Tag Archive for: Economy

NAFTA countries set to blow through Paul Ryan’s May 17 deadline without a deal

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Bloomberg.com / Financial Post / May 14

 

The three countries’ ministers working on the deal aren’t scheduled to meet this week, sources say, though lower-level talks continue and may yield a breakthrough

NAFTA negotiators from the U.S., Canada and Mexico are poised to miss the deadline this week cited by House Speaker Paul Ryan, the latest blown marker for reworking the 24-year-old deal.

U.S. Trade Representative Robert Lighthizer, Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Affairs Minister Chrystia Freeland aren’t scheduled to meet together in person this week, according to three government officials familiar with talks who spoke on condition of anonymity. The trio met at least bilaterally every day last week.

The Trump administration is increasingly preoccupied with its efforts to reach a peace deal with North Korea and avoid a trade war with China. Senior economic adviser Liu He will be in Washington this week for talks with the administration on ways to resolve the trade dispute between the two countries.

Lower-level NAFTA talks will continue and could yield a breakthrough and a ministerial meeting, but none has been scheduled so far, according to the people. The three officials said the ministers could meet next week, or later in the month. Chief negotiators are scheduled to hold a conference call early this week to assess the status of the talks and whether a ministerial meeting is feasible later this week, one of the people said.

While the ministers will keep in touch by phone, the lack of a face-to-face meeting after such a big push last week would show how far apart the sides remain on updating the North American Free Trade Agreement. Ryan injected a sense of urgency when he said lawmakers need notice of intent to sign a deal by May 17 so they can vote before this Congress ends in December.

The Canadian dollar pared its gain in Monday trading, while Mexico’s peso extended its losses, falling 0.7 per cent to 19.5585 per dollar at 1:45 p.m. in New York.

WORK CONTINUES

Although Ryan’s comments put the firmest deadline yet on NAFTA talks, many analysts have said U.S. deadlines are murky, and that a deal reached later in May or even in June could theoretically get passed. A spokeswoman for Ryan, AshLee Strong, said the May 17 target is due to timelines set out in U.S. trade law, not an arbitrary political date. “This is not a statutory deadline, but a timeline and calendar deadline,” Strong said by email Friday.

Whether Lighthizer could seek to notify Ryan by Thursday of his intent to sign, without an actual deal in place, is somewhat unclear. Lighthizer cited the House speaker’s deadline to pressure his Canadian and Mexican counterparts during a trilateral meeting Friday, according to two people familiar with the talks. President Donald Trump’s trade chief has indicated he needs a deal this month but hasn’t publicly identified a particular day.

Emily Davis, a spokeswoman for Lighthizer, referred to a written statement he released Friday when asked for comment Monday. In it, Lighthizer said talks have “covered a large number of very complex issues” and the U.S. “is ready to continue working with Mexico and Canada to achieve needed breakthroughs on these objectives.” The statement made no mention of any deadline.

‘TOO STUBBORN’

Former Mexican President Vicente Fox said Mexico will only sign on to a good NAFTA deal, otherwise it could withdraw and pivot to expanded trade with countries such as China, Argentina and Brazil.

“Mexico is not weak on this negotiation. We have leverage, and this should be understood on the U.S. side — which, by the way, everybody understands how this can be solved except Señor Trump,” Fox said Monday in an interview with Bloomberg Television. “He’s too stubborn. He just wants to win, he wants all the marbles for himself and nothing for the rest.”

Freeland is in Mexico City Monday for talks on Venezuela and hasn’t said if she will meet Guajardo privately there. In a sign of the dimming odds for an imminent deal, Guajardo and his team told dozens of stakeholders from Mexico’s private sector they should return home from Washington because no breakthrough was expected, according to two people familiar with the meeting. Stakeholders from all three countries are cancelling or delaying visits to Washington this week, four other people familiar with the talks said.

The existing NAFTA remains on the books unless a country withdraws, which would require six months notice. No country has given that notice, though Trump has threatened to do so. On Friday, the president called NAFTA a “horrible disaster” for the U.S.

Lighthizer has said the political calculus for passing a new NAFTA would change if it had to be voted on by the next Congress. Mexico and Canada have downplayed the urgency to reach a deal this week.

The countries have been holding periodic discussions since August. They had initially sought a deal by December, and then by March, and are now in what they consider a continuous round of negotiations. Talks have focused recently on the auto sector, with Canada hailing progress but with big gaps still remaining. Even if the sides agree on auto rules, they remain far apart on issues such as a sunset clause and dispute-settlement panels.

Ryan is pushing for a deal because of timelines in U.S. trade law, but another deadline looms. Mexico’s election will be held July 1 and looks set to usher in a new president who could seek changes to anything not yet finalized.

