Friday, August 30, 2013

Labor Day: Monday September 2, 2013

In observance of Labor Day,  Bill Hay International will be closed Monday, September 2, 2013.


Thursday, August 29, 2013

From The International Business Times: Pacific Alliance Reaches Agreement On Trade Within The Region; 92 Percent Of Trade Tariffs To Be Eliminated


Mexico, Colombia, Chile and Peru are closer than ever. The four fastest-growing economies in Latin America have finalized negotiations to frame their newborn Pacific Alliance as a tool to bring about a more integrated trade within the region.

The Pacific Alliance members announced an agreement on Monday in Playa del Carmen, Mexico, for the initial elimination of tariffs on 92 percent of their trade. Tariffs on the remaining 8 percent will also be dropped “progressively and steadily,” said Colombia’s Minister for Commerce Sergio Díaz-Granados.
The agreement is the result of two years of negotiations and meetings, since the bloc was founded in 2011.
“This is a huge milestone,” said Díaz-Granados, “a revolutionary deal in integration in the region.”
Combined, the members of the Pacific Alliance have a GDP of $2 tillion, which makes up 35 percent of the region’s GDP -- and that percentage will grow once Costa Rica and Guatemala, expected to join within the next 12 months, become full members.
“We are before something that is the most positive we can recall in integration, not only in Latin America but also the world,” said Chilean Foreign Minister Alfredo Moreno.
The Pacific Alliance is a reaction to the failed past Latin American blocs, such as the dying Mercosur. Non-members have criticized it in the past; Bolivian President Evo Morales said that the organization was a ploy by the United States to oppose the left-wing governments in the region and their alliances.  The United States has not expressed interest in joining the Pacific Alliance, nor has it attended any of the meetings. 




Wednesday, August 28, 2013

From Forbes: Mexico: Is The Aztec Tiger Starting To Whimper?


Mexico’s Finance Ministry cut its 2013 growth forecast for Mexico to 1.8%, down from its previous prediction of 3.1%. Mexico’s National Statistics Institute reported that the country’s GDP (at least when seasonally adjusted) actually contracted 0.74% during the second quarter of 2013. This is more bad news for the economy that Thomas Friedmanhastily dubbed the Aztec Tiger. In the fourth quarter Mexico’s economy grew at an anemic 0.8 percent. Despite campaign promises that voters would “earn more” and the introduction of an ambitious set of reform bills, Mexico’s economy started to slow at exactly at the time that the country’s new president, Enrique Peña Nieto, took office.

Nomura Securities strategist Benito Berberexplained “Finally, after growing strongly since 2010, Mexican economic activity was bound to plateau, particularly with fiscal headwinds in the U.S. The market perhaps did not realize that the full impact of the reforms will be felt starting in 2014, with the peak in the coming five years.”
Although Mexico rebounded quickly from the global recession, reporting 5.5% growth in 2010 and outpacing Brazil in both 2011 and 2012, recent growth rates have disappointed many investors. A 3% growth rate is underwhelming in comparison to the 5% or 6% that some analysts predicted. Mexico’s stock market has fallen and investor confidence may be diminishing. In a recent interview Henry TricksThe Economist’s Mexico correspondent explained“there does seem to be a very serious crime problem here [and] anecdotal evidence that investment is being curtailed because companies are worried about the…situation. People are worried about crime.” Tourism, one of Mexico’s most important sectors, has also been affected by security concerns. Telecommunications reform, education reform, fiscal reform and energy reform are all ambitious projects, but the government needs to make sure it can implement these measures and turn campaign promises into policies. Overall though, many of Mexico’s economic problems stem from weak growth in countries around the globe in general and in the U.S. in particular.
Although Mexico continues to emerge as an automotive industry heavyweight, in recent years the country’s top income decile has benefited the most, even while many middle class families saw their incomes stagnate or even decline.
The country’s billionaires, on the other hand, have done quite well.
According to a Forbes report, in 2013 Carlos Slim, Mexico’s telecom magnate, increased his net worth by $4 billion over the previous year, a feat that helped him ear the title of “world’s richest man” for the fourth consecutive year. His personal wealth is estimated to be over $73 billion. As I explained in a previous article, “In 2012 Slim’s America Movil telecom companyreported total revenues of $62 billion, a 6 percent jump from 2011. The company added more than 1 million cell phone customers in Mexico during the course of the year.”
According to Forbes’ analysis 15 of Latin America’s 99 billionaires are from Mexico. As I explained in a previous article, “While nearly three quarters of the residents in Mexico’s countryside have sub-middle class income levels, three of the top five wealthiest individuals in Latin America are from Mexico.” For instance, Alberto Bailleres Gonzalez, who serves as the chairman of Industrias Peñoles, is the second wealthiest man in Latin America. His net worth tops $18.2 billion. Mexico’s third wealthiest businessman is German Larrea Mota Velasco, the owner of mining company Grupo Mexico. He is the fifth wealthiest man in Latin America. Forbes estimates his net worth at US$16.7 billion. His company Grupo Mexico reported net income of over $2 billion last year.
Overall, Mexico’s billionaires continue to do well even as the economy slows. Although the slow growth may be a short-term disappointment for investors, it may be a long-term benefit for Mexico, if sluggish growth can help spur further economic reforms. In the medium term, Mexico will need to work to boost consumer credit access and spur domestic demand. After all, Mexico’s middle class has waited a long time for the benefits from hype about the Aztec Tiger. In addition to being the home of the world’s wealthiest man, Mexico needs to focus on improving the prospects of middle class families.
In a tough global environment, Mexico’s economy may be starting to whimper. Further economic reforms, however, could help unleash the Aztec Tiger’s latent potential.

