Listado de la etiqueta: Canada

USMCA: Who are the winners and losers of the ‘new NAFTA’?

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Washington Post / Heather Long / October 1

Trump and Trudeau can tout this as a major victory ahead of key elections in their countries. It’s a lot less clear whether ‘NAFTA 2.0’ is good for Mexico and U.S. automakers.

The United States, Canada and Mexico finalized a sweeping new trade deal late Sunday, just hours before their Oct. 1 deadline. President Trump was up early Monday tweeting that the agreement is “a great deal for all three countries,” and Prime Minister Justin Trudeau said Sunday night that it was a “good day for Canada.”

The deal is expected to take effect around Jan. 1, 2020. Congress has to approve it, a process that will take months, but confirmation looks likely, given that Republicans are pleased Canada got on board and some Democrats are pleased with the stronger labor provisions.

Here’s a look at who’s smiling — and who’s not — as the world sees this news.

Winners:

President Trump. He got a major trade deal done and will be able to say it’s another “promise kept” to his voters right before the midterm elections. And he won the messaging game — he persuaded Canada and Mexico to ditch the name “NAFTA,” for North American Free Trade Agreement, which he hated, and to instead call the new agreement “USMCA,” for United States-Mexico-Canada Agreement. It’s not a total trade revolution, as Trump promised, but USMCA does make substantial changes to modernize trade rules in effect from 1994 to 2020, and it give some wins to U.S. farmers and blue-collar workers in the auto sector. Trump beat his doubters, and his team can now turn to the No. 1 trade target: China.

Prime Minister Justin Trudeau. There might not be a lot of love lost between Trump and Trudeau, but in the end, Trudeau didn’t cave much on his key issues: dairy and Chapter 19, the treaty’s dispute resolution mechanism. Trudeau held out and got what he wanted: Canada’s dairy supply management system stays mostly intact, and Chapter 19 remains in place, a win for the Canadian lumber sector. On dairy, Canada is mainly giving U.S. farmers more ability to sell milk protein concentrate, skim milk powder and infant formula. On top of the substantive issues, Trump went out of his way to criticize the Canadian negotiating team in the final days of deliberations, which Trudeau can play up as a sign of just how hard his staff fought on this deal.

Labor unions. This agreement stipulates that at least 30 percent of cars (rising to 40 percent by 2023) must be made by workers earning $16 an hour, about three times the typical manufacturing wage in Mexico now. USMCA also stipulates that Mexico must make it easier for workers to form unions. The AFL-CIO is cautiously optimistic that this truly is a better deal for U.S. and Canadian workers in terms of keeping jobs from going to lower-paying Mexico or to Asia, although labor is looking carefully at how the new rules will be enforced. It’s possible this could accelerate automation, but that would take time.

U.S. dairy farmers. They regain some access to the Canadian market, especially for what is known as “Class 7” milk products such as milk powder and milk proteins. The United States used to sell a lot of Class 7 products to Canada, but that changed in recent years when Canada started heavily regulating this new class. USMCA also imposes some restrictions on how much dairy Canada can export, a potential win for U.S. dairy farmers if they are able to capitalize on foreign markets.

Stock market investors. A major worry is over, and the U.S. stock market rallied Monday with the Dow gaining nearly 200 points.

Robert E. Lighthizer. Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin couldn’t get major trade deals done for the president, but U.S. Trade Representative Lighthizer did. He led negotiations with South Korea on the revamped U.S.-South Korea trade deal (KORUS) that the president just signed, as well as on the “new NAFTA.” Lighthizer is proving to be the trade expert closest to Trump’s ear.

Losers:

China. Trump is emboldened on trade. A senior administration official said Sunday that the U.S.-Canada-Mexico deal “has become a playbook for future trade deals.” The president believes his strategy is working, and he’s now likely to go harder after China because his attention won’t be diverted elsewhere (at least on trade matters).

