mexico tha neg - michiganclassic 2013 dw

8/12/2019 Mexico THA Neg - MichiganClassic 2013 DW

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Mexico THA Neg Classic DW


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A2 Mexican Economy Adv


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Mexico Econ Up

Mexican economy boomingVardi 10/15/2012 (Nathan Vardi,staff writer for Forbes, The Mexican Miracle: Despite DrugWar, Economy Is Booming, http://www.forbes.com/sites/nathanvardi/2012/10/15/the-mexican-mircale/)

When Vikram Pandit, the chief executive of Citigroup, was asked on Monday to break down the emerging markets that hadcontributed to some good-looking financial results for the third-biggest U.S. bank, the first country he pointed to was Mexico.

Driven by Mexico, Citigroups Latin-American consumer banking revenue grew 7% year-over-year in the third quarter to $2.4 billion, while the banks revenue in Asia was down. We think that Mexico isextremely well-poised for growth, Pandit saidon Citigroups earnings conference call. I was just there nottoo long ago and with the leadership change there in addition to prospects for reforms and what

you are seeing on the groundthat is a high spot definitely. Citigroups stock was up 4% on Monday. Not toolong ago, the idea that big-shot American CEOs would be touting Mexico would have seemed unlikely. When the financial crisis hitthe U.S. in 2008, FORBES predicted a Mexican Meltdown. The explosion of the drug war between the Mexican drug cartels andthe government, coupled with the sure-to-come drop in exports to the contracting U.S. economy, seemed like it would derail Mexicoagain and ensure that other emerging markets like Brazil would keep passing it by. The U.S. Joint Forces Command lumped Mexico

in the same category as Pakistan and worried it was becoming a failed state. Mexicos economy was hitvery hardbythe financial crisis and its recession was severe, but its recovery miraculously has been evenstronger. Even with the weak U.S. recovery and the ongoing drug violence, Mexico has boomed .Top officials in the Mexican government predict the countrys economic growth could reach 5% in2012, after gross domestic product increased by 3.9% and 5.5% in the last two years. At the same time,Brazils economy has slowed and Mexico is starting to catch up to its regional rival. The Mexican stock market hasperformed well, with the benchmark IPC index up nearly 13% in 2012 and more than 20% in thelast year. Pemex, the state-owned oil company that dominates the Mexican economy, recently announced deep-water oildiscoveries in the Gulf of Mexico, suggesting the company might be able to slow the decline of its production. Enrique Pena Nieto ofthe PRI has been ratified as the winner of the presidential election and the transfer of power appears to be going on with much lesssocial unrest than when Felipe Calderon was elected in 2006. Its not just U.S. banks that are benefiting from Mexicos resurgent

economy:Wal-Mart said its important Mexican stores increased monthly sales by 15.3%in Septemberto $2.59 billion. Wal-Mart opened 20 Mexican stores in September alone. Wal-Mart, of course, demonstrates both the opportunityand peril with which foreign investors view Mexico. Wal-Marts Mexican unit is the companys most important foreign subsidiary,

but it has been embroiled in an embarrassing and costly bribery controversy that was first exposed by The New York Times. Indeed,foreign direct investment has remained weak. But if the new leadership in Mexico can open Mexicos energy sector to foreigninvestment, even that statistic could soon turn around for Mexico. The biggest evidence of Mexicos recent relative success canprobably been seen in the number of Mexicans who are staying or returning to Mexico. As Calderon recently noted in The Wall

Street Journal, the net rate of migration of Mexican workers toward the United States has recentlybeen zero.We are in the middle of the rebirth, he said.

American gas boom benefits Mexicos manufacturing and PEMEXChanntalFleischfresser7-3-13(Contributing Editor @ Smart Planet, worked for The Economist,

WNET/Channel 13, Al Jazeera English, Wall Street Journal and Associated Press. She holds degrees fromthe University of Pennsylvania and the Columbia University Graduate School of Journalism, WhoBenefits from US Shale Oil Boom? Mexican Manufacturing, 7-3-13http://www.smartplanet.com/blog/bulletin/who-benefits-from-the-us-shale-oil-boom-mexican-

manufacturing/23426)