 

Bloomberg.com / Financial Post / May 14

 

NAFTA negotiations enter critical week with the U.S. still pushing a hard line

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From: Financial Post / Thomson Reuters / Veronica Gomez and Anthony Esposito / May 7

 

Sources close to the talks have suggested there is a creeping feeling of uncertainty and pessimism because of gridlock on the most critical issues

WASHINGTON — Talks to update the NAFTA trade deal enter a make-or-break week on Monday, as ministers from Canada, the United States and Mexico seek to resolve an impasse in key areas before elections in Mexico and the United States complicate the process.

Discussions in Washington will center on rules of origin that govern what percentage of a car needs to be built in the North American Free Trade Agreement region to avoid tariffs, the dispute-resolution mechanism and U.S. demands for a sunset clause that could automatically kill the trade deal after five years.

U.S. Trade Representative Robert Lighthizer warned last week that if the talks took too long, approval by the Republican-controlled Congress may be on “thin ice.” The aim is to complete a vote during the “lame-duck” period before a new Congress is seated after November’s congressional elections.

Mexico holds its presidential election on July 1 and the front-runner, leftist Andres Manuel Lopez Obrador, says he wants a hand in redrafting NAFTA if he wins.

“We have a window of opportunity in the next two or three weeks … considering two things: where the talks are now and the political calendars” in Mexico and the United States, said Moises Kalach, head of the international negotiating arm of Mexico’s CCE business lobby, which is leading the private sector’s involvement in the talks.

Sources close to the talks have suggested there is a creeping feeling of uncertainty and pessimism going into the new round because of gridlock on the most critical issues.

At the heart of the NAFTA revamp is U.S. President Donald Trump’s desire to retool rules for the automotive sector in order to try to bring jobs and investment back north from lower-cost Mexico. Despite months of talks on the issue, the sides remain far apart.

A round of talks among Canadian Foreign Minister Chrystia Freeland, Mexican Economy Minister Ildefonso Guajardo and Lighthizer scheduled for last week was cancelled to allow consultations with the Mexican car industry and for the American to go on a trade mission to China.

Mexico’s main auto sector lobby has described the latest U.S. demands, which include raising the North American content to 75 per cent from the current 62.5 per cent over a period of four years for light vehicles, as “not acceptable.”

“The positive momentum on the rules of origin appears to be counterbalanced by the opposite movement on labour wage treatment proposals,” said Flavio Volpe, president of Canada’s Automotive Parts Manufacturers Association.

The U.S. proposal also would require that 40 per cent of the value of light-duty passenger vehicles and 45 per cent for pickup trucks be built in areas with wages of US$16 per hour or higher.

That is seen as a hard pill to swallow for Mexico, where the Ann Arbor, Michigan-based Center for Automotive Research has estimated auto assembly workers average under US$6 an hour, and auto parts plants workers average less than US$3 an hour.

Critics also say it would create a bureaucratic nightmare of paperwork.

 

From: Financial Post / Thomson Reuters / Veronica Gomez and Anthony Esposito / May 7

 

 

Mexico Opens Last Round Of Oil Bidding Before Election

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From: Oil Price / Oxford Business Group / 28 April 2017

 

The latest round of open bidding for exploration rights in Mexico’s energy sector received mixed interest, with two further rights sales to take place later in the year.

Of the 35 shallow offshore blocks on offer in the March 27 auction, 16 were sold, with the strongest interest seen in blocks in the Sureste Basin – in the south-eastern portion of the Gulf of Mexico – where all eight offerings found buyers.

Mexico’s state-owned oil producer, Petróleos Mexicanos (Pemex), won seven of the blocks on offer, one in its own right and six more in partnership with overseas energy firms.

Fourteen oil majors were pre-qualified to bid alongside 22 consortia. France’s Total was the biggest winner in the Sureste Basin, coming away with the largest share of three blocks coverin­­g a total of 2342 sq km. It received two of these as part of a consortium with Pemex, and one with BP and Pan American.

The Ministry of Energy estimates that developing and operating the 16 blocks will require investment of $8.6 billion over the lifetime of the deposits.

Related: How High Can Trump Push Oil Prices?

Overall response to the auctions was slightly muted, with local and international majors showing some caution when making offers, partly due to the upcoming presidential election in July 2018, which has sparked concerns about potential changes to energy sector policy and rising supply in the market.

Auctions for shale deposits set for September

Indeed, the March auction was the first of up to three rights sales to be staged this year, with the remaining two land bids scheduled for late July and early September. The former will cover a total of 37 contractual areas in Burgos, Tampico-Misantla-Veracruz and the Sureste Basin.

The September round of bidding will be particularly notable, as it will be the first time that development rights for shale deposits have been auctioned off in Mexico.

