Weekly Review I January 31, 2024 by PRODENSA

GENERAL SITUATION IN MEXICO

Weekly Review I January 31, 2024

UPCOMING REFORMS TO THE FEDERAL LABOR LAW GET TO KNOW THE IMMINENT CHANGES:

Labor regulations in Mexico continue to be constantly updated. Three reform initiatives to the Federal Labor Law are advancing steadily. As soon as Congress starts sessions, it is highly probable that we will see the following modifications approved. PATERNITY LEAVES The days of paid paternity leave will increase in Mexico from the current 5 to 20 days for the birth or adoption of an infant. A large majority of deputies have already approved this initiative, it is now up to the chamber of deputies to analyze and vote on it. Of the several reforms to the Federal Labor Law that are to come, the paternity leave reform is expected to be one of the first to be approved and unlike the rest, it will come into force the day after its publication. LEY SILLA (CHAIR LAW) It will be prohibited to force workers to remain standing during the entire working day and, in the case of incompatible duties, to prohibit them from sitting down during the performance of their duties. This new reform establishes sanctions in case of non-compliance, as well as the obligation to have enough seats or chairs available to workers in companies. Prepare yourself because now you will have to ensure, if they do not do their work sitting, that they have periodic breaks during their day and that there are chairs or seats in designated areas for rest during the day. LABOR RIGHTS OF PEOPLE IN SITUATIONS OF VULNERABILITY Employers will be obliged to have a minimum percentage of workers in vulnerable situations. The percentage has not yet been defined, there are already initiatives approved by senators to make it mandatory for companies to have at least 5 percent of older adults and 5 percent of people with disabilities. In the Chamber of Deputies, they may set a single percentage for companies to prove that they have both older adults and people with disabilities, but also people of African descent and indigenous communities. It is highly likely that staffing quotas will soon become law. Is your company ready? AUTHOR: ALVARO GARCIA, VP OF HUMAN RESOURCES PRODENSA

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE January 24 – 30, 2024

TECHNOLOGY • Data breach: Following the illegal leak of personal information of over 300 Mexican journalists on a website, the President attributed the incident to hacking, suggesting it aimed to portray his government as “persecutory” and “dictatorial.” He emphasized the need for an investigation to identify the perpetrators, and a comprehensive report on the matter will be generated. The President also highlighted the importance of submitting a report to the National Institute for Transparency (INAI). Additionally, efforts will be made to ensure that the Ministry of the Interior (SEGOB) provides support to all individuals affected by the data breach. • Internet and Telecommunications: The Federal Electricity Commission (CFE) reported on progress in expanding internet access and cellular coverage, with specific numbers regarding installed sites and antennas.

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE INFRASTRUCTURE • Tren Maya: In the report on the progress of the Tren Maya, it was noted that 37,600 passengers have been transported in 41 days of operation, with a 70% operational capacity. The main destinations include Merida, Teya, Cancun, Campeche, Valladolid, and Palenque. The availability of online ticket sales through the entradastrenmaya.com.mx website is highlighted. • Contract Review and Reconstruction: The President highlighted the need to review and potentially cancel contracts made during the neoliberal era, citing issues with the ISSSTE, the Aeropuerto de Texcoco contract, and others. He expressed the government’s commitment to rebuilding institutions that were compromised during that time. • Gasoline Theft and Price: The President discussed past gasoline theft by criminal networks, stating that such activities no longer occur. He mentioned a decrease in gasoline prices, particularly at the border, where it is 5 pesos less than the national average. • Aguakan Concession: Regarding the Aguakan concession in Quintana Roo, the President criticized the Ballesteros family, alleging their previous involvement in questionable dealings and emphasizing the government’s reluctance to bail out private companies. • Water Infrastructure Projects: The President announced the upcoming inauguration of the Acueducto de los Pueblos Yaquis at the end of February and highlighted commitments to address water issues with the Seri community. He mentioned the planned inauguration of several water supply projects in different states.

