globalEDGE Blog - By Tag: mexico

New president-elect Donald Trump has proposed several new policies, including one that involves establishing tariffs on countries around the world. However, many economists are worried about the subsequent impact on the United States and the global economy.

So far this year, we have seen market fluctuations and consumers spending less, but Wingstop has emerged as an example of success in the fast-food industry. While major chains like McDonald’s and Starbucks have dealt with declining consumer spending, Wingstop has demonstrated remarkable strength. The success comes from strategic marketing, cautious pricing, and attractive product offerings.

A wave of anti-tourism protests has hit Europe as residents in popular destinations push back against the overwhelming influx of visitors, with demonstrations flaring in the Netherlands, Greece, Italy, Portugal, and notably Spain.

Spring break. Images of beaches, bikinis, and maybe a fleeting sunburn cross our minds. But beyond the fun, this annual student craze unleashes a surprising ripple effect on the economy.

American Football and the National Football League is mainly known as American sport, but the National Football League (NFL) is trying to change that perception; and their efforts internationally are reaching an economic boom.

In 2022, electric vehicles will become mainstream - we will see more on the roads daily. 2023 may see a significant increase in the production of these cars, even though 2022 did present lower sales. We saw high-interest rates and market instability in the past year, which impacted electric vehicle sales. The rising cost of batteries and shortages of critical materials also drove electric vehicle sales down.

Soccer, most commonly known as football worldwide, has an immense amount of popularity and support from individuals of all ages. It is universally known to bring others together to provide a positive and enjoyable experience. Lately, this has not been the case.

From being on a variety of toast to a great addition to smoothies, avocados have become a popular ingredient in Americans' diets. However, this staple piece may become more difficult to find and more expensive to buy after the United States decided to ban all imports of avocados from Mexico temporarily. This ban stemmed from a verbal threat made to U.S. safety inspectors. While these threats were not made public, interest from drug cartels have made their way into the avocado industry and continually find methods that broaden their illegal income streams.

Finder's keeper's loser weepers. When a person finds something and keeps it, the loser has no right. Many societies had followed this saying throughout history when it came to looting ancient artifacts, and now it's affecting our global economy and society.

As the climate disaster is steadily increasing in conversation across nations, the Security and Exchange Commission (SEC) in the United States attempts to place regulations on sustainability reports within large corporations. They are pushing for these reports to act like financial reports; they can be audited in this case. If these regulations pass, the sustainability reports would mimic financial reports and be audited to keep companies from stretching their energy-efficiency disclosures. Without this, it has become a pattern that companies' reports are unreliable and very inconsistent with the revelations they have put out.

As every country rides out the spiking of the Omicron variant, hopeful to see some type of stabilization from it, many have chosen to close their borders to people and businesses for a few weeks to avoid overwhelming hospitals. We’re seeing tighter restrictions and harder borders than we’re used to outside of the COVID-19 Pandemic world. As more variants continue to rise, it would be a good idea to look into how border closings affect businesses, customers, and how you may prepare your business for another possible closure.

The COVID-19 virus has been ravaging countries as many have recently failed to reach the World Health Organization’s goals for vaccination percentages, whether for lack of access, lack of easy spread of information, or the spread of misinformation surrounding vaccinations. There have been spikes regarding the Delta variant in the United States, Mexico, Russia, Australia, and some parts of Europe and Africa. However, throughout all of this chaos, there is new hope surrounding a new antiviral pill that could be a strong contender for treating COVID-19 without the use of injections.

Tulum, located in Quintana Roo, Mexico, is known for its modern bohemian-style atmosphere, its beautiful beaches and cenotes, and its eco-friendly nature. Just a decade ago, Tulum was relatively untouched and undeveloped, but it is now one of the fastest-growing destinations in the world for both vacations and residency. A big reason for this is the developers’ strict commitment to preserving Tulum’s natural beauty by building highly sustainable and environmentally friendly infrastructures. These efforts have attracted some of the world’s best architecture firms and novel real estate investors alike.

The exploding cannabis industry has seen the most growth in the last year as ever before and is looking for an even better 2021 with Mexico set to legalize sometime in the coming months. Assuming this does happen and Mexico follows the lead of some U.S. states, Canada, and Uruguay, they will then become the world’s largest country to legalize Cannabis with a population of 121 million. This large input of new customers will need suppliers meaning that many Cannabis companies across the U.S. and Latin America are looking to seek substantial growth when the bill officially passes.