Tuesday, August 27, 2013

From Reuters: Mexico moving to grow trade ties with Asia



Asia could become twice as important to Mexico as an export market over the next five years as the country strengthens trade ties with the fast-growing economies of the region, Mexican EconomyMinister Ildefonso Guajardo said on Monday.
Latin America's biggest exporter is working to diversify its trade to reduce its dependence on the U.S. market, which takes in more than three quarters of Mexico's exports.
For years a peripheral market for Mexico, Asia has been growing in importance, and Mexican President Enrique Peña Nieto has been at pains to bolster relations with China in particular since he took office at the start of December.
Mexico's economy is facing its toughest year since 2009 and net trade has been a drag on growth, with imports rising faster than exports in 2013. However, robust demand in the Orient for Mexican goods has helped to take the edge off.
Guajardo told Reuters the government was in the midst of "redesigning" ties with Asia and was optimistic the share exports to the region would increase before Peña Nieto's term comes to an end in December 2018.
"From what we have today to what we could have, I think it could be double (the export share)," he said in an interview on the sidelines of a meeting of ministers from Colombia, Mexico, Peru and Chile in the Caribbean resort of Playa del Carmen.
The four countries make up the Pacific Alliance, a nascent Latin American bloc that later on Monday could conclude talks on removing the last trade barriers between them.
Favoring stronger trade with fast-growing Asian economies, the members of the Pacific Alliance are pushing free market policies to spur growth and boost foreign investment.
Once the initial round of talks has concluded, the Pacific Alliance might consider setting up more flexible rules to allow other nations to join, Guajardo said, noting that Costa Rica and Panama were keen to sign up.
COOPERATION FROM CHINA
Mexican exports have been almost flat so far this year, with the economy now expected to grow by less than two percent.
But exports to Asia jumped by nearly 15 percent in the first half of 2013, accounting for almost five percent of the total, according to data from the national statistics agency. In 2000, they made up just over one percent of the Mexican total.
Exports to China rose by more than a quarter in the January-June period to some $3.3 billion, although that was dwarfed by the volume of Chinese exports reaching Mexico at $28.7 billion.
Still, around 90 percent of Mexico's imports from China are component parts for producers that help to make Latin America's No. 2 economy more competitive, Guajardo said.
Peña Nieto and China's President, Xi Jinping, met in June and signed a number of agreements to strengthen economic ties, open up China to Mexican pork and tequila, and provide Mexican oil monopoly Pemex with a $1 billion Chinese credit line.
Mexico and China have long been rivals for the U.S. market, and Mexico also belongs to the U.S.-led Trans-Pacific Partnership (TPP), trade talks that could end up covering 40 percent of global economic output.
Some see the TPP, which also includes JapanAustralia, New Zealand, Canada, Chile, Peru, Malaysia, Vietnam, Singapore and Brunei, as a move to isolate China, although Beijing said in May it would examine the possibility of joining the talks.
Guajardo said Mexico would not stand in the way if China made a formal request to participate.
"Mexico wouldn't have any objection if China put forward a bid to join one day," he said. "Obviously, it needs to be with the consent of all the countries."

Friday, August 23, 2013

Press Release from the Tijuana EDC: Baja California, Mexico´s Aerospace Destination Will Host the Fourth Edition of Its Aerospace and Defense Forum



Tijuana, Mexico (PRWEB) August 20, 2013
The preparations are almost complete for August 29, when the official kick off of the event takes place. “We are eager to show the State’s potential and position ourselves as Mexico´s premier state for both Aerospace and Defense manufacturing,” announced officials of Baja California State Government, along with the Baja California Aerospace Cluster, Tijuana EDC and its municipal counterparts State Economic Development Organizations.

Now that the global aerospace industry has turned its attention towards Mexico, the country´s aerospace and defense hub, Baja California, will congregate top leaders of Mexican Aerospace Industry, U.S. Defense Industry professionals, representatives of global manufacturing companies and several delegations expected at the event.

The event will showcase a key note presentation by SAFRAN that will talk about supplier development and integration to the Aerospace Industry. Additionally featured in a panel discussion format will be the BASA agreement, ITAR and regulations applicable to Aerospace manufacturing in Mexico, with participation of Mexico´s leading aerospace professionals such as Flavio Diaz Mirón, Alfredo Nolasco, Chief Country Representative of Bombardier Mexico, and Agustin Cano from the DGAC (FAAs Mexican counterpart).

The State of Baja California stands out as Mexico´s premier state for aerospace manufacturing and is home for 25 percent of Aerospace companies in the country, with over 64 firms that represent a value of imports of $1.2 billion annually. Representatives from leading manufacturing firms such as Eaton, Esterline, Zodiac, will participate in the B2B meetings that this year accounts a registration of over 75 companies.