Depleting natural gas reserves and high potential for shale – the country has 545trn cu feet of technically recoverable sources of shale gas, according to the World Resources Institute – have driven Mexico to accelerate development of the industry.

Early last month the energy sector regulator, the National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos, CNH), called for bids on nine blocks in the Burgos Basin – located in the state of Tamaulipas, in the north-west of the country – to be auctioned off in September.

The blocks contain an estimated 1.1 billion barrels of oil equivalent (boe), and winning bidders will have the right to conduct exploratory work for conventional oil and gas, as well as any shale deposits identified.

Energy reform supports private sector development

The successive rounds of auctions for exploration and production rights are the keystone of Mexico’s energy reform policy. Launched in 2013, the reforms ended Pemex’s upstream and downstream monopoly, and offer the country the potential to generate $1trn of foreign direct investment by 2040, according to the Mexican Association of Hydrocarbons Companies.

 

From: Oil Price / Oxford Business Group / 28 April 2017

 

 

 

 

Mexico fully expects to reach a consensus on NAFTA trade deal

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FROM: CNBC / Sam Meredith / 22 April 2018

Mexico believes it is on the brink of agreeing to the modernization of the North American Free Trade Agreement (NAFTA).

Alongside the U.S. and Canada, Mexico is in the midst of eight-month-old talks to try to update the NAFTA deal — which is thought to underpin about $1.2 trillion in yearly trilateral trade.

“In the baseline scenario of the central bank, we have that there will be a version of NAFTA,” Mexican Central Bank Governor Alejandro Diaz de Leon told CNBC’s Joumanna Bercetche on Saturday.

“We know that there have been ups and downs in the negotiation … (But) we do hope that the advantages for the three countries will prevail in some version of the agreement,” he added.

Rules of origin

In an apparent bid to try to quickly wrap up the reworking of the 24-year-old accord, leading Mexican officials have sought to convey an upbeat tone in recent days.

Late last week, Mexico’s Economy Minister, Ildefonso Guajardo, said lawmakers had made “a lot of progress” after the second day of meetings with U.S. Trade Representative Robert Lighthizer and Canada’s Chrystia Freeland. And on Sunday, Mexican President Enrique Pena Nieto said his country was feeling optimistic about the prospect of being able to successfully conclude the talks in the coming weeks.

Canada’s Foreign Minister Chrystia Freeland (C) speaks before the start of a trilateral meeting with Mexico’s Economy Minister Ildefonso Guajardo (L) and U.S. Trade Representative Robert Lighthizer during the third round of NAFTA talks involving the United States, Mexico and Canada in Ottawa, Ontario, Canada, September 27, 2017.

Ministers from the U.S., Canada and Mexico are trying to press ahead with the negotiations in order to try to avoid clashing with a presidential election in Mexico on July 1. Nonetheless, reaching this milestone would mean overcoming major differences on several U.S. demands.

Canada and Mexico have battled with the U.S. over their apparent reluctance to adhere to tougher NAFTA regulations on the content of vehicles made in North American nations. Often referred to as the rules of origin, it is widely considered to be a key sticking point to the talks.

President Donald Trump’s negotiators had initially called for tariffs on the content of vehicles made in NAFTA nations to increase to 85 percent from 62.5 percent. However, Washington’s stance over this issue has reportedly softened in an effort to reach a consensus with their North American neighbors sooner rather than later.

Market has ‘priced in’ NAFTA outcome

The U.S. was thought to be looking to secure a deal in principle with the NAFTA agreement sometime over the next three weeks. Meanwhile, Mexico’s Guajardo said he saw an 80 percent chance of reaching a deal by the first week of May.

Trump, who has repeatedly threatened to walk away from the negotiating table in the absence of major changes, has criticized the pact for creating jobs in Mexico at the expense of U.S. workers.

When asked to what extent it had been a challenge to manage Mexico’s currency at a time when tweets from the U.S. president could prompt volatile swings in the exchange rate, Mexico’s Diaz de Leon replied: “Obviously some of these news and posture and messages have an effect on the exchange rate, but I also think the exchange rate has been learning how to extract the signal from those pieces of information.”

“So far, the market has priced in the NAFTA event according to what is likely to happen,” he added.

FROM: CNBC / Sam Meredith / 22 April 2018

 

 

Los beneficios sociales de la Reforma Energética

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Cuando se promulgó la Reforma Energética a finales del año 2014, fueron diversos los beneficios sociales anunciados por el Gobierno Federal, entre los que se encontraban: 1) la creación de empleos; 2); el aumento de recursos públicos que serían utilizados para la construcción de escuelas, hospitales y el mejoramiento de servicios públicos en general, y 3) el aprovechamiento sustentable de los recursos naturales.