Big business is on the rise in the US and in other developed economies. It has become ever more common that local mom and pop shops are run out of business by corporate goliaths that are able to flex their expansive resources and economies of scale to undercut their smaller competitors’ prices. In Latin America, this is not the case. In these emerging economies, you can still find many local family-run businesses lining the street corners, relatively unperturbed by major corporate competitors.

As stated by Capital Economics’ Chief Asia Economist Mark Williams, “China’s time as an emerging markets outperformer is ending”. The reasons for this include high levels of debt, a declining working-age population, and lower levels of productivity. This has the potential to send shockwaves through countries supply chains and force companies to look elsewhere when seeking imports. The Chinese government is planning to cut taxes and boost military spending as a cash injection into the economy, but analysts remain skeptical. Last year, China reported growth of 6.6%, anything below this mark would be a new three-decade low.

The first round of NAFTA renegotiations between the United States, Canada, and Mexico concluded in Washington this past Sunday. Trade representatives from each country began to lay out their goals for a probable update of NAFTA policy. The 24-year-old trade bloc, which was established to eliminate barriers among its three trade partners, has garnered intense backlash in recent years. According to data from the Bureau of Labor Statistics, a third of U.S. manufacturing jobs have been lost since NAFTA was first established. In addition, NAFTA has caused Mexico to lose 1.3 million farm jobs due to removed tariffs that rendered Mexican farmers effectively noncompetitive.

Contrary to many people's beliefs, cannabis can be useful as a tool for battling depression, calming nausea from chemo treatments, and practicing spiritual customs. These are just a few of the reasons citizens have been speaking out to their governments worldwide about the legalization of medical marijuana.

On April 26, United States President Donald Trump announced plans to "re-negotiate" the terms of the North American Free Trade Agreement (NAFTA) with Canada and Mexico. As related in a White House press release, the administration had intended to completely withdraw the U.S. from the trade deal, but was dissuaded from doing following conversations with Canadian Prime Minister Justin Trudeau and Mexican President Peña Nieto. At present, NAFTA stands in its current form, although the U.S. has explicitly stated its desire for major changes to the trade deal. The situation is predictive of a potentially volatile future for NAFTA and trade relations between the U.S., Canada, and Mexico.

In conjunction with our blog series on central banking policy throughout the world, today we turn our attention to Central America and the unique fiscal and monetary landscape that is often an afterthought when examining the world economy. For the purposes of this blog, when referencing Central America, we are incorporating Mexico and all other continental countries of North America that are south of the United States of America. While Europe, Japan, and the US are locked into low interest rate environments, Central America offers a unique landscape for central banking.

Ok, so normally my globalEDGE blogs are a bit more topical, serious, and germane to my international business and trade interests. But I’m finding myself up early, from jetlag, in my hotel room in Nairobi, Kenya where I am attending the joint meeting of UNCTAD and the World Investment Forum, and it strikes me that cocoa beans have been in the news lately. And the world may not have noticed!

Let’s connect the dots. Kenya is of course in Africa, and Africa accounts for 73 percent of the world’s cocoa bean production according to a 2016 report by UNCTAD (but only 19 percent of the cocoa bean roasting/grinding/refinement which is done mainly in other parts of the world, led by Europe at 39 percent). In Africa, Ghana and Cote d’Ivoire lead the way – each country has about 30 percent of their export earnings coming from the cocoa bean commodity. And therein lies the crux perhaps; that cocoa beans are viewed as a commodity.

On Wednesday, United States President Barack Obama, Canadian Prime Minister Justin Trudeau, and Mexican President Enrique Peña Nieto will meet in Ottawa for the annual North American Leaders' Summit. The meeting, commonly referred to as the Three Amigos Summit, has gathered almost every year since 2005 to discuss strategic cooperation and important economic issues. This year's meeting in particular will prove to be of high significance. The primary objective of the 2016 Summit is to develop clean power plans for each country in the continued combat against climate change. However, recent political developments may cast a shadow over this year's talks.