U.S. car buyers. Economists and auto experts think USMCA is going to cause car prices in the United States to rise and the selection to go down, especially on small cars that used to be produced in Mexico but may not be able to be brought across the border duty-free anymore. It’s unclear how much prices could rise (estimates vary), but automakers can’t rely as heavily on cheap Mexican labor now and there will probably be higher compliance costs.

Canadian steel. Trump’s tariffs on Canadian steel and aluminum remain in place for now, something Trudeau has called “insulting” since the two countries are longtime allies with similar labor standards.

Unclear:

Mexico. America’s southern neighbor kept a trade deal in place, but it had to make a lot of concessions to Trump. It’s possible this could stall some of Mexico’s manufacturing growth, and it’s unclear whether wages really will rise in Mexico because of this agreement. Big energy companies can also still challenge Mexico via Chapter 11, something that could constrain Mexico’s new government as it aims to reform energy policies.

Ford, GM, Chrysler and other big auto companies. There’s relief among auto industry executives that the deal is done, but costs will be high for big car companies: The steel tariffs are still in place on Canada; more car parts have to come from North America (not cheaper Asia); and more car components have to be made at wages of $16 an hour. It remains to be seen how car companies are able to adjust and whether this has long-term ramifications for their bottom lines.

Big business. Many business groups are relieved that Trump got a trilateral deal and didn’t end up tearing up NAFTA entirely, as he had threatened to do. And they like a lot of the trademark and patent provisions. But the details of USMCA include some losses for big business. Some regulatory compliance costs will probably rise, especially for automakers, and big business lost Chapter 11, the investor dispute settlement mechanism that companies have used to sue Canadian and Mexican governments (the one exception is that energy and telecommunications firms still get a modified Chapter 11 with Mexico).

Washington Post / Heather Long / October 1

Feature: Mexico’s oil industry cautiously optimistic of future energy policy

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S&P Global / Daniel Rodriguez / Edited by Pankti Mehta / October 1

 

Mexico City — Oil and gas executives attending last week’s Mexican Petroleum Congress (CMP) in Acapulco told S&P Global Platts that they were cautiously optimistic about the future of the country’s energy reform, pointing to higher oil prices and some clarification of President-elect Andres Manuel Lopez Obrador’s policies.

The conference took place as Lopez Obrador held a closed-door meeting with the country’s association of hydrocarbon producers, AMEXHI, on Thursday in Mexico City.

The incoming administration gave a firm message: Mexico will continue the energy reform and private upstream investment as long as they can deliver results by boosting output.

The meeting cleared some uncertainties that had built up since Lopez Obrador’s electoral victory in July. Obrador has been historically opposed to private investment in Mexico’s energy sector.

PRIVATE OPERATORS TO PRODUCE 280,000 B/D: LOPEZ OBRADOR

According to a video of the meeting obtained by Platts, Lopez Obrador told operators that the future of the reform rested on their shoulders.

«We want to give you the opportunity to invest and work on this reform,» Lopez Obrador said. However, companies must invest and boost output to prove the success of the country’s new energy model.

The president-elect said his goal is that private operators produce 280,000 b/d of crude oil and 305 MMcf/d of the natural gas by the end of his term in 2024. «That would be the ideal. We aren’t asking for more and we are happy with that level,» he said.

This is a very conservative projection compared to the 430,000 b/d estimate shared by outgoing Energy Secretary Pedro Joaquin Coldwell at the inauguration of CMP.

At a webcast press conference Thursday, Mexico’s future energy secretary Rocio Nahle said that auction rounds would be halted. She said the country first needs to evaluate the 110 contracts awarded to date because they have not helped boost domestic production.

«It would be irresponsible to continue auctioning areas without a previous production gain [from awarded areas],» Nahle said.

OPERATORS ARE CALM WITH INCOMING GOVERNMENT

AMEXHI members are allies of the state and can collaborate with Pemex to «continue strengthening Mexico’s energy security,» Alberto de la Fuente, AMEXHI’s president, said in a statement Thursday.

This message of partnership was also shared by senior executives from BHP Billiton, BP, Chevron, DEA Deutsche Erdoel, Equinor, and Shell at the CMP.