One key event will be the Tijuana industrial tour, dozens of companies have signed up to learn first-hand of the competitive advantages gained by global aerospace and defense companies, the tour will visit Conesys, Benchmark Mexico – formerly Suntron-, and Barry Avenue Plating where attendees will have lunch with industrial top leaders of the region before visiting the Eaton Aerospace facilities, ending with a cocktail at Hotel Rosarito to do networking, share experiences, and taste a sample of the Baja´s cuisine. Two additional industrial tours are scheduled for Mexicali and Ensenada on that same day.

About Tijuana EDC: Founded in 1989, the non-profit Tijuana Economic Development Corporation (DEITAC as its acronym in Spanish) has been dedicated to helping companies of all types take advantage of the benefits found in the Tijuana. With over 130 private-sector members from both sides of the border who are experts in areas like industrial development, construction, law, accounting, custom brokerage and logistics, maquiladora/shelter services and more, the Tijuana EDC can help your company map out a new path to profits and competitiveness.

Thursday, August 22, 2013

From SD Union Tribune: Baja tourism chief promotes border crossing drivers license



 — A top Mexican tourism official on Wednesday backed legislation creating a special California driver’s license to help speed up wait times at border crossings, saying the economies of both states would benefit.
“Let us continue to build bridges that will unite us and not walls that will divide us,” Baja California Tourism Secretary Juan Tintos urged in his testimony to California lawmakers.
Sen. Ben Hueso, D-San Diego, is carrying legislation that would initiate a voluntary “enhanced drivers license” for California residents who frequently visit Mexico. The licenses would be embedded with technology that allows border agents to use scanners to read information from a distance, thereby helping move vehicle traffic through the “ready lanes” more quickly.
Without discussion, the Assembly Appropriations Committee postponed a final vote until later this month. Although license applicants would pay an extra fee to cover costs, the Department of Motor Vehicles estimates that launching the program will take $4.5 million.
Business interests say the excruciating often hours-long waits cost millions of dollars in commerce by discouraging cross-border trips for recreation, shopping and dining.
“I am certain this will strengthen our relationship and economic ties,” Tintos said in his testimony,
In a later interview, Tintos said Baja California is enjoying one of its best tourism summers in a decade — up about 25 percent — as security fears ease and the region’s economy rebounds.
Its destinations also saw business drop off when the U.S. began requiring a passport for re-entry, which caused “people to think twice,” he said. The drug cartel wars also scared away visitors.
“We have made a great deal of progress on our side,” he said.
The California tourist dollar flows back to the state when Baja California residents visit San Diego area shops, restaurants and parks, Tintos said.
Hueso said studies indicate that California’s economy loses about $1.3 billion a year because of congestion at ports of entry. Wait times now average 70 minutes and at peak congestion it can take three hours to cross.
“We should ask ourselves: ‘Why are we not doing this?’,” Hueso said.
Jose Larroque, representing the Smart Border Coalition, told lawmakers: “The border is not only an incredible economic engine, it is also the gateway that allows ties among our communities — the flow of relations in health, education, culture and family.”
If signed into law, California would become the first state bordering Mexico to offer such a program. Several states adjacent to Canada already provide a similar license to about 100,000 drivers.
Tintos said Arizona and Texas are looking to implement a similar program.
By acting now, Baja California and the state of California will have an edge, he said. “We’ve got to take the lead,” Tintos said.
License applicants would have to be eligible of a U.S. passport, undergo rigorous security checks and pay more.
There was no opposition voiced at the committee. But privacy advocates have expressed concerns that the license could expose drivers to identity theft and government tracking because the readers are commercially available.
Gov. Jerry Brown has not taken a position on Senate Bill 397.

Wednesday, August 21, 2013

From Reuters: Mexican economy shrinks for first time in four years




Aug 20 (Reuters) - Mexico's economy contracted for the first time in four years in the second quarter as lower government spending, sluggish consumption and weak demand for exports hammered industry and services in Latin America's No.2 economy.

The contraction took investors by surprise, but many stuck to bets that the central bank will keep interest rates on hold as it watches for the withdrawal of U.S. economic stimulus measures.

The Mexican economy shrank by 0.74 percent in the second quarter compared with the first quarter, the national statistics agency said on Tuesday, well below forecasts in a Reuters poll for a 0.21 percent expansion.

Mexico's government had already lowered its growth forecast for the year to 3.1 percent, and some analysts expect another revision, given the poor second-quarter data.

"That's a horrible number ... There's no way of belittling the bad number," said Alberto Bernal, head of research at Bulltick Capital Markets. "With this number in mind, of course it clearly shows that the risk is that growth for the full year is going to be close to 2 percent."

President Enrique Pena Nieto is betting on a wide-ranging package of economic reforms to boost growth, but those measures are still in the pipeline and it will be months, at best, before they translate into gains.

While poor growth data normally gives a central bank reason to cut interest rates, all eyes are on when the U.S. Federal Reserve will start to pull back on its economic stimulus program, limiting Mexican policymakers' room for maneuver.


Mexico's second-quarter economic growth compared with a year earlier was 1.5 percent, well short of expectations for 2.32 percent in a Reuters poll.

The Mexican peso pared its gains after the data.

The central bank, which has also cut its growth outlook for 2013, has said it is confident growth will pick up in the second half.