Mexican President Enrique Peña Nieto is now at the halfway point of his 6 year presidential term. On Wednesday, he delivered his third State of the Union address, during which he highlighted his plan to boost the Mexican economy. Although a number of measures and reforms were proposed, many Mexican citizens believe that the President’s reforms have not succeeded due to the corruption and economic uncertainties present throughout the country.

For the first time in nearly 80 years, Mexico is holding an oil auction in which energy firms from all over the world will compete. Is this bid for oil going to hold lackluster results or is it the key for Mexico's energy reform? Petróleos Mexicanos, mononymously known as Pemex, virtually controls the entire nation’s oil industry. Nationalized in 1938, Pemex was designed to push out external parties like the U.K. and the U.S. following major labor disputes and their ostensible domination of the energy markets. Therefore, the auctions being held are a step, or leap, in the opposite direction. The bidding marks the first time ever that private oil companies are being allowed to set up in Mexico and that oil contracts are being sold off. For a country whose oil industry has been monopolized for 77 years, the auctioning offers a world of possibilities to both Mexico and its prospective investors. To be exact, the sell-off is estimated to draw in a revitalizing $62.5 billion for the Mexican economy.

Brazil and Mexico have renewed vehicle quotas for four years, postponing the creation of a free trade agreement to at least 2019. The two largest Latin American economies originally had free trade of vehicles for a brief period in 2011 and 2012, but transitioned to a quota system after Brazil complained of economic issues that were hurting the nation’s competitiveness abroad, especially in the auto industry. The new deal penned earlier this month permits $1.56 billion of duty-free vehicle imports for the first year of the agreement. This amount will increase by 3% every year until 2019 when the nations will return to free trade, barring any extension or renewal of the quota system.

The slogan, “Time is Money, Efficiency is Life”, has driven China to become the world’s largest manufacturing power over the last decade. But the era of cheap China seems to be drawing to an end now. A similar issue is happening in another part of the world. Australia, the old auto-manufacturing giant, is seeing an increasing number of auto-production lines drawing out of the country and moving to lower-cost destinations around the world. The global manufacturing industry is currently undergoing dramatic changes.

Within the past week, the Congress of Mexico has approved new legislation that will allow the country's energy industry to award contracts to private oil companies. As a result of these new reforms, not only will the state-owned oil giant Pemex lose its monopoly over the country's oil sector that it's held since 1938, but foreign oil firms will also be able to enter the lucrative Mexican oil market.

On February 19th, President Barack Obama flew to Mexico to meet with Mexican president Enrique Peña Nieto and Canadian prime minister Stephen Harper, approximately twenty years after the three nations had signed NAFTA. The goal of the Toluca summit was to attempt to reduce trade frictions and come to agreement on trade conflicts between these countries. Issues discussed included Obama's trade executive order, the controversial Keystone XL oil pipeline, the "trusted traveler" program, updating NAFTA, and the Trans-Pacific Partnership.

In 2001, economist Jim O’Neill identified the world’s strongest emerging economies as the BRIC countries, which is an acronym that stands for Brazil, Russia, India, and China.  Thirteen years later, O’Neill has offered another acronym defining today’s emerging economic powerhouses – the MINT countries.  Mexico, Indonesia, Nigeria, and Turkey all show signs of strong future GDP growth and the potential to become major players in the global economy.

Worrying about the United States expansionary ambitions in the mid-1800s, Mexico prohibited foreign ownership of land within 50 kilometers (31 miles) of the coast or 100 kilometers of an international border. This policy was pretty efficient for protecting the homeland but it did block some foreign investments throughout history. As the financial crisis spread all over the world, Cancun realized it needs help from foreign investors and this help was going to break the law. Some real-estate developers believe the move could boost the nation's vacation-home market, while others think it would be hard on the locals acquiring their own estates.

Mexico has reached a tipping point; it is no longer the poor nation it once was a generation ago. But, it also has a long way to becoming rich. The nation’s economy is the 13th largest in the world, but many experts claim that Mexico has been running under the radar in respect to a strong business investment for many international business investors.

