Category Archives: Mexico

(BBG) Trump Says He’s Agreed on Mexico Trade Deal to Replace Nafta

(BBG) President Donald Trump said the U.S. is pursuing a new trade accord with Mexico to replace the North American Free Trade Agreement and called on Canada to join the deal soon or risk being left out.

Trump announced the agreement with Mexico in a hastily arranged Oval Office event Monday with Mexican President Enrique Pena Nieto joining by conference call. Pena Nieto said he is “quite hopeful” Canada would soon be incorporated in the revised agreement, while Trump said that remains to be seen but that he wanted those negotiations to begin quickly.

Canadian Foreign Minister Chrystia Freeland is leaving a trip in Europe early to travel to Washington for Nafta talks on Tuesday, spokesman Adam Austen said on Monday. Canada and the U.S. are still at odds over some key issues.

The U.S. and Mexico agreed to increase regional automotive content to 75 percent from the current 62.5 percent in Nafta, with 40 percent to 45 percent of production by workers earning at least $16 an hour, the U.S. Trade Representative’s office said in an emailed statement. They agreed to review the deal after six years, softening a demand by the U.S. for a clause to kill the pact after five years unless it’s renewed by all parties. Duty-free access for agricultural products will remain in place, USTR said.

The peso rallied, and the Canadian dollar also advanced. U.S. stocks rose, with the S&P 500 Index closing just short of 2,900 and the Nasdaq Composite Index topping 8,000 for the first time. Automakers and railroads were among the top gainers.

As he announced the move, Trump said he would drop the name Nafta from the accord because of its unpopularity.

“We’re going to call it the United States/Mexico Trade Agreement,” he said. Nafta “has a bad connotation because the United States was hurt very badly by Nafta for many years.”

‘Big Day’

While the president hailed it as “a big day for trade,” groups representing American workers and companies withheld full endorsements.

The Business Roundtable, which represents CEOs at major U.S. companies, said it was encouraged by the progress but said Nafta “must remain trilateral” and is concerned the announcement might not signal an improvement. A coalition of five unions including the AFL-CIO and United Steelworkers said more work is needed to fix Nafta. “We are not done yet,” the unions said in a statement.

An accord between the U.S. and Mexico is the biggest development in talks that began a year ago, punctuated by Trump’s repeated threats to quit altogether. Significant breakthroughs came during the past several days of bilateral talks on automobiles and energy. The three countries trade more than $1 trillion annually, much of it under the pact.

But questions remain about how the Trump administration will steer a deal through Congress, and whether Canada will be part of the final pact. Trump has been authorized by Congress to seek new Nafta through his so-called fast-track authority, which allows the president to submit trade deals to lawmakers for a basic yes-or-no vote, provided the administration follows certain procedures.

Canada Hopes

The U.S. plans to submit a letter to Congress on Friday, said Trump’s trade representative, Robert Lighthizer, told reporters on Monday. The U.S. hopes Canada will join the pact this week, but it will have the option to sign on later, he said. That suggests the administration believes it has congressional authority to move ahead with its current plan as a two-way deal.

But some experts are less certain. Trump would have to go back to Congress to ratify a bilateral agreement with Mexico, said Mickey Kantor, who oversaw America’s entry into Nafta as Bill Clinton’s first U.S. trade representative.

“They’d have to go back to the Congress,” he said. “To walk away from an arrangement with the two and try to set up bilateral deals would probably cause a tremendous political response.”

Canada firmly opposes a U.S. plan to scrap a measure that allows Nafta countries to settle disputes in cases involving dumping and unfair subsidies, and has also warned it won’t totally dismantle protections for its dairy industry, as the U.S. would like.

Important Step

Republican Senator Orrin Hatch, chairman of the Senate Finance Committee, called the deal with Mexico an important step but added that “a final agreement should include Canada.” As the main trade committee in the Senate, the finance panel’s approval will be key to any deal.

Canada, which has been on the sidelines of the talks since July as Mexico and the U.S focused on settling differences, said an overhaul of the trilateral pact will still require its endorsement. “Canada’s signature is required,” Austen, Freeland’s spokesman, said in an email on Monday. “We will only sign a new Nafta that is good for Canada and good for the middle class.”

Pena Nieto said in a tweet on Monday that he spoke with Trudeau and stressed the importance of Canada rejoining Nafta talks.

Trump doesn’t plan to invoke a clause to formally withdraw from the pact, which any country can do with six months’ notice, Lighthizer said. Since his election campaign, the president has repeatedly threatened to kill the pact.

Talks to update Nafta began a year ago, but in recent weeks have been held between just the U.S. and Mexico. The U.S. president says the 24-year-old deal has led to hundreds of thousands of lost American jobs, and he promised to either change it to be more favorable to the U.S., or withdraw.

The U.S. push to finish Nafta talks comes at the same time it’s in a spiraling trade war with China, and has threatened to place tariffs on cars imported from major manufacturing centers in Asia and Europe — efforts that have created new uncertainty for many businesses and investors.

“They want to talk,” Trump told reporters on Monday, referring to Chinese officials. But “it’s been too one-sided for too many years, for too many decades and so it’s not the right time to talk.”

(BBC) Mexico election: López Obrador vows profound change after win

(BBC)

Left-wing candidate Andrés Manuel López Obrador has claimed victory in Mexico’s presidential election, saying “profound change” is coming.

The ex-Mexico City mayor, known by his initials Amlo, is projected to win about 53%. His rivals have conceded in a crushing defeat for the main parties.

Mr López Obrador’s key pledge has been to tackle the “evil” of corruption.

He has also been highly critical of President Donald Trump and ties with the US will now be closely watched.

Relations with Washington have been hugely strained, with Mr Trump strongly criticising Mexico over trade and migration. Mr Trump has sent a tweet of congratulations.

What has López Obrador said?

Late on Sunday, the 64-year-old promised to respect civil liberties and said he was “not looking to construct a dictatorship, either open or hidden”.

Some opponents have expressed fears that his leftist and populist policies could damage the already sluggish economy and turn Mexico into “another Venezuela”, which is suffering a deep economic crisis and rampant inflation.

Hailing a “historic night”, Mr López Obrador called on all Mexicans to reconcile and repeated his campaign pledge to review energy contracts for signs of corruption.

“Corruption is… the result of a decadent political regime. We are absolutely convinced that this evil is the main cause of social and economic inequality, and also that corruption is to blame for the violence in our country,” he said.

He has insisted that no-one involved in corruption will be spared, not even those he calls “brothers-in-arms”.

So what are his other main policies?

On combating Mexico’s record levels of violence, much of it related to drug cartels, Mr López Obrador said he would have daily meetings with his security cabinet, which under him, he said, would be under a “unified command”.

Sunday’s election followed one of Mexico’s deadliest campaigns in decades with more than 130 political candidates and party workers killed.

Media captionHow should Mexico’s new president deal with Trump?

During the campaign Mr López Obrador had often used confrontational language when referring to Mr Trump, but struck a more conciliatory note in his victory speech, saying he would seek “friendly relations”.

He also tried to reassure the business sector, saying there would be no nationalisation and that he would respect private business. He also said his government would be fiscally disciplined and taxes would not be raised.

On social policies, he said he would double pensions for the elderly upon taking office on 1 December as a first step to reducing Mexico’s disparate income levels.

Andrés Manuel López Obrador – a brief biography

  • Born to a family of shopkeepers on 13 November 1953 in the rural community of Tepetitán, in southern Tabasco state
  • Known popularly as Amlo, which is an acronym using the full initials of his name
  • Elected Mexico City mayor in 2000
  • After losing the presidential elections in 2006 and 2012, he ran again this time under a three-party coalition led by the leftist National Regeneration Movement party (Morena) he founded in 2014
  • The self-styled anti-establishment figure has now ended the dominance of the PRI and PAN parties he called the “mafia of power”

López Obrador, a winner at last

What have his rivals said?

The latest figures from the Mexican electoral institute show Mr López Obrador has won more than double the votes of his nearest challenger. It is the widest victory since the 1980s.

Ricardo Anaya, candidate for the conservative National Action Party (PAN), looked set to be runner-up to Mr López Obrador.

Graphic

“I recognise his triumph, I express my congratulations, and I wish him the greatest success for the good of Mexico,” Mr Anaya said.

Ruling party candidate José Antonio Meade, who lies in third place according to initial results, told supporters that he wished the winner “the greatest success”.

Obrador received the most votes in all but two states

Mr Meade’s Institutional Revolutionary Party (PRI) has dominated Mexican politics for much of the past century but has slumped in popularity.

The electoral institute figures put official turnout at 62.7%. As well as a new president, 128 senators and 500 deputies in Congress were elected, in addition to state and local officials.

Graphic

Mr López Obrador’s coalition is set to have a majority in the lower house and possibly the Senate.

How will US-Mexico relations be affected?

Mr López Obrador had been the candidate most critical of Mr Trump and had said he would make the US president “see reason”, branding his anti-immigrant policies “irresponsible” and “racist”.

Mr Trump has riled Mexico by saying he will renegotiate the North American Free Trade Agreement (Nafta) and build a wall along the US-Mexico border.

His hardline stance on migration – particularly the separation of migrant families at the US border – has brought widespread condemnation.

Some 2,000 children remain separated from their migrant parents, despite Mr Trump agreeing to curtail the policy.

In his victory speech, Mr López Obrador said: “We will pursue a relationship of friendship and co-operation with the United States, always rooted in mutual respect and in the defence of our fellow Mexicans who live and work honourably in that country.”

