Trade Game

Central American leaders said Wednesday that trade with the U.S. is fueling steady growth in the region, but they must forge closer ties with one another to continue advancing.

Salvadoran President Tony Saca, a close ally of Washington, urged counterparts to boost infrastructure and investments to withstand a sharp economic downturn in the United States.

"We have to see Central America as a bloc," Saca told a panel at the World Economic Forum on Latin America in Cancun, where he announced plans to explore for natural gas with neighboring Guatemala along the nations' Pacific coasts.

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Importance: If problms continue and all th countries are tied together then this could just create more problems or, this could turn out great we may never know.

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Science!!!

Mexico and the United States signed here on Monday an agreement on cooperation in science and technology for security issues.

The agreement was signed by Mexico's Interior Secretariat Juan Camilo Mourino Terrazo and U.S. Secretary of Homeland Security Michael Chertoff on the sidelines of the ongoing North American leaders' annual summit here.

The aim of the agreement is to establish a framework to promote, develop and facilitate bilateral cooperation activities in science and technology and other national security issues, according to a press release from the Mexican delegation.

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Importance: Mexico will probably gain alot from this agreement since the U.S. is showing them their technological toys.

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Mxico and U.S.

DALLAS (AP) -- Mexican President Felipe Calderon made an investment pitch Tuesday to business officials, saying his country has "solid economic fundamentals" and is dealing with transportation needs and crime.

And while Calderon has criticized U.S. immigration policy, he said U.S. investment in his country could ease the pressure for Mexicans to move -- legally or otherwise -- to the United States.

"The goal is not to see every year Mexican people trying to cross the border to the United States," Calderon said. "Our goal is to create opportunities for our people in Mexico. That is absolutely possible."

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Importance: If Calderon can make his words come true no only will Mexico's economy grow but, the U.S. government will have a maller immiration problem.

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MEXICO CITY, April 24 (Reuters) - Mexico's peso firmed on Thursday and bond prices fell after high inflation data reduced expectations that the central bank will lower borrowing costs any time soon.

The peso MEX01 strengthened 0.27 percent to 10.448 per dollar, nearing a two-year high, while long-term bond prices fell for the 10th straight day as investors bet against the central bank easing interest rates soon to fight an expected impact on Mexico by the U.S. economic slowdown.

The government's benchmark 10-year peso bond dropped 0.338 of a point in price to bid 99.649, pushing its yield up 5 basis points to 7.80 percent, a three-month high. Bond yields move inversely to prices.

Meanwhile, the benchmark IPC index .MXX fell 0.36 percent to 31,731 points, dragged down by losses in shares of telecommunications bellwether America Movil and mining companies. Stocks pared losses after the IPC fell more than 1 percent in early trade.

On Thursday, the central bank reported that higher costs for goods like tomatoes and chicken pushed consumer prices up 4.53 percent in the 12 months through April 15.

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Importance: Just some updates on essentials in the Mexican economy. There are some interesting global connections, and it the economic link between the U.S. and Mexico becomes very obvious...Though it does not seem that the Mexican central bank is allowing everything that happens in the U.S. effect its decisions.

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Changing Immigration Attitude

Mexico loses more than just workers when its people cross the U.S. border illegally in search of jobs. It loses fathers, mothers, sons, daughters, sisters and brothers. It loses social structure.

The remittances expatriates send home can never compensate for the loss of people whose energy, talents and integrity are essential to Mexico's future.

Remittances - nearly $24 billion in 2007, according to the Mexico's Central Bank - help individual families but have a corrosive effect on Mexico. Without them, political pressure would build at home to create jobs.Without the relief valve illegal migration offers for Mexico's unemployed, there would be enormous demand to deal with the corruption and lack of opportunity in Mexico.

Mexico is showing a welcome recognition of the downside of illegal immigration.

Earlier this year, Mexican President Felipe Calderón called it his "duty" to create opportunities at home. "I'm not a president who likes to see Mexicans leave the country, because every immigrant who leaves Mexico represents a loss," he said in February.

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Importance: Stimulating job growth at home and discouraging illegal immigration will help build and strengthen the Mexican economy. Before the government was actually encouraging illegal immigration by handing out booklets that gave safety tips; now that they realize the detrimental effects immigration is having on the economy they are beginning to change their mind, now printing booklets depicting the hardships and danger of attempting illegal immigration.

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India, Mexico sign pacts in civil aviation, energy

Mexico City (PTI): India and Mexico have signed two agreements for cooperation in civil aviation and energy sectors as part of their efforts to strengthen bilateral ties.

