Daily Headlines: July 26, 2016

* Brazil: Amid the plethora of negative news on the upcoming Rio Olympics there’s a small glimmer of hope –Brazil’s economy could emerge from a deep recession by the end of this year.

* Mexico: In light of free trade becoming a hot topic in the U.S. presidential race, Mexican Foreign Minister Claudia Ruiz Massieu suggested “modernizing and updating” the North American Free Trade Agreement.

* Latin America: LATAM Airlines, Latin America’s largest air carrier, was fined some $22 million over “violating accounting laws connected to a scheme to bribe Argentine union officials.”

* Argentina: Ex-Argentine President Cristina Fernandez de Kirchner claimed to be unafraid of going to jail over allegations of corruption and compared her situation to that of suspended Brazilian leader Dilma Rousseff.

* Ecuador: As part of the latest legal tug-of-war between Ecuador and Chevron, the South American country’s central bank paid $112 million as part of an arbitration ruling favoring the U.S. oil firm.

* Chile: The Chilean Supreme Court last week unanimously lengthened the prison sentences against two former military officers convicted in the 1973 deaths of documentary filmmaker Charles Horman and university student Frank Teruggi.

YouTube Source – CCTV News (Brazil’s economy entered its fifth straight quarter at a loss at the beginning of 2016, but could emerge from its crippling recession by the end of this year).

Online Sources – Washington Post, Los Angeles Times, MarketWatch, Reuters, USA TODAY, Al Jazeera English
 

Daily Headlines: July 11, 2016

* Haiti: The State Department pledged support by the United States to Haiti despite suspending financial help to the Caribbean country’s troublesome election process.

* Latin America: The quality of higher education in Latin America has been unable to meet the growing demand for a university education, according to new research.

* El Salvador: Ten people including five police officers were arrested over allegedly participating in a death squad linked to the deaths of forty suspected gang members in El Salvador.

* Mexico: Mexican President Enrique Peña Nieto called the North American Free Trade Agreement a “win-win mechanism” for job creation and economic growth for his country, the United States and Canada.

YouTube Source – AJ+ (From January 20, 2016: “Protesters calling for fresh elections clashed with riot police in Haiti as the presidential run-off vote looms.”)
 
Online Sources – The Washington Post, Fox News Latino, The Hill, Times Higher Education

Daily Headlines: February 22, 2013

* Brazil: Former environment minister and presidential candidate Marina Silva launched a new political group “seeking to break the monopoly of traditional political parties.”

* Cuba: Will the U.S. State Department soon remove Cuba from its list of state sponsors of terrorism?
 
* Haiti: The U.N. rejected compensating victims of a cholera outbreak that killed thousands in Haiti.

* Mexico: U.S.-based Cargill reached a settlement regarding a free trade dispute with Mexico.

Video Source – YouTube via user TEDxTalks

Online Sources- Mercopress, Miami Herald, BBC News, NBC News

LatAm Alphabet Soup

There's UNASUR and MERCOSUR, obviously NAFTA and CAFTA-DR.

ALBA, CAN (Andean Community of Nations), ACS (Association of Caribbean States), OECS (Organization of Eastern Caribbean States) ALADI (The Latin American Integration Association which is Mexico plus most of South America but not Central America), and SICA (Central American Integration System).

And of course the US Congress is still evaluating passage of free trade agreements with Colombia and Panama, with Canada working towards one with the Caribbean (CARICOM).

Whew.

For good measure, this year some new ones are being inaugurated: AIP (Área de Integración Profunda) - a new body made up of Chile, Colombia, Peru and Mexico. And Chile, Colombia and Peru are consolidating their stock markets.

As an aside, since every rising market needs a good name (BRICs, PIIGS, Civets), I'm going to go ahead and dub these the "Andean Jaguars." Can't wait for that to take off.

Ok, you get the idea. But aside from the myriad of summits that led Felipe Calderon to compare Latin American diplomacy to a mountain range, what is the tangible impact of all these agreements?

Despite the seemingly excessive, frequently overlapping agreements and integration systems, the recent rise of "Multi-latinas," a new class of competitive cross-border Latin American firms is one of the most positive developments of all these agreements.

The Multi-latinas are companies that operate across Latin America, primarily with Latin American capital, and that take advantage of their local expertise to find niches and beat international competitors. América Móvil is a perfect example.