A poco más de tres años de la puesta en marcha de la Reforma Energética, es importante preguntarse si estos beneficios se han cumplido o tienen posibilidades de hacerse realidad, lo anterior, teniendo como base la idea de que estamos hablando de un proyecto de largo plazo, cuyas bondades requieren de tiempo para madurar. No obstante, podemos mencionar algunos datos que ya es posible vislumbrar.

Actualmente, más de 70 empresas nacionales e internacionales se encuentran realizando actividades para la exploración y extracción (E&E) de hidrocarburos en México, a través de los más de 100 contratos que ya se han adjudicado en los procesos de licitación organizados por la Comisión Nacional de Hidrocarburos (CNH), y que se traducen en inversiones comprometidas de más de 200 mil millones de dólares.

Todas estas empresas requieren de una variedad de servicios y personal capacitado para llevar a cabo sus operaciones en nuestro país, lo que trae consigo la creación y/o reactivación económica de empresas mexicanas, así como empleo para diversos profesionistas en lo individual; esto además, facilita a los contratistas cumplir con sus obligaciones de contenido nacional. De acuerdo a estimaciones de la Secretaría de Energía, se espera la creación de 230 mil a 900 mil empleos durante los próximos 15 años[1].

En cuanto a mayores recursos públicos para el Estado, los contratos de E&E, prevén diversas contraprestaciones a su favor, entre las que se encuentran regalías, bonos y pago de impuestos; además, México obtiene, en promedio, el 70% de utilidad de los mencionados contratos[2]. Hoy en día ya es posible hablar de importantes éxitos como el pozo Zama, perforado por la empresa Sierra Oil & Gas, de capital mexicano, el cual es definido como uno de los más grandes descubrimientos de los últimos 20 años; o el campo de la empresa italiana Eni, que ha resultado ser más productivo de lo que inicialmente se pronosticó. Dichos éxitos se verán reflejados también en las finanzas públicas.

Por último, en cuanto al objetivo de aprovechar sustentablemente los recursos naturales, la Agencia de Seguridad, Energía y Ambiente (ASEA) ha puesto especial atención en regular los aspectos relacionados con la seguridad industrial y protección ambiental, a fin de procurar que las actividades de la industria de los hidrocarburos no causen daños a terceros, en sus bienes y personas, instalaciones y medio ambiente.

Una de las medidas tomadas al respecto consiste en la obligación que tienen los operadores del sector hidrocarburos de contratar seguros de responsabilidad civil- ambiental y control de pozos, una efectiva garantía financiera, cuyo propósito es asegurar que contarán con los recursos necesarios para reparar los daños que causen en el desarrollo de sus actividades.

En NRGI Broker hemos participado activamente en la Reforma Energética y conocemos su regulación. Para contratar seguros, acércate a nosotros, somos los expertos y con gusto te atenderemos.

[1] https://www.animalpolitico.com/2018/02/900-mil-empleos-pemex/

[2] https://www.eleconomista.com.mx/empresas/Enfatizan-beneficios-de-reforma-energetica-20171206-0020.html

Trudeau meets with Mexican president at critical time in NAFTA talks

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From: Lee Berthiaume / The Canadian Press / Times Colonist / 13 April

 

LIMA, Peru — Two of the three political leaders with the most at stake at the NAFTA table huddled Friday behind closed doors, their most senior trade lieutenants alongside, in hopes of unlocking a mutually beneficial solution to the cross-border conundrum posed by U.S. President Donald Trump.

Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto gathered on the sidelines of a major international summit in Peru’s capital, along with Foreign Affairs Minister Chrystia Freeland and Mexico’s economy secretary Ildefonso Guajardo.

 U.S. Trade Representative Robert Lighthizer pulled out of the summit at the last minute, sending his deputy, C. J. Mahoney, in his place.

The sit-down, the first face-to-face between the two leaders since November, comes at a critical time, with Canada, Mexico and the U.S. all looking for a breakthrough in the ongoing effort to update the North American Free Trade Agreement — and Trump’s wild-card trade strategies doing little to clear the air.

It was also a chance for Trudeau to take stock of Mexico’s position — and perhaps share strategies — before the prime minister heads into a meeting Saturday with U.S. Vice-President Mike Pence.

Pence is in Peru instead of Trump, who was originally scheduled to attend but decided against it at the last minute, ostensibly to deal with the American response to a chemical attack in Syria. Earlier this week, Trump said he was prepared to “renegotiate forever” to get a good NAFTA deal.

Trudeau and Pena Nieto made small talk as members of the media captured the start of their meeting.

