Monday, September 30, 2013

From La Prensa (San Antonio): Mexican business opposes VAT boost in border region

Mexico City, Sep 30 (EFE).- Representatives of business organizations in northern Mexico on Monday rejected President Enrique Peña Nieto's proposal to increase the value added tax rate from 11 percent to 16 percent in regions that border the United States.

"The increase of five percentage points in the tax will mean a real increase of 45.5 percent with a heavy impact on prices of products and public services subject to this levy," groups in the states of Baja California, Baja California Sur, Coahuila, Chihuahua, Sonora and Tamaulipas said in a newspaper ad.
Firms along Mexico's northern border compete "every day with the strongest economy in the world," the ad said.
Currently, the VAT in Mexico's northern and southern border regions is lower than in the rest of the country, and if the initiative is implemented both those zones would be brought into line with other areas.
"We reject the argument that the (current) differentiation implies 'privileges' that in no way have benefited either the country or the residents of the border strip since this stance shows a lack of understanding of the reality that prevails in this zone of Mexico," the ad said.
Those signing the message noted that in the United States the sales tax ranges from 6 percent to 8 percent, and so raising the VAT on the Mexican side would place them at a "great disadvantage," as it would encourage area residents to do their shopping north of the border.

Wednesday, September 25, 2013

From Mexico Fiscal Reform Could Be Bad For Maquiladoras

The maquiladora export industry that’s a key component of the U.S.-Mexico border economy could face major changes under proposed reforms to Mexico’s tax system.
Mexico currently collects fewer taxes from its citizens and companies than almost any other developed country. Mexico relies heavily on revenues from its state-run oil industry, which is in decline.
Mexican President Enrique Peña Nieto wants to change this.
One way he wants to do it is by tightening control over the country’s vast maquiladora export industry.
Factories that make and export goods to the U.S. and other foreign markets currently don’t pay taxes on their raw materials and machinery.
But that would change under the proposed reform. Maquiladoras would have to pay the normal 16 percent sales tax on their raw materials and then request a refund of that money when they export the final product.
That would require exporters to invest a lot more cash up front, said Héctor Vega, a tax partner with Deloitte Mexico. It could erase some of the advantage Mexico has over its manufacturing competitors, Vega said.
“Because we are very close to the U.S., it’s very natural doing business,” he said. “However, this 16 percent will impact a lot and maybe determinate where you put your investment, either in China, either in Vietnam, either in Malaysia or keep it in Mexico.”
Still, Vega is hopeful that the tax change affecting maquiladoras will ultimately be stripped from the final fiscal reform bill.

From Forbes: From Pemex To Retail, Mexico Looking Better

Despite its lackluster performer this year, Mexico is still a favorite investment for Latin America-bound emerging market fund managers. And on Monday, investors were given another reason to like this country.

Retail sales rose 1.3% year over year in July. The headline retail sales index posted a stronger expansion than consensus, which was 0.5%. In seasonally adjusted terms, Mexican retail sales rose 0.6% month over month, also above than consensus.
The surprise of Mexico’s retail performance is due to general goods same-store sales (SSS) declined 4.7% in m/m sa in July, while consumption imports also contracted 1.7% m/m sa in that month.
Five out of eight sectors posted monthly gains within retail and within that universe, automotive did best.  Car sales were up 2.7% on the month. Healthcare, supermarket and department store sales increases made up for declines in food and clothing drops.
Besides today’s retail sales data, investors are getting more upbeat about Mexico’s leader, Enrique Peña Nieto.
Mexico is introducing some new reforms to increase competitiveness. One the market is most excited about is in the the energy sector.  Right now, government oil giant Pemex rules the land and sea when it comes to oil and gas. Nieto wants to invite others to give Pemex a hand. So far, he has had a couple of successes in the government, which suggest entrenched interests inside Pemex may be coming around, albeit slowly, to his line of thinking.
Key figures are taking his side. Pemex CEO Emilio Lozoya Austin said in August that if the government fails to reform its energy policy, Mexico could become an oil importer as soon as 2015.
For now, the Constitution of Mexico reserves the natural resources for the people of Mexico, so it prevents foreigners from coming in and developing oil reserves.  That work all falls on Pemex.  The investment in oil and gas equipment and exploration all end up being a big burden on Mexico’s fiscal accounts.  Plus most of the profits of Pemex go to the government and that leaves them less money to re-invest in oil production.
Peña Nieto would like to take more of a Brazil approach to its oil reserves than a Venezuelan one. Even though Petrobras is the kingpin of Brazilian oil, multinationals are allowed bigger stakes in Brazil’s oil wealth.
“Mexico needs to broaden out their tax base,” said Marc Tommasi, managing director and head of international investment strategy at Manning & Napier in Rochester, NY. “Mexico is still a big oil derivative play. And that story has been tougher to sell in recent years because the production profile has been deteriorating so rapidly. It’s getting critical and they need to do something soon,” he said.
Higher car sales means more demand for fuel in Mexico.
Mexico is looking better. Peña Nieto is one reason. A stable U.S. is another. Any upside to the U.S. economy is an added bonus for Mexico investors, Tommasi said.
But investors are still taking a wait-and-see approach to confirm whether Mexican consumers can keep the economy growing. Retail sales have been generally stagnant throughout the year.
August is looking up, said Marco Oviedo, a Mexico analyst at Barclays Capital in Mexico City.
The resumption of government expenditures along with a better manufacturing performance should support employment growth too, helping to keep Mexico in the investor spotlight for the rest of 2013.
The attention hasn’t helped Mexican equities. From a top down perspective, Mexico’s been an underperformer this year.
The iShares MSCI Mexico (EWW) exchange traded fund is down 5.03% while the iShares MSCI Emerging Markets Index (EEM) ETF is down 4.74%.   Mexico looks better in the rear view mirror. Over the last 12 months, EWW is up over 3%, while EEM is up 1.16%. And over the last five years, EWW has outright clobbered the benchmark MSCI EM, up 37.39% to the benchmark’s gain of 9.83%.