The bank cut interest rates to a historic low of 4 percent in March, but most expect it will not take advantage of cooling inflation to cut rates further this year.

Fears of a tapering of the Fed's bond-buying program, which has supported appetite for risky assets, hit Mexico's peso hard in June but the currency has since steadied. (Editing by Kieran Murray and John Wallace)

From The AZ Star: Pemex to form company to explore for oil in US



MEXICO CITY — Mexico's state-owned oil company says it will form a new entity to explore and produce shale gas and deep-water oil in U.S. territory.
The plan will help Petroleos Mexicanos, known as Pemex, acquire drilling techniques it now lacks for complicated terrain in Mexico, chief executive Emilio Lozoya said in an interview with the Wall Street Journal.
Pemex confirmed the plan Monday.
"The geology is similar and we can benefit from numerous areas of collaboration with international oil companies," Lozoya said.
Pemex has so far been unable to exploit its shale and deep-water reserves, and the Mexican constitution limits its ability to hire outside expertise in Mexico. The government has proposed allowing Pemex to enter profit-sharing contracts with private companies and let outside companies refine and transport oil inside the country.
That would require politically controversial changes to the constitution, which states that Mexico's oil belongs to the state.
Mexico's oil production has dropped by about one-quarter over the last decade.

Thursday, August 15, 2013

From The NY Times: Oil Reforms by Mexico May Upend Markets



Oil Reforms by Mexico May Upend Markets


HOUSTON — A sweeping reform suggested for Mexico’s energy laws has the potential not only to return the country to its early-1980s heyday of energetic oil drilling, when it was one of the world’s most promising producers, but also to reduce further the United States’ dependence on OPEC producers, according to oil experts.
The reform proposed by President Enrique Peña Nieto on Monday would partly reverse more than 50 years of state-owned oil production — Mexico was the first country to take over its oil industry — and allow foreign private oil companies to partner with the national oil company in sharing profits from exploration.
American oil companies responded with enthusiasm, predicting that Mexico would open for exploration deep-water oil fields in the Gulf of Mexico and large onshore oil and gas shale deposits, with terms that would be attractive to companies that have deep pockets and experience with the newest drilling technologies.
“This is a good start,” said Kurt Glaubitz, a Chevron spokesman. “We’re optimistic about the reforms that are taking place and the opportunities that Mexico is presenting to international oil companies.”
Mexico ranks ninth among the world’s leading oil producers and the third among sources of foreign oil to the United States, but its production has plunged in recent years. Its exports to the United States have plummeted from 1.7 million barrels a day in 2006 to a little more than 900,000 barrels a day in recent months, while it has been forced to import increasing amounts of gasoline from the United States refineries.
Mexico’s proven oil reserves have fallen since the 1980s from nearly 60 billion barrels of oil to a little more than 10 billion as shallow-water oil fields have been tapped out. The national oil company, Petróleos Mexicanos, does not have the capital or expertise to extensively explore deep-water prospects in the Gulf of Mexico or technically challenging shale fields requiring modern techniques like horizontal drilling and hydraulic fracturing, which have substantially increased production north of the border.
In a report this week, Citi Research estimated that Mexico might have 29 billion barrels of oil and gas reserves in the Gulf of Mexico that could be recoverable with foreign capital and expertise. Mexico could also have an additional 13 billion barrels of recoverable oil shale reserves. All told, energy experts say the country could increase its production by as much as 25 percent by 2024, to nearly four million barrels a day — potentially vaulting Mexico to the fifth or sixth position among the most prolific oil producing countries.
An additional million barrels of oil a day on world markets would represent less than 2 percent of current global demand, but that could still provide an additional cushion — along with booming production in the United States and Canada — to ease oil price spikes during periods of instability in the Middle East and North Africa.
Currently, world oil markets are well supplied and several OPEC nations have expressed concerns that they are losing the North American market because of the expansion in American oil shale drilling in recent years. Increased production from Mexico, which is not a member of OPEC, would further decrease the cartel’s leverage.
The United States would be the most likely beneficiary of a new Mexican oil boom since its fields are close to Gulf of Mexico refineries, which are already designed to process various grades of Mexican crude.
“The impact on the global market could be very significant,” said David L. Goldwyn, a State Department coordinator for international energy affairs in the first Obama administration. “You could have increased production of light sweet crudes from the deep water Gulf, which would provide significant pressure on OPEC production. It means pressure on the Saudis, Kuwaitis, the Venezuelans and Russia.”
Mr. Goldwyn said an increase in Mexican oil production could drain foreign oil company investment from countries like Angola, Venezuela and Nigeria as well as the new Arctic oil and gas regions, where costs for exploration and development are high.
The Mexican president’s proposal is expected to be enacted by the Mexican Congress next year. But oil experts caution that it could take as long as 10 years — for Mexico to conduct seismic testing and an auction for deep-water prospects, and for the foreign companies to do their own appraisal drilling — for production to begin in earnest. Experts say, however, that shale drilling and enhanced oil recovery from older wells could begin sooner.
Jorge R. Piñon, former president of Amoco Oil Latin America, said foreign oil companies would want to be sure that the profit-sharing contracts would be lucrative before they invested in Mexico since the country would not formally give the companies a share of the oil reserves. “I’m extremely cautious about it,” he said. “The question is will they offer a real competitive option or only offer half of a solution.”
Under the Mexican proposal, foreign companies would receive a share of revenues from oil and gas fields rather than the hydrocarbon volumes themselves to sell. Oil companies prefer to be able to report to investors that they have acquired actual reserves for future production, but they have accepted similar agreements in other countries.
The Citi Research report noted that depending on how the agreements are negotiated, oil companies might be able to report reserve holdings under Securities and Exchange Commission accounting rules, though Mexico will still insist that reserves are held by the state. Under the rules, reserves that are equal to the value of the cost recovery and revenue earned could be allowed to be listed on company books.
Should that be the case, the report concluded, “the results will be revolutionary for the country.”