But the presence of several senior Mexican trade officials, as well as Freeland — Trudeau’s most trusted point person on NAFTA — left little doubt about the subject that would dominate the agenda once the doors were closed.

Trudeau’s meetings with Pena Nieto and Pence come as the three are attending the Summit of the Americas, which is held every four years and brings together leaders from across the Western Hemisphere.

The prime minister started his day Thursday by meeting Peruvian President Martin Vizcarra, who served as Peru’s ambassador to Canada before the previous president was forced to resign over a scandal last month.

Trudeau delivered a 10-minute address to business leaders from across the Americas encouraging them to invest in Canada, noting that the country has free trade agreements with dozens of countries around the world.

Even as his government struggles to deal with a pipeline crisis at home, one that has forced him to return to Canada on Sunday before resuming his travels to Europe, Trudeau pitched his country as a great place to invest, telling hundreds of business leaders “that big things can get done in Canada.”

More than half the countries with which Canada has free trade agreements are in the Americas, Trudeau said, and the hope is to add a deal with Latin America’s largest trading bloc, Mercosur, to that tally.

“Even in this age where the value of trade is being questioned by some, we have successfully negotiated landmark agreements with Europe and with Asia,” Trudeau added — a not-so subtle dig at protectionists like Trump.

The prime minister went on to emphasize Canada’s skilled labour force, low unemployment and debt-to-GDP ratio, recent federal investments in infrastructure and a new investment agency as proof that Canada is open for business.

The message appeared well received, and Kenneth Frankel, president of the Canadian Council for the Americas, said the region offers a natural opportunity for Canada — particularly as it looks for a northern partner who isn’t Trump.

Yet Siegfried Kiefer, president of Calgary-based engineering firm Atco Ltd., said Latin American leaders have told him they need massive new investments in infrastructure to grow their economies first.

On that front, Canada’s own record on infrastructure and “national-interest projects” has room for improvement, Kiefer said, including Kinder Morgan’s Trans Mountain pipeline, which is at the centre of a fierce battle between the Alberta and B.C. governments.

“The business community is generally looking for proof in the pudding,” he said.

“The public unrest relative to some of these projects is really what you’re trying to deal with. And that in my mind deals with how do you gain the trust of the people of the country that you have looked at the merits of the project objectively.”

Trudeau’s day also included hosting a lunch with representatives from the 15-country Caribbean Community, where he announced $25 million in new funding to help the region deal with natural disasters such as hurricanes.

The prime minister is also scheduled to meet with Chilean President Sebastien Pinera, who took office in March and whose country is an important political and trade partner with Canada.

From: Lee Berthiaume / The Canadian Press / Times Colonist / 13 April

Mexico’s economy minister says odds of a Nafta deal ‘in principle’ at 80%

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From: Market Watch / 9 April

Mexico’s economy minister, Ildefonso Guajardo, said in a TV interview on Monday that the likelihood of signing a renegotiated pact ‘in principle’ on the North American Free Trade Agreement is about 80%. Guajardo, however, said he didn’t expect a Nafta deal would be struck this week, but would likely be signed around the first week of May. He speculated that the U.S. and would be inclined to complete a deal ahead of coming midterm elections. Nafta negotiators are currently meeting in Washington, D.C., for their eighth round of talks. Last week, President Donald Trump said he was looking for a deal in principle at the Summit of the Americas in Lima, Peru, next week. The Mexican peso USDMXN, -0.3324% which started Monday’s session weaker, climbed 0.2% higher versus the dollar, with one buck fetching 18.2450 pesos. The iShares MSCI Mexico ETF EWW, +1.29% was up 0.5% in response.

From: Market Watch / 9 April

 

 

Full list of U.S. products that China is planning to hit with tariffs

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FROM: Usatoday / 5 de abril  de 2018

China announced additional tariffs on 106 U.S. products Wednesday, in a move likely to heighten global concerns of a tit-for-tat trade war between the world’s biggest economies.

The effective start date for the new charges will be revealed at a later time, though China’s Ministry of Commerce said the tariffs are designed to target up to $50 billion of U.S. products annually.

More: Stocks fall as China tariff threat hits Boeing, Ford shares as trade war fears intensify

More: Brewing trade war looms over oil markets as tariff battle escalates

Below is the full list of products that are set to be subject to duties.