(GUA) US, Canada and Mexico beat Morocco in vote to host 2026 World Cup

(GUA)

Delegates of Canada, Mexico and the United States celebrate after winning a joint bid to host the 2026 World Cup.
 Delegates of Canada, Mexico and the United States celebrate after winning a joint bid to host the 2026 World Cup. Photograph: Pavel Golovkin/AP

The 2026 World Cup will be held in the United States, Canada and Mexico after they beat Morocco by a margin of 69 votes to host the tournament which will be expanded to 48 teams for the first time.

The Moroccan bid used its final address to Fifa congress to point out the country has a ban on weapons and would not hike up ticket prices to increase profit, a thinly veiled swipe at its rivals. But it was not enough to sway the room as it lost the vote, with the United 2026 bid receiving 134 votes to its 65.

Donald J. Trump

@realDonaldTrump

The U.S., together with Mexico and Canada, just got the World Cup. Congratulations – a great deal of hard work!

The United States-led bid was judged by a Fifa taskforce to be vastly superior to its north African rivals on technical grounds, with a total of 23 stadiums, already built or under construction, at its disposal. Morocco, while enticing some federations with its commitment to fan engagement in a footballing nation, would have had to build or renovate all of the 14 stadiums in its bid book.

That difference – alongside the promise of £4bn in extra profit for the federations – was enough to convince some undecided voters to side with the United 2026 campaign, which opened its final 15-minute pitch by handing the stage to Alphonso Davies, a 17-year-old Canadian born in a Liberian refugee camp in Ghana. “In Canada, they’ve welcomed me and I know they’ll welcome you,” he said.

Of 211 federations, 203 submitted a vote. That number accounted for the four bidding nations who were ineligible, plus three American-governed territories who abstained because of a perceived conflict of interest plus Ghana, who did not attend congress after corruption allegations. The way the federations voted was made public for the first time, perhaps the most surprising revelation being Russia voting for the United 2026 bid despite political tensions between the nations.

The Fifa heirarchy, including the president, Gianni Infantino, preferred the North American bid which has promised to generate around an $11bn (£8.24bn) profit for Fifa compared to the projected $5.7bn (£4.48bn) a Morocco World Cup would raise. The Moroccans had been keen to emphasise its more fan-friendly pricing in contrast with the United 2026 bid which stated an average ticket price of $431 (£322), a significant increase on the Brazil and Russia World Cups.

It was the first World Cup vote since 2010, when the FA suffered humiliation after Russia won the right to host the 2018 tournament. Allegations of corruption immediately followed that vote with Qatar securing the 2022 event. The prospect of a more controversy-free World Cup also swayed Fifa in favour of the United 2026 bid.

Infantino took the opportunity to claim the Fifa landscape has drastically changed since he succeeded Sepp Blatter. “It was clinically dead when I took over two years ago,” he said. “Now it is alive. There are no longer additional costs in the balance sheet.”

Proceedings at congress, held at Moscow’s Expocentre on the outskirts of the city centre, came to an unexpected halt halfway through as Infantino announced the arrival of Vladimir Putin. Most of the hall rose to their feet to greet the arrival of the Russian president but the FA delegation, led by the chief executive, Martin Glenn, remained seated. Putin offered little alternative to David Gill, the English Fifa council member, but to shake his hand as he made his way along the line of those on the stage.

Eight years ago when Russia was awarded the 2018 World Cup in Zurich, Putin spoke mainly in English as he thanked the audience “from the bottom of my heart”. He struck a different, more serious tone this time round although he was full of praise for Infantino, calling him a “good front man and true fighter”. Infantino responded in kind, thanking Putin “on behalf of the entire world of football … from the bottom of our heart a big thank you for your engagement, for your passion, for really making us feel part of the same team”.

Putin closed his speech by saying in English: “Welcome to Russia.”

(Reuters) Mexico slaps tariffs on U.S. steel, agricultural products

(Reuters) Mexico will impose tariffs of 15 percent to 25 percent on U.S. steel products and on some agricultural goods, the Mexican economy ministry said on Tuesday, after pledging to retaliate against U.S. President Donald Trump’s metals tariffs.

The ministry published a list of new tariffs in the government’s official gazette, which included a 20 percent tariff on U.S. pork imports, apples and potatoes and 20 to 25 percent rates on types of cheeses and bourbon.

The ministry also said it was opening a 350,000 tonne tariff-free quota for imports of pork legs and shoulders from other countries.

+++ (BBG) Canada, Mexico to Get Initial Exemption From Trump Tariffs

(Bloomberg) — The Trump administration will initially
exclude Canada and Mexico from stiff tariffs on steel and
aluminum imports, an exemption they would lose if they fail to
reach an updated Nafta agreement with the U.S., White House
trade adviser Peter Navarro said on Wednesday.
The two nations won’t be subject to tariffs on their steel
and aluminum if they sign a new North American Free Trade
Agreement that meets the satisfaction of the U.S., Navarro said,
adding that other American allies could use a similar system to
ask for an exemption.
If Nafta talks fall through, Canada and Mexico would face
the same tariff as other nations, expected to be 25 percent on
steel and 10 percent on aluminum.
“Here’s the situation, and the president has made this
public,” Navarro said. “There’s going to be a provision which
will exclude Canada and Mexico until the Nafta thing is
concluded one way or another.”
The decision-making process regarding the tariffs has
evolved and more changes could be made before President Donald
Trump formally approves them. China on Thursday vowed to
retaliate, its most forceful comments yet on the threatened
tariffs.

China Response

“A trade war is never the right solution,” China’s Foreign
Minister Wang Yi told reporters in Beijing. “In a globalized
world, it is particularly unhelpful, as it will harm both the
initiator and the target countries. In the event of a trade war,
China will make a justified and necessary response.”
Earlier Wednesday, White House Press Secretary Sarah
Huckabee Sanders said the tariff plan would feature “potential
carve outs for Canada and Mexico based on national security”
considerations and also possible exclusions for specific
countries.
Australia is among those making the case for exemption,
with Foreign Minister Julie Bishop citing her nation’s status as
a “close ally and partner” in a Sky News interview on Thursday.

‘Encouraging’

“While the news is encouraging, our efforts are ongoing,”
Trade Minister Steven Ciobo said in a reply to emailed questions
on Thursday about Huckabee Sanders’ comments. “We are leaving no
stone unturned to secure Australian exports and the jobs they
support.”
Negotiators from the U.S., Canada and Mexico wrapped up the
seventh round of Nafta talks this week in Mexico still hoping
for a breakthrough on the biggest sticking points. The president
hinted at the tariff incentive in a tweet earlier this week,
without elaborating on how the trade-off would work.
Trump’s plan to impose tariffs on aluminum and steel
triggered threats of retaliation from trading partners including
Canada, Mexico and the European Union. Lawmakers of his own
Republican Party have been turning up the pressure, warning of
severe political and economic ramifications and the potential
for a trade war from such broad-based measures.
Navarro, the director of the Office of Trade and
Manufacturing Policy, said in an interview with the Fox Business
Network on Wednesday evening that Trump would sign the tariff
proclamations on Thursday at 3:30 p.m. in the Oval Office
surrounded by workers in the steel and aluminum industry.

EU Retaliation

But a person familiar with the planning said that the
president would likely not sign on Thursday because lawyers
needed more time to polish the details and finish the paperwork.
The White House schedule released late Wednesday didn’t list a
tariff announcement for Thursday.
The threat of retaliation over the tariffs, which the
International Monetary Fund has warned could eventually damage
growth, is already rising. Besides China, the European Union has
said it would respond with its own 25 percent tariff to hit $3.5
billion of American goods. The bloc is targeting iconic U.S.
brands produced in key Republican states on a range of consumer,
agricultural and steel products, according to a list drawn up by
the European Commission.
Treasury Secretary Steven Mnuchin, in an interview on
Wednesday, said he recognizes the risk of retaliation against
the U.S. for steel and aluminum tariffs but he still believes
the move will benefit American workers.
“We are the freest trader in the world, hands down,”
Navarro told Bloomberg TV on Wednesday. “All we get for that is
a half a trillion dollar a year trade deficit that offshores our
wealth, offshores our jobs.”

(AP) President: Mexico hit by biggest quake in century, 5 killed

(AP) One of the most powerful earthquakes ever to strike Mexico has hit off its southern coast, killing at least five people, toppling houses and businesses and sending panicked people into the streets more than 650 miles (1,000 kilometers) away.

The U.S. Geological Survey said the earthquake hit off Chiapas state near the Guatemalan border with a magnitude as 8.1 — equal in force to the 1985 quake that killed thousands and devastated large parts of Mexico City.

Officials said at least five people died, but the death toll could rise as authorities assess the damage. Buildings collapsed, power was cut at least briefly to more than 1 million people and authorities closed schools Friday in at least 11 states to check them for safety.

“The house moved like chewing gum and the light and internet went out momentarily,” said Rodrigo Soberanes, who lives near the Chiapas state city of San Cristobal de las Casas.

The U.S. Geological Survey recorded at least 20 aftershocks of magnitude 4.0 or greater within about five hours after the main shake, and the president warned that a major aftershock as large as magnitude 7.2 could occur.

The USGS said the quake struck at 11:49 p.m. Thursday (12:49 a.m. EDT ; 0449 GMT Friday) and its epicenter was 102 miles (165 kilometers) west of Tapachula in Chiapas. It had a depth of 43.3 miles (69.7 kilometers).

The quake caused buildings to sway violently in Mexico’s capital more than 650 miles (1,000 kilometers) away. As beds banged against walls, people still wearing pajamas fled into the streets, gathering in frightened groups.

