WEEKLY REPORT 24.5.24

May 18 –24, 2024

HOT TOPICS:

USMCA Trilateral Meeting

The USMCA Free Trade Commission met in Phoenix, Arizona, on May 23 Mexican Secretary of Economy Raquel Buenrostro, U S Trade Representative Katherine Tai, and Canada's Minister of Export Promotion, International Trade and Economic Development Mary Ng, highlighted the positive outcomes of the USMCA and the importance of continued collaboration for the well-being of North America They stressed that the Treaty includes progressive mechanisms for ongoing trade evolution among the three countries The officials also engaged in dialogue with union leaders to better understand the benefits of the USMCA for workers and identify additional opportunities During the meeting, the Ministers also agreed to jointly expand their collaboration on issues related to non-market policies and practices of other countries, which undermine the Agreement and harm U S , Canadian, and Mexican workers, including in the automotive and other sectors

Furthermore, after the meeting, Katherine Tai emphasized to Secretary Buenrrostro the need to advance in the USMCA consultations on energy and fisheries, and also revealed her concern about the high cost of the radio spectrum in the country

Source: Secretaría de Economía, Executive Office of the U S President, and Milenio

ELECTRICTY IN MEXICO

Mexico's manufacturing industries are concerned about recent power outages affecting their operations, which pose a risk to economic activity and the nearshoring trend The National Council of the Maquiladora and Export Manufacturing Industry (Index) has urged the federal government to prioritize the supply and distribution of electricity, warning that demand will soon exceed supply without intervention Index emphasized that addressing energy supply issues is crucial for economic growth and leveraging the benefits of nearshoring The private sector, surveyed by the Bank of Mexico, also sees energy competition as a potential growth limiter It is important to note that during the first five years of Andrés Manuel López Obrador's (AMLO) government, Foreign Direct Investment (FDI) in the energy sector dropped by 30% compared to the corresponding period of Enrique Peña Nieto's administration BBVA Research Mexico indicates that this decline has negatively impacted the National Electric System (SEN), limiting Mexico's ability to benefit from nearshoring

Source: Forbes and Reforma

FUEL SHORTAGES IN BAJA CALIFORNIA

Residents of Playas de Rosarito, Tecate, and Tijuana in Baja California face an imminent gasoline shortage due to a blockade by members of the Ejido Maclovio Rojas at the Pemex plant in Rosarito, preventing fuel tankers from entering or leaving The protesters are using this action to pressure the president during his upcoming visit to Baja California to address land tenure regularization issues in their communities

Source: Excelsior

BLINKEN TO AMLO: DO NOT EXPROPRIATE

U S Secretary of State Antony Blinken warned the Mexican government against a potential expropriation of Vulcan Materials' land in Playa del Carmen, stating it would deter investments During a Senate Foreign Relations Committee hearing, Senator Tim Kaine highlighted the issue, noting AMLO's attempts to seize the property through police and military actions Kaine asked Blinken to make it clear to the Mexican government that seizing U S companies' private property would harm the U.S.-Mexico relationship.

President Andrés Manuel López Obrador denied that the government expropriated the mine However, he confirmed that the company's facilities remain closed This statement follows nearly two weeks after U S senators warned Mexico against potential confiscation of the property Mexican authorities halted limestone extraction in 2022 due to alleged environmental damage, a measure Vulcan called "unexpected" and "arbitrary " Tensions escalated in 2023 when Mexican security forces took over Vulcan's port terminal.

Source: El Universal and El Economista

NUEVO LEÓN’S GOVERNOR ACCUSED OF CORRUPTION

The Governor of Nuevo León, Samuel García, has been accused of purchasing a 17 7-hectare property worth over 700 million pesos in San Pedro Garza García, 18 months after taking office The land is intended for a 2,800 square meter residence, but García did not report this in his 2023 asset declaration He denies buying the land, stating it belongs to his family's company due to a legal payment García challenged anyone to prove otherwise and offered to resign if proven guilty

Source: Proceso

HOT TOPICS:

March in favor of Democracy

On May 19, there was a march called the “Pink Tide” in Mexico City in favor of democracy and PRI-PAN-PRD presidential candidate Xóchitl Gálvez the event featured Xóchitl and Santiago Taboada, the coalition candidate for head of government of Mexico City Gálvez and Taboada mingled with the crowd of pink shirts and PAN flags in the main square, amid chants of "Out with Morena," directed at the ruling party of President Andrés Manuel López Obrador and leading presidential candidate Claudia Sheinbaum Due to the fact that the civil organizations that organized this "March for Democracy", which was first announced as non-partisan, use the color pink to identify themselves, the National Electoral Institute (INE) made a call to not use the same color of the institute's logo. According to government sources, 95,000 people attended the event Additionally, more than 250 intellectuals and academics signed a statement showing their support for Xóchitl

Source: El Financiero and Animal Político

LAST PRESIDENTIAL DEBATE: A RECAP

The last debate between the candidates to the presidency took place on the 19th of May

During the debate they discussed 4 sets of issues: 1) Social Policy, 2) Insecurity and Organized Crime, 3) Migration and Foreign Policy, and 4) Democracy, Pluralism, and Division of Powers