Some are true multinationals - Vale, CEMEX, Bimbo, Embraer. Many more operate exclusively within the region. They are big drivers of growth in the region and could turn into what multinationals in Latin America emulate in order to succeed, rather than the other way around.

A provision of establishing the common stock market was that Peru lower its capital gains tax to 5% (previously it had ranged from 5-30%). By comparison, the US capital gains tax is 15% after the "Great Tax Compromise." Granted, it's difficult to actually incorporate a business in Peru. But 5% is attractive nonetheless.

Image Source: AmericaEconomia

Online Sources: Financial Times TILT Blog, Bloomberg, Colombia Reports, Wikipedia, The Economist, La Republica, Americas Society/Council of the Americas, BusinessWeek, Boston Consulting Group

Mexicans on White House hunger strike

Overlooked amid all the violence in Mexico’s northern border area is the rash of murders targeting women. According to local women’s rights activists as many as 500 women have been murdered since 2003 and most of these deaths have gone unpunished. To bring attention to these crimes (and other border issues) a small group of Mexicans are participating in a unique form of protest.

Thirteen women gathered in front of the White House on Monday and commenced a hunger strike. They requested that the U.S. government pay more attention to social problems along the border region. Claiming to represent the citizens of El Paso, Texas and Ciudad Juarez in Mexico, the women claimed that border communities are not only suffering due to violence but also “crushing” poverty and a lack of resources.

One of the protesters told the Mexican press that she blamed the North American Free Trade Agreement of 1994 for doing more harm than good. Another activist tried to summarize what they stood for:

“Violence (in the border area) has become the latest layer in our reality where poverty, unemployment, a lack of opportunities and poor education surrounds us”, said 25-year-old Rubi…

According to organizers the hunger strike will be carried out at the gates of the White House only during the day for security reasons. They are also trying to deliver a letter to President Obama expressing their concerns though for the time being they have reportedly been assured of appointments with representatives of at least five different federal agencies.

Image- Milenio (Via Notimex).
Online Sources- Milenio, El Informador, The Latin Americanist

NAFTA states strengthen commitment

The U.S., Canada, and Mexico wish to minimize obstacles impeding free trade among them according to the top economic representatives from those countries.

Mexican Minister of the Economy Gerardo Ruiz Mateos said to the local press that the main goals for trade in North America are to work together, foster competition, and encourage employment. Along with U.S. counterpart Ron Kirk and Canada’s Stockwell Day, the three met yesterday in Dallas and pledged to improve envormental standards and ensure fair labor regulations.

In addition, Mateos and Kirk discussed the uncertain future of a program permitting Mexican freight trucks to enter the U.S. but whose funding was halted by the Obama administration. Mexico retaliated by raising taxes on ninety U.S. imports yet Kirk admitted that not all those tariffs have been implemented. For his part, Mateos was non-committal over what will happen to resolve that dispute:

Mexico's Secretary of Economy Gerardo Ruiz Mateos sidestepped a question asking if Mexico might lift the tariffs in advance of any resolution of the cross-border trucking issues.

He noted that Transportation Secretary Ray LaHood was meeting with Mexican Transportation Secretary Molinar Horcasitas in Washington soon to discuss the problem.

Image- MSNBC (“Mexican trucks drive on an international bridge leading to Texas.”)
Online Sources- SDPNoticias.com, EFE, MSNBC, AFP, The Latin Americanist

Mexico retaliates over freight dispute

Mexico’s government shot back at a U.S. trade decision by raising the tariffs on about 90 imports.

President Barack Obama’s signing of a $410 billion government spending bill last week helped relax travel restrictions to Cuba. But the newly signed law also put the brakes on a pilot program permitting widespread access of Mexican freight trucks into the U.S.

The cross-border program has been mired in controversy ever since the debate over the North American Free Trade Agreement (NAFTA) in the early 1990s. Several special interests groups supported (Mexico, commerce groups) and opposed (environmentalists, labor unions) the plan. The topic heated up in 2007 when the Bush administration relaxed the rules to permit 500 Mexican trucks greater access beyond a very narrow zone just above the border.

