Identifier
Created
Classification
Origin
09MEXICO973
2009-04-03 16:02:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Mexico
Cable title:  

Mexico Economic Weekly - April 3

Tags:  ECON EFIN ETRD ENRG ELTN EAIR PGOV SENV MX 
pdf how-to read a cable
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RR RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #0973/01 0931602
ZNR UUUUU ZZH
R 031602Z APR 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 5929
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
UNCLAS SECTION 01 OF 03 MEXICO 000973 

SIPDIS
SENSITIVE

STATE FOR WHA/MEX, WHA/EPSC
STATE FOR EEB
USDOC FOR 4320/ITA/MAC/WH/ONAFTA/GWORD
TREASURY FOR IA
ENERGY FOR WARD, LOCKWOOD AND DAVIS

E.O. 12958: N/A
TAGS: ECON EFIN ETRD ENRG ELTN EAIR PGOV SENV MX
SUBJECT: Mexico Economic Weekly - April 3

UNCLAS SECTION 01 OF 03 MEXICO 000973

SIPDIS
SENSITIVE

STATE FOR WHA/MEX, WHA/EPSC
STATE FOR EEB
USDOC FOR 4320/ITA/MAC/WH/ONAFTA/GWORD
TREASURY FOR IA
ENERGY FOR WARD, LOCKWOOD AND DAVIS

E.O. 12958: N/A
TAGS: ECON EFIN ETRD ENRG ELTN EAIR PGOV SENV MX
SUBJECT: Mexico Economic Weekly - April 3


1. (U) The Mexico Economic Weekly supplements reporting from
Mission Mexico Consulates and the Embassy Mexico Economic Section to
provide a sense of ongoing trends. Please contact Adam Shub
(shubam@state.gov) or Jonathan Austin (austinjt@state.gov) for
questions or comments about this report.


2. (U) Table of Contents:

ECONOMY AND FINANCE:
--------------

UNEMPLOYED NOT RECEIVING EXPECTED ASSISTANCE - Matamoros

BAJA CALIFORNIA OPTIMISTIC ABOUT ECONOMIC RECOVERY - Tijuana

SALES SURPASS OF USD4.5 BILLION AT AGROBAJA 2009 - Tijuana

WORK STOPPAGES TO BEGIN AT HONDA'S MEXICO PLANT - Guadalajara

GRUMA SALES UP DESPITE RECESSION - Monterrey


TRADE AND INVESTMENT:
--------------

CANACAR VP: CROSS-BORDER PROGRAM DISPUTE A "NON-ISSUE" FOR MEXICAN
BORDER TRUCKERS - Ciudad Juarez

RETALIATION'S IMPACT AT THE BORDER - Tijuana

BAJA CALIFORNIA HIGHLIGHTS ADVANTAGES OF STATE TO SPANISH
ENTREPRENEURS - Tijuana

STRIKE CRISIS AND INSECURITY FOR CUSTOMS BROKERS - Tijuana

NUEVO LEON CLOSE TO LANDING KEY FOREIGN DIRECT INVESTMENT -
Monterrey


TRANSPORTATION AND INFRASTRUCTURE:
--------------

CANACAR BRIDGE BLOCKADES CANCELLED - Matamoros

CARRIER STRIKE IN TIJUANA-MEXICALI - Tijuana


--------------
ECONOMY AND FINANCE:
--------------


3. (U) UNEMPLOYED NOT RECEIVING EXPECTED ASSISTANCE: According the
Secretary of Economic Development and Employment for the State of
Tamaulipas, Alfredo Gonzalez, "The Mexican Federal Government
promised support for the unemployed but so far in Tamaulipas only
8,000 jobless people are actually getting it." By Gonzalez' count,
this accounts for only eight percent of those currently unemployed
in the state. (Matamoros)


4. (U) BAJA CALIFORNIA OPTIMISTIC ABOUT ECONOMIC RECOVERY:

According to a survey developed by the Instituto Nacional de
Estadistica, Geografica e Informatica (INEGI),an estimated four
thousand jobs were lost during the first quarter of 2009. The
Secretary of Labor and Social Welfare said that the economic crisis
is abating in Baja California, and that announcements of new
investments have generated optimism that the state's economy will
improve in the second quarter. (Tijuana)


5. (U) SALES SURPASS USD4.5 BILLION AT AGROGROBAJA 2009: AgroBaja
2009 will be remembered as one of Mexico's largest exhibitions of
agriculture- and fisheries-related products and services. Last
week's exhibition at kilometer 7.5 of the Mexicali-San Felipe road
brought together producers and suppliers from Mexico and the United
States interested in agriculture, aquaculture, livestock and
fisheries. Producers from several states participated in the
non-traditional pavilions promoted by SEGARPA. Sales at the
exhibition surpassed USD4.5 million. (Tijuana)


6. (U) WORK STOPPAGES TO BEGIN AT HONDA'S MEXICO PLANT: Unable to
avoid the fate of the other auto manufacturers in the country, Honda
announced that it would begin work stoppages for the first time in
the plant's history. Starting May 16, Honda will close the doors of

MEXICO 00000973 002 OF 003


its plant just south of Guadalajara to all of its 1,800
manufacturing employees for 13 days over a period lasting until
September. The stoppages will cut the assembly of its CR-V model by
2,000 units, or 4% of its annual production. Sales in the first two
months of 2009 from the plant fell about 28% on last year due to a
drop in sales in the US, destination of 40% of the plant's
production. (Guadalajara)


7. (SBU) GRUMA SALES UP DESPITE RECESSION: First quarter sales of
large Monterrey companies are expected to be down sharply due to
falling exports to the United States. However, milling and
tortilla company Gruma is weathering the recession well, according
to a Roberto Gonzalez Alcala, Director General of Gruma Mexico. In
a March 30 meeting, Gonzalez told Consulate General Monterrey that
notwithstanding the economic recession, Gruma was in reasonable
shape. Like CEMEX, Alfa, and Vitro, the company had suffered losses
in the derivatives market but had been able to restructure its
obligations with its creditor banks into long-term debt. As half
of Gruma's revenues came from its 18 tortilla and 5 milling plants
in the U.S., the recent devaluation of the peso had not hurt the
company. Meanwhile, sales in Mexico were up nearly 7 percent, a
pleasant surprise given that Gruma operates in a fairly mature
market. (Monterrey)


--------------
TRADE AND INVESTMENT:
--------------


8. (U) CANACAR VP: CROSS-BORDER PROGRAM DISPUTE A "NON-ISSUE" FOR
MEXICAN BORDER TRUCKERS: The recent cancellation of the US/Mexico
Cross-Border Trucking Demonstration Project has led to charges of
protectionism by the GOM and retaliatory tariffs ranging from 10 to
45 percent levied on 89 U.S. exports. Until Congress zeroed out
funding for the project in the FY 2009 Omnibus Appropriations Act,
the program had authorized up to 100 Mexican trucking companies
access to US highways beyond the 25-mile U.S. border commercial
zone. According to Manuel Sotelo, Vice President of CANACAR
(Mexico's National Trucking Chamber Union) for the Northwest zone,
the cancellation of the Demonstration Project is of little
consequence to Mexican truckers. Sotelo asserted that "none of the
7,000 truckers affiliated with CANACAR participated in the pilot
program because of the high investment required to bring trucks and
drivers to US standards, as well as the disproportionate scrutiny
from US law enforcement on Mexican trucks in the US." He claimed
that "even if the sector were completely liberalized, Mexican
truckers would not want to operate in the US." Sotelo cited low
subscription rates in the pilot program -- e.g., 26 trucking
companies from Mexico -- to support his point. For its part, the
Juarez Chapter of the National Chamber of Commerce (CANACO) is
complaining about the GoM's decision to impose retaliatory tariffs
on US exports, claiming the tariffs create distortions and reduce
the welfare of consumers in Juarez. CANACO-Juarez President Daniel
Murguia Lardizabal commented to local press that as prices rise on
imports, Mexican consumers will most likely increase their purchases
of these products in El Paso. (Ciudad Juarez)