«We aren’t here to replace Pemex but to complement it and help to achieve the incoming administration’s goal of boosting oil output,» Steve Pastor, BHP Billiton’s president for petroleum operations, told Platts last week at the CMP.

De la Fuente denied that private operators were uncertain over the review of contracts awarded by the country’s National Hydrocarbon Commission (CNH).

In the statement, he said that AMEXHI members left the meeting with the incoming administration with the knowledge that Lopez Obrador will honor their contracts.

However, some industry members expressed their frustration to Platts at the conference about an apparent lack of understanding from the incoming administration on the long-term nature of the upstream industry.

INCOMING ADMINISTRATION WILL SEEK TO CUT RED TAPE

At the meeting with AMEXHI members, Lopez Obrador said his administration would work with regulators to cut the red tape and quicken the development of new projects.

«Some of you have told me permits take too long, and regulators delay your investment plans as well as Pemex’s activities,» Lopez Obrador said. «We are going to solve all bureaucratic roadblocks.»

Juan Carlos Zepeda, CNH’s president commissioner, told reporters Friday there was space to make the regulatory process leaner and more efficient while protecting the wellbeing of the country’s fields and hydrocarbon resources.

«We share views with President-elect Lopez Obrador and the industry … we are working toward that path without neglecting our responsibility of protecting Mexico’s reservoirs,» Zepeda said.

Right now, Mexico is more efficient than the US when it comes to the development of wells as CNH only requires notice from the operators instead of regulatory approvals, Zepeda said.

Also, CNH is working on a new process to expedite the approval of exploratory and development programs, which is currently under public consultation, he added.

A major regulatory roadblock for Mexico’s upstream sector has been Pemex’s framework to farmout projects via CNH auctions, Pemex senior officials said at CMP.

Zepeda said he supports the idea of Pemex being able to choose its own farm out partners. However, the company should maintain transparency levels upheld by CNH.

 

S&P Global / Daniel Rodriguez / Edited by Pankti Mehta / October 1

 

AMLO y sector energético: ¿cómo se respetó en el USMCA-TLCAN?

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Político MX / 1 Octubre

 

Al paso de las horas luego de conocerse el documento del USMCA, Acuerdo Comercial que reemplazará al Tratado de Libre Comercio de América del Norte (TLCAN), aparecen las “letras pequeñas” en sectores clave o “intocables” de nuestra economía, como es el energético. En apenas dos párrafos se despeja casi cualquier atisbo de duda sobre eventuales intervenciones de nuestros socios; el presidente electo Andrés Manuel López Obrador asumió que ellos determinaron esta postura que finalmente destrabó las negociaciones.

Hasta donde ha sido posible revisar el nuevo texto, además de las definiciones y el preámbulo, se compone de 32 capítulos sectoriales: destacan precisamente comercio agrícola, reglas de origen, medidas fitosanitarias, derechos de propiedad intelectual, protección a inversiones, servicios financieros y telecomunicaciones.

Trasciende que en un capítulo que se volvió a redactar luego de la inclusión del equipo de transición en la renegociación, quedó explícito el derecho del Estado mexicano a los hidrocarburos y la posibilidad de modificar sus leyes para proteger esta propiedad.

«Reconocimiento del Estado mexicano directo, inalienable e impresionable a la propiedad de hidrocarburos», se nombró al capítulo 8 del documento donde se advierte:

– «En el caso de México, y sin perjuicio de sus derechos y recursos disponibles en virtud de en este Acuerdo, Estados Unidos y Canadá reconocen que México se reserva el derecho soberano de reformar su Constitución y su legislación interna”.

– «El Estado mexicano tiene la propiedad directa, inalienable e imprescriptible de todos hidrocarburos en el subsuelo del territorio nacional, incluida la plataforma continental y la zona económica exclusiva ubicada fuera del mar territorial y adyacente, (al igual) que en estratos o depósitos, independientemente de sus condiciones físicas de conformidad con Constitución de México«.