Wednesday, August 14, 2013

From The Monitor: Editorial - Mexican traucks should keep on trucking in US



It’s been two years since the Obama administration opened U.S. roadways to Mexican freight trucks, amid protests from protectionists, truckers’ unions and others who insisted that Mexican trucks and those who drove them, weren’t fit to be on our U.S. roads.
But those fears have not proven to be true.
In fact, it’s likely that most drivers haven’t noticed any difference between Mexican commercial vehicles and their U.S. or Canadian counterparts motoring alongside them.
The North American Free Trade Agreement, which went into effect on Jan. 1, 1994, gave freight trucks from the United States, Mexico and Canada full access to the roadways of all three countries. But the Clinton administration, under pressure from U.S. trucking interests, issued a temporary moratorium on access to Mexican trucks. There were concerns that the vehicles and their drivers were somehow inferior and posed a safety hazard for U.S. drivers. This “temporary” ban stretched on for more than 17 years.
The George W. Bush administration, however, quietly launched a pilot program giving trucks from across the border limited access. This went largely unnoticed until it was discovered as a funding item in a budget bill.
On July 8, 2011, President Barack Obama opened our roadways to Mexican trucks. And after two years, it appears that Mexican trucks are fitting in quite nicely. These vehicles are steadily bringing in billions of dollars worth of Mexican goods to U.S. markets and transporting our products to consumers across the border. They aren’t driving us off the road nor breaking down en masse in the middle of roadways — as previously feared.
As sensible trade proponents have insisted all along, Mexican vehicles are typically bought from the same companies that supply U.S. freight lines and, for the most part, are maintained just as well as American trucks. If not, these big rigs would not  get past inspection stations at U.S. ports of entry and would be detained at inspection stations along highways in Texas and across the U.S.
Accident information, sorted by country of registration, wasn’t immediately available from the U.S. or Texas departments of transportation. However, safety progress reports from the U.S. Federal Motor Carrier Safety Administration indicate that total accidents, injuries and deaths have actually declined in the two years since Mexican trucks have had access to our roads.
Some 4,200 fewer large-truck crashes, of all nationalities, were reported in 2012 from 2010. There were 150 fewer fatalities and 3,700 fewer injuries in 2012 also.
Last month alone, 1,006 border crossings were reported from Mexico, drawing 735 inspections. Of all those inspections, just four trucks were taken out of service and four drivers weren’t allowed to continue. That means nearly every truck and driver has all the necessary paperwork and is passing safety inspections.
Those inspections, and the overall vigilance of properly maintaining cargo vehicles, regardless of nationality, indeed must continue for the betterment of trade and commerce amongst all three NAFTA nations. And hopefully these statistics will put to rest fears that Americans have about Mexican trucks and prompt more people to believe they should keep on trucking here.
It’s been two years since the Obama administration opened U.S. roadways to Mexican freight trucks, amid protests from protectionists, truckers’ unions and others who insisted that Mexican trucks and those who drove them, weren’t fit to be on our U.S. roads.
But those fears have not proven to be true.
In fact, it’s likely that most drivers haven’t noticed any difference between Mexican commercial vehicles and their U.S. or Canadian counterparts motoring alongside them.
The North American Free Trade Agreement, which went into effect on Jan. 1, 1994, gave freight trucks from the United States, Mexico and Canada full access to the roadways of all three countries. But the Clinton administration, under pressure from U.S. trucking interests, issued a temporary moratorium on access to Mexican trucks. There were concerns that the vehicles and their drivers were somehow inferior and posed a safety hazard for U.S. drivers. This “temporary” ban stretched on for more than 17 years.
The George W. Bush administration, however, quietly launched a pilot program giving trucks from across the border limited access. This went largely unnoticed until it was discovered as a funding item in a budget bill.
On July 8, 2011, President Barack Obama opened our roadways to Mexican trucks. And after two years, it appears that Mexican trucks are fitting in quite nicely. These vehicles are steadily bringing in billions of dollars worth of Mexican goods to U.S. markets and transporting our products to consumers across the border. They aren’t driving us off the road nor breaking down en masse in the middle of roadways — as previously feared.
As sensible trade proponents have insisted all along, Mexican vehicles are typically bought from the same companies that supply U.S. freight lines and, for the most part, are maintained just as well as American trucks. If not, these big rigs would not get past inspection stations at U.S. ports of entry and would be detained at inspection stations along highways in Texas and across the U.S.
Accident information, sorted by country of registration, wasn’t immediately available from the U.S. or Texas departments of transportation. However, safety progress reports from the U.S. Federal Motor Carrier Safety Administration indicate that total accidents, injuries and deaths have actually declined in the two years since Mexican trucks have had access to our roads.
Some 4,200 fewer large-truck crashes, of all nationalities, were reported in 2012 from 2010. There were 150 fewer fatalities and 3,700 fewer injuries in 2012 also.
Last month alone, 1,006 border crossings were reported from Mexico, drawing 735 inspections. Of all those inspections, just four trucks were taken out of service and four drivers weren’t allowed to continue. That means nearly every truck and driver has all the necessary paperwork and is passing safety inspections.
Those inspections, and the overall vigilance of properly maintaining cargo vehicles, regardless of nationality, indeed must continue for the betterment of trade and commerce amongst all three NAFTA nations. And hopefully these statistics will put to rest fears that Americans have about Mexican trucks and prompt more people to believe they should keep on trucking here.