Shale gas has been a tremendous boost toAmericas economyover the last few years, loweringenergy costs and evenprompting debate about whether it could make the U.S. more competitiverelative to other countries with low labor costs but inefficient energy structures. But the U.S. is not there yet, and someconsiderations still stand in the way, including the fact that gas exports could lead to Dutch disease, a situation in which greater oil

exports would drive up the value of the dollar and actuallymake U.S. exports less competitive on the world market.While theU.S. determines how this new oil boom will affect its global competitiveness, however, onecountry seems perfectly poised to reap the benefits. Mexico, conveniently close to the U.S., is in a position
http://www.smartplanet.com/search?q=channtal+fleischfresserhttp://www.smartplanet.com/search?q=channtal+fleischfresserhttp://www.smartplanet.com/search?q=channtal+fleischfresserhttp://www.smartplanet.com/search?q=channtal+fleischfresserhttp://www.smartplanet.com/blog/bulletin/who-benefits-from-the-us-shale-oil-boom-mexican-manufacturing/23426http://www.smartplanet.com/blog/bulletin/who-benefits-from-the-us-shale-oil-boom-mexican-manufacturing/23426http://www.inc.com/drew-greenblatt/what-the-natural-gas-boom-means-for-us-manufacturing.htmlhttp://qz.com/65208/will-americas-oil-boom-save-its-manufacturing-sector-or-make-it-ill/http://qz.com/65208/will-americas-oil-boom-save-its-manufacturing-sector-or-make-it-ill/http://www.inc.com/drew-greenblatt/what-the-natural-gas-boom-means-for-us-manufacturing.htmlhttp://www.smartplanet.com/blog/bulletin/who-benefits-from-the-us-shale-oil-boom-mexican-manufacturing/23426http://www.smartplanet.com/blog/bulletin/who-benefits-from-the-us-shale-oil-boom-mexican-manufacturing/23426http://www.smartplanet.com/search?q=channtal+fleischfresser


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to take advantage of the U.S. cheap natural gas exports. Mexicos manufacturing sector hasalready been competing with China thanks to its supply of cheap labor, and thanks to itsintegration into the U.S. supply chain, it is able to compete on both labor and energy fronts.Indeed, Pemex, Mexicos state-owned oil company, has plans to build a $3.3 billion, 750-mile pipelineconnecting Los Ramones, Mexico near the countrys industrial center straight to Agua Dulce, close toTexas shale oil fields.

Mexican lending changes will improve economyCattan and Martin 6/10/2013 (Staff writers for Bloomberg, Mexico Lending ReformMay Boost Economy in 2014, Aportela Says,http://www.bloomberg.com/news/2013-07-10/mexico-lending-reform-may-boost-economy-in-2014-aportela-says.html)

A bill to boost bank lending in Mexico would have an immediate impact on the economy,helping to boost growth as soon as next year, Deputy Finance Minister Fernando Aportela said.The bill encourages development banks to work more closely with the financial industry to liftlending, which reached only 26 percent of gross domestic product last year, Aportela said today

at the Bloomberg Mexico Conference in New York. Aportela said he expects the reform bill,which was presented in May, to be debated in special congressional sessions in August.Mexicos commercial bank lending as a percentage of GDP is the lowest among Latin Americannations, according to the most recent data from the International Monetary Fund. PresidentEnrique Pena Nietos reform proposals, which also include measures targeting the energyindustry and taxes, would lift growth by at least one percentage point, Aportela said.Were trying to have in our package elements to accelerate the impact on the economy,

Aportela said. Were expecting to feel the effects of thefinancial reform, if we get approval byCongress, during 2014.
http://www.reuters.com/article/2013/05/14/mexico-gas-idUSL2N0DV06820130514http://www.reuters.com/article/2013/05/14/mexico-gas-idUSL2N0DV06820130514http://www.bloomberg.com/news/2013-07-10/mexico-lending-reform-may-boost-economy-in-2014-aportela-says.htmlhttp://www.bloomberg.com/news/2013-07-10/mexico-lending-reform-may-boost-economy-in-2014-aportela-says.htmlhttp://www.bloomberg.com/news/2013-07-10/mexico-lending-reform-may-boost-economy-in-2014-aportela-says.htmlhttp://www.bloomberg.com/news/2013-07-10/mexico-lending-reform-may-boost-economy-in-2014-aportela-says.htmlhttp://www.bloomberg.com/news/2013-07-10/mexico-lending-reform-may-boost-economy-in-2014-aportela-says.htmlhttp://www.bloomberg.com/news/2013-07-10/mexico-lending-reform-may-boost-economy-in-2014-aportela-says.htmlhttp://www.reuters.com/article/2013/05/14/mexico-gas-idUSL2N0DV06820130514


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Mexico Econ Resilient

The Mexican economy is resilient reforms, diversification, lowinflation are boosting growthJones andGuthrie 5-8-13(Kristin and Amy, staff writers and analysts @ the Wall Street JournalUpdate: Fitch lifts Mexico Rating on Economy, Reforms, Wall Street Journal,http://online.wsj.com/article/BT-CO-20130508-718436.html)