Es a partir de esto que en León, Guanajuato, López Obrador explicó su apoyo a este acuerdo, junto al incremento a los salarios de trabajadores del sector automotriz y que se otorga certidumbre a los inversionistas.

“Se aceptó nuestra propuesta de reducir al mínimo, el capítulo de energéticos, originalmente en un capítulo muy amplio se hablaba inclusive de una comunidad energética para América del Norte… Esto, consideramos, no era conveniente para nuestro país, y ese capítulo se redujo a dos pequeños párrafos, qué podría decirles, dos pequeños históricos, porque quedó a salvo la soberanía de nuestro país en materia energética…” explicó a grandes rasgos.

Pese a ello, los expertos del sector energéticos consultados acotan que a pesar del lenguaje “fuertemente redactado”, el capítulo de energía no impide que las compañías extranjeras extraigan petróleo en México bajo la liberalización de la industria aprobada por el gobierno saliente, esto es, lo que establece la reforma energética.

¿Armonización o continuismo? plantearán algunos escépticos sobre este movimiento por demás estratégico y que no deja de ilustrar cómo fueron las negociaciones, “el estire y afloje” para que al final todos los actores involucrados quedaran conformes. Ahora habrá que lidiar con los efectos que generen esos lineamientos: la base con la que habrá que iniciar el 1 de diciembre el próximo gobierno.

 

Político MX / 1 Octubre

 

Canada trade minister pushes quick ratification of trade deal with Asia Pacific

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The Business Times / AFP / September 18

 

[OTTAWA] Canada’s trade minister on Monday signalled that the government will push ratification of the Trans Pacific Partnership quickly through parliament, as stalled North American free trade talks have raised concerns it could lose its privileged access to the US market.

«Rapid ratification of the TPP» will mean «farmers, ranchers, entrepreneurs and workers across the country can finally tap into new markets,» trade minister Jim Carr said in a speech to parliament.

Signed in March without the United States, the Trans-Pacific Partnership will come into effect 60 days after ratification by at least six of the 11 signatories – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The trading bloc represents 500 million consumers and 13 percent of the world’s economic output.

Ottawa wants to be among the first six TPP signatories, but is facing pushback from the powerful union representing Canadian auto workers. Unifor wants stricter labour standards written into the pact and for negotiations with the United States and Mexico to revamp the North American Free Trade Agreement completed first.

High-level talks ended last week with no deal, and no date has been set yet for Canada’s foreign minister Chrystia Freeland to return to Washington to continue negotiations.

For Canada, implementing the TPP is «of paramount importance,» said Mr Carr, if only to act as a counterbalance to growing US protectionism under US President Donald Trump, who has threatened to cut Canada out of a new continental trade deal if Ottawa didn’t give in to his demands.

«This is not just a new trade agreement for Canada, it is also a message we send to the rest of the world: trade is important, the rules are important and we will not give in to protectionism,» the minister said.

 

The Business Times / AFP / September 18

 

Acuerdo comercial México-Estados Unidos da certidumbre en negocios: KPMG

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Economía Hoy / Septiembre 17

 

El acuerdo bilateral de entendimiento entre México y Estados Unidos en la renegociación del Tratado de Libre Comercio del Norte (TLCAN) da certidumbre en los negocios, destacó el socio de Comercio Internacional y Aduanas de la consultora KPMG en México, César Buenrostro.

Este acuerdo, abundó, coadyuva a otorgar un mayor grado de certeza al comercio exterior mexicano, pues más del 80% de las exportaciones se destinan a Estados Unidos y casi un 50% de las importaciones provienen de dicho país.

Aunado a lo anterior, casi la mitad del total de la inversión extranjera directa en México proviene de Estados Unidos, por lo que la importancia de contar con reglas del juego bien establecidas y de largo plazo tiene un carácter preponderante, expuso en un artículo.

Señaló que este convenio bilateral de entendimiento entre México y Estados Unidos se dio a conocer luego de un año, y tras siete rondas de discusión, una intermedia y algunas otras ministeriales en la renegociación del TLCAN.