From USA Today: Trade fuels effort to build better border crossings

http://www.usatoday.com/story/news/nation/2013/08/14/stateline-border-boom/2651835/

SANTA TERESA, N.M. — New Mexico Gov. Susana Martinez, a Republican who won office three years ago calling for more secure borders, now focuses on the border region for another reason: boosting trade with Mexico.
With her Mexican counterpart, Chihuahua Gov. César Duarte, Martinez last week promoted their joint plan for a massive new commercial area straddling the border. Together, they want to build a transportation and manufacturing hub that would capitalize on the recent surge in the Mexican economy.
New Mexico has been working for years to lay the groundwork for development of this desert expanse, which is just west of El Paso, Texas. Its chief selling point is an international crossing free from the traffic bottlenecks of the bridges in El Paso and further east along the Rio Grande.
"This part of the state has long been hungry for industry, for work, for jobs," Martinez, a native of the area, said Friday. "I really do think that this part of the state is going to be a mecca for the development of manufacturing plants, logistics plants, of jobs and families coming to this part of this state."
The New Mexico plan is one of many efforts along the border to lure more business to local crossings. Key ports of entry, including those in San Diego and Nogales, Ariz., are slated for improvements. U.S. Customs and Border Patrol has agreed to increase staffing at checkpoints in California, Texas and Florida if local authorities pick up the bill.
The border crossings are seeing an uptick in traffic, as trade between the United States and Mexico grows. In 2012, a record 5.1 million trucks crossed the border. Trucks carry 80 percent of goods between the countries.
"Trade between our countries has exploded," said Simon Rosenberg, president of New Democrat Network, a left-leaning think tank based in Washington, D.C. American trade with Mexico now exceeds U.S. trade with Germany, Japan and the United Kingdom combined, he noted.
The boom comes as companies selling to Americans rely more heavily on Mexican factories to produce their goods. Mexico is becoming more attractive, because wages are rising in China and transportation costs are increasing with the cost of fuel.
What happens on the border could affect broad swaths of the U.S. economy, Rosenberg said. Mexico is the third-ranked country for imports into the United States, and it is the second-largest market for U.S. goods abroad. It is the first- or second-ranked destination for exports from 22 states.
But goods often cross the border multiple times before they become final products that reach store shelves or auto dealerships. In fact, American parts make up nearly two-thirds of Mexican products sold in the United States.
Overshadowed by security
Even with so much riding on trade with Mexico, Congress has focused more of its attention on border security. Heightened safety measures designed to stop drugs, weapons, terrorists and unauthorized immigrants at the border also slow the flow of trade.
"Mexico is a pillar of the U.S. economy, without a doubt, but we're also working through our security measures on our border," said Erik Lee, associate director of the North American Center for Transborder Studies at Arizona State University.
For years, the Border Patrol got a huge infusion of money for staff, vehicles and equipment to patrol the areas between the ports of entry. But while the ranks of their green-shirted colleagues grew by leaps and bounds, the blue-shirted customs officers at the ports got relatively little.
Because of homeland security concerns after the September 2001 terrorist attacks, no new land ports were built between the U.S. and Mexico until 2009, which Lee said posed "huge challenges for both commerce and security."
The immigration package recently passed by the U.S. Senate emphasizes border security, even though it also addresses border backlogs. It would add 3,500 customs agents, on top of the 22,000 working now. But it would also double the size of the already ubiquitous Border Patrol along the southern border to 38,405 officers.
In the Santa Teresa area, U.S. customs officials are working on a plan to station officers at a Foxconn plant in Mexico, so the computer parts manufacturer can have its trucks clear customs before they even get to the border. Pre-cleared trucks would then be able to use a dedicated lane at the Santa Teresa crossing.
Francisco Uranga, a Foxconn executive who led the governors on a tour of the company's factory last week, said the presidents of both countries supported the idea. But actually putting the program in place has been frustratingly slow, because of security concerns.
"No terrorist that has done any damage to this country came through the Mexican border, but all of the attention is being put on us," he said.
Building a better gateway
Cross-border trade is at the heart of plans to transform the region around Santa Teresa, which has already seen significant changes in recent years.
The port itself just underwent an $11 million expansion paid for by federal stimulus funds. The crossing today handles some 400 trucks a day between 6 a.m. and midnight, or about half of its new capacity. New Mexico officials have asked the federal government to keep the port open around the clock.
But the biggest change on the horizon for Santa Teresa is a new $400 million Union Pacific rail yard, scheduled to open in 2015.
Its current facilities in El Paso are hemmed in by the city, but the New Mexico location offers the company plenty of room to grow. The new terminal will let the company fuel its trains, inspect them and switch crews all in the same place.
New Mexico lawmakers helped attract Union Pacific to the area by eliminating the state's tax on locomotive fuel to stay competitive with Texas, which does not have such a tax.
Eventually, the plan promoted by Martinez and Duarte calls for a rail line crossing the border in Santa Teresa.
But Union Pacific's main reason for building the new facility in New Mexico is to handle growing east-west traffic, said Ivan Jaime, the company's director of border policy and community affairs.
State officials also gave a boost to the area by raising the weight limit on trucks entering from Mexico within six miles of the Santa Teresa crossing. Jerry Pacheco, executive director of the International Business Accelerator, said the change has attracted seven companies to Santa Teresa in the last two years.
New Mexico officials also set aside $5 million this year to upgrade the area's water and wastewater system. Other infrastructure improvements, such as a four-lane highway connecting the border checkpoint to a nearby interstate highway, are already in place.
"Our motto is to keep infrastructure ahead of development," Pachecho said.
Coordinating infrastructure on both sides of the border can be difficult, and Santa Teresa's backers say a key selling point for the New Mexican project is the shared plan with the Mexican state of Chihuahua.
States competing
New Mexico officials hope the improvements in Santa Teresa will attract more residents to the area, but many of the new jobs will also likely go to Texans. El Paso is closer to the crossing than Las Cruces, the nearest major city in New Mexico.
Union Pacific, for example, expects that building the Santa Teresa rail terminal will create 3,000 jobs during construction. Once complete, the facility will employ 600 people. Between 200 and 250 of them will be relocated from Union Pacific's existing El Paso rail yards, the railroad says.
Bernardo Ayala, Union Pacific's vice president for Mexico markets, said the company does not look at decisions of where to expand as a competition between states.
"It's a region, it's a community. It's well-connected and well-integrated," he said of the El Paso area. "(Union Pacific's expansion) is going to drive more jobs. Mexico, Texas and New Mexico are looking for that in terms of providing economic stability."
Texas Gov. Rick Perry, a Republican, for years has publicly wooed companies from other states.
But Texas Secretary of State John Steen, who leads the state's outreach efforts with Mexico, said he was not troubled by New Mexico's expansion in Santa Teresa and Union Pacific's decision to expand there.
"We put a big emphasis on recruiting businesses into Texas, but we don't do it in a negative way," Steen said. "We enjoy the competition. Sometimes it works in your favor, and sometimes it goes against you."
But Martinez wants New Mexico to compete with Texas and other states.
"All our states do — and that's what they're supposed to do —compete with one another," Martinez said. Businesses can "go anywhere in the world. We want them to look at New Mexico."