Chiapas Gov. Manuel Velasco said that three people were killed in San Cristobal, including two women who died when a house and a wall collapsed. He called on people living near the coast to leave their houses as a protective measure.

“There is damage to hospitals that have lost energy,” he said. “Homes, schools and hospitals have been damaged.”

Tabasco Gov. Arturo Nunez said two children had died in his Gulf coast state. One of them was killed when a wall collapsed, and the other was a baby who died in a children’s hospital that lost electricity, cutting off the infant’s ventilator.

The Pacific Tsunami Warning Center said waves of one meter (3.3 feet) above the tide level were measured off Salina Cruz, Mexico. Smaller tsunami waves were observed on the coast or measured by ocean gauges in several other places. The center’s forecast said Ecuador, El Salvador and Guatemala could see waves of a meter or less. No threat was posed to Hawaii and the western and South Pacific.

Mexican authorities said they were evacuating some residents of coastal Tonala and Puerto Madero because of the warning.

The quake hit as Mexican emergency agencies were bracing for another crisis on the other side of the country. The U.S. National Hurricane Center said Hurricane Katia was likely to strike the Gulf coast in the state of Veracruz early Saturday as a Category 2 storm that could bring life-threatening floods.

In neighboring Guatemala, President Jimmy Morales spoke on national television to call for calm while emergency crews checked for damage.

“We have reports of some damage and the death of one person, even though we still don’t have details,” Morales said. He said the unconfirmed death occurred in San Marcos state near the border with Mexico.

The quake occurred in a very seismically active region near the point of collision between three tectonic plates, the Cocos, the Caribbean and the North American.

Mexico’s National Seismological Service said the area has seen at least six other quakes of magnitude 7.0 or greater since 1900 — though three of those all occurred within a nerve-wracking nine-month span in 1902-1903.

(Reuters) Exclusive: U.S., Canada, Mexico agree on fast-paced NAFTA talks – sources

(Reuters) U.S., Mexican and Canadian officials have agreed to an aggressive timetable to renegotiate the North American Free Trade Agreement (NAFTA), sources said, aiming to conclude early next year to avoid Mexico’s 2018 presidential elections.

The plan is to hold seven rounds of talks at three-week intervals, according to two Mexican officials who asked not to be identified because of the sensitivity of the issue.

Described by one Mexican official as a “very aggressive calendar,” the sources said the goal was to conclude the talks before the electoral campaign was in full swing.

Negotiators fear the renegotiation process could become a political punching bag in Mexico due to President Donald Trump’s repeated swipes at Mexico and as Andres Manuel Lopez Obrador from the leftist National Regeneration Movement (MORENA) party leads a number of early polls for next year’s election.

Trump has pushed for a renegotiation of NAFTA, threatening to dump it if he cannot rework the accord to the benefit of the United States. He argues it has fueled a trade deficit with Mexico and cost thousands of U.S. jobs.

The first round of talks to upgrade the accord underpinning over a trillion dollars of trilateral trade between the United States, Mexico and Canada is due to take place in Washington from Aug. 16-20, U.S. Trade Representative Robert Lighthizer said on Wednesday.

The talks will alternate sites among the three countries and the second round is slated to happen in Mexico, one of the Mexican sources said. However, a U.S. Trade Representative spokesperson said the countries have not all agreed to the number of rounds and the frequency of talks.

A well-placed Canadian source familiar with discussions said the United States had proposed the “staggering” schedule but could also not confirm whether an agreement had been reached on the timetable.

U.S. administration officials said Mexico had asked for the negotiations to be completed by the end of the year before the Mexican presidential election heats up.

Lighthizer has said he hopes the negotiations could be wrapped up by the end of the year, while noting that he was not prepared to set a deadline for the talks. John Melle, assistant U.S. trade representative for the Western Hemisphere, will lead the day-to-day negotiations of NAFTA for the United States.

Lighthizer, who by U.S. rules is the chief NAFTA negotiator, said in June that completing the negotiations by the year end was a “very, very quick time frame and we’re not going to have a bad agreement to save time.”

Impact on Immigration

David MacNaughton, Canada’s ambassador to Washington, told reporters on Tuesday, “Obviously if we could get a clarification of the trading relationship sooner rather than later, it would be better, but having said that, we’re not going to rush into a bad deal.”

Canadian officials said there is no chance of making substantial changes to NAFTA if talks wrap up by the end of 2017. Modernizing the pact in a serious way will take two years, they forecast.

After the United States unveiled on Monday its much-anticipated objectives for the renegotiation, the agenda was generally viewed as fairly limited in scope and greeted as such by Mexico and Canada.

A U.S. administration official and a congressional source said there were growing concerns within the Trump administration, on Capitol Hill and in the business community that Trump policies could embolden anti-U.S. populist Lopez Obrador, who has tapped into Mexico’s resentment toward Trump.

Some see the series of recent high-level visits by Trump cabinet members to Mexico, including Homeland Security Secretary John Kelly, Secretary of State Rex Tillerson and Energy Secretary Rick Perry, as signs of those concerns.

U.S. officials caution that if things go badly on the trade front, Mexico would gain leverage on immigration. It has been praised by U.S. officials for curbing the flow of Central American immigrants through Mexico, but it could decide to reduce its border enforcement.

“If the current president of Mexico were to capitulate in any major way to Trump’s unreasonable demands, then it would be a huge bonanza for Lopez Obrador,” said Fred Bergsten, a senior fellow at the Peterson Institute for International Economics.

(Economist) Hacking the hacks: Is Mexico’s government spying on its critics?

(Economist) An investigation finds spyware on the phones of journalists and activists.

MEXICANS do not trust their government. Just 29% have some confidence in the institution, according to Latinobarómetro, a polling firm. A report in the New York Times on June 19th, widely broadcast by the Mexican media, must have reduced that number. It said that software sold to the government to spy on suspected criminals had turned up on the mobile phones of journalists and human-rights campaigners who criticise the government perfectly legally.

Investigations by the Times, Citizen Lab (a research centre in Toronto) and three NGOs named 15 people, most of them critics of the government of President Enrique Peña Nieto, whose phones were found to have the spyware. They include Carmen Aristegui, a journalist who helped uncover a controversial purchase of a house by Mr Peña’s wife from a government contractor. Another target was employees of Centro Prodh, a human-rights group that represents the families of 43 students who disappeared in 2014. Many Mexicans excoriated Mr Peña for what they saw as his limp response to this crime, which reportedly involved local police and drug gangsters.

The software, called Pegasus, is sold by an Israeli firm, NSO Group, to governments that agree to use it only to fight crime. It is activated when an unsuspecting person clicks on a link in a text message. Pegasus then gets access to all the data on the phone, including calls, texts and photos. No one knows who authorised the targeting of journalists and activists. The Mexican army, the attorney-general’s office and the intelligence services have all bought the software. To snoop legally, any government agency would need warrants from a court; there is no evidence that any were issued. The government denies that it targeted non-criminals and notes that the report provides no information on who authorised the eavesdropping attempts.

This will not lessen the outrage. The spying on journalists victimises a profession already under assault by criminal gangs. More than 125 have been killed or disappeared in Mexico since 2000; at least five have been murdered so far this year. On June 21st the opposition National Action Party claimed that attempts had been made to hack the phones of four of its leaders. The government has so far not said it will investigate why the phones of law-abiding citizens have been tapped. If anger grows, it may have no choice.

(AP) TRUMP TO MEXICO: TAKE CARE OF ‘BAD HOMBRES’ OR US MIGHT

(AP) President Donald Trump warned in a phone call with his Mexican counterpart that he was ready to send U.S. troops to stop “bad hombres down there” unless the Mexican military does more to control them, according to an excerpt of a transcript of the conversation obtained by The Associated Press.

The excerpt of the call did not detail who exactly Trump considered “bad hombres,” nor did it make clear the tone and context of the remark, made in a Friday morning phone call between the leaders. It also did not contain Mexican President Enrique Pena Nieto’s response. Mexico denies that Trump’s remarks were threatening.

Still, the excerpt offers a rare and striking look at how the new president is conducting diplomacy behind closed doors. Trump’s remarks suggest he is using the same tough and blunt talk with world leaders that he used to rally crowds on the campaign trail.

Eduardo Sanchez, spokesman for Mexico’s presidential office, denied the tone of the conversation was hostile or humiliating, saying it was respectful.

“It is absolutely false that the president of the United States threatened to send troops to Mexico,” Sanchez said in an interview with Radio Formula on Wednesday night.

A White House spokesman did not respond to requests for comment. The Mexican Foreign Relations Department had earlier told The AP: “The negative statements you refer to did not occur during said telephone call. On the contrary, the tone was constructive.”

The phone call between the leaders was intended to patch things up between the new president and his ally. The two have had a series of public spats over Trump’s determination to have Mexico pay for the planned border wall, something Mexico steadfastly refuses to agree to.

“You have a bunch of bad hombres down there,” Trump told Pena Nieto, according to the excerpt given to AP. “You aren’t doing enough to stop them. I think your military is scared. Our military isn’t, so I just might send them down to take care of it.”

A person with access to the official transcript of the phone call provided only that portion of the conversation to The Associated Press. The person gave it on condition of anonymity because the administration did not make the details of the call public.

The Mexican website Aristegui Noticias on Tuesday published a similar account of the phone call, based on the reporting of journalist Dolia Estevez. The report described Trump as humiliating Pena Nieto in a confrontational conversation.

Mexico’s foreign relations department said the report was “based on absolute falsehoods.”

Americans may recognize Trump’s signature bombast in the comments, but the remarks may carry more weight in Mexico.

