The first part of the first week of the month of October centered around the signing of the new trade agreement between Mexico, the United States and Canada known as the United States-Mexico-Canada Agreement (USMCA). The three countries were able to strike a deal in time (auto-imposed deadline of September 30th) in order to have President Peña Nieto sign the agreement before his departure November 30th. On behalf of the new Mexican government, future Foreign Relations Secretary, Marcelo Ebrard, released a statement in which he said that the new administration was happy with the outcome as it would allow the Mexican economy to face much less uncertainty. Later that week, President Elect Andres Manuel Lopez Obrador indicated that he especially liked that the USMCA had mechanisms that would allow Mexican workers salaries to grow in the manufacturing sector, especially in the automobile industry where the U.S. and Canada had made an important point to produce 40% of vehicles where wages were $16 USD/hour. Additionally, he said that the new agreement did not interfere with Mexico’s sovereignty and rights to determine what to do with its natural resources (i.e. oil and gas) thanks to what his chief negotiator, Jesus Seade, had negotiated with the other countries. In reality, this is much more of a talking point to appease his electoral base as there was never an intention from Mexico’s northern neighbors to limit the country’s right to do so. But since the 2013 Energy Reform opened the sector to private investment, there are many Mexicans that thought that the USMCA would strip Mexico of its resources or make it easier for U.S. and Canadian firms to secure our oil fields thanks to the rhetoric spread by some left-wing politicians during the election process.
Continuing with the topic of oil and gas, during a visit to the state of Guanajuato, AMLO announced an investment of $4 billion pesos (~$210 million USD) to rehabilitate the Salamanca refinery located within the state. This is part of a broader strategy his government plans to implement regarding Mexican refineries. During his campaign, the President Elect criticized the amount of fuel that Mexico imports from U.S. refineries located in Texas and Louisiana as it has driven fuel prices in Mexico upwards due to the rise in the exchange rate since Trump became a candidate (the Mexican peso – U.S. dollar exchange rate passed from about 15.5 pesos/dollar to around 19 pesos/dollar with a high of 22 pesos/dollar just before Trump took office). One of his proposals was to rehabilitate and build new refineries in the country to avoid importing fuel –a proposal battered by critics saying that building new refineries is very costly and with their low margins, they require very efficient operations, something Pemex and its labor union have never been good at. Furthermore, in a visit to the state of San Luis Potosi, he said that his government would not allow new fracking activities to protect the environment. On another topic, celebrating the 50th anniversary of the Tlatelolco Square massacre from October 2nd, 1968 (where the President ordered the military and police forces to open fire on students protesting the Mexican government’s lack of democratic processes right before the 1968 Mexico City Olympic Games), President Elect Lopez Obrador swore he would never use law-enforcement officials to hurt civilians as well as promising that all people in jail for political reasons would be liberated the first day of his government. However, the topic that created more controversy during the week came in the later days when the future head of the Science and Technology National Council (CONACYT for its initials in Spanish), Maria Elena Alvarez, ordered the current government officials to halt any new scholarships and grants that would be given to people in 2019, as the cuts in government spending ordered by the new administration demanded so. She sent a letter to the current head Enrique Cabrero saying so that got leaked to the press resulting in a social media backlash. Many of the Mexican students abroad (doing graduate programs) and the non-profit organizations that research science related topics could be left without funding if what Mrs. Alvarez ordered was true, so the future Mexican government faced an outcry that was fueled by opposition figures that found it easy to pile on the bad idea of cutting spending on science and technology. In a statement released later by Mrs. Alvarez, she explained that her letter only meant for the cutting of funds for scholarships or grants not previously assigned, but the hostile tone of it did not help her cause as the damage was done.
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Manuel Franco
4/24/2023 10:42:05 am
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