From Huffington Post: Mexico: more than borders and beaches

Probably one of the best short descriptions of 2013 Mexico.



The biggest surprise from my recent visit to Mexico was how wide the gap is between how most Americans perceive our neighbor to the south and the reality of what it is today.
The view of Mexico from the United States seems to either fixate on the struggles we have along the border or the attractiveness of their seemingly endless number of magnificent beaches. The truth is that in between that challenging border and inviting beaches lies a country of 116 million enterprising people on the move. The United States ignores that reality to its detriment.
Five experiences from my trip highlight aspects of Mexico that most Americans ignore:
Political Maturation: With the landmark election of Vicente Fox as president in 2000, Mexico's democracy has matured into a multi-party competition where the peaceful handover of power is commonplace. While dining with former President Fox, it was clear he is following the path of past American presidents by contributing to political discourse through educating future leaders, advancing ideas, and being available to support, not undermine, the current opposition party president.
Political Cohesion: Meetings with both Institutional Revolutionary Party (PRI) President César Camacho Quiroz and the National Action Party (PAN) President Gustavo Madero reinforced the sense of political maturation in Mexico through collaboration that is missing in current American politics.
After the 2012 Mexican presidential election of PRI candidate Enrique Peña Nieto, PRI, PAN, and the leftist PRD party agreed on an alliance, known as the Pact for Mexico, to work together to tackle seemingly intractable challenges that have vexed Mexico for decades. The trio has taken action to increase the effectiveness of education, streamline labor restrictions, and to facilitate competition in the telecommunications, media and banking industries. Freeing up the energy sector is next on the docket.
Sound Economics: Solid economic goals have buttressed political gains. While the Brazilian government has preoccupied itself with state-directed capitalism and intervention incurrency markets, Mexican politics has largely been driven by efforts to free the economy from the inefficiencies caused by state control or private monopolies. The success Mexico has achieved has attracted reverse migration from the United States. During my meeting with Bank of Mexico Governor Agustin Carstens, I was struck by his focus on the benefits of providing the private sector long-term certainty, the kind of enlightened policy guidance that has greatly benefited Mexico.
Young, Industrious Workforce: The rise in Chinese manufacturing has received great attention. However, the "Hecho en Mexico" brand is prepared to take on all competitors. According to the latest census statistics, half of Mexico's population is age 26 or younger. While many other nations, including China, are facing demographic challenges, such a young, vibrant workforce is a real strength.
The Mexican economy is adept at designing and building products up and down the supply chain, unlike other emerging markets that only provide labor stock. Mexico excels at making large complex products, holding the titles of largest flat screen television exporter, the third largest computer manufacturer, and fourth largest vehicle exporter in the world. It is no slouch in white-collar occupations either, graduating more than 115 thousand young engineers every year, more than Canada, the United Kingdom, Germany, or emerging market rival Brazil. Its IT services industry is one of the five largest in the world. The United States' technological prowess and highly productive laborers collaborating with such a young and talented workforce creates a highly competitive duo.
Affinity with the United States: Canadians tend to bristle when reminded of how similar they are to Americans. Mexicans, however, have an amazingly warm view of the United States. Despite the heated rhetoric involving stereotypes and caricatures of Mexican society from some American politicians, Mexicans generally retain a positive spirit about their association with their northern neighbor. Many Mexican business and political leaders are pleased that their country's economic future is hitched to diversified integration with the United States' economy rather than simply providing resources to Asia, as is the situation for much of South America. Rather than despising Mexico's affinity towards the United States, we should embrace it.
While Mexico still has work to do to secure its border, free up its economy, and provide ample opportunities for its citizens, one must recognize that it is well on its way to joining the ranks of the world's great powers.
Rather than fixate only on its border and beaches, it is essential that Americans see the bigger picture: a cohesive, democratic, economically vibrant, and friendly neighbor that would be the envy of any great power.
Much ink has been spilled talking about how China might overtake the United States economically. Yet there have been no articles about China overtaking a North American economy. Indeed, the complementarity of the United States and Mexican economies make us a far more formidable competitor together than we are apart.
A core American strength has always been its alliances. Mexico was pulled into World War II when ships providing supplies to the United States were attacked. Its fighter pilots fought alongside America in the Philippines. A tighter embrace of Mexico could lead to a cornucopia of benefits for both nations.