Political analyst and former presidential spokesman Ruben Aguilar notes Pena Nieto had enjoyed an apparent spike in his low approval levels, as Mexicans rallied around him for publicly challenging Trump in the border wall dispute.

The latest remarks could undercut that, if Pena Nieto is viewed as “weak,” he said.

Trump has used the phrase “bad hombres” before. In an October presidential debate, he vowed to get rid the U.S. of “drug lords” and “bad people.”

“We have some bad hombres here, and we’re going to get them out,” he said. The phrase ricocheted on social media with Trump opponents saying he was denigrating immigrants.

Trump’s comment was in line with the new administration’s bullish stance on foreign policy matters in general, and the president’s willingness to break long-standing norms around the globe.

Before his inauguration, Trump spoke to the president of Taiwan, breaking long-standing U.S. policy and irritating China. His temporary ban on refugees and travelers from seven Muslim-majority countries, aimed at reviewing screening procedures to lessen the threat of extremist attacks, has caused consternation around the world.

But nothing has created the level of bickering as the border wall, a centerpiece of his campaign. Mexico has consistently said it would not pay for the wall and opposes it. Before the phone call, Pena Nieto canceled a planned visit to the United States.

The fresh fight with Mexico last week arose over trade as the White House talked of a 20 percent tax on imports from the key U.S. ally to finance the wall after Pena Nieto abruptly scrapped his Jan. 31 trip to Washington.

The U.S. and Mexico conduct some $1.6 billion a day in cross-border trade, and cooperate on everything from migration to anti-drug enforcement to major environmental issues.

Trump tasked his son-in-law and senior adviser, Jared Kushner – a real estate executive with no foreign policy experience – with managing the ongoing dispute, according to an administration official with knowledge of the call.

At a press conference with British Prime Minister Theresa May last week, Trump described his call with Pena Nieto as “friendly.”

In a statement, the White House said the two leaders acknowledged their “clear and very public differences” and agreed to work through the immigration disagreement as part of broader discussions on the relationship between their countries.

+++ V.I. (BBG) Trump Floats 20 Percent Border Tax as Mexico Feud Deepens

(BBG) The Trump administration floated a 20 percent tax on imports from Mexico to pay for a wall along the southern U.S. border, a plan revealed hours after Mexican President Enrique Pena Nieto canceled his first meeting with the new U.S. leader.

The idea of a border tax was first proposed by White House Press Secretary Sean Spicer to reporters on board Air Force One as Trump returned from a congressional Republican retreat in Philadelphia. Later in the day, Spicer amended his remarks in a meeting with reporters in his office.

“When you look at the plan that’s taking shape now, using comprehensive tax reform as a means to tax imports from countries that we have a trade deficit from, like Mexico, if you tax that $50 billion at 20 percent of imports,” Spicer said on the president’s plane. “By doing that we can do $10 billion a year and easily pay for the wall just through that mechanism alone.”

Spicer didn’t explain how such a tax would work or how it would affect U.S. consumers and companies. Asked if the tax could be applied to other countries, Spicer said the administration is “focused on Mexico right now.”

Later, Spicer summoned reporters to his office and said the tax was only “one solution” to pay for the wall and might be applied at a lower rate. He said its economic impact would have to be examined.

The comments nonetheless suggested the White House is moving toward a “border adjusted” tax plan on companies’ domestic sales and imports that is favored by House Republicans as a replacement for the current U.S. corporate tax. House Ways and Means Chairman Kevin Brady, a Texas Republican and backer of the approach, called Spicer’s comments “very encouraging news.”

Spicer’s remarks were part of a conflict between Trump and Mexico that escalated over a 24-hour period after the U.S. president signed a directive Wednesday to initiate the process of building the border wall. Trump’s border plan rapidly exploded into a showdown that threatens one of the world’s biggest bilateral trading relationships.

The cross-border sparring prompted a drop in the Mexican peso, which fell 0.7 percent to trade at 21.21 per U.S. dollar following Pena Nieto’s announcement. Mexico’s currency has plunged almost 14 percent since Trump’s election on concern that Trump will renegotiate or scrap the North American Free Trade Agreement.

After Pena Nieto said in an address Wednesday that his country would refuse to pay for a barrier on the U.S. southern border, Trump blasted him with a tweet Thursday morning. “If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting,” Trump wrote.

Pena Nieto, who was to meet with Trump Jan. 31, responded a few hours later with his own tweet: “This morning we’ve informed the White House that I won’t attend the working meeting scheduled for next Tuesday with @Potus.”

Higher Prices

The border tax Trump floated wouldn’t be imposed directly on Mexico but instead added to the cost of products as they crossed the border. That would translate to either lower profits for companies that import goods such asFord Motor Co., Wal-Mart Stores Inc. and Target Corp. or higher prices for U.S. consumers who buy the products.

“Mexico doesn’t pay for the wall,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities. “American consumers who shop at places that import, like Wal-mart and Target, pay for the wall, making it a regressive tax supporting a dumb, wasteful idea.”

The National Retail Federation condemned the plan hours after it surfaced.

“Americans are already paying billions of dollars in tariffs and this is just going to result in one more price increase,” David French, senior vice president of the trade group, said in an e-mailed statement.

Republican Senator Lindsey Graham of South Carolina offered his own light-hearted criticism on Twitter.

“Border security yes, tariffs no. Mexico is 3rd largest trading partner. Any tariff we can levy they can levy. Huge barrier to econ growth,” Graham tweeted. “Simply put, any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad.”

And Senator Ben Sasse, a Nebraska Republican who opposed Trump’s election, tweeted simply: “Tariffs are a tax on American families.”

Tax Overhaul

A border adjustment tax would radically remake the U.S. corporate tax system. House Republicans’ plan would apply a 20 percent tax rate to companies’ domestic sales while exempting their exports. Under the plan — which would apply to all countries, not just Mexico — businesses could no longer deduct the cost of imports they use or sell. The plan would generate roughly $1.1 trillion in revenue over a decade, according to an analysis by the conservative Tax Foundation.

Brendan Buck, a spokesman for House Speaker Paul Ryan, said that Spicer was describing the Republicans’ tax plan.

Currently, the U.S. taxes its corporations’ worldwide income at a 35 percent rate — though they can use foreign tax credits to reduce that amount, and companies don’t have to pay any U.S. tax on overseas income until they bring it to the U.S.

House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell both suggested Thursday that, after months of studiously ignoring the border wall proposal, they’re now ready to act on the barrier as part of a spending request they expect from Trump that would help jump-start construction.

The two congressional leaders said they’re ready to spend as much as $15 billion from the federal treasury to build the wall.

Trump Promises

Trump won office with two central campaign promises: construction of a wall along the 1,989-mile border, at Mexico’s expense, to halt illegal immigration and an end to the decline of U.S. manufacturing jobs.

Also at issue is the Nafta accord among the U.S., Mexico and Canada. The U.S. and Mexico traded $531 billion in goods and services in 2015, almost five times the trade between the U.S. and U.K. Mexico is the third-largest trading partner with the U.S., following China and Canada, and it sends close to 80 percent of its goods to its northern neighbor.

Mexico’s Foreign Minister Luis Videgaray and Economy Minister Ildefonso Guajardo have been in Washington since Tuesday meeting with Trump administration officials to discuss the agreement.

“Negotiations are paralyzed,” said Jose Antonio Crespo, a political analyst at the Center for Economic Research and Teaching in Mexico City. “It’s clear that Trump made this decision, because he imposed conditions that are unacceptable.”

+++ (BBG) Mexico’s President Cancels U.S. Visit as Trump Feud Deepens

(BBG) Mexico’s President Enrique Pena Nieto canceled a meeting with U.S. President Donald Trump planned for next week as a dispute over Trump’s border wall plan exploded into a showdown that threatens one of the world’s biggest bilateral trading relationships.

Trump, hours later, characterized the scuttling of the meeting as a mutual decision between the two governments, even as he called Mexico disrespectful in its approach.

“Unless Mexico is going to treat the U.S. fairly, with respect, such a meeting would be fruitless and I want to go a different route,” Trump said in a speech to Republican lawmakers at a retreat in Philadelphia Thursday afternoon.

His spokesman later said the administration was considering slapping a 20 percent tax on imports from Mexico to pay for the barrier, a move that threatens to add to tensions in the U.S.-Mexico relationship.

The dispute over the border wall and trade has become the first major foreign policy test for Trump, who took office on Jan. 20. The outcome has domestic political implications and economic consequences for both countries.

The conflict between Trump and Mexico, which had been building since the U.S. presidential campaign, came to a head over a 24-hour period as Trump signed a directive to initiate the process of building a border wall and the two leaders conducted a foreign policy exchange via Twitter.

After Pena Nieto said in an address Wednesday that his country would refuse to pay for a barrier on the U.S. southern border, Trump blasted him with a tweet Thursday morning. “If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting,” Trump wrote.

Pena Nieto responded a few hours later with his own tweet: “This morning we’ve informed the White House that I won’t attend the working meeting scheduled for next Tuesday with @Potus.”

The cross-border sparring prompted a drop in the Mexican peso, which fell 1.1 percent to trade at 21.29 per U.S. dollar following Pena Nieto’s announcement. Mexico’s currency has plunged almost 14 percent since Trump’s election on concern that Trump will renegotiate or scrap the North American Free Trade Agreement. Peso-denominated government bonds have also taken a hit since the U.S. election, with the yield on benchmark bonds due in 2024 rising 1.43 percentage points to 7.53 percent as the peso’s weakness led the central bank to hike interest rates.