Yellow soybean
Black soybean
Corn
Cornflour
Uncombed cotton
Cotton linters
Sorghum
Brewing or distilling dregs and waste
Other durum wheat
Other wheat and mixed wheat
Whole and half head fresh and cold beef
Fresh and cold beef with bones
Fresh and cold boneless beef
Frozen beef with bones
Frozen boneless beef
Frozen boneless meat
Other frozen beef chops
Dried cranberries
Frozen orange juice
Non-frozen orange juice
Whiskies
Unstemmed flue-cured tobacco
Other unstemmed tobacco
Flue-cured tobacco partially or totally removed
Partially or totally deterred tobacco stems
Tobacco waste
Tobacco cigars
Tobacco cigarettes
Cigars and cigarettes, tobacco substitutes
Hookah tobacco
Other tobacco for smoking
Reconstituted tobacco
Other tobacco and tobacco substitute products
SUVs with discharge capacity of 2.5L to 3L
Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 2500ml, but not exceeding 3000ml for SUVs (4 wheel drive)
Vehicles with discharge capacity of 1.5L to 2L
Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 1000ml, but not exceeding 1500ml for SUVs (4 wheel drive)
Passenger cars with discharge capacity 1.5L to 2L, 9 seats or less
Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 1000ml, but not exceeding 1500ml for 9 passenger cars and below
Passenger cars with discharge capacity of 3L to 4L, 9 seats or less
Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 3000ml, but not exceeding 4000ml for 9 passenger cars and below
Off-road vehicles with discharge capacity of 2L to 2.5L
Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 2000ml, but not exceeding 2500ml for off-road vehicles
Passenger cars with discharge capacity of 2L to 2.5L, 9 seats or less
Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 2000ml, but not exceeding 2500ml for 9 passenger cars and below
Off-road vehicles with discharge capacity of 3L to 4L
Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 3000ml, but not exceeding 4000ml for off-road vehicles
Diesel-powered off-road vehicles with discharge capacity of 2.5L to 3L
Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 2500ml, but not exceeding 3000ml for diesel-powered off-road vehicles
Passenger cars with discharge capacity of 2.5L to 3L, 9 seats or less
Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement exceeding 2500ml, but not exceeding 3000ml for 9 passenger cars and below
Off-road vehicles with discharge capacity of less than 4L
Other vehicles equipped with an ignited reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source. Cylinder capacity displacement not exceeding 4000ml for off-road vehicles
Other vehicles which are equipped with an ignited reciprocating piston internal combustion engine and a drive motor and can be charged by plugging in an external power source
Other vehicles that are equipped with a compression ignition type internal combustion engine (diesel or semi-diesel) and a drive motor, other than vehicles that can be charged by plugging in an external power source
Other vehicles which are equipped with an ignition reciprocating piston internal combustion engine and a drive motor and can be charged by plugging in an external power source
Other vehicles that are equipped with a compression-ignition reciprocating piston internal combustion engine and a drive motor that can be charged by plugging in an external power source
Other vehicles that only drive the motor
Other vehicles
Other gasoline trucks of less than 5 tons
Transmissions and parts for motor vehicles not classified
Liquefied Propane
Primary Shaped Polycarbonate
Supported catalysts with noble metals and their compounds as actives
Diagnostic or experimental reagents attached to backings, except for goods of tariff lines 32.02, 32.06
Chemical products and preparations for the chemical industry and related industries, not elsewhere specified
Products containing PFOS and its salts, perfluorooctanyl sulfonamide or perfluorooctane sulfonyl chloride in note 3 of this chapter
Items listed in note 3 of this chapter containing four, five, six, seven or octabromodiphenyl ethers
Contains 1,2,3,4,5,6-HCH (6,6,6) (ISO), including lindane (ISO, INN)
Primarily made of dimethyl (5-ethyl-2-methyl-2oxo-1,3,2-dioxaphosphorin-5-yl)methylphosphonate and double [(5-b Mixtures and products of 2-methyl-2-oxo-1,3,2-dioxaphosphorin-5-yl)methyl] methylphosphonate (FRC-1)
38248600a articles listed in note 3 to this chapter containing PeCB (ISO) or Hexachlorobenzene (ISO)
Containing aldrin (ISO), toxaphene (ISO), chlordane (ISO), chlordecone (ISO), DDT (ISO) [Diptrix (INN), 1,1,1-trichloro-2 ,2-Bis(4-chlorophenyl)ethane], Dieldrin (ISO, INN), Endosulfan (ISO), Endrin (ISO), Heptachlor (ISO) or Mirex (ISO). The goods listed in note 3 of this chapter
Other carrier catalysts
Other polyesters
Reaction initiators, accelerators not elsewhere specified
Polyethylene with a primary shape specific gravity of less than 0.94
Acrylonitrile
Lubricants (without petroleum or oil extracted from bituminous minerals)
Diagnostic or experimental formulation reagents, whether or not attached to backings, other than those of heading 32.02, 32.06
Lubricant additives for oils not containing petroleum or extracted from bituminous minerals
Primary Shaped Epoxy Resin
Polyethylene Terephthalate Plate Film Foil Strips
Other self-adhesive plastic plates, sheets, films and other materials
Other plastic non-foam plastic sheets
Other plastic products
Other primary vinyl polymers
Other ethylene-α-olefin copolymers, specific gravity less than 0.94
Other primary shapes of acrylic polymers
Other primary shapes of pure polyvinyl chloride
Polysiloxane in primary shape
Other primary polysulphides, polysulfones and other tariff numbers as set forth in note 3 to chapter 39 are not listed.
Plastic plates, sheets, films, foils and strips, not elsewhere specified
1,2-Dichloroethane (ISO)
Halogenated butyl rubber sheets, strips
Other heterocyclic compounds
Adhesives based on other rubber or plastics
Polyamide-6,6 slices
Other primary-shaped polyethers
Primary Shaped, Unplasticized Cellulose Acetate
Aromatic polyamides and their copolymers
Semi-aromatic polyamides and their copolymers
Other polyamides of primary shape
Other vinyl polymer plates, sheets, strips
Non-ionic organic surfactants
Lubricants (containing oil or oil extracted from bituminous minerals and less than 70% by weight)
Aircraft and other aircraft with an empty weight of more than 15,000kg but not exceeding 45,000kg