SECURITY • Violence: Regarding violence and homicides in the country, the President presented statistics from various presidential terms, emphasizing a 20% decrease in homicides during the current administration. He accused a “pact of silence” among “star journalists” during the Felipe Calderon government. The President defended his strategy, attributing the decrease in homicides to addressing root causes, particularly drug consumption. • Colosio’s Assassination Investigation: The President discussed new information about potential misconduct in the Colosio assassination case, expressing concern over the impartiality of a district judge and vowing not to close the investigation. He emphasized the historic importance of resolving this crime. INTERNATIONAL • US Elections: In relation to the U.S. electoral process, the President questioned the lack of support from both Republican and Democratic governments for citizens in Latin America and the Caribbean, leading to migration. He opposed border closure and wall construction, urging political parties to demand transparency from the National Electoral Institute (INE) regarding alleged resource allocation to civil organizations.

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE HEALTH • Health: The President reiterated the government’s commitment to establishing the best healthcare system globally, ensuring the people’s right to free health. Dr. Alejandro Svarch from COFEPRIS highlighted the institution’s role in developing the “Patria” vaccine and emphasized transparency in the evaluation process. The vaccine was found effective against circulating COVID-19 variants, a crucial step for COFEPRIS’s final authorization. Additionally, the President called for pharmaceutical companies to avoid deceptive practices, urging them to submit medications for proper approval. POLITICAL AGENDA • Economic and Political Situation: The President highlighted the strength of the economy and employment but acknowledged an ideological problem stemming from conservative authoritarian thinking. He reiterated his intention to retire from politics after his term, emphasizing a commitment to not perpetuate power. • Upcoming Events: The President shared plans for future conferences in Tabasco, the inauguration of a refinery, and visits to Chiapas. He expressed gratitude to China for timely deliveries and announced an upcoming meeting with the Chinese ambassador to commemorate the Year of the Dragon. • Constitutional Reforms: The President emphasized his goal of restoring the spirit of the 1917 Constitution, especially in terms of justice, which he believes was eroded during the neoliberal period. He criticized past constitutional reforms, stating they favored private interests over the people’s welfare, and highlighted the negative impact on CFE and PEMEX.

• Autonomous Organizations and Initiatives: Addressing the initiative to abolish autonomous bodies, the President argued that these entities were created to protect private interests rather than serving the public. He accused them of damaging CFE and PEMEX and simulating competition and transparency. The President acknowledged COPARMEX’s right to express its views on the initiatives but suggested it represents a sector within the PAN rather than defending entrepreneurs. • Elections and Opposition: Encouraging voters to consider candidates, parties, and national projects, the President criticized the opposition for ignoring the people’s needs and serving particular interests. He described a productive meeting with U.S. lawmakers, highlighting the importance of respectful dialogue despite differences. He emphasized the rejection of mistreatment towards Mexicans and migrants.

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE • Secretariat of the Navy’s Achievements: The Secretary of the Navy presented achievements in various projects, including port development, the Islas Marias tourist project, and the national strategy for handling sargassum. The President praised the Navy’s role in rescuing the government and driving national development. • Constitutional Reforms: President Lopez Obrador announced upcoming constitutional reforms to be presented to Congress on February 5. These include a law on the rights of Indigenous Peoples and Afro-Mexican communities, elevating most Welfare Programs to constitutional status, lowering the age for senior pension beneficiaries, and reforms to increase salaries and pensions. • Welfare Programs: Details were provided about various Welfare Programs. The Secretary of Welfare mentioned that between March and June 2024, over 12 million seniors would receive payments totaling 465 billion pesos. Persons with disabilities and working mothers were also included in these programs. • Minimum Wage Increase: The President stressed the importance of increasing the minimum wage above inflation rates. He shared a graph showing the improved purchasing power of essential goods with the minimum wage and asserted that raising the minimum wage does not necessarily lead to inflation.