Monday, September 23, 2013

Press Release from the White House, Office Of The Vice President: U.S.-Mexico High Level Economic Dialogue

FACT SHEET: U.S.-Mexico High Level Economic Dialogue

Today in Mexico City, Vice President Joe Biden, together with the Mexican government, launched the U.S.-Mexico High Level Economic Dialogue (HLED), co-chaired by the U.S. Department of State, U.S. Department of Commerce, Office of the U.S. Trade Representative and their Mexican counterparts. Participants in today’s HLED launch include Secretary of Commerce Penny Pritzker, U.S. Trade Representative Michael Froman, Assistant Secretary of State Jose Fernandez, Assistant Secretary of State Roberta Jacobson, Acting Secretary of Homeland Security Rand Beers, Undersecretary of the Treasury Lael Brainard, and Secretary of Transportation Anthony Foxx.
In May 2013, President Obama and President Peña Nieto announced the formation of the High Level Economic Dialogue to advance strategic economic and commercial priorities central to promoting mutual economic growth, job creation, and global competitiveness. The United States and Mexico are long-time strategic allies and critical economic partners.  We share not only a 2,000 mile border but a dynamic commercial relationship that generates more than $500 billion in trade in goods and services and supports millions of jobs in both countries. The global competitiveness of both of our countries requires continued and deepened economic integration, commercial exchange, and policy alignment.
The High Level Economic Dialogue will meet annually at the Cabinet level and will bring together leaders from the public and private sectors to build on and promote sustained progress on a range of existing successful bilateral dialogues and working groups.  Mexico and the United States have developed an initial work plan laying out potential areas for cooperation under three broad pillars: 
  • Promoting Competitiveness and Connectivity
    • Transportation
    • Telecommunications
  • Fostering Economic Growth, Productivity, Entrepreneurship, and Innovation
    • Joint investment promotion
    • Economic development on the border and a Comprehensive Economic Development Strategy
    • Making effective use of the North American Development Bank (NADB)
    • Partnership on advanced manufacturing
    • Entrepreneurship
    • Workforce Development
  • Partnering for Regional and Global Leadership
    • Partnering to promote development in Central America
    • Regional trade priorities
    • Transparency and anti-corruption
Among other takeaways and as initial steps toward accomplishing the goals laid out in the HLED work plan, the United States and Mexico plan to: continue the work of the Mexico-U.S. Entrepreneurship and Innovation Council (MUSEIC) and expand entrepreneurship delegation exchanges; collaborate on organizing an information and communications technology road show, regulatory workshop series, and broadband innovation information exchanges; announce negotiations to modernize and expand our bilateral air transport relationship; develop an agenda of ongoing cooperation on intelligent transportation and freight systems; make efficient use of the North American Development Bank by supporting new and ongoing cross-border initiatives and directing its Board to begin an assessment of the Bank’s long-term capital needs as well as how it can more effectively leverage private sector capital to support border infrastructure; and pursue joint investment initiatives. 
The United States and Mexico recognize that broad public engagement is essential to efforts to deepen our economic relationship.  We will continually engage and solicit input from the private sector, including small business, civil society, the Mexican-American diaspora community and labor organizations, on an ongoing basis as we develop cooperation efforts under the HLED pillars.

From The Hill: Biden: U.S.-Mexico relationship has 'awesome potential and promise' - The Hill's On The Money

Vice President Biden said Friday that the U.S. and Mexico had "awesome potential and promise," pledging during a visit to Mexico City that the two nations would improve cooperation on trade, education and transportation.

"There is no question our economic partnership has been a success, but there is also no question there is much, much, much, much more potential," Biden told Mexican officials at the launch of the U.S.-Mexico High Level Economic Dialogue.

Biden, along with top Cabinet officials, including Secretary of Commerce Penny Pritzker, U.S. Trade Representative Michael Froman, and Secretary of Transportation Anthony Foxx, met with their Mexican counterparts in an effort to boost cross-border economic partnerships.