The frontrunner, Claudia Sheinbaum, kept dodging Xóchitl Gálvez’s attacks without really engaging with her Jorge Álvarez Máynez emphasized on his proposals, while also attacking his counterparts Regarding social policy, Claudia proposed a minimum wage to cover 2 5 basic baskets and establishing in the Constitution that the wage remains above inflation Xóchitl said she would reinstate the Popular Health Insurance, install 2 million solar roofs, and build 5 million homes, while Álvarez Máynez mentioned he would establish a minimum wage of MXN 10,000, promote the legislative initiative to reduce the workweek, and establish a fiscal reform with a progressive approach In security, Sheinbaum emphasized she would rely in the National Guard and focus in attending the causes of violence, while Xóchitl mentioned she would ensure the National Guard operates under civil command, while removing the armed forces from tasks related to organized crime Álvarez Máynez proposed a National Pacification Plan, which would professionalize state and municipal police, and a National Security Strategy focused on civilian leadership In terms of migration and foreign policy, Claudia said she would participate in more international conventions in climate change, strengthen relations with the CELAC, and promote economic development in the Southeast to stop migration Xóchitl said she would put order in the border, promote partnerships with the private sector to attract nearshoring, and regularization programs for migrants in the U S , while Máynez proposed to involve the Mexican Foreign Service in activities to attract nearshoring Lastly, in democracy, all candidates proposed to reduce the number of deputies in the Congress Before the electoral ban starts on May 30, the three candidates will realize campaign closure events Claudia Sheinbaum will hold an event in the center of Mexico City, while Xóchitl will be in Monterrey Jorge Álvarez Máynez will hold several regional events but has not confirmed where he will do his campaign closure

Source: Prodensa Intelligence

ACCIDENT IN THE CAMPAIGN TRAIL

The stage where Jorge Álvarez Máynez, Movimiento Ciudadano’s (MC) presidential candidate, was present in San Pedro Garza García, Nuevo León, was destroyed by the wind Máynez was at a campaign event with Lorenia Canavati, MC's mayoral candidate for San Pedro, when part of the stage structure collapsed during a storm Máynez reported that he went to a hospital for treatment following the incident and that he is well Until now, 9 people have passed away and more than 100 people have been injured

Source: Expansión

ELECTIONS IN PUEBLA

Puebla, the state with the 11 highest GDP in 2023, is holding elections for governor on June 2nd Alejandro Armenta Mier, the candidate for Morena, is leading the polls with 59 4% of vote intention Eduardo Rivera Pérez, from the PRI, PAN, PRD, and PSI, had 36 1%, and Fernando Morales Martínez, the candidate from Movimiento Ciudadano, finds himself last with 4 5% As for their proposals, Armenta proposed a wealth redistribution plan, which includes reducing the gap between social classes, providing labor protection and investing in infrastructure Eduardo Rivera has 21 proposals, and among the most important are to provide MXN 6 million to young entrepreneurs, build industrial parks, create a Specialized Intelligence Agency for National and International Markets in favor of local producers and exempt from payroll tax micro-enterprises with 5 or less employees Finally, Fernando Morales proposed to provide MXN 5 thousand to farm workers, specifically in periods of scarcity, as well as to guarantee a salary for single mothers, women in situations of violence, women with disabilities and caregivers

Source: El Economista and Poblanerías

MEXICO CITY ELECTORAL RACE: MORE PEOPLE JOIN TABOADA

In Mexico City, local deputies of Morena, candidates of Movimiento Ciudadano and leaders of Partido del Trabajo have publicly decided to join the campaign of Santiago Taboada, candidate for the governorship of Mexico City for the coalition "Va por la CDMX“ composed by the PAN, PRI and PRD This is an important development, as Taboada finds himself closer to the leading candidate from Morena, Clara Brugada As of now, Brugada is 11 percentage points ahead of Taboada, but some polls point to a much closer difference This happened after the Movimiento Ciudadano candidate for the mayorship of Álvaro Obregón, Esther Mejía Bolaños, decided to decline in favor of Morena during her participation in the debate for the municipality

Source: El Universal, Expansión, and Milenio

Legislative and Regulatory issues: HOT TOPICS:

Initiative Before the Congress of the Union to Amend Article 74 of the Federal Labor Law

Presented by: Deputy Esperanza Villalobos Pérez (CDMX - MORENA)

Purpose: Establish May 10 (Mother's Day) and the third Sunday of June (Father's Day) as mandatory rest days

Status: 2024-05-21 - Initiative referred to the Labor Affairs, Work, and Social Welfare Commission for review

Initiative to Enact the Climate Emergency Law for Addressing Heat Waves in the State

Presented by: Deputy Edmundo José Marón Manzur (Tamps - PAN)

Purpose:

• Develop, coordinate, and implement the Climate Emergency Response Program against Heat Waves

• Establish coordination between state and municipal public administration entities for policies to prevent and reduce extreme heat risks

• Define Climate Emergency Declaration with recommendations to mitigate heat risks

• Define Heat Wave as a period of at least five consecutive days with temperatures meeting or exceeding specific thresholds per municipality

• Form agreements with public and private institutions for donations to support the Response Program

• Create the Climate Emergencies Committee to issue emergency declarations and apply coordinated health, civil protection, water supply, and environmental protection protocols

Status: 2024-05-22 - Initiative referred to the Energy and Climate Change Commission for review

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