Si bien el proceso se dio de forma trilateral, precisó que Canadá no participó en las sesiones de julio y agosto debido a que compartía la postura del sector automotriz, planteada por Estados Unidos, principal tema de las negociaciones bilaterales.

No obstante, el 31 de agosto Canadá reanudó la renegociación del TLCAN con Estados Unidos con la finalidad de lograr un entendimiento benéfico para los tres países miembros y que abone a la competitividad de la región, anotó.

Buenrostro apuntó que las disposiciones relacionadas con el acceso al mercado canadiense de lácteos y derivados provenientes de Estados Unidos, la exportación de madera y el mecanismo de solución de controversias contemplado en el capítulo 19 del acuerdo son temas álgidos que deberán resolverse.

Resaltó que el acuerdo bilateral de entendimiento entre México y Estados Unidos contribuye para disminuir la incertidumbre que prevaleció por casi un año referente a la sobrevivencia del TLCAN.

Sin embargo, es importante conservar el carácter trilateral del tratado dada la estrecha interrelación e interdependencia de las cadenas productivas de los tres países, aunado a que Canadá aporta casi el 10 por ciento del total de la inversión extranjera en México, subrayó.

El socio de Comercio Internacional y Aduanas de KPMG en México apuntó que después de un año de negociaciones, son varios los sectores productivos del país los sujetos a las modificaciones del TLCAN actual.

Estos deben estar conscientes en tomar medida de los posibles impactos como podrían ser los cambios a las reglas de origen (automotriz y autopartes), disposiciones de productos agrícolas, mecanismos de solución de controversias, comercio digital, propiedad intelectual, entre otros.

 

Economía Hoy / Septiembre 17

 

 

Canadá y Estados Unidos reanudan diálogo sobre el TLCAN

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Informador / AFP / Septiembre 11

 

Chrystia Freeland Y Robert Lighthizer se reunirán el martes en Washington

La canciller de Canadá, Chrystia Freeland, se reunirá el martes con el representante estadounidense de Comercio, Robert Lighthizer, en Washington para retomar las negociaciones para rediseñar el TLCAN, informó este lunes un portavoz canadiense.

Las dos partes cerraron el viernes dos semanas de negociaciones, pero sin llegar a un acuerdo que permita a Canadá mantenerse en el TLCAN. Entonces no se anunció una fecha para retomar las charlas.

México y Estados Unidos ya llegaron a un acuerdo a finales de agosto y Washington informó al Congreso que pretende firmar un nuevo acuerdo el 30 de noviembre, con la perspectiva de que Canadá forme parte del mismo.

Pero Ottawa y Washington negocian con dificultad una nueva versión del TLCAN, suscrito en 1994 entre Canadá, Estados Unidos y México. Las conversaciones se iniciaron a demanda del presidente de Estados Unidos, Donald Trump, quien considera que el pacto es «uno de los peores acuerdos comerciales de la historia» de su país.

Trump exige que Canadá se abra más al mercado estadounidense, principalmente en productos agrícolas.

 

Informador / AFP / Septiembre 11

 

U.S. turns up pressure on Canada to loosen grip on dairy industry in NAFTA talks

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Calgary Herald / The Canadian Press / September 11

 

WASHINGTON — Canada’s foreign affairs minister says Tuesday’s anniversary of the 9/11 terrorist attacks on the United States should serve as a reminder of the deep ties between the two countries as they haggle over the future of North American free trade.

Chrystia Freeland underlined the anniversary at the start of another day of trade talks aimed at breaking an impasse on a renewed North American Free Trade Agreement.

The renegotiation of the 24-year-old NAFTA, which also includes Mexico and is integral to the continent’s economy, has dragged on for 13 months.

The in-person, high-level negotiations got back underway as events marking the 17th anniversary of the 2001 attacks took place around the U.S., including at the Pentagon with Vice President Mike Pence, not far from where the trade meetings are taking place.

Freeland said the memorials should help to add some context to the ongoing negotiations on free trade that were started at Trump’s behest.