FROM: Usatoday / 5 de abril  de 2018

 

 

The economic relationship between Mexico and the United States

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FROM: Oup Blog / Roderic Al Camp / 17 de febrero de 2018

Mexico and the United States share a highly integrated economic relationship. There seems to be an assumption among many Americans, including officials in the current administration, that the relationship is somehow one-sided, that is, that Mexico is the sole beneficiary of commerce between the two countries. Yet, economic benefits to both countries are extensive.

Mexico has played a significant role in the rapid expansion of US exports in the 1990s and 2000s. It alternated between the second and third most important trade partner of the United States in the last decade. In 2014, the United States exported a total of $240 billion worth of goods to Mexico, with the largest  products coming from the computers and electronics, transportation, petroleum, and machinery sectors. By contrast, China only purchased $124 billion of US exports. Exports to Mexico accounted for approximately 1,344,000 jobs in the United States.

California alone, boasting the eighth largest economy in the world, exported more than 15% of its products to Mexico by 2014, exceeding what it trades with Canada, Japan, or China. As of 2014, Mexico’s purchases of California exports supported nearly 200,000 jobs in the state. In fact, 17% of all export-supported jobs in California, which account for a fifth of all individuals employed in the state, are linked to the state’s economic relationship with Mexico. More than half of those export-related positions can be traced to the North American Free Trade Agreement. California and Texas – the two largest economies in the United States, and two of the three largest state/provincial economies in the world – are significantly influenced economically by Mexico.

In 2014, a heavy portion of exports from six US states were purchased by Mexico: 41% in Arizona, 41% in New Mexico, 36% in Texas, 25% in New Hampshire, 23% in South Dakota, and 23% in Nebraska. As Senator John McCain noted several weeks ago, the Trump administration’s decision to renegotiate, rather than withdraw from NAFTA, prevented a horrific economic impact on Arizona. The GDP of the United States and Mexican border states accounts for a fourth of the national economy of both countries combined, exceeding the GDP of all the countries in the world except for the United States, Japan, China, and Germany.

The United States provides the single largest amount of direct foreign investment in Mexico, but what I want to stress, and to educate Americans about, is that Mexican entrepreneurs and venture capitalists invest heavily in the United Sates. By 2013, Mexico had invested $33 billion, the only emerging economy among the top fifteen countries with direct foreign investments in the United States. In 2015, Pemex, the government oil company, opened the first retail gasoline station in the United States, in Houston, and plans on opening four more in that city. This is a pilot project to test the American market nationally. OXXO, another Mexican firm, has opened two convenience stores in Texas, and plans on investing $850 million to open 900 stores in the United States.

Finally, Mexico also influences the US economy through tourism in the same way that American tourists play a central role in Mexico’s economy. In 2014, 75 million foreigners visited the United States, generating $221 billion dollars. Canada accounts for the largest number of visitors each year, followed by Mexico, which provided 17 million tourists in 2014, who spent $19 billion. Along the border, at the end of the decade, Mexican visitors generated somewhere around $8 billion to $9 billion dollars in sales and supported approximately 150,000 jobs.

Another way to look at the relationship between Mexico and the United States is through cultural influences.  Mexico exerts impact through music, food, film, and language. For example, there are multiple fast-food chains that spe­cialize in Mexican food. Grocery stores stock more items originating from Mexico than any other ethnic cuisine in the world, including beers, beans, hot sauces, peppers, and torti­llas. Corona is the best-selling foreign beer in the United States. Mexican foods such as guacamole and caesar salad are so com­monplace that they have lost their identity as Mexican cuisine.