9. (U) RETALIATION'S IMPACT AT THE BORDER: In March, COLEF
economic researcher Alejandro Diaz Bautista said that the economic
impact of Mexico's commercial reprisals against the U.S. will not
only damage exporters and importers, but also will stick the end
consumer north of the border, with increasing costs for a number of
products. (Tijuana)


10. (U) BAJA CALIFORNIA HIGHLIGHTS ADVANTAGE OF STATE TO SPANISH
ENTREPRENEURS: Governor Osuna Millan was received by Club Yeccan, a
group of Spanish businessmen with interests in Mexico. The Governor
outlined the political, economic and social development of Baja
California, showcasing the state's big infrastructure projects, such
as Punta Colonet. Thirty Spanish businessmen, researchers, and
reporters attended the event. Many noted their surprise at the
quality of services and infrastructure that Baja California offers.
(Tijuana)


11. (U) STRIKE CRISIS AND INSECURITY FOR CUSTOMS BROKERS: Pedro
Garcia Hernandez, president of the Confederation of Associations of
Customs Agents, commented in Ensenada that the flow of imports and
exports has fallen by almost fifty percent because of the economic
crisis and public security problems in Baja California. The customs
agencies have sought ways to maintain economic activity to avoid
layoffs and cutbacks in work hours of customs brokers. (Tijuana)


MEXICO 00000973 003 OF 003



12. (SBU) NUEVO LEON CLOSE TO LANDING KEY FOREIGN DIRECT
INVESTMENT: Nuevo Leon and its Secretary of Economic Development
have been working hard to win foreign direct investment in high
value added fields, especially in renewable energy and aerospace.
Nuevo Leon is currently contending for a USD700 million renewable
energy investment from American company First Solar. First Solar
has already decided on Monterrey if they chose Mexico for their next
free field solar project; Monterrey and a site in Malaysia are
competing in the final rounds of the decision process. Spirit
Aerospace, a first tier supplier for Boeing Corporation, is also
considering a substantial investment in the area. Spirit is looking
to build a new plant in Nuevo Leon Chihuahua, Coahuila or Queretaro.
(Monterrey)


--------------
TRANSPORTATION AND INFRASTRUCTURE:
--------------


13. (U) CANACAR BRIDGE BLOCKADES CANCELLED: Cross-border shippers,
especially maquiladora managers, breathed sighs of relief on
Saturday, March 21, when a two-day blockade of border crossings
(planned for March 23-24) by transportation union CANACAR was called
off. The blockade, announced by the union weeks ago, had been a
tense subject among manufacturers and labor unions, as the flow of
commercial traffic across international bridges is critical for both
manufacturing supplies and finished-goods deliveries that keep
thousands of people working in northern Mexico. According to
Roberto Mattus, director of the Matamoros Maquiladora Association,
the blockade could have cost regional manufacturers many days in
manufacturing delays, work stoppages, and millions of dollars in
lost revenues. (Matamoros)


14. (U) CARRIER STRIKE IN TIJUANA-MEXICALI: Affiliates to the
National Confederation of Mexican Carriers (CONATRAM) remain on
strike, with nearly 300 units stationed in kilometer 20 of the
Tijuana-Mexicali corridor. The demands of the transportation sector
are to reduce and stabilize the price of diesel at 5.50 pesos a
liter, improve road safety, lower cost of tolls and suspend payment
of the Single Rate Business Tax (IETU). Carriers are pending a
response from the federal authority on their requests. (Tijuana)

BASSETT