Fitch Ratings upgraded Mexicoby a notch Wednesday, citing the country's strong economicfundamentals, stable oil production, progress in addressing drug-relatedviolence and agreater-than-anticipated political commitment to pass structural reforms. The ratingsfirm putMexico's long-term foreign currency issuer default rating attriple-B-plus, three rungs into investment grade.The outlook isstable. Fitch noted Mexico's economic resilience despite a sluggisheconomy in the U.S., Mexico's key trading partner, with three-year growth averaging 4.5% in2012. The agency also praised Mexico's prudent macro-economic policy, which underpins thecountry's low inflation. In upgrading Mexico, Fitch jumped ahead of Standard & Poor's, which in March changedMexico's outlook to positive from stable, citing the reform momentum. S&P and Fitch both cut the country to triple-B

from triple-B-plus in late 2009, when the global financial crisis led Mexico's economy to contract 6% and the peso to lose more thana quarter of its value against the U.S. dollar. Moody's Investors Service kept Mexico at Baa1, the equivalent of triple-B-plus and two

notches above the minimum investment grade. The government of President Enrique Pena Nieto, who took office in December,has "reinvigorated" Mexico's reform momentum to pass structural reforms that had languishedfor many years, Fitch said Wednesday. Cooperation among Mexico's three major political parties inrecent months has led to overhauls of labor rules, public education and telecoms. Still pending aremoreambitious reworkings of the tax code and a possible opening of foreign investment in the oil sector.Combined, the reforms are seen eventuallyboosting Mexico's annual economic growthby onepercentage point. A recent dispute over government spending ahead of July local elections threatened to derail the reform drive.

The political forces behind the reform effort, known as the Pact for Mexico,reconciled their differenceson Tuesday. "The pact has achieved a pace that doesn't cease to surprise, and a pace that shouldn't be lost," CesarCamacho, national president of the ruling Institutional Revolutionary Party, or PRI, said Wednesday at an event beside other toppolitical leaders, all of whom reiterated their commitment to secure more reforms. Mr. Pena Nieto thanked his colleagues onWednesday for their "political will" to overcome differences and advance a common agenda to make Mexico more competitive

internationally and more fair at home. The Fitch upgrade gave the Mexican peso a boost Wednesday as thecurrency moved below MXN12 to the U.S. dollar for the first time since August 2011, trading inMexico City at MXN11.9780, according to Infosel, compared with MXN12.0355 at the close Tuesday. Local governmentbonds yields were lower on the day, with 10-year bonds due 2022 yielding 4.46%, down four basis points from Tuesday's close.

Fitch said its previous concernsabout oil production and violence had eased, citing thediversification of the oil production base anda decline in the homicide rate in recentmonths. Sustained high growth and fiscal flexibilitywould be positive for ratings, while a persistentlyunderperforming economy and destabilizing debt dynamics would be negative, Fitch said.

Mexicos economy is resilient corruption undermines growthhowever

The Heritage Foundation 13(think-tank and research organization aimed at conservative policies,2013 Index of Economic Freedom: Mexico;http://www.heritage.org/index/country/mexico)

Mexicos economic freedom score is 67.0, making its economy the 50th freest in the 2013 Index. Its score is 1.7 points betterthanlast year, reflecting notable improvements in investment freedom, trade freedom, and monetary freedom. Mexico is ranked 3rd out

of three countries in the North America region, but its score is well above the world average. The Mexican economy hasshown amoderate degree of resilience in the face of a challenging global economic environment.Reform efforts have continued in many areas related to economic freedom . Implementation ofpolicies intended to support open markets and encourage a vibrant private sector has enhanced
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investment flowsand the vitality of entrepreneurship, althoughgrowth remains sluggish.The 2012 labor reform bill,which aimed to increase labor market flexibility, was weakened by amendments to protect the countrys powerful unions. Mexicohas lagged notably in promoting the rule of law and strengthening the legal framework. The

judicial system remains vulnerable to political interference, and property rights are not strongly protected.Corruption further undermines long-term institutional competitiveness.Recent years expansionarypublic spending threatens fiscal sustainability. The reform agenda addressing these shortcomings has been extensive, but progresshas been marginal.