"President Obama is deeply invested in the maturation of this relationship at every level," Biden said.

Biden said that the rise of the Mexican middle class had created "incredible opportunities" inside and outside of the country. He said by connecting the nations "roads, rails and infrastructure," the nations could "drive innovation on both sides of the border."

The travel by top-level administration officials is the first in an annual series of gatherings between Mexican and U.S. partners. The program was announced by Obama and Mexican President Enrique Peña Nieto in May.

According to the White House, the U.S. and Mexico share "a dynamic commercial relationship that generates more than $500 billion in trade in goods and services, and supports millions of jobs in both countries."

"Every Cabinet member wanted to be a part of this because they see the potential," Biden said, joking he was worried that not everyone would be able to secure a seat on the flight from Washington.

The vice president also touched briefly on immigration reform, saying the administration believed it was "a matter of justice, respect and according dignity to all people to bring 11 million men, women and children out of the shadows."

He also expressed sympathy to the Mexican people for recent floods that have ravaged the country, noting that he would travel after the meetings to Colorado to survey similar damage there.

From The New York Times: For Migrants, New Land of Opportunity Is Mexico


MEXICO CITY — Mexico, whose economic woes have pushed millions of people north, is increasingly becoming an immigrant destination. The country’s documented foreign-born population nearly doubled between 2000 and 2010, and officials now say the pace is accelerating as broad changes in the global economy create new dynamics of migration.
Rising wages in China and higher transportation costs have made Mexican manufacturing highly competitive again, with some projections suggesting it is already cheaper than China for many industries serving the American market. Europe is sputtering, pushing workers away. And while Mexico’s economy is far from trouble free, its growth easily outpaced the giants of the hemisphere — the United States, Canada and Brazil — in 2011 and 2012, according to International Monetary Fund data, making the country more attractive to fortune seekers worldwide.
The new arrivals range in class from executives to laborers; Mexican officials said Friday that residency requests had grown by 10 percent since November, when a new law meant to streamline the process took effect. And they are coming from nearly everywhere.
Guillaume Pace saw his native France wilting economically, so with his new degree in finance, he moved to Mexico City.
Lee Hwan-hee made the same move from South Korea for an internship, while Spanish filmmakers, Japanese automotive executives and entrepreneurs from the United States and Latin America arrive practically daily — pursuing dreams, living well and frequently succeeding.
“There is this energy here, this feeling that anything can happen,” said Lesley Téllez, a Californian whose three-year-old business running culinary tours served hundreds of clients here last year. “It’s hard to find that in the U.S.”
The shift with Mexico’s northern neighbor is especially stark. Americans now make up more than three-quarters of Mexico’s roughly one million documented foreigners, up from around two-thirds in 2000, leading to a historic milestone: more Americans have been added to the population of Mexico over the past few years than Mexicans have been added to the population of the United States, according to government data in both nations.
Mexican migration to the United States has reached an equilibrium, with about as many Mexicans moving north from 2005 to 2010 as those returning south. The number of Americans legally living and working in Mexico grew to more than 70,000 in 2012 from 60,000 in 2009, a number that does not include many students and retirees, those on tourist visas or the roughly 350,000 American children who have arrived since 2005 with their Mexican parents.
“Mexico is changing; all the numbers point in that direction,” said Ernesto Rodríguez Chávez, the former director of migration policy at Mexico’s Interior Ministry. He added: “There’s been an opening to the world in every way — culturally, socially and economically.”
But the effect of that opening varies widely. Many economists, demographers and Mexican officials see the growing foreign presence as an indicator that global trends have been breaking Mexico’s way — or as President Enrique Peña Nieto often puts it, “the stars are aligning” — but there are plenty of obstacles threatening to scuttle Mexico’s moment.
Inequality remains a huge problem, and in many Mexican states education is still a mess and criminals rule. Many local companies that could be benefiting from Mexico’s rise also remain isolated from the export economy and its benefits, with credit hard to come by and little confidence that the country’s window of opportunity will stay open for long. Indeed, over the past year, as projections for growth have been trimmed by Mexico’s central bank, it has become increasingly clear to officials and experts that the country cannot expect its new competitiveness to single-handedly move it forward.
“The fact that there is a Mexican moment does not mean by itself it’s going to change our future,” said Ildefonso Guajardo Villarreal, Mexico’s economy minister. “We have to take advantage of the Mexican moment to do what is required of us.” The challenge, he said, is making sure that the growing interest in his country benefits all Mexicans, not just newcomers, investors and a privileged few.
Mexico has failed to live up to its economic potential before. “They really blew a moment in 1994 when their currency was at rock bottom and they’d just signed Nafta,” said Kevin P. Gallagher, a professor of international relations at Boston University, adding that those conditions created a big opportunity for Mexican exports.