Still Talking

Trump’s spokesman, Sean Spicer, indicated the administration still wanted Pena Nieto to come to the U.S. “We’ll look for a date to schedule something in the future,” he told reporters. “We’ll continue to coordinate.”

In a second tweet, Pena Nieto also said the door wasn’t closed to a meeting: “Mexico reiterates its willingness to work with the U.S. to achieve accords in favor of both nations.”

Pena Nieto had been under domestic pressure to stand up to Trump, and that only intensified after Trump on Wednesday signed the directive on the wall. In his televised address on Wednesday, Pena Nieto said Mexico demanded respect as an autonomous nation even as it negotiates new trade rules with the U.S.

“Hostile actions in Washington, such as the announcement of the construction of the wall, from our point of view, means that the U.S. doesn’t want any collaboration from our side,” Senator Armando Rios Piter of the Democratic Revolution Party said in a statement Wednesday.

Maryland Senator Ben Cardin, the senior Democrat on the Foreign Relations Committee, put responsibility for the rift on Trump.

“Less than one week after taking office, President Trump is already causing serious damage to one of our most important relationships in the world,” Cardin said in a statement. “U.S. national security depends directly on cooperation with our neighbors.”

Central Promise

Trump won office by making two central promises of his campaign the construction of a wall along the 1,989-mile border at Mexico’s expense to halt illegal immigration and halting the shift of manufacturing jobs. He said in an interview on ABC Wednesday that construction could begin in a matter of months, though it would initially be funded by U.S. taxpayers.

But he may have to wrestle with members of his own party in Congress. Republican leaders have discussed spending $12 billion to $15 billion, but it’s unclear whether that would pay for the wall Trump envisions. Republicans lawmakers also are debating Trump’s plan for massive spending on infrastructure, expanding the military and cutting taxes while juggling their own pledges to address the national debt.

Spicer told reporters traveling with Trump that a tax on imports from Mexico could pay for wall construction.

“When you look at the plan that’s taking shape now, using comprehensive tax reform as a means to tax imports from countries that we have a trade deficit from, like Mexico, if you tax that $50 billion at 20 percent of imports,” Spicer said, “by doing that we can do $10 billion a year and easily pay for the wall just through that mechanism alone.”

Trade Dispute

Also at issue is the Nafta accord among the U.S., Mexico and Canada. The U.S. and Mexico traded $531 billion in goods and services in 2015, almost five times the trade between the U.S. and U.K. Mexico is the third-largest trading partner with the U.S., following China and Canada, and it sends close to 80 percent of its goods to its northern neighbor.

But Trump has blamed the pact, which entered into force in 1994, for the loss of U.S. jobs. He’s vowed to renegotiate the agreement while also pressuring U.S. companies, including automakers General Motors Co. and Ford Motor Co., to scale back plans for building plants in Mexico.

“It has been a one-sided deal from the beginning of Nafta with massive numbers of jobs and companies lost,” Trump said in two tweets Thursday.

Mexico’s Foreign Minister Luis Videgaray and Economy Minister Ildefonso Guajardo have been in Washington since Tuesday meeting with Trump administration officials to discuss the agreement.

Given just how much Mexico has benefited from the pact — its annual trade surplus with the U.S. has soared to over $60 billion — there’s a sense that Videgaray has little leverage in the talks. In the past, they’ve signaled that they’re prepared to broaden the accord to include industries like internet commerce and energy.

“Negotiations are paralyzed,” said Jose Antonio Crespo, a political analyst at the Center for Economic Research and Teaching in Mexico City. “It’s clear that Trump made this decision, because he imposed conditions that are unacceptable.”

(OBS) EUA: Muro com o México vai mesmo acontecer. Decreto é assinado esta quarta-feira

(OBS)Trump vai mesmo dar a ordem para avançar com a construção de muro na fronteira dos EUA com o México. Decreto é assinado hoje e esperam-se mais medidas nos próximos dias.

“Amanhã está previsto que seja um grande dia para a Segurança Nacional. Entre outras coisas, vamos construir o muro!” A frase do presidente Donald Trump, publicada na noite de terça-feira na rede social Twitter, vai em linha com o que escreveram diferentes meios de comunicação internacionais. Segundo o The New York Times, Trump vai mesmo avançar com a construção de um muro na fronteira com o México já esta quarta-feira. E prevê-se que esta seja a primeira de uma série de medidas com vista a refrear a entrada de imigrantes e a reforçar a segurança nacional.

A construção de um muro com a fronteira mexicana foi uma das promessas de Trump em plena campanha presidencial. Mas se, em setembro do ano passado, o agora presidente dos EUA garantiu que seria o México a pagar pelo muro, após as eleições a sua equipa admitiu que o investimento será assumido, numa primeira fase, pelos contribuintes norte-americanos, tal como explica o jornal espanhol El País.

Este deverá ser também um dos temas na agenda do encontro entre Donald Trump e o seu homólogo mexicano, Enrique Pena Nieto, que terá lugar no próximo dia 31 de Janeiro. Os dois presidentes falaram ao telefone no sábado passado, para acertar pormenores das conversas sobre comércio, segurança e imigração, e o stafe dos dois presidentes já está a trabalhar em conjunto para preparar a reunião.

A fronteira entre os dois países tem mais de 3.200 quilómetros — até ao momento, apenas mil quilómetros estão muralhados. O muro, afiança o The New York Times, terá um custo estimado de 6.5 milhões de dólares por milha (cerca de 1,6 quilómetros), e 4.2 milhões de dólares por milha adicionais para estradas e vedação — estas estimativas não incluem a manutenção do muro.

As diretivas previstas para os próximos dias deverão abranger áreas como a imigração, a segurança das fronteiras e os refugiados, e incluem medidas como a manutenção da prisão de Guantánamo Bay — que Barack Obama prometeu, sem sucesso, encerrar durante o seu mandato — e designar a Irmandade Muçulmana, do Egito, uma organização terrorista.

Em causa está também a suspensão temporária da entrada de refugiados nos Estados Unidos, à exceção de minorias religiosas a fugir de perseguição. Outra ordem implica a também suspensão de vistos para cidadãos da Síria, Iraque, Irão, Líbia, Somália, Sudão e Iémen.

+++ (BBG) Canada Signals Possible U.S. Trade Deal That Excludes Mexico

(BBG) Canada’s government will consider bilateral trade measures during renegotiation of the North American Free Trade Agreement, a sign it could potentially move ahead at least in part without Mexico.

The comments from David MacNaughton, Canada’s ambassador to the U.S., suggest Donald Trump’s protectionist pledges are splintering the continental pact as the president prepares to meet Mexico’s Enrique Pena Nieto late this month.

Justin Trudeau. Photographer: Cole Burston/Bloomberg

Prime Minister Justin Trudeau’s government arrived in Calgary Sunday evening for cabinet meetings where Trump is looming large. The president signed an executive order Monday withdrawing from the Trans-Pacific Partnership trade accord and intends to begin talks soon to renegotiate Nafta, abruptly ending the decades-old U.S. tilt toward free trade.

MacNaughton said upon arrival that his focus is on avoiding Canada being “collateral damage” in trade actions aimed at China and Mexico. “We will cooperate on trilateral matters when it’s in our interest and we’ll be looking to do things that are in our interest bilaterally also. Some of them may be within Nafta, some may not be,” he said.

Trudeau talked with Pena Nieto on Sunday, releasing a short summary afterward saying they “spoke about the importance of the Canada-Mexico bilateral relationship, and of the trilateral North American partnership.”

Line of Fire

Since Trump’s election victory, Canadian trade officials and observers have held out hope they’re not Trump’s target. Canada is the top buyer of U.S. goods overall and the top buyer for 35 individual states, a detail Trudeau emphasized to the president in a call Saturday. What Canadians fear is that any tariffs or other measures applied broadly will sideswipe them. About 70 percent of Canadian trade is with the U.S.

“I don’t think Canada’s the focus at all, but I think we are part of that,” MacNaughton said. “That’s what we’ve got to worry about — is if we’re collateral damage.”

Trump officials have yet to raise any specific concerns about Canadian trade, MacNaughton added. “Their biggest concern frankly in terms of trade is the deficits they have with China and Mexico. That’s what they’ve raised.”

Chrystia Freeland. Photographer: Qilai Shen/Bloomberg

Chrystia Freeland.

Photographer: Qilai Shen/Bloomberg

Trudeau has prepared for the Trump era by promoting his trade minister, Chrystia Freeland, to serve as foreign minister and his main liaison for talks with Trump. He appointed a retired general as her deputy with a specific focus on wooing the U.S. administration, and reshuffled staff to focus on U.S. ties.

‘Primarily’ Bilateral

Asked about Mexico on Monday, Freeland cited Pena Nieto’s visit to Ottawathis summer as evidence of “a very mutually beneficial Nafta partnership. But of course, our relationship with the United States is primarily a bilateral relationship.”

Meanwhile, Trump-style politics are looming larger in Canada. Trudeau canceled a trip to the World Economic Forum in Davos, Switzerland, in favor of a rural tour aimed at fending off controversies that painted him as out-of-touch. His main rival party is embroiled in a leadership race where several candidates are drawing from Trump’s playbook.

Freeland has downplayed the risks of major trade impacts, saying she’s “really confident” Canada can build a strong relationship with the Trump team. “There’ve been nearly a dozen meaningful changes to Nafta since it was first concluded, so we’re looking forward to those conversations,” she said in a television interview on inauguration day.

(WP) Commerce nominee Ross says top priority is renegotiating NAFTA

(WP) Wilbur Ross: Trade partners who don’t ‘play fair … should be punished’. 