Previous economic problems have occurredMexicos still hereKennethSilber 11(analyst @Think Advisor and senior editor for RESEARCH Magazine, his work ineconomics has appeared in several publications, writes @ Wall Street Journal, Mexicos ResilientMarket, 6-1-11,http://www.thinkadvisor.com/2011/06/01/mexicos-resilient-market)

In December 1994, the Mexican peso was devalued sharply amid panic aboutfactors ranging fromcurrent-account andbudget deficits and lending standards to the leftist insurgencyin the state ofChiapas. The IPCclosed the year at 2,373, and it traded below the 2,000 level during much of the first half

of 1995. A U.S.-led international package of loans and guarantees helped stabilize Mexicos economy, preparing the way forrenewed growth in 1996. The IPC ended 1995 at 2,778 and was at 3,361 at end-1996. The late 1990s were a time ofcautious but general ally upward movement in Mexicos equity market.The IPC made its first push above the 5,000line in August 1997. The 7,000 mark was hit on Dec. 28, 1999, the third-from-last trading day of the decade. Millennial Ascent:A

vigorous Mexican bull market began in mid-2003.The IPC, which hovered around the 7,000 level in June of thatyear, closed 2003 at 8,795. Then the bulls pace picked up. The IPC made its first push above 10,000 in February 2004and by year-end was at 12,917. The 15,000 mark was hit in September 2005. The IPC crossed the 20,000 line for the first time inApril 2006 and ended that year at 26,448. The IPC first closed above the 30,000 line on May 11, 2007. It fluctuated around that line

for the rest of 2007, closing the year at 29,536. The indexpoked above the 32,000 line briefly in April 2008, but insubsequent monthswas caught in the downdrafts of the global financial crisis. The IPC fell below 25,000 thatSeptember and below 20,000 the following month, briefly dipping below the 17,000 mark in Octobers last week. The IPC ended

2008 at 22,380 and at end-March 2009 was back below 20,000. But the resilience of Mexicos marketbecame increasingly evident. In early October 2009, less than a year after its low point, the

IPC pushed backabove the 30,000 line. The index ended 2009 at 32,120. In the decade and a half since thepeso crisis, Mexico had tended toward fiscal restraint in its macroeconomic policies andcautious lending standards in its banking system. Both now paid off in bolstering investorconfidence amid worldwide financial jitters. The nation also was well-positioned to withstanddropping oil prices; unlike fellow energy exporters Venezuela and Russia, Mexico had notpoured its oil revenues into an unsustainable spending spree . So Close to the U.S.: The earlier-mentionedPorfirio Daz-attributed quote appears to be a poor guide to Mexicos situation in the early 21st century. The countrysproximity to the U.S. now is a selling point that helps draw investors into Mexicos stock market. Mexicosready access to its giant neighbor as an export market is a major reason for this. Ironically, though, growing concerns about U.S.

public finances may also increase Mexicos attractiveness. Mexicos public debt recently has stood at a little over40 percent of GDP, compared to a U.S. equivalent of nearly 60 percent. When Standard & Poorsshifted to anegative outlook on U.S. debt in April,Mexican financial markets took it in stride, as analystsnoted the contrast with Mexicos own strong fiscal position .
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A2 Production Decline

Oscillation in oil prices is normal right now no risk; oil productionis increasingSteven P.Otillar 13 (@Akin Gump Strauss and Feld LLP, @OGM (Oil and Gas Monitor), Outlook forMexicos Oil Industry, Opportunity and Obstacles, 5-1-13,http://www.oilgasmonitor.com/outlook-for-mexicos-oil-industry-opportunities-and-obstacles/5126/)

After eight years of decline, oil production in Mexico is again showing signs ofpromise. Recently, Pemex announced two deep-water finds in the Gulf of Mexicototaling 325 millionbarrels. In March,Carlos Morales, the head of exploration and productionfor Pemex, expressed Pemexs hope that by the end of PresidentEnrique Pea Nietos termin2018, Mexico would reach daily oil production of approximately three million

barrels, an increase of almost 15percent.
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A2 Oil K2 Econ

Mexican economy is no longer as dependent on oil other sectors areboosting the economy and making it competitive to ChinaTimothyAeppel 6-28-13(staff writer @Wall Street Journal; Bloomberg News Mexico ManufacturingLooks to Gain Competitive Edge on China,http://blogs.wsj.com/economics/2013/06/28/mexico-manufacturing-looks-to-gain-competitive-edge-on-china/)

Mexicos competitive edgeover China insome types of manufacturing is set to keep growing.Bloomberg News: Thats the assessment of the Boston Consulting Group, which in a new report estimates Mexican factory wages will

be nearly 30% lower than Chinas by 2015, when adjusted for productivity differences. Mexican workers typicallyproduce more per hour than their Chinese counterparts. By that same measure, Mexico alreadylast year became a less expensive place than China to make some products, according to BCGs estimates.Mexicos strengthening factory sector is helping boost that nations economy. BCGestimates thatwithin five years, Mexicos factories will churn out up to $60 billion a year morein goodsmuch of it destined for export. About two-thirds of Mexicos exports currently go to the U.S. We know

theres a lot of work leaving China for Mexico, because its cheaper,saysHarold L. Sirkin, a BCG seniorpartner. He says Mexicos gains will help U.S. manufacturers as well, since products made inMexico contain four times as many U.S.-made parts,on average, as those made in China. Mr. Sirkin says fourindustries in particular are getting a boost: electronics, automobiles, appliances,and machinery. Besides having relatively low wages, Mexico is also benefiting from its close proximity to the U.S. and lowenergy costs. Mexico also has more free trade agreements 44 than any other country. That makes it an attractive place to makegoods destined for many markets.
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2nc Diversification turn