While most news headlines involving Mexico revolve around drug cartels, illegal immigration, and law enforcement, economists are noticing a new story south of the border. Trade between the United States and Mexico has been surging recently, including a 17 percent increase to a record level of $461 billion (USD) in 2011. Mexico is currently competing with China for the title of America's second-largest trading partner following Canada, and the Mexican economy became the top investment destination for the aerospace industry this year. Mexico's middle class, which is quickly growing to be the country's majority, has been responsible for much of the trade with the U.S. since they are buying record levels of American goods.

Franchises have been booming worldwide. Close to 10 million employees work at approximately 400,000 franchise locations worldwide. Franchise owners enjoy that they can open a restaurant without as much risk, and the restaurants enjoy the increase in revenue coming from new stores in a variety of countries. One of the most recent booms in the franchise world is the massive growth in Latin markets. In the past year alone Brazil has experienced a 15% growth in franchises, Mexico has had a 13% increase, and Argentina also had double digit growth with 10.5%. 

After a strong recovery last year, local and foreign investors are optimistic about growth and investment opportunities in Mexico. The strong recovery in 2010 was fueled by the increase of exports and tourism as well as growth in the mining industry. These factors helped produce an economic growth of 5.5 percent. This was the best result Mexico has experienced over the past decade. Mexico looks to continue this economic growth trend and the good news is 2011 seems to be shaping up just as well.

In 2001, global economist Jim O’Neill labeled Brazil, Russia, India, and China as the premier emerging markets of the world with enormous economic potential. The mainstream BRIC acronym was applied to these countries and the hype surrounding these countries was well deserved. Over the past decade, the countries have contributed to over a third of world GDP growth. Recently, Jim O’Neill named the next tier of large emerging economies using the term MIST – or Mexico, Indonesia, South Korea, and Turkey.

The United States has long been known as a global powerhouse when it comes to innovation – especially when it comes to manufacturing. These innovations may not necessarily be products (although some certainly were) but, rather, just tweaks to the manufacturing process that greatly improved efficiency (think of interchangeable parts or the assembly line, both developed by Americans). However, in today’s global economy, the United States is losing jobs in the industrial manufacturing sector, despite still being on the forefront of innovation. Many claim that this is simply because of the lower wages required in other countries, but is that the only reason why?

The auto industry has certainly gone through hard times these past few years, and now it is trying to rebuild itself. Part of the comeback is restructuring the companies, and finding ways to cut costs. This is often done by offshoring the manufacturing portion to countries that demand lower wages. Mexico is one of the countries that will see the benefits of this move in the next few years.

Heineken has just announced that it will be buying the beer operations of Femsa, a large beverage company in Mexico. The beer industry has experienced several acquisitions this past decade, so this move was not exactly a surprise. Many brewing companies have done this to tap into different markets across the world.

As the Trade North America Conference continues, it is important to understand the nuances of the North American Free Trade Agreement (NAFTA) which make the implementation of NAFTA’s goals possible. One of the largest barriers to getting the agreement passed, and which still creates issues today are the legal issues surrounding the agreement, as well as how it deals with the differing legal systems of each of the countries involved.

Why should a small business enter the Canadian and Mexican market? There are a plethora of opportunities in both countries. From a United States perspective, they are the largest foreign investor in Canada and the most popular destination for Canadian investment. The U.S. exports to Canada exceed their exports to the entire European Union. Mexico isn't far behind with the second largest market in the world for U.S. exports. In 2007, U.S. and Mexico two-way trade exceeded one billion dollars a day. I will briefly discuss both the challenges, potential, and strategies for entering both the Canadian and the Mexican market.

An integral part of the Trade North America Conference are sessions about the North American Free Trade Agreement (NAFTA). It is essential to be educated about NAFTA in order to be able to expand your business in North America.

The Trade North America Conference, happening in Detroit this week, is a great opportunity for the Midwest regional business community to learn about today’s trade climate. Underscoring the importance of the event, Undersecretary of Commerce, Dennis Hightower and former Governor of Michigan, John Engler will be speaking. The focus of the conference is to equip businesspeople with information which will enhance their ability to successfully export products to Canada and Mexico.

 If you're looking for a last minute deal on international summer travel, Mexico may be the best option. In the wake of a swine flu pandemic that crippled Mexico's tourism industry, hotels and resorts are slashing their prices - as much as 70% - in an effort to regain solid footing.