Archive for category Economy

Haitian migration impacting Tijuana economy and culture

TijuanaIn March 2017, approximately two months ago, we accompanied representatives of a funding organization to the city of Tijuana to learn about the impact of Haitian immigration in the area.  Tijuana, an industrial city located on the U.S.-Mexico border near San Diego, California, is well known as a last stop for migrants from Mexico and other Latin American countries before trying to enter the United States, legally or otherwise.  Our colleagues at the foundation had provided funds for local organizations assisting the Haitian migrant community and they wanted to see how the money was being spent.  What we found was truly remarkable. Read the rest of this entry »

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Victory for Trump casts shadow over Mexico

Brrrrr

Brrrrr

The victory of Donald Trump in the U.S. presidential election of November 8, 2016 casts a dark, cold shadow over the relationship between the United States and Mexico.  On one hand, Mr. Trump has expressed his opposition to the North American Free Trade Agreement (NAFTA), which we support.  Since entering into effect in 1994, this agreement has been implemented painstakingly through tremendous effort by all sides, and has built a trade relationship in which Mexico represented a market of US$267 billion for U.S. goods and services in 2015.  Putting up barriers to the Mexican and Canadian markets for U.S. exporters for the presumed purpose of saving jobs in the United States risks destroying many of the jobs this trade has created.

But for Mexicans, the election of Mr. Trump cannot help but be seen as a deeply personal affront.  Throughout the campaign, the U.S. President-elect repeatedly expressed disdain and derision toward Mexican immigrants in the United States, which many people in this country take as a personal insult to all Mexicans.  Mr. Trump is a crass boor.  But the fact that a majority of American voters validated his harshly worded opinions about Mexicans (not to mention Muslims, women and other people) sends a clear and chilling message to Mexico and to the world that the American people share these opinions and values.  This stunning revelation will now hang like a toxic cloud over every business meeting, trade mission, trade show and even long-running relationships between business people in the two countries.  We can only hope that the intelligence and personal grace of individual business people will help to buffer the damage the election of Donald Trump will do to the U.S.-Mexico relationship.  But make no mistake, the resentment is deep, and this cannot be good for our economic and personal relations going forward.

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Brexit and Mexico

BrexitWe were positively gobsmacked when the news hit that the British electorate had voted to leave the European Union in the UK referendum held June 23, 2016.  We should add that when new Prime Minister Theresa May subsequently named Boris Johnson Foreign Secretary, we were whatever comes after gobsmacked in the hierarchy of silly English expressions, but we’ll save that topic for another post.  Not being stuffy pensioners in the Midlands, our prime concern over Brexit is the historical context for peace and prosperity in a unified Europe, and by extension the world.  After all, the history of Europe is largely the history of thousands of years of uninterrupted warfare until the EU’s monumental attempt to pacify the region through cooperation following World War II.  A handful of billion Euros here and there seems like a small price to pay for the opportunity for peace in Europe, but hey, what do we know here in the tropics.  In any case, as British millennials figuratively jumped off the roof in the aftermath of the vote, we naturally began wondering how Brexit would affect us in Mexico, despite being neither British nor European.

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Recent and upcoming investment in Mexico

Information collected from media reports over the past month:

  • Food processing: Mexican dairy products giant Grupo Lala plans investment of approximately US$7 million to expand its pasteurized products plant in the western state of Jalisco, the company reported. Lala also plans to establish three new distribution centers in the region. (El Financiero, May 25, 2016)
  • Telecommunications: Spanish telecom operator Telefónica is planning five projects in Mexico this year requiring investment of approximately US$185 million, the company reported. Resources will support expansion of its 4G LTE network to new areas of the country and reinforcement of its fiber optic network, among other activities. (El Financiero, May 20, 2016)
  • Solar energy: Spanish energy investors Fisterra Energy initiated construction of a major solar power plant in the northern state of Chihuahua, the state government reported. The US$350 million generation site reportedly will include 1.5 million photovoltaic panels. (El Financiero, May 18, 2016)
  • Medical devices: Italian medical device manufacturer Haemotronic announced plans to establish a production site in the northern state of Tamaulipas. The US$10 million facility is planned to take advantage of its border location to serve the U.S. market. (Mexican Business Web, May 18, 2016)
  • Pharmaceuticals: German drug maker Merck is planning to expand production capacity at its plant in the central State of Mexico at an estimated cost of US$9.8 million, the company reported. The site produces a substantial portion of Merck’s OTC products for the Latin American market. (Reforma, May 6, 2016)
  • Tourism: Mexican adventure park operator Experiencias Xcaret plans investment of approximately US$25 million to open a new ecological entertainment park in the southeastern state of Quintana Roo. The company operates popular adventure parks in the Riviera May region such as Xcaret, Xel Ha and Xplor. (Reforma, May 4, 2016)
  • Automotive: German electronics and engineering multinational Bosch is projecting investment of approximately US$100 million in Mexico operations this year. A substantial portion of the funds will support a new plant to produce automotive steering columns under construction in the central state of Querétaro, the company reported. (El Financiero, May 5, 2016)
  • Services: U.S. assisted living service providers Belmont Village plan to open their first facility in Mexico, the company reported. The US$42 million housing and care complex for seniors is planned to be the first of a series of similar sites Belmont will open in Mexico’s largest cities. (El Financiero, May 3, 2016)
  • Electronics: Mexican automotive electronics manufacturer Seeräuber Automotive inaugurated a new production plant in the western state of Jalisco, the company reported. The US$1 million site will provide manufacturing, assembly and supply management services to regional Tier 1 automotive suppliers. (Mundo Automotriz, May 3, 2016)

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Exchange rate rattles nerves in Mexico

TradeWe’re wearing mittens inside the office here at the Mexico Business Blog Global Campus, but chilly temperatures in the black heart of the Mexico City winter are the least of our worries as financial markets plummet and the dollar skyrockets. The peso started off 2015 in the neighborhood of 14.6 to the dollar and continued to inch up throughout the year. Pundits routinely speculated that the dollar would come back down by year-end, but by the second quarter central bank Banco de México (Banxico) was selling off dollars to ease pressure on the peso. When the dollar broke the 17-peso barrier in the third quarter foreheads began to perspire, and now that we’ve surged past 18 pesos to the dollar, the question isn’t when to panic, but how to go about it. Read the rest of this entry »

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