A gradual decrease of the oil sector is good helps Mexico wean offoilThomas Black and Jens E. Gould 09(correspondents for Bloomberg from Monterrey and MexicoCity, Mexicans Evading Tax Mock Calderons Bid to Wean off Oil, 12-2-09,http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXCfVXENwOr0)

In Mexicos struggle to rekindle growth, a big part of the solution will be fixing the tax system,saysJerome Booth,chief of research at London-based Ashmore Group Plc, which manages $25 billion of emerging-market

securities. Mexico has the lowest tax collection as a percentage of its economy among the 30 Organizationfor Economic Cooperation and Development members, the OECD says. Politicians have been talking about this for 10 years, and

they havent got it done, Booth says. Theyve got toexpand the tax base. Under PresidentFelipeCalderon,the government is challenging resistance to reducing the countrys dependenceon oil for the first timesinceVicente Fox failed during his first year in office in 2001.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXCfVXENwOr0http://search.bloomberg.com/search?q=Jerome+Booth&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://search.bloomberg.com/search?q=Felipe+Calderon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://search.bloomberg.com/search?q=Felipe+Calderon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://search.bloomberg.com/search?q=Felipe+Calderon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://search.bloomberg.com/search?q=Vicente+Fox&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://search.bloomberg.com/search?q=Vicente+Fox&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://search.bloomberg.com/search?q=Felipe+Calderon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://search.bloomberg.com/search?q=Felipe+Calderon&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://search.bloomberg.com/search?q=Jerome+Booth&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXCfVXENwOr0


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2nc Alt cause

Defeating monopolies is key the plan cant change Mexicoseconomic culture

The New York Times 3/31/2013(Editorial Board, Mexicos Ambitious Economic Agendahttp://www.nytimes.com/2013/04/01/opinion/mexicos-ambitious-economic-agenda.html )

Newly inaugurated Mexican PresidentEnrique Pea Nieto promised during his campaign to triple Mexicos GDP growth rateto 5-6 percent annually. In order to even approach that lofty goal, Pea Nieto must confront the countrys bloatedmonopolies that discourage competition and raise the cost of goods and servicesfor Mexicans.Complicating this already monumental task is Mexicos entrenched culture of monopolies, which will beharder to defeat than the

actual monopolies themselves.When it comes to Mexican monopolies, the big offenders arewell-known:Telmex, the telecommunications conglomerateowned by the worlds richest man, Carlos Slim; Televisa, thelargest multimedia company in Latin America; Cemex, a building material supplier and cementproducer with a reported market share of nearly 90 percent; and Walmex, Wal-Marts branch inMexico and the nations largest private sector employer, to name a few.According to the OECD, thelack of competition in Mexicos economy has cost the country $129.2 billion between 2005 and

2009, or 1.8 percent of GDP per year. Pea Nieto has statedbroadly that Mexicans should havemore consumer choice and that companies should be made to compete, ensuring lower prices and betterquality. But although he has promised to fight monopolies, he has avoided mentioning the specifics of which onesand how. To complicate matters, the Mexican government runs two of the countrys largestmonopolies, both of which are constitutionally mandated. Pemex, the state-owned petroleumcompany and one of the worlds top petroleum producers, controls all of the countrys oil andgas exploration, drilling, transportation and sales. Mexicos state-owned electricity monopoly,the Federal Electricity Commission, is responsible for generating, controlling and transmittingall of the countrys electricity. Both companies are notoriously inefficient.Mexicos labor unionsare not by definition monopolies, but they too succeed inexercising undue influence over the government, thereby makingMexicos labor force less competitive. Over their history, labor unions have won important rights for Mexicos workers.However, Mexicos unions have today become disruptive behemoths, focused primarily on their

own self-preservation. Year after year, unions have evaded government regulation by auctioningtheir political capital to the highest bidder. Union-led protests frequently shut down MexicoCitys main avenue for hours, causing massive traffic jamsin an already congested city. Meanwhile, unionleaders, some of whom have been in office for decades, have politicians fearful of crossing them, and have been accused ofeverything from influence-peddling to corruption and mismanagement of funds. It is therefore nosurprise that unions managed to escape relatively unscathed from Mexicos recently approved labor reform bill, which seeks tomodernize the countrys inefficient labor sector. The bill makes it easier to hire and fire workers, eases restrictions on part-time workand updates outsourcing practices. However, as a result of their alliance with the majority PRI party, which returned to thepresidency with Pea Nieto, unions succeeded in enfeebling measures intended to make them more accountable, democratic and