Union Minister for Non-Conventional Energy Vilasrao Muttemwar and Mexico's Minister for Foreign Relation Patricia Espinoza and Secretary of Energy Georgana Kessel inked the agreements here on Thursday.

Mexican President Felipe Calderon, who was present at the singing ceremony along with visiting Indian President Pratibha Patil, said India was an "important" partner for his country in the Asia-Pacific region.

The first agreement calls for cooperation in air services between the two countries while the second one was related to enhanced ties in the energy sector.

Full story here

Importance: These agreements are good for both parties involved. They not only strengthen bilateral ties, but they're also projected to increase inclusive economic growth. The agreements improve the world order regarding energy and civil aviation.

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Bribes

Mexicans are spending more on bribes than they were a couple of years ago.

Mexicans paid the equivalent of about $2.6 billion in bribes last year, according to the nonprofit group Transparency Mexico. That’s 42% higher than two years earlier and an average of more than $24 for each of Mexico’s 105 million people.

Much of the money went to fix parking tickets, get garbage collected or secure parking spots from the legions of informal attendants who block off spaces and charge for them.

Corruption in Mexico is rife and the informal economy huge. If you’re stopped for a traffic infraction, it’s often cheaper and easier to pull out your wallet than to go to the station to face all the paperwork.

Bribes are paid for a wide range of activities, Transparency Mexico found. People pay them to get telephone service installed, loans approved, to prevent illegally parked cars from getting clamped or to sell things on the street without authorization.

The survey showed that 197 million bribes were paid nationwide last year, a big jump from the 115 million in 2005. But while people here are paying more bribes than they did two years ago, they are spending less on each. The average bribe was about $13, compared with $17 in 2005.
The poll was based on interviews with 16,000 people around the country in December. It has a margin of error of less than 1 percentage point.

Link

Importance: So the price of bribes are dropping, obviously as there has been an increase in participation nationwide. This should help to demonstrate just how common corruption is considered in Mexico.

Mexican Investments in India

President Pratibha Patil, on her visit to Mexico, has said that Indian investments into Mexico have been growing steadily and that now India looks forward with enthusiasm on the part of Mexican investors to enter the Indian market.

"There are tremendous opportunities in the areas of infrastructure and tourism in India which can be exploited by Mexican entrepreneurs. We welcome investments being made by Mexican companies in India," she said during ceremonial reception at Los Pianos, the Presidential House, hosted by Mexican President Felipe Calderon on Thursday.

The President expressed hope that the India-Mexico High Level Group on Trade, Investment and Economic Cooperation will meet in June this year to draw up a roadmap for the rapid development of trade and economic relationship between the two countries.

In her banquet speech, the President further said that the democratic yearning of both the countries, faith in non-violence and dialogue, the pluralistic and secular credentials of policies make the two countries natural allies in facing the global challenges of today.

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Importance: In addition to discussing their investment ideas, the two countries also signed an agreement in energy and aviation sectors. In regard to Indian investment in Mexico, I have to wonder how the Mexicans allow it, considering their feelings on foreign investment; perhaps, their ire is only directed toward developed countries that they believe would take advantage of their situation.

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Flying Peso's

Mexico's peso reached the highest level in two years after a report showed an unexpected increase in U.S. retail sales, underpinning bets that demand for exports from Mexico's biggest trading partner will stay strong.

The peso, the biggest gainer among the six most-traded currencies in Latin America, was also

buoyed by speculation further reductions in U.S. interest rates will make local fixed- income assets more attractive to foreign investors.

Speculation that exports ``will sustain currency flows detonated gains in the peso,'' said Alejandro Martinez, a fixed- income analyst in Mexico City at HSBC Mexico SA. ``The increase in the yield differential also helps maintain a strong peso.''

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Importance: It is good that the peso is rising in value, but if it's all based on or mostly based on what the U.S. economy is doing don't expect for it to last.

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Sit-In

Lawmakers had to cram into conference rooms to press ahead with routine business on Tuesday.

Leftist MPs seized the podiums of both houses last week in protest at plans to ease limits on private involvement in the state oil giant, Pemex.

The government says Pemex needs outside investment to boost falling production.

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Importance: The oil is in the hands of the government and if it's not then no one knows what will happen, but people are picking sides faithfully.

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Oil Reform Leads to Hunger Strike

The government says the Pemex oil company needs outside investment to boost falling production and increase exploration for new reserves.