NEWS BY STATE

BAJA CALIFORNIA Considering the estimate of the Quarterly Indicator of State Economic Activity (ITAEE) published by INEGI, and using seasonally adjusted data, it is observed that Baja California has accumulated 12 consecutive quarters of annual growth, thus sharing second place with Oaxaca in this positive dynamic, informed the Secretary of Economy and Innovation, Kurt Honold Morales. This indicator represents the preliminary trend of the Gross Domestic Product per Federal Entity (PIBE). In this sense, it can be observed that Baja California’s economic recovery since the pre-pandemic period has been remarkable. With a growth of 8.9%, it ranks as the eighth state with the best economic performance. At the national level, the increase was 5.5%. SOURCE: UNIRADIO

SONORA Last week, representatives of the European Union and its main development banks held a working tour in Sonora to learn about the conditions of the solar parks in the state. The hosts were Gerardo Perez, vice president and country manager of EDF Renewables and current president of the Mexican Wind Energy Association (AMDEE), as well as Alejandro Ramirez, director of Sustainable Projects and Hector Fernando Moran, director of International Affairs, both from the Council for Sustainable Development of the government of Sonora. Recall that the Mexican government committed to a 22 to 35 percent increase in the goal of reducing polluting emissions by 2030, which would oblige it to increase the generation of renewable energies over the next eight years, with the goal of reaching 40 gigawatts (GW) of clean energy. This would imply incorporating more than 25 GW of new capacity to the current energy matrix. SOURCE: EL FINANCIERO

NEWS BY STATE

TAMAULIPAS Tamaulipas is the country’s logistics platform with 18 international bridges, and the largest border crossing by railroad, with 58 percent in cargo movement through two bridges, in addition to a third that is about to be built, said here the undersecretary of economy in the state, Sergio Guajardo during the First Expo Congress of Foreign Trade and Customs held in this city. He emphasized that Nuevo Laredo is one of the most important cities in Tamaulipas in terms of logistics and international trade, having several strategic projects such as the construction of the National Customs Agency of Mexico (Anam), “a commitment of the federal government that is being crystallized with an investment of more than 4,500 million pesos,” said the official during the inauguration of this event at the Cultural Center of this border. SOURCE: EN LINEA DIRECTA

NUEVO LEON With the intention of solidifying the position of the state of Nuevo Leon as a global hub for smart and electric mobility, as well as detonating economic development in this sector, the state will host the first edition of the International Mobility of the Future Summit 2024 (IMOF), which aims to be the most important event of its kind globally and will bring together international companies and specialists in smart mobility. At the presentation of the fair, which will be held on June 26 and 27 at Cintermex, Monterrey, and is expected to bring together more than 2,500 attendees in 5,000 square meters of exhibition space, Governor Samuel Alejandro Garcia Sepulveda highlighted the importance of this type of event in his mobility strategy. SOURCE: CLUSTER INDUSTRIAL

NEWS BY STATE

COAHUILA The first stone of the Binational Industrial Complex Puerto Nava, in the former “El Fenix” ranch, in the municipality of Nava, was laid by the Governor of Coahuila, Manolo Jimenez Salinas and state authorities. In the first phase of the complex, more than 14 million pesos will be invested, which will house industrial warehouses and transfer spaces for cargo trucks and will be a connection between the states of Coahuila and Texas, United States. SOURCE: MEXICO INDUSTRY

CHIHUAHUA In his last report of activities at the head of the Chihuahua Industrial Association, Roman Rivas said that “throughout these years, we have managed to evolve a solid foundation that supports our continued growth and success as an organization, regardless of who we are; today we can say that the strength of INDEX Chihuahua will allow for the continuity and orderly survival of our association. Governance, at the heart of our structure, is a key priority for all the members of the Board of Directors”. The industry leader emphasized that during these three years, strategic alliances were strengthened with institutions and organizations that he said were considered key to the industry. SOURCE: EL PUNTERO

NEWS BY STATE

SAN LUIS POTOSI During the third quarter of 2023, San Luis Potosi’s economic activity was among the five best performers in the country, both on a quarterly and annual basis. According to the Quarterly Indicator of State Economic Activity (ITAEE), San Luis Potosi grew at 2.6% between July and September 2023 with respect to the immediately preceding quarter. SOURCE: LIDER EMPRESARIAL