transparent. Transportation monopolies also negatively impact Mexicos growth. In a country withsprawling urban centers and an increasingly fast-paced life, good public transportation is paramount. But centrally plannedpublic transportation projects aimed at reducing traffic and pollution are often obstructed bytaxi and bus drivers unions eager to protect their monopolies. The unions have already

succeeded in obstructing the construction of streamlined metro-bus systemsin Acapulco and Puebla,both important and populous cities. Such public transportation systems would encourage competition byoffering travelers an alternative to often overpriced taxis and dangerous buses. Instead, the existingtransportation monopolies inconvenience passengers and present a significant challenge for city planning and development acrossMexico. In Mexico City, for example, thousands of unregulated pesero buses drive recklessly and pollute heavily. Because theycompete for fares, they often race other buses to pick up passengers, adding to the chaos of driving in a metropolitan area of more

than 21 million people. Mexicos supposedly free-market economy has long been held hostage bymonopolies that control up to80, 90 or even 100 percent of market share. Injecting competition into theeconomy and regulating monopolies requires a tough stance toward big business and unions. Pea Nietos PRI party is allied with

both. In order for the new president to even approach his growth promise -- not to mention keeping


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Mexico competitive in the global economy -- the incoming administration must tackle monopolies in ameaningful way. This means not just confronting big companies but also unions, low-levelmonopolies and the governments own state-run companies. Pea Nieto claims that addressingMexicos monopoly problem is part of his proposed structural reforms.Specifically, his team hasproposed harsher penalties for monopolistic behavior, and antitrust courts that would embolden Mexicoscompetition authority, Cofeco. Pea Nieto also proposed a constitutional amendment that would allow private and foreigninvestment in Pemex, arguing that Mexico should increase production capacity and emulate Brazils state-run oil company,Petrobras. This Sunday, on his second day in office, Pea Nieto signed a pact with the chairmen of rival parties the PAN and the PRDto work collaboratively to, among other things, weaken Mexicos telecommunications monopoly. Still, Pea Nieto would not be thefirst Mexican president to implement pro-competition and antitrust reforms. The Mexican Antitrust Act was strengthened twiceunder former President Felipe Caldern, in 2006 and 2011. Cofeco even succeeded in slamming Telcel mogul Carlos Slim with arecord $1 billion fine in April 2011. The question is whether Pea Nieto can take reforms further than his predecessor. Although hehas presented himself as the new face of the PRI, many are skeptical that Pea Nieto will break from the party known for its

corruption and cronyism. Pea Nieto ran on a platform of economic reforms that would improve the everyday lives of Mexicans.Real change in Mexico will require addressing the culture that allows monopolies to flourish. Unless Pea Nieto is willing to jeopardize his close ties to the political elites, unions and big business that underlie this culture,Mexicans are likely looking at six more years of subpar economic performance.

Lack of infrastructure is what makes decrease likelyNational Infrastructure Program 12 (National Infrastructure Program 2007-2012: Mexico, 2012,

http://www.motran.org/Research/Mexico-LEAP/mexico_ntnl_infrastructure_prog.pdf)

Infrastructure is synonymous of economic, social and human development. Economic growth andopportunities forthewell-beingof Nations are clearly correlated with the level of development oftheir infrastructure. The countries we compete with are placing the highest priority on themodernization of their infrastructure, because they know that it is a condition for success in theglobal economy. Mexico cannotand should not fall behind.For a number of reasons, Mexico has not beenable to maintain a rate of investment in the sector in keeping with its capabilities. The recurrentfinancial crises, the insufficiency of public finances, the lack of clear incentives and of conditions of certaintyfor investment, among many other reasons, explain this lag which has also translated, unfortunately, intoaloss of opportunities for Mexicans and underdevelopment. Today, nevertheless, we Mexicans have a great opportunity toovercome these lags.We have conditions of economic stability, sound public finances, a strategic

geographical position, a network of trade agreements that afford Mexico direct access not onlytothe worlds largest marketbut to different regions and to more than one billion consumers on several continents. We havea young population which is increasingly well trained and certainty in the direction of what we want for the future. Mexicanstoday have the opportunity and the historical responsibility of giving a renewed projection and a newprofile to the countrys infrastructurefor development. Few sectors such as this better reflect the possibilities forprogress. It is therefore possible to say that to invest in infrastructure is to build a better Mexico.