But the protesting deputies and senators argue that this will lead to a creeping privatisation of Pemex.

The protesters want a broad debate on Pemex, in state hands for 70 years.

Leftist deputies and senators have been camped out on the floors of the upper and lower houses since they took over the Congress building last week.

In the lower house, lawmakers from the Democratic Revolution Party (PRD) and two other smaller parties have piled chairs around the speaker's platform.

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Importance: The opposition to allowing Pemex freedom for expansion says multitudes for the political culture of Mexico. People are so wary of foreign investors taking advantage or a share of Mexican profits that they are actually going to limit their own growth and allow Pemex to continue to run overbudget and unefficiently.

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Assessment Complete

LONDON (Thomson Financial) - Mexico's Industrias Penoles S.A.B. de C.V. will spin off its precious metals assets into the Fresnillo Group and plans to list the company on the main market of the London Stock Exchange in May.

Fresnillo, the world's largest primary silver producer, is estimated to be worth about $8 billion and is a potential FTSE 100 candidate.

Proceeds from the new shares in the initial public offering, expected to be about $900 million, will be used by Fresnillo to re-pay existing debt and to finance expansion plans.

The company did not disclose possible proceeds from the sale of existing shares. However implied proceeds of about $1 billion can be estimated as Penoles said it expects to retain about three quarters of the company following the offering.

Fresnillo, Mexico's second-largest gold producer, produced about 34.4 million ounces of silver and approximately 280,000 ounces of gold in 2007 and aims to double silver output within the next 10 years and increase its gold production.

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Importance: Sounds like extending privatization to me...

Marine killing suspect caught in Mexico

MORELIA, Mexico A Marine suspected of killing a pregnant colleague told police he slept in fields and survived by eating fruit that he found during a three-month manhunt that ended with his arrest in western Mexico, authorities said.

FBI agents and police in the small town of Tacambaro arrested Cpl. Cesar Laurean on Thursday. He is charged with first-degree murder in the death of Marine Lance Cpl. Maria Lauterbach, who had accused him of rape. Her burned remains were found in January in the backyard of his home near Camp Lejeune.

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Importance: Police have finally caught the man who murdered, burned, and buried the pregnant marine months ago. This helps the U.S.-Mexico relations because there were arguments about what should be done. Look here for updates on his trial and sentencing.

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Absolut-ly Not!

The contours of the billboard map of Mexico and its neighbors may have been familiar, but not its political boundaries: California, Arizona, Nevada, New Mexico and Texas were shaded in the green of a Mexico that stretched from close to Canada to the jungles of Guatemala. "In an Absolut World!" the billboard proclaimed, alongside the image of a bottle of Absolut vodka.

Ruminating over the loss to the U.S. of what had been Mexican territories before the Mexican-American war of 1846-1848 may have been an ad maker's idea of a good way to sell hard liquor and get a chuckle south of the Rio Grande, but some up north didn't find it so funny. After a barrage of complaints on its Internet site and threats to boycott the Swedish-made brand in the U.S., Absolut announced it was withdrawing the advert. "In no way was this meant to offend or disparage, nor does it advocate an altering of borders, nor does it lend support to any anti-American sentiment, nor does it reflect immigration issues," wrote Absolut spokeswoman Paula Eriksson on the company website. "Instead, it hearkens to a time which the population of Mexico may feel was more ideal."

That may be overstating it, somewhat: It's unlikely that most Mexicans really feel that mid-19th century life was exactly "ideal." But the heat generated online by the ad does reveal that the war and resultant redrawing of the map 160 years ago can still spark a furor on both sides of the border. Thousands of critics accused the ad of being anti-American and took pains to defend the inclusion of the southwestern states into the union. "It is absurd to believe that the U.S. stole Texas and California since most inhabitants of the Southwest considered the 19th century Mexican government a totalitarian regime and wanted independence, and rightfully so, from Mexico," wrote a blogger who signed in as CPTLOU on the Absolut forum.

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Importance: This is hilarious.

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Trade with Barbados

Barbados intends to move closer to Latin America on trade and other economic matters.

That indication came from Prime Minister David Thompson who said while in Miami on Monday that his Government saw the Spanish and Portuguese speaking nations of the Western Hemisphere as an alternative to some of island's long-standing trading partners.

"I believe that as Barbados and the Caribbean continue to consider strategies for countering economic challenges, increased attention must be given to the potential which Latin America offers as an alternative to some of our traditional trading partners," Thompson said.