But now, he and others contend, Mexico has another shot. If the country of 112 million people can harness the energy of foreigners and newly educated Mexicans, become partners with the slew of American firms seeking alternatives to China, and get them to do more than just hire cheap labor, economists and officials say Mexico could finally become a more equal partner for the United States and the first-world country its presidents have promised for decades.
“This is their second chance,” Professor Gallagher said. “And this time, they really have to capitalize on it.”
Protection to Openness
For most the 20th century, Mexico kept the world at arm’s length. The 1917 Constitution guaranteed Mexicans would be given priority over foreigners for various jobs, and until the 1980s the country favored policies that protected domestic industry from imports.
Mexico was never totally closed — midcentury wars in Europe and the Middle East sent ripples of immigrants to Mexico, while Americans and Central Americans have always maintained a presence. But it was not a country that welcomed outsiders; the Constitution even prohibited non-Mexicans from directly owning land within 31 miles of the coast and 62 miles of the nation’s borders.
Attitudes began to soften, however, as Mexico’s relationship with the United States began to change. Many economists and social scientists say that closer ties with Mexico’s beloved and hated neighbor to the north, through immigration and trade, have made many Mexicans feel less insular. Millions of emigrants send money earned abroad to relatives in Mexico, who then rush out to Costco for more affordable food and electronics. Even the national soccer team, after decades of resistance, now includes two Argentine-born midfielders.
“It’s a new era in terms of our perspective,” said Francisco Alba Hernández, a scholar at the Colegio de México’s Center for the Study of Urban and Environmental Demographics. “We are now more certain about the value of sharing certain things.”
Like immigrants the world over, many of Mexico’s newcomers are landing where earlier arrivals can be found. Some of the growth is appearing in border towns where foreign companies and binational families are common. American retirees are showing up in new developments from San Miguel de Allende to other sunny spots around Cancún and Puerto Vallarta. Government figures show that more Canadians are also joining their ranks.
But the most significant changes can be found in central Mexico. More and more American consultants helping businesses move production from China are crisscrossing the region from San Luis Potosí to Guadalajara, where Silicon Valley veterans like Andy Kieffer, the founder of Agave Lab, are developing smartphone applications and financing new start-ups. In Guanajuato, Germans are moving in and car-pooling with Mexicans heading to a new Volkswagen factory that opened a year ago, and sushi can now be found at hotel breakfasts because of all the Japanese executives preparing for a new Honda plant opening nearby.
Here in the capital, too, immigrants are becoming a larger proportion of the population and a growing part of the economy and culture, opening new restaurants, designing new buildings, financing new cultural offerings and filling a number of schools with their children. Economics has been the primary motivator for members of all classes: laborers from Central America; middle-class migrants like Manuel Sánchez, who moved here from Venezuela two years ago and found a job selling hair products within 15 days of his arrival; and the global crème de la crème in finance and technology, like Mr. Pace, 26, whose first job in Mexico was with a major French bank just after graduating from the University of Reims.
Mr. Pace, bearded and as slim as a Gauloises, said he moved to Mexico in 2011 because college graduates in France were struggling to find work. He has stayed here, he said, because the affordable quality of life beats living in Europe — and because Mexico offers more opportunity for entrepreneurship.
Sitting at a Belgian cafe with a laptop this spring, speaking Spanish with a lilt, he said he recently opened a communications business that was off to a blazing start. One of his partners was French, the other Mexican, and in their first few months of operation, they got more than 30 clients, including VivaAerobus, a discount airline aimed at Mexico’s emerging middle class.
More recently, as Mexico’s economy has slowed, Mr. Pace said a few clients had canceled planned promotions, but over all his business has grown this year to include work for international brands like Doritos and the beer Dos Equis.
“We’re not going back to France,” Mr. Pace said. “The business is doing well and we’re very happy in Mexico.”
Some Mexicans and foreigners say Europeans are given special treatment because they are perceived to be of a higher class, a legacy of colonialism when lighter skin led to greater privileges. But like many other entrepreneurs from foreign lands, Mr. Pace and his partners are both benefiting from and helping to shape how Mexico works. Mr. Rodríguez, the former Interior Ministry official, Cuban by birth, said that foreigners had helped make Mexico City more socially liberal.
And with so many Mexicans working in the informal economy, foreigners have little trouble starting new ventures. Many immigrants say Mexico is attractive because it feels disorderly, like a work in progress, with the blueprints of success, hierarchy and legality still being drawn. “Not everyone follows the rules here, so if you really want to make something happen you can make it happen,” said Ms. Téllez, 34, whose food business served more than 500 visitors last year. “No one is going to fault you for not following all the rules.”
