. Remove the bottom of the pan and the parchment paper. (Add some sliced, toasted pecans, if you’d like.) Allow to cool completely before slicing and if you’d like, top with the tequila whipped cream that we made for our delicious strawberry pie!

Disfruta, along with a Honey-Bee Cocktail!

Honey-Bee Cocktail:

Ingredients:

60 ml (4 Tbs.) of tequila

30 ml (2 Tbs.) of Melipona honey

10 ml (2 tsp.) of mezcal

2 dashes Angostura bitters

22 ml (1 1/5 Tbs.) freshly squeezed lime juice

Ice

Lemon peel

Steps:

Make Honey syrup:

Heat water and Melipona honey in a saucepan over medium high heat and bring to a boil. Reduce heat to low and boil for 2 minutes. Remove from heat and allow to cool completely. Store in a glass jar.

In a cocktail or martini glass, pour mezcal into the glass and tilt the glass to ensure the mezcal covers the entire surface. Fill the glass with crushed ice and reserve. Next, fill a cocktail shaker with several ice cubes and add tequila, lime juice and honey syrup. Close the shaker and shake vigorously to mix all the ingredients well (about 30 seconds, give or take). Discard crushed ice from glass. Using a strainer over the shaker, pour the cocktail into the glass. Add two dashes of Angostura bitters. Garnish with lemon peel.

Deborah McCoy is the one-time author of mainstream bridal reference books who has turned her attention to food, particularly sweets, desserts and fruits. She is the founder of CakeChatter on Facebook and X (Twitter), and the author of four baking books for “Dough Punchers” (available at Amazon). She is also the president of The American Academy of Wedding Professionals.

Southwest Airlines to expand routes to Mexico beach destinations

By

MND Staff

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August 26, 2024

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Travelers can book their spring break flights from March 8 through April 7, 2025. (Unsplash)

Southwest Airlines is adding new destinations in Mexico and expanding its flight schedule for the upcoming spring season, in a move to meet the growing demands of its customers.

Starting March 8, 2025, Southwest will commence weekly Saturday service from Nashville, Tennessee to the popular spring break destination of San José del Cabo (Los Cabos), Mexico.

Southwest unveiled two Pacific spring break flights beginning in 2025: Los Cabos and Puerto Vallarta. (Montage Los Cabos)

The new route will add to Southwest’s existing non-stop route connecting Nashville and Cancún.

The airline, based in Dallas, will also begin Saturday flight service between Sacramento, California, and Puerto Vallarta, Mexico, on March 8, 2025.

“Thanks to our world-renowned flexibility, two free checked bags and a schedule that flexes with travelers’ demands, customers can book their flights today and secure their spring getaway,” Southwest Airlines’ Vice President of Marketing Jennifer Bridie said in a statement.

Besides the free checked bags, the low-cost carrier offers no change fees. This flexibility allows travelers to adjust their plans without incurring additional costs, a rarity in the airline industry.

The expansion of the airline’s flight schedule allows travelers to book their spring break flights through April 7, 2025.

According to Allianz Partners, which analyzed more than 3.4 million flight itineraries for spring break trips between five and eight days in length, Mexico was the most popular international destination for U.S. spring breakers in 2024, with three cities on the list. Coming in first was Cancún, followed by San José del Cabo (Los Cabos) in No. 2 and Puerto Vallarta in No. 4.

With over 100 weekly flights each, American Airlines and United Airlines operate the largest number of weekly flights from the U.S. to Cancún, followed by Southwest.

With 34,332 seats per month, Dallas is the U.S. city with the most seats to Cancún. This route also has the highest number of operations with 186.

With reports from Simple Flying and Travel and Tour World