“Maybe that helps us all put into perspective the negotiations that we’re having — and also put into a little bit of historical perspective the importance and the significance of the relationship between Canada and the United States,” Freeland told reporters outside the offices of her counterpart, U.S. Trade Representative Robert Lighthizer.

“At the end of the day we’re neighbours, and at the end of the day, neighbours help each other when they need help.”

Freeland and Lighthizer left the bargaining table Friday without a deal following two weeks of negotiations. She said she spoke with Lighthizer over the weekend and they agreed it would be useful for them to meet again face to face.

“The conversations over the weekend continued to be constructive and productive,” she said.

Freeland will spend Tuesday in the U.S. capital before she heads to Saskatoon to attend Liberal caucus meetings that begin later in the day and run through Thursday.

Lighthizer spent Monday in Brussels for trade discussions with the European Union — preliminary talks that are scheduled to resume later this fall.

Ottawa and Washington are trying to reach an agreement that could be submitted to the U.S. Congress by month’s end. A deal would see Canada join a preliminary trade agreement the Trump administration struck last month with Mexico.

The two sides have so far been unable to resolve their differences over U.S. access to the Canadian dairy market, a cultural exemption for Canada and the Chapter 19 dispute resolution mechanism.

A Canadian source with knowledge of the NAFTA discussions says an agreement is within reach, but getting there will require flexibility from all sides.

Prime Minister Justin Trudeau said during an interview Tuesday with a Winnipeg radio station, CJOB, that there are certain positions Canada has and remain firm on. But he said the Liberals plan to be flexible on other issues in order to get a deal.

“It’s time to update this deal after 25 years. We’re just going to stay working constructively to get to that win, win, win that we know is there,” he said in the interview.

There is another wild card in Washington: hurricane Florence, a monster Category 4 storm that’s bearing down on the U.S. east coast and is sure to make its presence felt in the national capital area later in the week.

 

Calgary Herald / The Canadian Press / September 11

 

el-regimen-de-responsabilidad-objetiva-en-las-actividades-de-exploracion-y-extraccion-de-hidrocarburos

The regime of strict liability in the activities of Exploration and Extraction of hydrocarbons

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The General Administrative Provisions that establish the Guidelines on Industrial and Operational Safety and Environmental Protection to carry out the activities of Surface Recognition and Exploration, Exploration and Extraction of Hydrocarbons (DACG/E&E), were published in the Official Gazette of the Federation, issued by the National Agency for Industrial Safety and Environmental Protection of the Hydrocarbons Sector (ASEA), established  that those who carry out works or activities for the exploration and extraction of hydrocarbons are subject to a regime of strict liability, that is, they operate under the assumption that they are creating a risk to people and the environment and, therefore, in case of causing damage they must carry out its repair, without this being conditioned to prove their fault.

 

Derived from the above, ASEA imposes on operators the obligation to perform all actions necessary to prevent environmental damage arising from the risks created, for which they must contain, characterize and remedy them with opportunity under their own processes and according to the applicable legislation and regulations.

 

In this sense, the “DACG/E&E” establish that Exploration and Extraction activities must be carried out under certain principles, such as:

 

  1. Minimize the risks at a level that is as low as reasonably possible, that is, up to a level where it is demonstrated that the cost of continuing to reduce that risk is greater compared to the economic benefit that would be obtained. This allows a reasonable balance between economic activity and the protection of third parties and the environment.
  2. Regularly review the risk reduction measures in order to update them based on the technological development and specialized knowledge.

 

  1. Implement emergency measures and foster a culture of the protection of people, the environment and facilities.

 

The aforementioned principles are aimed at preventing the accidents from happening, so they must be complemented with measures that have as their object the repair and / or compensation of the damages caused by the an accident.

 

One of the most effective measures to achieve this is to have financial instruments that allow for the consequences of the materialization of risks, such as an insurance.

At NRGI Broker we are experts in insurance for the Exploration and Extraction of Hydrocarbons. Come to us.

