In Mexico, Reforms Come at Labor's Expense

Stratfor: Two sweeping reform packages passed by Mexico's current administration — energy and education reform — signify major blows for the country's most powerful unions. Although the two packages differ greatly in scope and impact, together they herald substantial changes in the Mexican labor sector, effectively reducing the influence of two of Mexico's most powerful unions.

So far, the efforts to block implementation that have generated the most unrest and media attention in the country belong to the National Coordinator of Education Workers, a dissident faction within the National Education Workers Union. The faction has put up a public but largely ineffective fight against the reforms. But when the dissident group called to block June 7 elections, it failed to generate the necessary participants to carry out its threat. Now, the National Education Workers Union, one of the largest labor organizations in Latin America, will have to answer to federal oversight partly in the form of teacher evaluations. Read more. 

In Mexico, History Is Repeating Itself

Business Week: When Mexican President Enrique Peña Nieto visited President Obama on Jan. 6, hundreds of Mexican Americans demonstrated outside the White House. Hundreds more picketed at Mexican consulates across the U.S. It was an unusual display of solidarity with Mexicans south of the border, who have taken to the streets almost daily since September—when 43 college students were massacred by narco-gangsters—to denounce corruption and violence in their country.

Peña Nieto’s approval rating, which hovered above 60 percent two years ago, has plummeted into the 30s as marchers call for his resignation. That’s a dramatic fall considering how ardently U.S. and international boosters lionized him when he took office in December 2012. Then, it seemed like every financial gazette on the planet was declaring Peña Nieto’s Mexico “the Aztec Tiger.” New York Times columnist Thomas Friedman said it was poised to become a “more dominant economic power in the 21st century” than China. Read more. 

Mexico unveils first phase of historic oil reform

AFP: Mexico unveiled rules Thursday for the first phase of its historic opening of the oil sector to foreign investors, pledging transparent auctions in July for 14 shallow-water fields.

The highly-anticipated guidelines were made public four months after Congress gave final approval to legislation allowing foreign companies to drill for oil for the first time since 1938. Read more. 

Amid Mexico's Energy Reform, Fuel Theft Poses Risks

Stratfor: Two years into Mexican President Enrique Pena Nieto's six-year term, the president has already managed to pass contentious energy reform legislation that will allow foreign energy firms to operate independently inside the country. The government will award the first of these contracts in the first half of 2015, marking the beginning of an ambitious effort to revitalize Mexico's lagging energy sector.

For foreign companies, however, 2015 will also be an introduction to Mexico's complex security environment and its shifting constellation of transnational criminal groups, commonly referred to as cartels. Mexico's state-owned energy company, Petroleos Mexicanos, or Pemex, and its various contractors are already keenly aware of the risks these groups pose. This risk has intensified in recent years as organized crime groups have sought to diversify their operations beyond trafficking and have expanded fuel theft.

Three new ports to be built in the Gulf of Mexico

Southern Pulse: The Secretary of Communications and Transport (SCT) announced the construction of three new strategic ports in the Gulf of Mexico to accommodate the impact energy reforms will have on the country. In addition, the SCT revealed plans on 23 November 2014 to modernize and expand existing ports on the Gulf and the Pacific at a cost of several billion dollars. The Coordinación General de Puertos y Marina Mercante (CGPMyM) under Guillermo Ruiz de Teresa at SCT, expects to invest US$95 million to upgrade the Matamoros port in Tamaulipas, including construction of a dock that can handle new larger ships. Mexico hopes to become a logistical hub for goods in transit to move more efficiently. Read more. 

Mexico Supreme Court rejects energy referendum

AP: Mexico's Supreme Court on Thursday rejected a bid to hold a national referendum on a major energy overhaul that opened the sector to widespread private investment for the first time in 76 years.

In identical 9-1 rulings, the court found that referendum petitions filed by two leftist parties were unconstitutional because matters involving state revenue cannot be subjected to popular vote. Read more. 

Mexican President Peña Nieto’s Ratings Slip with Economic Reform

Pew Research Center: Mexican President Enrique Peña Nieto has been praised internationally for his ambitious reforms of everything from the energy sector to education to telecommunications, but a new Pew Research Center survey in Mexico finds that domestically his positive image is faltering and a key component of his political agenda – economic reform – is decidedly unpopular.

Mexicans today are evenly divided in their opinion of Peña Nieto, as negative ratings of the president’s influence have increased by nine percentage points in the past year to 47%. Similarly, negative views of the national government and Congress, both led by Peña Nieto’s Institutional Revolutionary Party (PRI), have gone up by roughly the same share over the past year, though 57% still say the national government has a positive influence.  Read more. 