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Importance: New trading partners! These guys aren't trading Poke'mon cards either, so Mexico should see good economic outcomes from this.

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Meeting in Cancun

The World Economic Forum released today more details during a press conference on the eve of its regional meeting in Latin America. The World Economic Forum on Latin America, scheduled to take place in Cancún, Mexico, from 15 to 16 April 2008, will bring together over 500 top global leaders from business, politics, government, academia, civil society and the media from 46 countries.

Under the theme "Securing a Place in an Uncertain Economic Landscape", the meeting will be co-hosted by the Government of Mexico under the patronage of President Felipe Calderón, who will be participating in the event.

The meeting in Mexico will focus on discovering and highlighting business opportunities brought about by the successful execution of a priority reform agenda. A globally attuned agenda that secures Latin America’s place in a shifting global landscape will be built around five core pillars:Global Trends and Economic Shifts, Asia and Latin America, Merging Business and the Environment, Growth through Critical Investments, Enhancing Innovation in Business and Social Issues.

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Importance: Any move to improve economic standards of Latin America is a good move. Hopefully this meeting will acomplish its goals.

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Oil Reform

MEXICO CITY (Reuters) - A plan to shake up Mexico's flagging state-run oil sector met with muted reaction on Wednesday, with most seeing it as positive but not enough to restore declining output and reserves overnight.

The government's proposal, which was diluted to give it the best chance of passing through Congress, proposes more hiring of private companies across the oil industry through "incentive contracts" that offer bonuses for work well done.

Foreign oil majors, who want Mexico to join the rest of the world in offering risk-sharing joint ventures, especially in the huge deep-sea sector, mostly declined to comment as they huddled in meetings over the plan.

But analysts see the sweetened service contracts doing little more than drumming up more business for oilfield service companies such as Schlumberger (SLB.N: Quote, Profile, Research), which state oil monopoly Pemex hires to help with engineering work.

"My initial impression is that it's relatively modest," said RoseAnne Franco at PFC Energy. "For the international oil companies it comes down to being able to book reserves."

Pemex, a top U.S. oil supplier, has long complained about Mexico's barriers to private oil investment and says it needs partners to help it unlock huge deepwater reserves as yields decline at its shallow water and onshore fields.

But many question whether the proposed contracts will attract big players like BP (BP.L: Quote, Profile, Research) and Petrobras (PETR4.SA: Quote, Profile, Research) into deep-sea exploration, given such costly and risky ventures are repaid in other countries by giving the partner a share in reserves.

"The important aspect of any contract is the incentive part. If someone is doing a really good job they should be paid for it. But there are different types of incentive around the world so we'll have to wait and see what they are offering," said a Mexico-based executive for a foreign oil major.

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Importance: Calderon is finally acting on the nation's need for an alteration in their oil operations. Even though this proposed reform is watered down in order to be passed in the Mexican Congress, it is a start. The political culture of the country would rebel against a reform too radical because the majority of the population is still against foreign investment despite Pemex's dire need of a partner in oil welling.

Venezuela to Nationalize the Cement Industry

MEXICO CITY -- Venezuelan President Hugo Chavez is planning a government takeover of his country's cement industry, his latest effort to impose state control over key sectors of an economy battered by shortages and inflation.

Chavez made the declaration during a televised cabinet meeting late Thursday. He has long accused foreign cement companies of keeping prices high and supplies tight by exporting their products to other countries while Venezuela is suffering a housing shortage.

"We're going to nationalize the cement industry. Enough already!" Chavez said.

The action is a blow to Monterrey, Mexico-based Cemex, the largest producer in Venezuela. Industry companies LaFarge of France and Switzerland's Holcim Ltd. would also be affected.

Chavez's government said it soon would begin compensation talks with the firms. But Mexico's Finance Minister Agustin Carstens on Friday condemned Venezuela's move against one of Mexico's largest and most successful multinational companies.

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Importance: Well the decision is Chavez's but a lot of the action this development is causing will be played out by Mexico's Calderon thanks to our friend globalization, inherently and heavily aided by multinational corporations (couchCEMEXcough). Thanks to our wonderful Globalization Briefing Paper, I believe we can all see the importance of the ramifications of Mr. Chavez's actions for Mexico. Although, I do feel the need to point out the irony in Mexico's taking offense at another nation's lack of faith in market operations, albeit their problem has mostly been with foreign investment as opposed to Venezuela's communistic approach of blaming business owners for the effects of governmental tinkering in the economy ...