The use of Spanish words and Mexican slang is evident in ev­eryday language in the United States; such terms range from “mano a mano” to “macho,” “enchilada” to “margarita,” and “rancho” to “hacienda.” According to a Pew Center study in 2011, 38 million individuals in the United States five years or older showed that the majority of them were Mexican, and were speaking Spanish at home. Spanish is also the most widely spoken non-English language among Americans who are not from a Hispanic country. The size of the Spanish-speaking audience in the United States has also influenced the growth of Mexican films. The musical influence has kept pace with cuisine. In 2010, the New Yorker magazine ran an extensive article about Los Tigres del Norte, a musical group from San Jose, California, who represent the norteño musical style. They boast a huge following among music fans. Selena, who died two decades ago, has sold more than 60 million albums, including songs representing the mariachi and ranch­era genres, and the number of copies of her posthumous best-selling album of all time, Dreaming of You, reached five million by 2015. Among young adults (18 to 34 years of age) who listen to the radio, Mexican regional music ranks seventh in popularity.

The relationship between the United States and Mexico has become more complex over time, incorporating cultural, musical, economic, familial, political, and security relationships beneficial to both countries and its citizens. But the most dramatic change in those many facets of our relationship with each other is the degree to which Mexico’s impact on and within the United States has grown in importance. Equally important to consider is that in spite of President Trump’s public criticisms of Mexico, our relationship at numerous levels, public and private, remains strong.

 

 

FROM: Oup Blog / Roderic Al Camp / 17 de febrero de 2018

The Economic Yield Curve Is the One to Watch

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From: Bloomberg / Joseph Carson / 21 de noviembre

 

The difference between the federal funds rate and economic growth is unusually wide, consistent with a positive outlook. The rapid flattening of the U.S. Treasury yield curve is raising concern about the economy’s prospects. That’s to be expected, since the slope of the curve has gained in importance as a forecasting tool due to its consistent and reliable track record. In short, a narrow curve is associated with a slowdown in growth.

The economic signal is even stronger when there is an outright curve inversion, which is when short-term yields exceed those on longer-dated Treasuries. We’re not there yet, but what has everyone up in arms is that at 63 basis points, the difference between two- and 10-year Treasury yields has collapsed from 128 basis points in January and is now the narrowest since 2007, just before the start of the last recession.

For some, changes in the Treasury yield curve are sufficient to warrant a change in the view on the future path of the economy. Right now, though, it’s not. It is important to balance the changes taking place in the financial market’s yield curve with the economy’s yield curve.
The economy’s yield curve is the spread between the federal funds rate and nominal gross domestic product. This relationship is most important since it’s the ability of the consumer and businesses to carry or afford the higher borrowing costs that could eventually impact economic growth.

Based on third-quarter data, the economy’s yield curve is close to 300 basis points, which is calculated by taking the 4.1 percent annualized rate of growth in nominal GDP less the quarterly average for the federal funds rate of 1.15 percent. The gap has expanded by 65 basis points from a year earlier. Even if the Federal Reserve, as expected, raises rates by 25 basis points at its December meeting the spread should widen based on estimates of 4.5 percent to 5 percent growth in nominal GDP.

In a historical perspective, the economy’s yield curve is unusually wide, consistent with a positive growth outlook. To be sure, the average spread during the 1990s growth cycle was 100 basis points and in the 2000s it was 200 basis points. Moreover, history also shows that a flat or an inverted spread between the federal funds rate and the growth in nominal GDP always precede an economic slowdown or recession.

In contrast, the traditional financial market yield curve, or the spread between the federal funds rate and the 10-year Treasury, stood at 110 basis points in the third quarter. It will likely end 2017 with the narrowest quarterly spread since the start of the last recession, sending the same signal as the two- to 10-year part of the curve.

It is quite possible that the narrowing of the traditional yield curve reflects technical factors more so than fundamental ones. The quantitative bond buying programs by the Fed and other central banks have no doubt produced an anchoring effect at the long-end of the bond market that was not present in prior cycles.

Also, changes in monetary policy often influence investor expectations on the outlook for growth and inflation. Given the current low-inflation environment, it could well be investors are betting that current path of monetary policy will dampen future inflation risks and possibly to lead to a reversal in short rates at some point down the road.

In all likelihood, the signaling effect from changes in the yield curve to the economy may not be as robust today and limited to the financial markets. The economy, meanwhile, will be supported by the wide and positive spread between the federal funds rate and nominal GDP growth, helping to support corporate profits and equities. The outlook for the fixed-income market is less sanguine because the positive growth environment will compel the Fed to continue to normalize monetary policy by boosting rates further.

 

From: Bloomberg / Joseph Carson / 21 de noviembre