 

AGRICULTURE, ECONOMY, GDP, INTERNATIONAL TRADE, TRADE WARS Last week in economy: Indian rupee slides while US dollar stabilizes after Trump secures Mexico trade deal

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Qrius / Pavas Gupta / September 3

 

Last week heralded further woes for the Indian economy as the rupee touched its lowest-ever-level of 71 against the dollar. At the same time, GDP forecasts stood at an all-time-high of 8.2% in 2018-19’s Q1. On the other side of the world, the US and China agreed to overhaul the NAFTA deal, bringing relief to the dollar. Read on to know more about what’s been up in the economy, outside and at home:

Indian Rupee slides to record-low at 71 against the greenback

On Friday, the rupee hit an all-time-low at 71 against the US dollar. The primary reason identified behind the drastic drop is persistent demand for the dollar amid rising crude oil prices. This is further reinforced by weak exchange rates of almost all Asian peers of the rupee. Per Forex dealers, the dollar’s strength against its rival currencies on expectations of rising interest rates amid lingering Sino-US trade tensions also weighed on the Indian fiat. To add to all these factors is the growing fear about rising inflation and consistent outflow of foreign funds from the domestic equity market.

“[The] Indian rupee has depreciated around 11 per cent year to date. Higher crude oil prices, demand from defence and oil marketing firms have contributed to the latest bout of weakness. Rupee was overvalued on trade weighted real effective exchange rate. Robust FDI flows in e-commerce companies, healthy forex reserves may limit the downside of the rupee”, said VK Sharma, Head Private Client Group & Capital Market Strategy, HDFC Securities.

US dollar steady post US-Mexico agreement to overhaul trade deal

After the United States and Mexico agreed to overhaul the North American Free Trade Agreement (NAFTA), volatility in the dollar cooled down; the currency is now steady against the euro and a basket of other major currencies. The overhauling of the deal brought optimism amidst global trade tensions.

The agreement to overhaul NAFTA exerted pressure on Canada to consent to new terms with the aim of preserving a three-nation pact.

“[The deal] would be positive for the Canadian dollar, Mexican peso, these currencies that have been sold on the back of higher trade tensions,”, said Shusuke Yamada, currency and equity strategist at Bank of America Merrill Lynch in Tokyo. “Overall, that would be negative for the Japanese yen and the US dollar. That’s positive for the risk assets in general,” he added.

On Tuesday, following two sessions of losses, the dollar index, which gauges the fiat’s performance against six other currencies, fell nearly flat. Later, it edged 0.05% higher to 94.834, making up for the earlier losses.

Ever since it hit a high on August 15, the dollar has fallen more than 2%. This comes amidst US President Trump’s criticism of the Federal Reserve for raising interest rates while the US government attempted to boost the economy.

India poised to become world’s fifth-largest economy in 2019

Finance Minister Arun Jaitley, on Thursday, said that India is expected to outstrip Britain to don the title of the world’s fifth-largest economy in 2019.

“This year, in terms of size, we have overtaken France. Next year we are likely to overtake Britain. Therefore, we will be the fifth largest [economy],” he asserted. Further, he said that the other economies of the world were growing at a much slower rate, adding that India had the potential to rank among the top three economies of the world within a span of 10-20 years.

India’s GDP growth at 8.2% in Q1 of 2018-19

In the first quarter of the 2018-19 fiscal year, ending June 30, India’s economy performed at an impressive rate of 8.2%. This marks India’s highest growth rate since the first quarter of 2016. Gross Domestic Product (GDP) growth was backed by a strong core performance and a healthy base.

These growth figures will be factored in by the monetary policy committee at its next review, which is scheduled for October 3-5.

The sectors of the economy that registered a growth of over 7% include ‘manufacturing, electricity, gas, water supply and other utility services’, ‘construction’, and ‘public administration, defence and other services’.

Foodgrain output to reach new heights in 2017-18

Foodgrain production in India is expected to grown to an all-time-high of 284.83 million tonnes in the 2017-18 crop year, which ended in June. According to the Agriculture Ministry, this burst in output is fuelled by record production of wheat, rice, coarse cereals and pulses after a normal monsoon cycle.