Mr. Lee said that compared with South Korea, where career options were limited by test scores and universities attended, Mexico allowed for more rapid advancement. As an intern at the Korea Trade-Investment Promotion Agency here, he said he learned up close how Samsung and other Korean exporters worked. “Here,” he said, “the doors are more open for all Koreans.” He added that among his friends back home, learning Spanish was now second only to learning English.
The results of that interest are becoming increasingly clear. There were 10 times as many Koreans living in Mexico in 2010 as in 2000. Officials at a newly opened Korean cultural center here say at least 12,000 Koreans now call Mexico home, and young Mexicans in particular are welcoming them with open arms: there are now 70 fan clubs for Korean pop music in Mexico, with at least 60,000 members.
A Creative Magnet
Europe, dying; Mexico, coming to life. The United States, closed and materialistic; Mexico, open and creative. Perceptions are what drive migration worldwide, and in interviews with dozens of new arrivals to Mexico City — including architects, artists and entrepreneurs — it became clear that the country’s attractiveness extended beyond economics.
Artists like Marc Vigil, a well-known Spanish television director who moved to Mexico City in October, said that compared with Spain, Mexico was teeming with life and an eagerness to experiment. Like India in relation to England, Mexico has an audience that is larger and younger than the population of its former colonial overlord. Mr. Vigil said that allowed for clever programming, adding that he already had several projects in the final stages of negotiation.
“In Spain, everything is a problem,” he said. “Here in Mexico, everything is possible. There is more work and in the attitude here, there is more of a spirit of struggle and creativity.”
Diego Quemada-Díez, another Spanish director who said he was the first person in his family to leave Spain since at least the 1400s, moved to Mexico in 2008 after working as a camera operator in Hollywood. He went to film school at the American Film Institute and completed a short film that won several awards, but he said he moved to Mexico because the United States had become creatively restrictive. He wanted to make a film without famous actors, about Central American immigrants. In Los Angeles, no producers would bite. Here, the government provided more than $1 million in financing. The film, La Jaula de Oro, had its premiere at Cannes this year, with its young actors winning an award.
“Europe feels spiritually dead and so does the United States,” Mr. Quemada-Díez said. “You end up wanting something else.”
He struggled to make sense of Mexico at first. Many foreigners do, complaining that the country is still a place of paradox, delays and promises never fulfilled for reasons never explained — a cultural clash that affects business of all kinds. “In California, there was one layer of subtext,” Mr. Quemada-Díez said. “Here there are 40 layers.”
Mexico’s immigrant population is still relatively small. Some officials estimate that four million foreigners have lived in Mexico over the past few years, but the 2010 census counted about one million, making around 1 percent of the country foreign-born compared with 13 percent in the United States. Many Mexicans, especially among the poor, see foreigners as novel and unfamiliar invaders.
Race, ethnicity and nationality matter. Most of the immigrants who have the resources or corporate sponsorship to gain legal residency here come from the United States and Europe. The thousands of Central American immigrants coming to Mexico without visas — to work on farms or in cities, or to get to the United States — are often greeted with beatings by the Mexican police or intense pressure to work for drug cartels. Koreans also say they often hear the xenophobic refrain, “Go back to your own country.”
Mr. Sánchez, the hair products salesman from Venezuela, said Mexicans who had not been able to rise above their economic class mostly seemed to resent the mobility of immigrants. In a country still scarred by the Spanish conquistadors, he said many of his Mexican neighbors responded with shock when they discovered that his younger sister was studying medicine at Mexico’s national university. Not that the quiet scorn is enough to deter him. “I earn more here in a year than I would in 10 years in my own country,” he said. “Mexicans don’t realize how great their country is.”
Many do, of course, especially those with experience elsewhere. Mexico has allowed dual nationality for more than a decade, and among the growing group of foreigners moving here are also young men and women born in Mexico to foreign parents, or who grew up abroad as the children of Mexicans. A globalized generation, they could live just about anywhere, but they are increasingly choosing Mexico.
Some are passionate idealists, like Luna Mancini, 27, a human rights lawyer working for the Supreme Court who was born in Mexico to Italian parents. After growing up in Barcelona, Spain, she returned to Mexico in 2009 because she felt that more could be done in Latin America, with law and with new tools of communication — digital video, social media — that encouraged grass-roots dialogue. Some, especially Mexican-Americans working in Mexico City’s hip culinary scene, have come here to reconnect with their roots. Others simply see Mexico as their best option, as an incubator for personal, professional and artistic growth.
Domingo Delaroiere, an architect whose father is French and mother is Mexican, said Mexico’s appeal — especially in the capital — was becoming harder to miss. When he came back here last year for a visit, after two and a half years in Paris, he said he was surprised. “Art, culture, fashion, architecture, design — the city was filling up with new spaces, things that are interesting, daring,” he said.
He soon decided it was time to move. Compared with Mexico, he said, “Nothing is happening in Paris.”