Mexican ambassador to the U.S. Arturo Sarukhan called the measure “protectionism” and threatened to take retaliatory action. Today the Mexican government did just that:

Mexico says it will increase tariffs on about 90 U.S. products in retaliation for last week's decision to cancel a pilot program that allowed some Mexican trucks to transport goods within the United States.

The Mexican Economy Department says the U.S. decision violates a provision of the North American Free Trade Agreement that was supposed to have opened cross-border trucking years ago.

Department officials told a news conference Monday that the measure will affect about $2.4 billion in trade: 90 agricultural and industrial products from 40 U.S. states.

Despite the limits placed over Mexican trucks, Canadian tractor-trailers have unrestricted access into the U.S.

Image- Truthdig
Online Sources- csmonitor.com, Los Angeles Times, AP, MSNBC, The Latin Americanist

Lula warns against global protectionism

Brazilian President Luiz Inacio Lula da Silva issued a stern warning against countries considering economic protectionism.

Last month, Lula considered appealing to the World Trade Organization (WTO) over so-called “Buy American” clauses in the Obama administration’s $787 billion stimulus bill. Yesterday, Lula went further in critiquing protectionist measures:

"If the United States, Europe, Brazil close themselves, the crisis could become much bigger and produce chaos instead of a solution," Lula told industry leaders in Sao Paulo during a visit by Jan Peter Balkenende, the prime minister of the Netherlands…

Lula also intends to speak against global protectionism and for the completion of the WTO's Doha round at the Group of 20 meeting of leading economies in London next month.

"The Doha round was almost finished but we had elections in the United States and then India and politics dominated. Now, nothing stands in the way," said Lula. "The Doha round is more of a political than a financial decision."

Lula’s comments came on the same day as the U.S. Trade Representative (USTR) identified Brazil as one of the “key emerging markets of the world.” Yet the USTR’s annual report also issued its own warning that the Doha round will not be renewed unless other countries are more open to U.S. goods.

The USTR report was the first issued under Barack Obama's presidency and also examined free trade. The USTR advised Congress to go ahead and approve a free trade pact with Panama as well as to work out disagreements to soon ratify a bilateral agreement with Colombia. NAFTA shouldn’t be scraped altogether, said the USTR, but suggested that Mexico and Canada revise several provisions in order to aid U.S. workers.

Image- TopNews.in
Online Sources- Bloomberg, Reuters, The Latin Americanist, easybourse.com, Economic Times, Radio Netherlands Worldwide

Zapatistas Celebrate 15 Years Since Chiapas Uprising

It was 15 years ago that the Ejército Zapatista de Liberación Nacional began a new era in grassroots struggles in San Cristobal de las Casas, Chiapas.

The Zapatistas made themselves known and linked the poverty that exists among the communities of Chiapas to the global economy the same day that NAFTA went into effect, January 1, 1994. The EZLN took a revolutionary approach against the Mexican government to reclaim indigenous rights in the area and while the Mexican mainstream media focuses on how no official agreement between the Zapatistas and Mexico's government has been reached since the San Andres Accords, that acknowledged some Indigenous rights, the ELZN was successful in creating 32 autonomous areas and building a movement that has global support.

Sources : Global Voices, VivirMexico, el Universal

News briefs – Free trade

* El Salvadorian President Tony Saca showed his support for free trade with the U.S. during a meeting with President George W. Bush on Thursday. In addition, Saca said that the Central American country will send a new yet reduced contingent of troops to Iraq.

* Israel and the Mercosur trading bloc are close to agreeing to a free trade pact according to Israeli officials. “It is something very important because it will be the first trade agreement for Israel in South America,” observed Israeli ambassador Itzhak Levanon over the possible agreement with what BBC News considers as the Americas’ “leading trading bloc.”

* Trade between the members of North American Free Trade Agreement (U.S., Canada, Mexico) grew by almost 6% in September. The U.S. government report also said that U.S.-Mexico trade was worth over $24 billion during that month.

* Much progress has been made in the latest round of free trade discussions between Peru and Canada admitted a top Peruvian trade official. Meanwhile, economists with a major U.S. manufacturing group asserted that a U.S.-Peru pact being debated in Congress is “a waste of time and a diversion from more pressing issues”.

Sources- Voice of America, AFP, Associated Press, Forbes.com, BBC News, Living in Peru, Western Farm Press

Image- USA TODAY (Mexican trucks cross into the U.S.)