Lack of foreign investment and development in non-energy sectors isslowing economic growth

WSM 09 (Mexico, Issue 10, Why Has Mexico Been Unable to Reap the Rewards of Globalization?August 2009,http://worldsavvy.org/monitor/index.php?option=com_content&view=article&id=634&Itemid=1104)

Lack of Economic Institutions and Infrastructure: Several experts, includingThomas Friedmaninhis seminal work The World Is Flat, have noted that Mexicos economic transformation to free marketprinciples stalled before critical phases were implemented: Mexico did complete mostmacroeconomic or structural adjustment reforms.Under pressure from US and the IMF, the governmentoverhauled fiscal and monetary policy to move the country toward an export orientation. It rolled back government spending,lowered or eliminated protectionist trade barriers, attracted foreign direct investment (FDI), and privatized state assets. It thereby
http://www.motran.org/Research/Mexico-LEAP/mexico_ntnl_infrastructure_prog.pdfhttp://www.motran.org/Research/Mexico-LEAP/mexico_ntnl_infrastructure_prog.pdfhttp://worldsavvy.org/monitor/index.php?option=com_content&view=article&id=634&Itemid=1104http://worldsavvy.org/monitor/index.php?option=com_content&view=article&id=634&Itemid=1104http://worldsavvy.org/monitor/index.php?option=com_content&view=article&id=634&Itemid=1104http://www.motran.org/Research/Mexico-LEAP/mexico_ntnl_infrastructure_prog.pdf


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established most of the conditions necessary for the free market to function. It did not, however, complete the nextphase: microeconomic reforms necessary to make the free market work. This critical phase includesbuilding institutionsto facilitate the activities of the free market banks, economic regulations, contract laws, training and technology,education, mechanisms that allow for collaboration and efficiencies, coherent tax policies, etc.As a result,Mexican companies have been unable to take advantage of the leveled playing field. Entrepreneurswere not supported, the work force lost ground to better educated workers in other countries, and monopolies discouraged the

growth of new businesses. Put simply, Mexico failed to develop the necessaryinstitutions and infrastructureto promote its own competitiveness in the free market it had joined. Mexicos weak laws andculture of corruption, from its judicial to electoral systems, limited its attractiveness to investors andentrepreneurs who require that the state honor contracts, punish lawbreakers, and create anatmosphere of trust and stability. The result isthat Mexico can be a difficult place to do business, severelyhampering its economic growth.


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A2 relations advantage


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SQ Solves

US-Mexican Relations improvingAntonio Garza4-29-2013; Obama Goes to Mexico: Time is Ripe to Advance BilateralRelationsBy Published April 29, 2013Fox News Latino

This weeks meeting between Presidents Obama and Pea Nieto brings U.S.-Mexico relations to center stage. This second face-to-

face between the two leaders occurs at a critical time in each presidency. Domestic reform efforts that have far-reaching implications for the bilateral agenda are underway in both countries. These includeimmigration reform in the U.S. and reforms to boost economic competitivenessin Mexico and thoughthey inject some short-term uncertainty into the relationship they also infuse it with a sense of new possibilities and opportunity.Presidents Pea Nieto and Obama have both entered a post-honeymoon environment that demands hard work and successivelyheavier lifts on every policy goal. - Antonio Garza Recent efforts to broaden the discourse on U.S.-Mexico relations have been largely

successfuland overdue. Nevertheless, security remains the focal point for many citizens ofboth countriesand aprimary challenge for Mexican leaders. Pea Nieto campaigned on promises of a recalibrated strategy on security and the Mexicanpublic has been patient in granting his administration time to develop its approach. But there are risks in the pace his team seems tohave adopted, including mounting skepticism at home and to some extent in the U.S.that the issue has not been given thepriority it deserves. Mexican officials emphasize their commitment is strong and encompasses efforts to reduce violence, protect

human rights and construct a rule of law that supports a more open and competitive economy. Now near the 150-day mark of hissix-year term, Pea Nieto has pushed through a number of long-awaited reforms to labor, education and telecommunicationsand is readying other, thornier ones for action. His efforts have been widely praised and his popularity is high, but passing thereforms is just the opening act. Implementation is crucial. And its this recognition that has prompted many observers, particularlyMexicans themselves, to be more circumspect in their praise of the administrations accomplishments to date. The foundation forthe administrations ambitious reform drive has been the Pact for Mexico, an historic agreement Pea Nieto and the leaders ofthetwo main opposition parties signed the day after the new PRI president took office. A few days ago the administration was forced totemporarily suspend all activities related to the Pact, including a planned announcement of financial reforms. The crisis wasprovoked by the oppositions discovery that the PRI was using public funds to finance party-run programs and thereby gainpolitical advantageahead of local elections in July. The dispute has exposed the inherent political tensions and consequent

