Mexico

The Supreme Court of Mexico struck down the national “Televisa law,” which was enacted last year to give away bandwidth for television, Internet, and telephone services exclusively to two media giants, Televisa and TV Azteca, without bids or compensation to the government.  Lawmakers will now have to re-draft the law to allow competition. 

In making the ruling, Justice Olga Sanchez said, “The fact that the media is concentrated in a few hands distorts the right to information because it allows those in control of the media to manipulate, to mold public opinion.”

Mexican President Felipe Calderon kicked off a five-nation tour of Europe this week, hoping to promote trade relations, increase investment in Mexico, and boost European tourism to Mexico.  Calderon began his trip in Rome, where he met with Italian Prime Minister Romano Prodi. Calderon was scheduled to meet with 400 Italian business executives in Milan on Tuesday before attending the G8 Summit in Germany on Wednesday, representing Mexico in the “Group of Five” or G5 — the five countries selected by the G8 as “emerging powers.” He will also visit France, Belgium, and Denmark on his European tour.

According to the Latin Business Chronicle, Mexico is the top Latin American destination for European Union exports and the second largest EU trade partner in the region. Calderon commented in Italy that it was important for Mexico to diversify its relations in the EU.

(Photo: Calderon with Prime Minister Romano Prodi in Italy)

Economic ministers from Mexico and India agreed today on a plan to bolster bilateral trade relations.  Indo-Mexican trade has increased by 600 percent in the last 6 years, totaling about $530 million through March in this fiscal year alone.   The countries announced in New Delhi today that they would set up a group of senior government officials to work out details of an investment promotion and protection agreement.

Mexico’s Economic Minister, Eduardo Sojo Garza-Aldape, and India’s Commerce Minister, Kamal Nath, will co-chair the group negotiating the details of the agreement. 

Sources: India, Mexico Seek to Boost Trade (AP, Forbes), India Looks for a Window in NAFTA through Mexico (The Hindu), and India, Mexico sign investment protection agreement (Economic Times, India)

Three notable Mexican film directors have signed a $100 million deal with Universal Pictures in Los Angeles to produce five movies, including Spanish-language films.  Guillermo del Toro, Alfonso Cuaron, and Alejandro Gonzalez Inarritu, who individually directed last year’s Oscar-recognized Hollywood hits “Pans Labyrinth,” “Babel,” and “Children of Men,” will call their new production company Cha Cha Cha.  Universal will distribute the trio’s films both in North America and overseas.   The three directors marketed themselves as a group in their talks with Hollywood studios.

(Photo: Inarritu, del Toro, and Cuaron)

See: Mexican Directors Ink $100M Studio Deal (AP: ABC News)

Contributed by Rich Basas of FPA’s Migration Blog: 

Rapid double digit economic growth in China and its newly minted membership in the WTO has greatly changed the world economy and China’s position as an economic and political power. This view, while prominent within China is more importantly the dominant view among its neighbors abroad. Much of the trade between China and economic powerhouses such as the US and EU have grown exponentially in the last 7 years, so much so that US debt is owed principally to China equaling a third of all US foreign debt and much of the US manufacturing base moving to China for low labour costs in the process.

Fears of losing American jobs have traditionally been the focus of political debate in the US due to the small economic boom in Mexico which formed after the Peso Crisis in the early 1990s. The move of many multinational companies to the southern side of Mexican border to manufacture products from A-Zto be reshipped back into the US at low labour costs has been the cause for much of the anguish of local US labour unions over the last 12 years of NAFTA. While low cost goods have come across the border to American consumers, it also provided much of the employment base for Mexican manufacturing in Mexico and was a strong engine for the Mexican economy throughout the 1990s until today.

With the emergence of China however as the principle manufacturer of the world’s goods in recent years and China’s emergence as the world’s largest economy in the next few years, Mexico has slowly realized that it is being replaced as the principle low cost manufacturer of goods to North America. The realization that Mexico may lose one of its principle engines of its economy to China has lead to more involved policy towards China. A push for a bilateral investment agreement took shape in March 2007 and will be worked out further this June. The hope for Mexico is that a bilateral investment agreement will take shape before the end of 2007 and help reinstall Mexico as a leading trade partner with China and the US. Further relations have taken shape as well, with the two main Unions in China and Mexico in a personnel and information exchange agreed to this month and future commercial deals taking shape as well.

It is uncertain where Mexico will be placed in the future economy, but as one of the leading nations regarding trade agreements abroad, Mexico will use any advantage it has to maintain recent success in the Mexican economy past its early NAFTA years.

For more information on the stories:
Mexico’s Foreign Trade Strategy in Trouble: The Impact of China -
(G.Bracho: Oxford University)
Mexico, China to push forward Bilateral Investment Agreement - (China View)
Mexico, China trade union to include worker exchange - (China View)
China’s ZTE to build massive WiFi network for Mexico City - (Information Week)

Mexican businessman Carlos Slim Helu has surpassed Warren Buffet to take the number two position on the Forbes list of the world’s richest people.  Slim, now worth $53 billion, is approaching Bill Gates’ fortune of $56 for the top spot.  Slim owns Mexico’s dominant phone company and has numerous other holdings throughout Latin America.  His wealth highlights the gap between rich and poor in Mexico, where his fortune alone accounts for 7% of the GDP. 

Carlos Slim Helu Now World’s Second-Richest Man (Forbes)
Why Not All of Mexico is Happy for Carlos Slim (Time)

According to the Wall Street Journal, Wal-Mart now accounts for half of all retail sales in Mexico.  Wal-Mart de Mexico reported net sales in 2005 of $164.3 billion pesos (or $15.4 billion U.S. dollars). The American retailer has expanded to several countries, and its success in Mexico has encouraged it to seek out other developing markets.  As in the U.S., some are not happy with the effect its stores are having on smaller, local businesses and markets.  But others point to job opportunities and say that its employees are paid well by local standards.  Certainly familiar with debate in countries such as the U.S., Wal-Mart now finds itself as a major player in the Latin American retail market, with plans to continue its expansion.

Wall Street Journal: In Mexico, Wal-mart is Defying its Critics
Walmart.com: Mexico Fact Sheet