For Mexico, good economic times are always just out of reach

McClatchyDC

BY Tim Johnson

The central bank chief calls it a “temporary pothole.”

Whatever the term, Mexico’s economy has hit some turbulence - despite the most ambitious overhaul to its business structure in decades.

Tax hikes have dampened consumer confidence, retail sales remain stagnant, and low U.S. demand for Mexican-made cars and televisions slowed the economy earlier this year to its lowest point in four years. Mexico grew at a sluggish 1.8 percent rate in the first quarter of 2014, forcing the government to ratchet down its forecast to 2.7 percent growth for the year.

Bankers and economists still voice hope that Mexico is on the threshold of faster growth because of the opening of the energy, banking and telecommunications sectors. “We know that the reforms don’t have an immediate effect and that it is necessary to have patience and persevere,” a Spanish banker, Francisco Gonzalez Rodriguez, chief executive of Banco Bilbao Vizcaya Argentaria, or BBVA, told a forum this week. Read more

NYT Article Highlights US NSA Corporate Spying, Mentions Spying on Mexican Oil Company

New York Times, May 21,  "Fine Line Seen in U.S. Spying on Companies"
The New York Times ran an article today noting that the Chinese have accused the NSA of applying a double standard regarding spying on companies to obtain trade advantages. Although the article leaves a lot out and uses language like "digging into corporations" instead of infiltrating their communications, it is exceptionally bold in implying that a double standard exists:

In each of these cases, American officials insist, when speaking off the record, that the United States was never acting on behalf of specific American companies. But the government does not deny it routinely spies to advance American economic advantage, which is part of its broad definition of how it protects American national security. In short, the officials say, while the N.S.A. cannot spy on Airbus and give the results to Boeing, it is free to spy on European or Asian trade negotiators and use the results to help American trade officials — and, by extension, the American industries and workers they are trying to bolster.

Among the things the article almost says but steps back from the brink of actually documenting with existing information from the NSA leaks, is that:
1) NSA stolen data is used to help US companies compete in the global market. This violation of basic trade rules caused Brazil to snub Boeing and go with Saab for a long-coveted $4.5 billion contract for jet fighters shortly after the NSA scandal broke.

In the context of all we now know about NSA operations thanks to whistleblower Edward Snowden, the defense offered by national intelligence director James Clapper rings hollow indeed:

“What we do not do, as we have said many times,” James R. Clapper Jr., the director of national intelligence, said after some of the initial N.S.A. revelations last year, “is use our foreign intelligence capabilities to steal the trade secrets of foreign companies on behalf of — or give intelligence we collect to — U.S. companies to enhance their international competitiveness or increase their bottom line.”

2) NSA spying operations make a mockery of the US's draconian global intellectual property crusade.

3) The NSA defends its disregard for international or local laws abroad. The New York Times puts it  euphemistically: "The N.S.A. says it observes American law around the globe, but admits that local laws are no obstacle to its operations." That the law is no obstacle is a polite way of saying that it is wantonly disregarded.

All this is critical to Mexico as it reviews the implementing legislation on energy reforms. We have always known that PEMEX is among NSA targets--and not just for national security reasons. The agency is ascertaining reserves, the shape of reforms, conditions for investment. Glenn Greenwald says in an interview with CNN Español in September of last year:

There are documents that indicate that one of the issues they most spy on Mexico for is energy and oil. They (the NSA) are interested in these issues, not just national security or drugs like most people think. They are interested in economic and energy resource issues." (my translation)

 The Mexican government is carefully controlling information that could affect the future of the energy sector privatization legislation. Information that the Chinese will present regarding NSA spying to benefit U.S. corporations will not help to convince those who are already reluctant to relinquish Mexican natural resource management (and profits) to U.S. oil companies.

Mexico's officials wage PR battle to sell energy reform plan

L.A. Times 
By Tracy Wilkinson and Richard Fausset
August 13, 2013

Mexico City - The little boy with the twinkling eyes smiles out from full-page newspaper ads. His hands are held out for us to see, covered in black oil, an offshore platform floating in the sea behind him.

"Oil is and always will be ours," the ad proclaims in large capital letters.

The Mexican government may not be selling its gigantic state oil company, but officials are going full steam in selling what they plan to do with it.

On Tuesday, the day after President Enrique Peña Nieto unveiled a broad package of energy-sector reforms, the government flooded the airwaves, newspapers and other media with slick messages defending the proposal. Government officials made the rounds of television and radio talk shows.  Read more.