Friday, September 20, 2013

From Fox News: US vice president in Mexico for trade talks

US Vice President Joe Biden arrived in Mexico City to hold talks with President Enrique Pena Nieto focused on trade ties, while likely avoiding US spying claims.

Biden will chair on Friday the inaugural "US-Mexico High Level Economic Dialogue" with other top officials, a panel created by President Barack Obama and Pena Nieto when the two met in the Mexican capital in May.

The US vice president will then meet with Pena Nieto for more talks centered on the economy, though US officials say the two will likely discuss security ties between the countries, which have partnered in the battle against drug cartels.

Biden was met at the international airport under driving rain by deputy foreign minister Sergio Alcocer and other senior officials.

Alcocer told reporters on Wednesday that the meetings would focus on the economy and not on reports that the United States snooped on Pena Nieto's emails when he was a presidential candidate in 2012 as well as Brazilian President Dilma Rousseff.

Pena Nieto discussed the issue with Obama at a G20 summit in Russia this month and the US leader promised an investigation into the report. Rousseff decided to postpone a long-planned visit to the White House next month.

Pictures From Bill Hay International: Parking in Maneadero, Baja California

It takes a special truck driver to park his tractor 60 feet up!!

Wednesday, September 18, 2013

From The Fronteras Desk: Keeping Drugs Out Of Cross-Border Commerce

SAN DIEGO — At the control room of a cross-border trucking company in Otay Mesa, south of San Diego, dispatchers spend their days talking over the radio with drivers and poring over computer screens, constantly monitoring the whereabouts and activities of their 150 trucks.
“We got it on the map every time a driver is moving, standing by, stop at a light or stuff like that,” the operations manager said while zooming in and out of a digital map. “Exactly, we know where the truck is at.”
The company president asked that we not identify the firm or its employees out of security concerns.
The company’s offices on the United States side are smack up against the U.S.-Mexico border fence. It also has offices and a truck yard in Tijuana, Mexico.
The trucking firm is meticulous about security measures. All of its trucks are equipped with GPS monitors.
Exact routes for the trucks are established from a warehouse in Mexico to the customer in the U.S., and software tells dispatchers if a truck goes off that route, or stops for more than two minutes.
The firm even hires private investigators to follow trucks at random to make sure they’re not involved in anything illicit.
“Is drug smuggling the major security risk?” I asked.
“Yes, that’s the highest, highest, in our industry,” the operations manager said.
Actually, the risks here are multiple.
Trucking companies have to be careful about who they're working for. A seemingly stand-up exporter could be sneaking drugs in shipments of, say, plastic toys.
Or a rogue company driver could be surreptitiously working for the cartels — or maybe forced to work for them.
These risks have grown along with an 80 percent increase in truck traffic at the U.S.-Mexico border since 1995, the year after the North American Free Trade Agreement went into effect.
This explosion in trade means more opportunities for drug smugglers to get their loads across the border undetected.
And while, at least at San Diego area border crossings, more drugs are detected in passenger cars, commercial trucks yield huge seizures — on average, more than 1,800 pounds of drugs per bust last year.
At the Otay Mesa commercial port of entry, U.S. Customs and Border Protection officers process more than 2,000 trucks a day. And border agents have seen drugs hidden in just about everything.
“In cans of jalapeños, in cans of cheese,” said Joe Garcia, deputy special agent in charge for U.S. Immigration and Customs Enforcement's Homeland Security Investigations.
“You see it mixed in with fabric softener, or laundry detergent,” he said.
Border agents at Otay Mesa first check a truck’s manifest when it gets to the head of the line. The manifest tells the agent about the truck, who’s driving it, and what it’s carrying.
An agent may chat up a driver to make sure he or she doesn’t seem nervous or shifty. Agents may send a truck to secondary inspection, where it could go through a giant x-ray machine or have its cargo offloaded.
Several hours after we visited the Otay Mesa cargo crossing recently, agents found 1,600 pounds of marijuana concealed in a shipment of limes.
If drugs do make it across the border, their likely first stop is Los Angeles.
“Los Angeles is really a transshipment point,” said Steve Woodland, who leads the Southern California Drug Task Force for the U.S. Drug Enforcement Administration.
“We are centrally located to be able to push the narcotics from California in multiple directions,” Woodland said.
Woodland helped dismantled a high volume drug ring in August. The smugglers brought meth, cocaine and heroin across the border in PVC pipes hidden inside the axles of big rig trucks.
During the two-and-half year investigation, law enforcement seized more than 2,400 pounds of meth — that's around 11 million doses.
According to the criminal complaint, the illegal shipments were coming across the border in Nogales, Ariz.
Back at the trucking company’s yard in Otay Mesa, a security guard runs a large round mirror with a long handle underneath the perimeter of a truck to make sure there’s nothing attached to the bottom.
The security guard also taps the truck’s wheels with a baseball bat. Tires that have something hidden inside make a distinct sound.
The company’s operations manager also tells me they do extensive background checks on their drivers.
“Especially if you’re moving from one side to another, you gotta have security in everything,” he said. “In every single little thing.”
There’s just too much at stake to take any risks, he said.

Monday, September 16, 2013

From Fox News Latino: Peña Nieto leads celebration of Mexico's independence

President Enrique Peña Nieto led the celebration of the 203rd anniversary of Mexico's independence from Spain.
Peña Nieto participated in the traditional ceremony from the balcony of the National Palace for the first time on Sunday night.