Tuesday, August 13, 2013

The Monitor: border entry wait times hurt our economy -




A component of comprehensive immigration reform that too often is overlooked in Washington is the tremendous amount of legal trade flowing across our southern border. Since NAFTA went into effect in 1994, American commerce with Mexico has exploded. Exports to our southern neighbor have increased by over 300 percent, while imports have grown by a remarkable 460 percent. Today, there are more than 6 million American jobs that rely on trade with Mexico, including over 460,000 in Texas, alone.
Unfortunately, our ports of entry that span the Rio Grande have not kept pace with this swell in commerce. After meeting with stakeholders and local officials in communities all along the border I, along with then-U.S. Sen. Kay Bailey Hutchison, asked the Government Accountability Office (GAO) to conduct a review of our ports of entry.

The report was released last month and confirms what local leaders, businesses and residents on the border already know: our ports of entry have been neglected for too long.  Border wait times are under-reported, infrastructure and staff are mismanaged and stretched too thin, and it is becoming harder to ensure safe and efficient trade and travel.
Highways are the arteries of commerce, and our ports of entry are the valves that regulate its flow. Currently, they are clogged, and this is needlessly harming the economy while effectively making it easier to smuggle contraband into the country. A Bloomberg Government study found that border delays cost the U.S. economy $7.8 billion in 2011. If corrective action is not taken, the annual damage is projected to rise to $14.7 billion by 2020.
We must fix this.
I authored an amendment to the immigration bill that passed the Senate earlier this summer that aimed to achieve a reduction in wait times by 50 percent at our ports of entry. Unfortunately, it did not muster the 60 votes needed for adoption. But with renewed attention to the issue generated by the GAO report, I remain hopeful that a fix will be an integral part of the immigration debate.
Nevertheless, a fix need not be tied to the fate of immigration reform. Cities, counties and private bridge owners want their bridges to stay open longer and accommodate more traffic. Unfortunately, Customs and Border Protection (CBP) doesn’t have the resources, and Washington lacks the will to offer much help.  
In response, organizations such as the Border Trade Alliance, Texas Border Coalition and other local stakeholders are exploring an innovative funding option: public-private partnerships. These would combine the resources of CBP with local governments and private companies or associations to improve services and conditions at ports of entry.
On the heels of the GAO report, CBP announced that it would initiate five such partnerships on a limited, provisional basis -- four of which are in Texas. This is commendable, but more needs to be done. CBP currently lacks the legal authority to enter into the long-term, robust agreements that are needed.
Earlier this year, I authored legislation, the Cross Border Trade Enhancement Act, that would give CBP the authority it needs. If signed into law, we would see such partnerships established in the Valley in short order.
Looking forward, I see reason for optimism. CBP is aware of the problem and seems willing to act. Communities along the border are eager to participate, and the GAO report will draw the attention of lawmakers as the immigration debate continues. I hope that the Obama administration will work with local leaders and with me to bring about these much needed upgrades to our ports of entry.
Until we do so, however, we cannot harness our full economic potential.
Sen. John Cornyn,
a Republican, has represented Texas in the U.S. Senate since 2002. Previously he had served as a district judge in Texas, member of the Texas Supreme Court and Texas Attorney General.