President-elect Trump’s nominee for commerce secretary Wilbur Ross gave opening remarks, Jan. 18, at his confirmation hearing before the Senate Committee on Commerce, Science, and Transportation. (Reuters)

Billionaire investor Wilbur Ross singled out changes to the nation’s free trade agreement with Mexico and Canada on Wednesday as “the first thing” he would address if confirmed to lead the Commerce Department in President-elect Donald Trump’s administration.

Speaking before the Senate commerce committee, Ross argued that the United States should open its economic borders to countries that “play by the rules.” But those that do not, he said, “should be punished — severely.”

“I am not anti-trade. I am pro-trade,” Ross said. “But I am pro sensible trade, not pro trade that is to the disadvantage of the American worker and the American manufacturing community.”

Ross appeared to face an easy path to confirmation, with lawmakers from both sides of the aisle praising his testimony Wednesday. Commerce chairman Sen. John Thune (R-S.D.) called Ross’s explanation of his stance on trade “reassuring.” Meanwhile, ranking Democrat Sen. Bill Nelson of Florida said Ross answers were “detailed” and “non-evasive” and called the hearing “a piece of cake.”

Trump made renegotiating the nation’s trade agreements a centerpiece of his presidential campaign, tapping into the frustration of many middle-class workers who have felt left behind by globalization. Since his election, Trump has already begun wielding the power of the bully pulpit, repeatedly calling for a border tax on U.S. companies that offshore jobs and sell their products back home.

He has taken to task individual companies such as Ford, General Motors and Toyota for investing in Mexico, sending their stock prices plummeting. But he has also touted new U.S. jobs created by telecom giant Sprint and pharmaceutical maker Bayer AG.

Ross was a close adviser to Trump during the election, and he is slated to take the leading role in setting trade policy in the new administration. Trump has named economist Peter Navarro to head a newly created manufacturing council within the White House and picked trade veteran Robert Lighthizer as the U.S. Trade Representative in charge of negotiating agreements.

On the campaign trail, Trump called for a blanket 35 percent tax on Mexican imports and a 45 percent tariff on goods from China. In a recent interview with the German newspaper Bild, he suggested imposing a 35 percent tax on German cars sold in the United States as well.

“When you start out with the adverse party understanding that he or she is going to have to make concessions, that’s a pretty good background to begin” negotiations, Ross said Wednesday.

Ross wants to ‘level the playing field’ with China

It is unclear if those measures are part of the border tax that Trump has long touted, and international trade experts say they are likely a violation of long-standing treaties. In a recent Wall Street Journal interview, Trump criticized a controversial tax plan by House Republicans intended to discourage imports known as “border adjustment.”

Ross indicated Wednesday that tariffs were an essential component of U.S. trade policy. However, he acknowledged that protectionist measures implemented during the Great Depression only served to deepen the nation’s economic distress.

“I think tariffs play a role both as a negotiating tool and to punish offenders that don’t play by the rules,” he said.

Trump’s top trade advisers have also raised concerns about China’s growing power in the world economy. Navarro has been particularly dire in his warnings, writing a book entitled “Death By China.”

Ross, who collects Chinese art and has extensive business interests in the country, sounded a stern but less strident tone in his testimony Wednesday. He said companies manipulate their currencies as a strategy for “attacking” the American economy, though he did not mention Trump’s pledge to label China a currency manipulator on the president-elect’s first day in office.

“China is the most protectionist country of very large countries,” Ross said.

Ross amassed his fortune by investing in the industries that were hit hardest by the forces of globalization — including steel, coal and textile. He recently announced he would step down down from his position on the board of directors at ArcelorMittal, the world’s largest steel producer, in advance of his confirmation. According to Bloomberg, Ross’s financial disclosures revealed assets of more than $330 million, though his net worth is estimated at $2.9 billion.

During his testimony, Ross said he would be “scrupulous in recusal” to prevent any conflicts of interest with his vast business empire. But he said his wide-ranging investments also provided him insight into the minutiae of trade law and said his companies have been the victims of unfair practices.

On Wednesday, he called for tougher enforcement of existing trade laws, arguing that countries often delay cases by failing to provide paperwork and that billions of dollars in penalties go uncollected. That hard-line stance has helped him win support from the United Steelworkers, which had backed former Secretary of State Hillary Clinton during the election.

Ross’s testimony was briefly interrupted by protesters criticizing Ross for his early support of the sweeping trade agreement with Asia known as the TransPacific Partnership, one of President’ Obama’s signature achievements. The deal has since become politically toxic, and Trump has vowed to pull out of the agreement once in office.

Ross said Wednesday he changed his mind after analyzing the details of the agreement, raising concerns about what he said were lax requirements on auto parts manufacturing.

“I came across some things that I felt were not consistent with things that had been advertised,” he said.

Protesters interrupt Trump’s commerce secretary nominee

Ross also highlighted proposals to incentive domestic growth, including spending on infrastructure. During the campaign, Ross and Navarro suggested a $137 billion tax credit that they said could spur $1 trillion in private sector spending on infrastructure projects with a regular revenue stream, such as toll roads. That proposal was widely panned by economists as unrealistic, but Ross defended it on Wednesday.

“The infrastructure needs of this country are so monumental that we need any available source of capital in order to meet it on a timely basis,” he said.

Ross said the tax credits should be one of several efforts by the federal government to boost infrastructure spending. Several top Republican lawmakers have questioned the need for additional government spending, however, and Ross did not propose a way to pay for those proposals.

Ross also acknowledged during the hearing that he had hired an undocumented immigrant in 2009 as a household employee. Ross said the worker had provided what appeared to be a valid Social Security card and driver’s license when hired. But in preparation for his confirmation, Ross said he requested that the employee provide the paperwork once more and that person was unable to do so.

Ross said the employee has been fired. He also said he paid all taxes required that person’s employment.

+++ (JN) Presidente do México rejeita pagar muro proposto por Trump

Bla Bla Bla…

(JNNo dia em que o presidente eleito norte-americano insistiu na construção de um muro entre os EUA e o México, o chefe de Estado mexicano contrapôs que pretende boas relações com Trump.

O Presidente mexicano, Enrique Pena Nieto, tornou esta quarta-feira, 11 de Janeiro, a rejeitar a pretensão de Donald Trump que seja o seu país a pagar o muro que o Presidente eleito dos EUA quer construir na fronteira mútua.

Nieto contrapôs que pretende boas relações com Trump.

O dirigente mexicano adiantou que está pronto para discutir o futuro do Acordo de Comércio Livre da América do Norte (NAFTA, na sigla em inglês), mas que o seu Governo rejeita qualquer tentativa de influenciar investidores estrangeiros “na base do medo e de ameaças”.

+++ (BBG) Trump Scores a Victory as Ford Aborts Planned Mexico Plant

(BBG) President-elect Donald Trump on Tuesday notched the biggest victory of his campaign to get automakers to keep jobs in the U.S. when Ford Motor Co. canceled a $1.6 billion Mexican expansion, saying it would add positions in Michigan instead.

The company’s announcement culminated a dizzying morning that started with Trump threatening to punish General Motors Co. for building a version of its fading compact car in Mexico. GM challenged his assertions, but minutes later Ford — a frequent target of Trump’s campaign-trail criticism — struck a different note.

Trump was “very pleased we were making this investment in U.S. jobs,” Mark Fields, Ford’s chief executive officer, told reporters at the automaker’s plant in Flat Rock, Michigan, where it will add 700 positions. “One of the factors we’re looking at is the more positive U.S. business environment that we foresee under President-elect Trump and the pro-growth policies that he’s been outlining. So this is a vote of confidence around that.”

Trump has pledged to revive U.S. manufacturing that has steadily migrated to countries with cheaper labor over the past couple decades. His persistent interventionist campaign has targeted companies including Boeing Co., Lockheed Martin Corp. and United Technologies Corp., singling out those whose job moves or prices have rankled him. While many analysts doubt the long-term efficacy of his approach, short-term gains, like Tuesday’s, can be had.

The Ford decision reverberated on the first trading day of 2017, with its shares rising 3.5 percent to $12.57 at 3:28 p.m. in New York. The Mexican peso weakened beyond 21 to the dollar on concern that Trump is succeeding in curtailing investment in the country. In a statement, the Economy Ministry said Mexico “regrets” the automaker’s move and remains committed to the 1994 North American Free Trade Agreement.

The auto industry has been a special prize for Trump, conjuring visions of a thriving, 1950s-era Detroit where shift work created jobs that paid for mortgages, college educations and an annual vacation. His feud with the auto industry emerged during the campaign. He appeared eight times in Michigan, driving home a message that he would cancel Nafta, which he blamed for sending auto-factory jobs to Mexico. Trump was the first Republican presidential candidate to win the state since George H.W. Bush in 1988.

Companies aside from Ford may find it more advantageous to work with Trump rather than to battle his unprecedented social-media reach and willingness to get involved in individual deals.

“You’re just setting yourself up to lose,” said Joe Watkins, a Pennsylvania-based Republican consultant and former aide to the first President Bush. “He can continue to keep you front and center in the news just with a single tweet, so why do you want to engage in a fight?”

Fields said the decision to scrap the new compact-car plant in Mexico reflected shifting consumer tastes, not pressure from the president-elect. While Ford did notify Trump and Vice President-elect Mike Pence before the announcement, Fields said the same decision would’ve been made regardless of Trump’s comments.

Small-Car Slump

“What we’ve seen is a marked decline in demand for small vehicles here in North America,” Fields told Bloomberg Television. “So we don’t need that capacity, and we’re going to take the Focus that was supposed to be produced there and produce it in an existing facility that we have in Mexico.”