QUERETARO In the first weeks of the year, three private investments have been confirmed in the state, in manufacturing, information technology and services, explained the Secretary of Sustainable Development (Sedesu), Marco Antonio Del Prete Tercero. The state, he recalled, began 2024 with a portfolio of 57 investment projects which, if completed, would represent 25,000 new jobs. SOURCE: EL ECONOMISTA

NEWS BY STATE

AGUASCALIENTES The National Institute of Statistics and Geography (INEGI) reported on Monday a remarkable economic growth in Aguascalientes during the third quarter of 2023. This increase, reflected in a 3.0% rise in economic activity compared to the previous quarter, places Aguascalientes among the entities with the highest economic development in Mexico. The Quarterly Indicator of State Economic Activity (ITAEE) indicates a seasonally adjusted increase of 7.1% in Aguascalientes on an annual basis. This indicator, adjusted for seasonal and calendar variations, evidences the robustness of the local economy and the effectiveness of regional development policies. SOURCE: HERALDO

GUANAJUATO The transformation and electromobility plan for Guanajuato, which has strategic lines and a portfolio of projects to consolidate the energy industry, was one of the projects analyzed by authorities from the State Secretariat for Sustainable Economic Development and the Automotive Cluster of Guanajuato (LAUGTO). They discussed the importance of continuing to support companies in their growth processes for expansions and, in general, the adaptation of the sector to the external and internal changes they are currently experiencing. SOURCE: MOBILITY PORTAL

NEWS BY STATE

CDMX A new drought is threatening the drinking water supply in Mexico. At least five states, including Mexico City, State of Mexico, Hidalgo, Morelos, and Puebla, are experiencing severe drought, according to the National Water Commission (Conagua). The lack of rainfall is depleting the country’s reservoirs. The National Meteorological Service (SMN) recorded a 43.7% decrease in precipitation during the first month of 2024 compared to the previous year. The Cutzamala System, which supplies 25% of the water in the Valley of Mexico, is at 40.1% capacity in its three dams: El Bosque, Valle de Bravo, and Villa Victoria. In the midst of this scarcity, Conagua decided to reduce the flow of the Cutzamala to 800 liters per second. The Government of Mexico City announced water supply rotations in 10 districts for the first two months of the year and launched the ‘Water in Your Neighborhood’ platform for residents to check when and at what time the supply is available. SOURCE: EL PAIS

STATE OF MEXICO Between September 1, 2023, and January 22 of this year, 204,575 new registrations were recorded in the Electoral Register by young people who turned or are about to turn legal voting age. These individuals would be eligible to vote for the first time in the Concurrent Electoral Process of 2024. This information was provided by Joaquin Rubio Sanchez, executive spokesperson of the National Electoral Institute (INE) in the State of Mexico. He specified that during the same period, 291,780 procedures for changing residence were registered, with the majority occurring within the state. SOURCE: EL SOL DE TOLUCA

INVESTMENT NEWS NORTHEAST PUERTO VERDE INDUSTRIAL PARK An investment of 604 million dollars has been announced for the construction of Puerto Verde Industrial Park in Nava, Coahuila, generating 500 jobs in the region. CENTRAL MEXICO CONTINENTAL German company Continental has announced an investment of 90 million dollars to install a new facility in Aguascalientes. This project is expected to create 200 jobs in the region. GRUPO MESS Mexican company Grupo Mess will invest 41 million dollars to develop a new Tech Industrial Park in Corregidora, Queretaro, generating 400 jobs in the region. VENTAGIUM DATA CONSULTING Mexican company Vetagium Data Consulting has announced an undisclosed investment in Queretaro. The project is expected to create 120 job opportunities in the region. THYSSENKRUPP MATERIAL Thyssenkrupp, a German automotive manufacturing company, will invest 37 million dollars to establish a new facility in Villa de Reyes, San Luis Potosi. This project is expected to create 65 jobs in the region. SOURCE: CLUSTER INDUSTRIAL

CONGRATULATIONS TO OUR CEO, EMILIO CADENA FOR HIS NEW ROLE AS CHAIRMAN OF THE BOARD OF DIRECTORS OF THE US-MEXICO FOUNDATION.