The previous record was pegged at 275.11 million tonnes, in the 2016-17 crop year.

In the Ministry’s fourth advance estimate released on Tuesday, it revised, in the upward direction, the total foodgrain production by 5.3 million tonnes from the earlier projection of 279.51 million tonnes for the current crop year.

“As a result of near normal rainfall during monsoon 2017 and various policy initiatives taken by the government, the country has witnessed record foodgrain production in 2017-18,” the ministry said in a statement.

 

Qrius / Pavas Gupta / September 3

 

La «carambola» que provocará el TLCAN en México

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Dinero en Imagen / Lindsay H. Esquivel / 3 Septiembre

 

CIUDAD DE MÉXICO.- La entrada en vigor del nuevo Tratado de Libre Comercio de América del Norte (TLCAN) impactará de manera favorable en la atracción de inversiones y abonará a la competitividad de las empresas, sin embargo, la industria automotriz y las cadenas de valor ligadas a este sector se verán perjudicadas.

Analistas consultados por Excélsior, explicaron los efectos que tendría sobre la economía mexicana el nuevo pacto acordado entre México y Estados Unidos, y al cual se podría sumar Canadá en los próximos días.

Arnulfo Rodríguez, economista principal de BBVA Bancomer, comentó que con el nuevo marco legal en materia de comercio con Norteamérica, la inversión privada, tanto doméstica como extranjera, eventualmente recuperará su dinamismo, porque la mayor certeza permitirá la ejecución de nuevos proyectos de inversión y la puesta en marcha de aquéllos que habían sido aplazados por la incertidumbre.

“Dado que habrá mucha mayor claridad en la relación comercial con Estados Unidos, el principal socio comercial de México, el impulso externo de un mayor crecimiento global se traducirá en un relativo mayor crecimiento económico para el país”, dijo.

Manuel Molano, director general adjunto del Instituto Mexicano para la Competitividad (IMCO), precisó que con las nuevas disposiciones, las redes de proveeduría local se reconfigurarán ante un cambio necesario, lo que llevará a fabricar de manera distinta para cumplir con el tratado y con ello ganar competitividad.

Yamel Cado, socia líder de Comercio Exterior de PwC, sostuvo que los sectores más beneficiados serán los ligados al sector energético, los de comercio electrónico y la agricultura, ya que resultaron favorecidos con la renegociación del TLCAN.

“Haber incluido al sector energético en el acuerdo es positivo, ya que refuerza a la reforma, lo cual significará un mayor ritmo de inversión, intercambio comercial y de creación de empleos”, señaló.

Mientras que, el sector agrícola es de los más beneficiados al eliminarse la cláusula de temporalidad agrícola y mantener sin aranceles ni cupos  los productos mexicanos.

EFECTOS NEGATIVOS

Los expertos coincidieron que la industria automotriz y los sectores ligados a ésta serán los que recientan los efectos negativos del nuevo TLCAN, debido a que se implementaron reglas “más restrictivas”.

“Es previsible que las cadenas de valor se vean afectadas en el mediano y largo plazo por las nuevas reglas, debido al incremento en el contenido regional mínimo para no pagar aranceles de 62.5% a 75%”, dijo Rodríguez.

Para Molano, “la industria automotriz va a sufrir en el corto plazo por el cambio de reglas” pues recordó que 70% de los autos fabricados en el país van al mercado estadunidense y al menos 14 subsectores de la industria manufacturera dependen de la producción de vehículos.

De ahí que el incremento en el contenido regional tendría que darse de manera paulatina para que sea favorable y no cause distorsiones, o de lo contario implicará un incremento de los costos de bienes intermedios en el corto plazo, hasta que la región mejore su competitividad respecto al resto del mundo.

Los expertos consideraron que la nueva disposición, que establece que 40 a 45% de las piezas de un automóvil sean manufacturadas en países en donde la mano de obra obtenga salarios de al menos 16 dólares la hora afectará
únicamente a México.

 

Dinero en Imagen / Lindsay H. Esquivel / 3 Septiembre