The president, accompanied by first lady Angelica Rivera, gave the "Grito," the traditional Independence Day rallying cry, around 11:00 p.m. as the tens of thousands of people in Mexico City's huge Zocalo plaza cheered.

The ritual of the Grito, one of the most important for Mexicans, consists of national, state and municipal officials shouting "viva" for the heroes of the War of Independence and for Mexico.

The ceremony commemorates Father Miguel Hidalgo's rallying cry early on the morning of Sept. 16, 1810, in the city of Dolores Hidalgo, in the central state of Guanajuato, the birthplace of the independence movement.

Mexico finally won its independence from Spain in 1821.

Peña Nieto appeared on the balcony holding a Mexican flag, rang the bell to mark the hour and began shouting the traditional "vivas."

At least 70,000 people turned out for the ceremony despite the heavy rains that drenched the capital on Sunday, officials said.

Many of the people in the huge plaza wore traditional costumes and hats.

The president returned the flag to an honor guard after the ceremony and then reappeared on the balcony with the first lady and their five children to wave at the crowd.

Peña Nieto, of the Institutional Revolutionary Party, or PRI, took office on Dec. 1.

The independence ceremony ended with the traditional fireworks display and ringing of bells.

The governors of Mexico's 31 states also participated in ceremonies at which they shouted the "Grito" to citizens gathered in plazas.

The independence celebrations will continue on Monday with a military parade in Mexico City.

The Zocalo was occupied by teachers protesting education reforms until Friday, when police cleared them out of the plaza.

Many of the protesters are now camped out at the Monument to the Revolution in downtown Mexico City.

The Zocalo, Mexico's largest plaza, was cleaned in record ti

Tuesday, September 10, 2013

From Your Valley Voice: Number of Mexican Nationals seeking to invest increases

Number of Mexican Nationals seeking to invest increases

Laura Garcia Valley Town Crier - Reporter | Posted: Tuesday, September 10, 2013 9:35 am
As of 2011, the number of undocumented immigrants has remained at 11 million, according to the Pew Hispanic Center.
While many individuals come into the U.S illegally, there are ways to go about it legally, ways that require a substantial amount of money. One of those is the Employment based Immigration Investor Visa (EB-5).
The EB-5 program was created by Congress in 1990 to stimulate the U.S economy through job creation and capital investment by foreign investors.
Under the program, visas are granted to immigrants who can invest $1 million in the U.S economy and will create or preserve at lest 10 full-time jobs for qualifying U.S workers within two years.
There are several steps that a new investor must take before entering the EB-5 program and granted permanent legal status.
Due to the growing violence across the border, the trend of Mexican nationals wanting to invest in the U.S has grown.
McAllen FranNet Consultant Cesar Cepeda says that the trend of Mexican nationals wanting to get involved in franchising started about two years ago.
Cepeda immigrated from Mexico 20 years ago and is a U.S. Citizen. He says that income, safety, and gaining a legal status are the reasons why Mexicans have such an interest in coming to the U.S.
As a consultant he now helps individuals through the lengthy process of attaining a franchise. He refers to his company as the for businesses.
“We know that small businesses are the backbone of the economy in the U.S because every single small business owner will create jobs, pay taxes and they're in constant motion,” Cepeda said.
Most recently, he paired business owner Alex Gomez, with Pro Cuts a franchise under Regis Salons. Gomez, who owns a jukebox business in Mexico, decided to open a franchise in the U.S much for the same reasons as everyone else.
The quest for stability, safety and ultimately a permanent resident status were the main factors.
At Pro Cuts, every station has its own television and the salon will feature a variety of sporting events every day. They specialize in men's haircuts that include a shampoo, head and neck massage, and hot towel treatment. Although the salon is geared towards men, they do cut women's and children's hair as well.
Currently, Gomez is taking steps to apply for an E2 Visa.
The U.S Citizenship and Immigration Services states the E-2 nonimmigrant classification allows a national of a treaty country to be admitted to the United States when investing a substantial amount of capital in a U.S. business.
In time, Gomez hopes to be granted permanent resident status upon reaching the EB-5.
Though Gomez already runs a successful business, he didn't have the first clue about starting a business in the U.S.
Enter Cepeda.
“ I was one of the many mexican nationals that comes here and try to open up a business like we do back home. By some sort of luck, we ran into Cesar,” Gomez said.
FranNet helps clients decide which business is better for them based on many factors and an in-depth analysis. They profile the client and suggest a number of businesses that best fits them. Ultimately, the decision is a family decision. A foreign concept to Gomez who says his wife Norma does not get involved with the business he runs in Mexico.
In a report on by Jana Kasperkevic it states that since 1990, foreigners have invested more than $6.8 billion, and the U.S. has given out 29,000 visas through the EB-5 visa program.
Because of our proximity to the border, the influx locally has been that of Mexican nationals, but world-wide, it is Asia who has taken most of the visas.
After a national opens their business they must present a business plan, along with numbers to the consulate and prove that they already set up and working.
The visa is conditional to the maintaining the business, if it were to fail, the visa would not be renewed.
The stress and pressures are greater for a national because it is double the risk. Not only are they risking their investment, they are risking their legal status.
Gomez, a father to two girls, says they've had their ups and downs but they have a specific plan.
FranNet does not get involved with any legal issues but they do connect their clients with the right people such as immigration lawyers.
After the business is up and running, the consultant and business owner usually part ways but Cepeda has remained involved. Gomez is grateful to him for continuing to assist them as they learn the ins and outs.
Gomez and his family still commute to Veracruz every month to stay on top of his business which helps fund the American business as per one of the conditions.
While the road to a permanent legal status will be long and winding, Gomez says he is very optimistic and plans to open three more stores in the future.
Pro Cuts is located at 4111 N 10th street in the Northcross Shopping Center in Mcallen.