United Auto Workers Vice President Jimmy Settles, who took the stage at Flat Rock after Fields, said he cried when he first learned of the new investment. The UAW has contended with declining membership for decades, and Settles said he had feared that any investment in electric cars might go to the U.S. West Coast. Now, temporary workers at Flat Rock have a chance to move into permanent positions.

“The UAW has long believed that companies that sell in our country should build their products in our country,” UAW President Dennis Williams said in a statement.

Mexican autoworkers earn less than $6 an hour on average, with a minimum wage of $4.50, according to the Center for Automotive Research. Their UAW peers average $28 an hour.

Still, new contracts have helped automakers keep U.S. labor costs under control, and the decision is a way to mitigate risks, said Kristin Dziczek, director of the center’s Industry, Labor & Economics Group . “Ford would not make a decision that did not make good business sense to them,” she said. “If it happens to make political sense, too, then that’s good.”

GM in Crosshairs

Earlier in the day, Trump trained his sights on GM. Trump said in a Twitter post that the largest U.S. automaker, which manufactures a Chevrolet Cruze hatchback model in San Luis Potosi, should build the car at home or face a hefty tariff.

“General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border,” Trump tweeted. “Make in U.S.A. or pay big border tax!”

That barb elicited a terse response from GM spokesman Tony Cervone challenging his assertions: “General Motors manufactures the Chevrolet Cruze sedan in Lordstown, Ohio. All Chevrolet Cruze sedans sold in the U.S. are built in GM’s assembly plant in Lordstown, Ohio. GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S.”

The automaker has sold only 4,500 hatchbacks north of the border, said another spokesman, Jim Cain. The 190,000 Cruze sedans that Americans have bought were all built in Lordstown, according to Cervone, who declined to say whether the company would engage further with Trump.

Mexico Agreements

There is no tariff on cars built in Mexico and shipped over the border for sale in the U.S. Mexico’s government has courted car companies around the world by entering into 13 free-trade agreements with 44 countries that make up 60 percent of the global gross domestic product. The country has tariff-free access to 47 percent of the worldwide vehicle market, compared with 9 percent for the U.S.

Mexico Boom

Nine global carmakers, including Toyota Motor Corp. and Nissan Motor Co., have announced more than $24 billion in Mexico investments since 2010.  BMW AG, Daimler AG and Volkswagen AG’s Audi each build or plan to assemble luxury vehicles, engines or heavy trucks in the country.

Toyota, which broke ground in November on a $1 billion plant in Guanajuato, has made no change in plans to build Corolla compacts there from 2019, spokeswoman Kelly Stefanich said. BMW AG’s construction of a 3 Series sedan plant in San Luis Potosí is “moving briskly along” in order to start production the same year, according to spokesman Kenn Sparks.

Nissan, which together with Daimler is investing $1 billion in a plant in Aguascalientes, said its business plans “remain unchanged,” according to spokesman Brian Brockman. The Mexican plant is scheduled to start producing cars this year.

Fields on Tuesday expressed skepticism that Trump would slap a 35 percent tariff on the Focus, which will still be built in Mexico.

“The right policies will prevail because we share the same aspirations that I think the president-elect does — we want a very strong U.S. economy,” Fields said. “The president elect has run on many of these stances and he seems to be a man of his word.”

(JN) Mota-Engil ganha contrato de 228 milhões no México

(JNCom esta nova adjudicação e outras recentes na Colômbia, México, Peru e Paraguai, a construtora aumentou a carteira de encomendas em mais de 400 milhões de euros na América Latina.

Mota-Engil ganha contrato de 228 milhões no México

A subsidiária da Mota-Engil no México ganhou, em consórcio, o contrato de “Associação Público Privada Coatzacoalcos-Villahermosa”, cujo montante total é de 228 milhões de euros, atribuído pela Secretaria Mexicana dos Transportes e Comunicações, informou a construtora portuguesa emcomunicado à CMVM.

O consórcio vencedor, onde a Mota-Engil México detém uma participação de 74%, será responsável pela reabilitação, manutenção e operação de uma auto-estrada com 130 quilómetros por um período de 10 anos, com início em Dezembro de 2017.

Adicionalmente, nas últimas semanas a empresa liderada por Gonçalo Moura Martins (na foto) viu a sua carteira de encomendas aumentar na região da América Latina através de vários projectos em diferentes países.

No México conseguiu também o contrato de construção, operação e manutenção da Ponte de Veracruz no Estado de Veracruz, com um valor total de 90 milhões de euros, sendo a participação da Mota-Engil México 100%; tendo também obtido o direito e a obrigação – através da sua subsidiária Socieda Generadora Fénix (SGF) – de venda de 314,6 mil CEL1 (Certificados de Energia Limpa) por ano durante um período de 20 anos a ter início em 2019

No Peru, a Mota-Engil ganhou um contrato de construção que ascende a 21 milhões de euros e que visa o melhoramento no hospital de Huari. Este contrato, com prazo de 18 meses, foi adjudicado no âmbito do sistema peruano de financiamento “Obras por impostos” que tem como objectivo promover o investimento em infra-estruturas cruciais ao país.

Na Colômbia, a construtora portuguesa conseguiu dois contratos de infra-estruturas na cidade de Barranquilla num valor total de 41 milhões de euros. A empresa será responsável pela construção de um sistema de drenagem, assim como por trabalhos de protecção e de urbanização na orla fluvial do rio Magdalena.

 

No Paraguai, foi adjudicado ao consórcio no qual a Mota-Engil detém uma participação de 20% o projecto de desenho, financiamento, construção, manutenção e operação da duplicação e melhoramento das vias designadas “Ruta 2” e “Ruta 7”, que ligam a capital Asunción à segunda cidade do país, Ciudade del Este, numa extensão de 170 quilómetros. O valor total de construção é de cerca de 275 milhões de euros e o contrato de manutenção e exploração decorre durante um período de 30 anos.

 

“Estes contratos irão contribuir para um aumento de mais de 400 milhões de euros da carteira de encomendas na América Latina, reforçando assim a visibilidade e sustentabilidade da actividade de construção da Mota-Engil, garantindo igualmente, no leilão de energia e nas novas concessões rodoviárias no México e Paraguai, uma recorrência e estabilidade de receitas a longo prazo”, sublinha o comunicado.

(WSJ) Donald Trump Vows Deportations After Easing Tone in Meeting With Mexican President Enrique Peña Nieto

(WSJ) Republican candidate says they didn’t talk about who would pay for proposed border wall; Mr. Peña Nieto said it won’t be Mexico.

 Hours after seeming to ease his immigration and trade policy while standing with Mexico’s president, Donald Trumpreiterated the tough stance that powered his Republican presidential campaign.

He told a crowd of raucous supporters Wednesday evening that all illegal immigrants are “subject to deportation” and all those seeking legalization would have to go home and re-enter the country legally.

Mr. Trump also doubled-down on his assertion that Mexico will pay to build an “impenetrable” wall on the Southern border. “They don’t know it yet, and they’re going to pay for it,” he said at a rally here just hours after his meeting in Mexico City with President Enrique Peña Nieto, who told Mr. Trump that his nation had no intentions of underwriting such a project.

In amplifying the harsh tone of his immigration policy, Mr. Trump was placing a clear bet that, on this signature issue of his campaign, it is more important to err on the side of revving up his supporters than to soften his tone to reach out to unpersuaded voters.

“We will break the cycle of amnesty and illegal immigration. There will be no amnesty,” Mr. Trump said. “Our message to the world will be this: you cannot obtain legal status or become a citizen of the U.S. by illegally entering our country.”

The surprise visit to Mexico City on Wednesday and the Phoenix address came as Mr. Trump trails Democratic rival Hillary Clinton in polling in each of the 11 battleground states that will decide the general election.

His weakness among Hispanic voters has damaged his standing in Colorado, Nevada and Florida, and made Arizona competitive—a heavily Republican state where the Clinton campaign opened two offices in August and invested more than $100,000 in field staffers to register voters and boost Democratic turnout.

David Axelrod, the senior strategist for President Barack Obama’s presidential campaigns, predicted Mr. Trump would reap some political benefit merely by standing next to a world leader. But Mrs. Clinton disagreed, saying on Twitter, “Trump just failed his first foreign test. Diplomacy isn’t as easy as it looks.”

For the last 10 days Mr. Trump has articulated varied proposals on how he would deal with the millions of undocumented immigrants already in the country. On Wednesday, he punted on that politically vexing issue.

Instead, Mr. Trump said he would jettison protections President Barack Obama has sought for parents of legal U.S. citizens and, on his first day in office, deport 2 million illegal immigrants he said have criminal records. He also said he would, without due process, remove any undocumented person who is arrested for any crime.

In Donald Trump’s immigration speech on Wednesday night, he again said Mexico would pay for the wall he wants to build on the southern border. But earlier in the day, Mexico’s president said he told Trump his country would not. Photo: Getty Images

“We will issue detainers for illegal immigrants who are arrested for any crime whatsoever and they will be placed into immediate removal proceedings,” he said.

Deportations wouldn’t be limited to people suspected or convicted of crimes. “Anyone who enters the United States illegally is subject to deportation,” he said.

For new immigrants, Mr. Trump said he would install “new screening tests” that he said would “include an ideological certification.” He also said he would complete a “biometric entry-exit visa tracking system.”

Mr. Trump also reiterated immigration proposals he has touted on the campaign trail. He would rescind Mr. Obama’s executive actions to defer deportations for some illegal immigrants brought to the U.S. as children and some illegal immigrant parents whose children are American citizens.