Monday, September 9, 2013

  •  And 
MEXICO CITY—President Enrique Peña Nieto, facing protests over his attempts to revamp Mexico's economy, unveiled a long-awaited tax overhaul on Sunday, promising to create a universal social-security system and unemployment insurance in exchange for a series of tax increases that seek to boost the government's nonoil revenue.
The proposal, expected to win congressional approval, seeks to raise rates on top earners to 32% from 30%, introduces a 10% capital-gains tax, and closes some corporate loopholes. It also seeks to slap a special tax on sugary soft drinks, in a country where obesity and diabetes are rising.
The bill avoided a more-controversial measure by leaving food and medicine exempt from sales taxes at a time when the economy has hit a soft patch and other government initiatives are facing street protests.
The proposal is the last major piece among the first-year president's initiatives, which have included moves to boost competition in the country's telecommunications market, improve public education by forcing teachers to get tested by an independent agency, and end the state monopoly on oil and gas by introducing competition with private firms.
On Sunday, the 47-year-old president got a boost from a lower-than-expected turnout of demonstrators protesting his initiatives. Led by former presidential candidate Andrés Manuel López Obrador, protesters marched in an organized effort to stop the president's planned energy-sector overhaul. But the populist politician drew only about 40,000 people, said Mexico City police—far fewer than he predicted and what he has marshaled in the past.
A separate protest on Sunday involving thousands of striking teachers who have been camped out in the capital's central Zocalo square refused to make way for Mr. López Obrador's demonstration, which moved to use a less-visible part of the city, sapping his effort of some of its impact.
Many analysts had expected the teachers—who are fighting the new education law—to make common cause with those opposed to the oil overhaul. But so far, that has failed to happen in a significant way. The relatively weak turnout and splintering of the opposition groups suggest a lower likelihood that such a coalition could derail Mr. Peña Nieto's broader agenda, which also includes the tax overhaul.
"The train has left the station on opposition to the energy reform," said George Grayson, a Mexico expert at the College of William and Mary in Virginia, commenting on the turnout for Mr. López Obrador's protest.
Fears of unrest rose during the past two weeks, during which a radical teachers union has disrupted the capital. Teachers blocked key roads, including access to the airport, to pressure the government to back down. So far, that has failed. Mexico's congress, after changing some provisions to appease the bill's detractors, passed it this month and the president is expected to sign it into law soon.
Many economists see Mr. Peña Nieto's energy bill as critical to the success of his administration and in boosting Mexico's competitiveness. The bill would change the constitution to let the government share profit with private oil firms. The bill, if passed, could attract billions of dollars in investment and reverse Mexico's falling oil output, which funds about a third of the federal budget through monopoly Petróleos Mexicanos, or Pemex.
But the oil change is contested in a country where the 1938 nationalization is seen as the high point in standing up to foreign powers. Polls show many Mexicans are ambivalent about the proposed changes.
Despite a low turnout, Mr. López Obrador's supporters vowed to march on and continue protests to try to build momentum. "It's true the movement has room to grow, that's why we'll have more protests this month and in October," said Martí Batres, a close adviser to the politician.
Mr. Peña Nieto isn't expected to have much popular opposition to the tax plan, which he pitched as a blueprint for social progress. Mexico is the only country in the Organization for Economic Cooperation and Development without unemployment insurance, or universal social security, officials said.
"The (tax) reform is a social reform," Mr. Peña Nieto said in a televised address, flanked by leading members of all three major parties.
The tax plan outlined Sunday is less ambitious than what had been expected, after the economy suffered a surprising downturn in the second quarter, contracting 0.7% from the first quarter, leading the government to lower its growth expectations and prompting the central bank on Friday to cut interest rates.
Analysts said the weak economy and recent protests probably caused policy makers to scuttle plans for a small sales tax on some food and medicines.
The proposal increases the sales tax rate on the border to 16% from 11%, bringing it in line with the rest of the country. It also eliminates the corporate practice of tax consolidation, where companies could count losses at one subsidiary against gains at another to lower their tax bill. It eliminates a minimum corporate tax that has long been opposed by companies who complain that it just raises the cost of calculating their taxes.