In addition to building the wall he said he would add 5,000 border patrol officers.

During his press appearance with Mexican President Enrique Peña Nieto, Donald Trump put a diplomatic spin on his usually blunt rhetoric about Nafta and making Mexico pay for a border wall. Photo: Reuters

Earlier, Mr. Trump’s campaign had signaled a softening of his rhetoric on issues of trade and immigration, and a more subdued Mr. Trump appeared to do that during a joint appearance with Mr. Enrique Peña Nieto.

On the issue of trade, the Republican presidential nominee did appear to give some room, telling reporters in Mexico City that he would aim to “improve” the North American Free Trade Agreement, an accord he has long called a disaster. In a joint briefing after the meeting, he also said he would aim to keep manufacturing “in our hemisphere,” referring to North America.

Yet, during his evening rally, Mr. Trump repeated his pledges to punish American companies that move to Mexico and enact steep new tariffs on imports.

Earlier in the day in Mexico City, Mr. Trump said at the briefing that “we didn’t discuss payment of the wall,” but called the barrier “a shared objective.”

Mr. Peña Nieto, however, said he told Mr. Trump in private that Mexico wouldn’t subsidize a border barrier. “At the beginning of my conversation with DonaldTrump I made clear that Mexico would not pay for the wall,” he wrote on Twitter later Wednesday.

Mr. Peña Nieto’s spokesman, Eduardo Sanchez, said Mr. Trump didn’t respond to the president’s statement, so there was no discussion. Trump spokesman Jason Miller released a statement that didn’t mention the wall payment dispute but said “it is unsurprising that they hold two different views on this issue.” Mr. Miller didn’t respond to requests for clarification.

Mr. Peña Nieto condemned several of Mr. Trump’s campaign proposals and his characterization of some illegal immigrants as drug dealers and rapists. “Mexicans felt offended by what was said” during the campaign, Mr. Peña Nieto said.

The Mexican president noted illegal immigration was at a 10-year low, and said economic activity in the two nations benefit each other. He called the Nafta trade pact a boon to the U.S. economy, but said he would be willing to “modernize” it.

Messrs. Trump and Peña Nieto described their meeting as polite but blunt. Mr. Trump said it was “a great honor” to be invited to Los Pinos, the official residence of the Mexican president, while Mr. Peña Nieto said Mr. Trump demonstrated his willingness to work with Mexico by visiting the country.

Mr. Trump, reading from notes, said he told Mr. Peña Nieto that Nafta has benefited Mexico far more than it has the U.S. Mr. Peña Nieto said his priority is “to protect Mexicans, wherever they are.”

The visit was harshly criticized in Mexico as capitulation to a U.S. candidate who had attacked the country repeatedly on the campaign trail. The meeting was unlikely to help Mr. Peña Nieto improve his approval ratings, which are the lowest of any Mexican leader in two decades, analysts said.

“Peña Nieto had a golden opportunity to speak truth to power and instead he showed weakness, handing the stage to Trump to reaffirm in our faces that yes, there will be a wall,” said Sergio Aguayo, an academic at the Colegio de Mexico graduate school in Mexico City.

Mr. Trump’s revised approach to Nafta differs from the trade policy he has articulated since launching his campaign. During a “60 Minutes” interview last September, he called Nafta “a disaster” that “shouldn’t exist.”

Though he said Wednesday that Nafta has benefited Mexico more than it has the U.S., he didn’t repeat calls to install tariffs of up to 40% on U.S. companies that relocate to Mexico.

(WSJ) Donald Trump Plans Trip to Mexico to Meet President Enrique Peña Nieto

(WSJ) Mexican president sent invitations to the Republican candidate and Democratic nominee Hillary Clinton.

Donald Trump is planning a quick trip Wednesday to Mexico to meet with President Enrique Peña Nieto, shortly before the Republican presidential nominee is slated to give a speech on immigration in Phoenix.

The trip, which Mr. Trump announced late Tuesday and which was confirmed by the office of Mr. Peña Nieto, follows an invitation the Mexican president sent Friday to both Mr. Trump and Democratic nominee Hillary Clinton, according to Mr. Peña Nieto’s office. The president’s office said the invitation “was well received by both campaign teams.”

The two men will meet in the Mexican President’s official residence, called Los Pinos, in the early afternoon and issue a statement immediately after. Neither will take any questions, according to a person familiar with the plans.

A trip to Mexico would represent a dramatic development on a subject that has been a controversial centerpiece of Mr. Trump’s campaign. He has vowed repeatedly that he will build a wall along the southern border of the U.S. to keep out illegal immigrants, and has said he will persuade Mexico to pay for it.

In an interview with CNN in July, Mr. Peña Nieto said there was “no way” Mexico would pay for a border wall.

Mr. Trump also has said he is opposed to the North American Free Trade Agreement, a pact that Mexico is party to and continues to support.

Mr. Trump set the stage for a showdown with the leadership of Mexico in his announcement speech last June, when he said the country was sending rapists and drug dealers across the border. Yet he also has pledged that he would find a way to have good relations with Mexico’s leaders, who, he has said, are outsmarting their American counterparts.

Mr. Trump’s speech Wednesday evening on immigration comes after more than a week in which he and his advisers have given conflicting explanations of his deportation policy. During the primary, he said he would expel all illegal immigrants from the country, but in recent days he has suggested focusing on those with criminal records.

On Tuesday morning, Mr. Trump sought to quash any speculation that he was also softening on his promise to build a wall “ From day one I said that I was going to build a great wall on the SOUTHERN BORDER, and much more,” he said on Twitter “Stop illegal immigration. Watch Wednesday!”

Many Mexicans were angered at the news of the meeting, in light of some of the things Mr. Trump has said about Mexico during his campaign over the past year.

“This is appeasement of the worst kind. Peña Nieto is like [Neville] Chamberlain to his Hitler,” said Alejandro Hope, a former Mexican intelligence official and security analyst, referring to the British prime minister who tried to appease Germany in the run up to World War II.

Mr. Hope said the visit—and ensuing potential photo op of both men shaking hands—undercuts Mrs. Clinton’s argument that Mr. Trump doesn’t have the temperament to be president.

“For Trump, this makes perfect sense. He polishes his image,” said Mr. Hope. “What is Pena going to get out of this? Half price on the wall?”

Mr. Peña Nieto and his aides had debated in the past how to respond to the real estate mogul, with many aides suggesting he take an aggressive stand against him, according to a person familiar with the meetings. But the president has said he should not take sides in a U.S. election and instead should appear above the fray, that person said.

But now the Mexican leader has inserted himself in the election through his invitation to both candidates, analysts said.

“I don’t know why Pena is doing this, especially now. It doesn’t help him at home, and brings him and Mexico into the middle of the U.S. election process (at least for a day); a fraught place for a foreign president to be,” Shannon O’Neil, a senior fellow at the Council on Foreign Relations in New York, wrote in an email.

Mexican officials are expected to try to use the occasion to get across Mexico’s views on immigration and trade, especially Nafta.

Mexican officials complain that the trade relationship has been distorted by both parties, with many Americans seeing Mexico and China as equally harmful for U.S. jobs. They emphasize that after 22 years of Nafta, the U.S. and Mexican economies have become tightly and beneficially joined.

“We want to project a positive image of Mexico based on objective data,” Mexican Foreign Minister Claudia Ruiz Massieu said in a recent interview. “Our bilateral relation has strengthened over the past 25 years…but in recent months stereotypes have emerged, stereotypes based on a biased view of the Mexican community and bilateral relations.”

Today, 32 U.S. states annually export at least $1 billion worth of goods to Mexico. U.S.-made components make up more than a third of every dollar in products Mexico ships back north, Economy Minister Ildefonso Guajardo said in a recent interview. U.S. components constitute only 3 cents of every dollar worth of products China exports to America, he said.

“Free trade isn’t the problem,” Mr. Guajardo said. “Today, the world competes in regions. Countries partner to set up production chains. Mexico shouldn’t be in the same basket as China.”

Some Mexicans suggested both politicians may need each other at a time when they are struggling. Mr. Trump lags behind in the polls and Mr. Peña Nieto has the lowest approval rating for a Mexican leader in two decades, largely due to a series of corruption scandals, tepid economic growth and rising violence.

(BBG) Smog-Hit Mexico’s $8 Billion Clean-Up Bid Heralds Bond Sale Rush

(Bloomberg) — Mexico’s push to reduce air pollution may set the stage for a surge in clean energy-related bond sales.

For the first time, the government will auction $8 billion worth of clean energy projects this year, according to Pricewaterhouse Cooper. The move comes as dangerous air quality
in vast industrial hubs across the nation has made cleaner energy a necessity. Earlier this year, some of the worst smog in a decade prompted Mexico City to impose a driving ban and factories to slash production.

While only one company in Mexico’s clean-energy industry has sold bonds in recent years, the notes have been among the most lucrative investments in the nation’s debt market. Wind farms located in southern Mexico known as Oaxaca II and Oaxaca IV have seen their $299 million of notes return 15 percent since March 30, when the Spanish construction company that owns them was among 10 firms awarded power projects worth $2.6 billion at an auction in Mexico. That’s the second-biggest gain in Mexico and twice the emerging-market average.

Claudio Robertson, who helps manage $4 billion at Investment Placement Group in San Diego, said Mexico’s burgeoning clean-energy industry will need to tap the bond market to finance projects.

“This is an industry that’s in diapers,” he said. “In Mexico, every lawmaker is voting for better air quality. This is going to be much more important than what it is today.”