limitations of the Pact. Though the parties may be able to resolve the immediate controversy, many see signs that thealliance is fraying and expect negotiations for remaining initiativeson the 95-item reform agendaincluding highly anticipated fiscal and energy reform packagesto be more problematic. President Obama will be able tosympathize with his Mexican counterpart on this score. Over four years and 100-days into his second term he has become wellacquainted with difficult negotiations. Like other two-term presidents, he may soon look to foreign affairs to burnish his legacy. His

visit to Mexico offers a rare opportunity to promote goals in both the domestic and foreign policy arenas. President Obamawill emphasize the need to continue to effect close security cooperation and coordination. Hewill also seek to positively frame the immigration reform debate,which is just getting underway in the U.S.Senate and is expected to continue for the remainder of the year. The visit to Mexico affords the chance tohighlight the successful and interconnected economic partnership the countries share and tomake the case for immigration reform as essential to North Americaseconomic security. And in manyrespects President Pea Nieto will have the opportunity to do the same. The U.S.-Mexico economic partnership isthriving. Mexico is the U.S.s second largest export market and third leading source of imports.Bilateral trade reached nearly one-half trillion dollars in 2012 , roughly $1.4 billion each day.Anestimated six million U.S. jobs depend on trade with Mexico.And strong regional supply chains mean thatnearly 40 percent of every product the U.S. imports from Mexico is really Made in America.As strong as the bilateralrelationship is now, however, it must deepen and evolve in order to ensure expandedopportunity and security for both countries going forward. Presidents Pea Nieto and Obama have bothentered a post-honeymoon environment that demands hard work and successively heavier lifts on every policy goal.With thestakes potentially so high on so many issues fundamental to the relationship, only the highest-level commitment will advance the agenda. There may never be a more opportune time.

U.S. Mexico cooperate in fight against drugsOrdonez 9/17/2012


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(Staff for McClatchly, Mexican, U.S. relations improve in fight against drugs, trafficking,http://www.mcclatchydc.com/2012/09/17/168769/mexican-us-relations-improve-in.html#.Ue7PpI2Thsk)

WASHINGTON Despite ongoing violence south of the border, cooperation between Mexico and theUnited States has reached unprecedented levels.

At a luncheon Monday at a Washington think tank, Homeland Security Secretary Janet Napolitanoand Mexican Interior Secretary Alejandro Poire touted how theyve teamed up to fight drug and

weapons trafficking, money laundering and human smuggling. Simultaneously, they warnedthat progress could be stalled if not continued by the next administrations in both countries.

The challenges are so massive, and the threats so clear, that as much as we have advanced it isimperative that the level of effort not only stays at the same level, but hopefully increases on

both sides of the border, Poire said.

While voters still have two months before they choose whether President Barack Obama or formerMassachusetts Gov. Mitt Romney should run the U.S., Mexicans voted this summer for President-electEnrique Pena Nieto. He takes over Dec. 1.

Its unclear whether Pena will continue the same relationship with Obama or Romney. Pena has stressedin campaigns that he wants to reduce the level of violence in Mexico.

Violence in Mexico has claimed more than 35,000 lives since President Felipe Calderon came into officein late 2006. Most of the fighting has been between drug gangs, but the violence has left Mexicansquestioning Calderons war on drug trafficking.

Last year, 15,273 Mexicans were killed in drug-related violence. Six out of 10 Mexicans think thatorganized crime gangs are getting the upper hand in the drug war, according to a Demotecnia poll.

Speaking as if Pena and Romney were sitting at one of the tables, both Poire and Napolitano stressedthat the relationship between the two countries must continue with the same urgency.

Cooperation between our two countries has never been stronger, but we also know that thethreats we face are dynamic, Napolitano said. We must continue to work together. This is not astatic situation and we should never be comfortable leaning back in our chairs and saying were done.

Poire credited U.S. intelligence with helping Mexico capture the alleged kingpin of the GulfCartel, Jorge Eduardo Costilla Sanchez, known as El Coss. The State Department had a $5 millionreward out for his arrest.

I think the reality is there is more day-to-day cooperation on an operational level on verysensitive issues than weve ever seen before, saidAndrew Selee, director of the Mexico Instituteat the Woodrow Wilson International Center for Scholars, which hosted the event. At the same

time, there is a great deal of distrust between and among agencies. And there are crises of trustand political taboos that are still hard to break.

Poire and other top Cabinet officials of the Calderon administration are in Washington for a securitymeeting Tuesday with Secretary of State Hillary Clinton and Attorney General Eric Holder.

While the two countries have been sharing intelligence for years, Poire and Napolitano said thedrops in border crossings by illegal immigrants has created more space to improve ties.


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Illegal immigration has long been one of the open wounds between the two countries, Seleesaid.

US- Mexico disagreements manageable for relations

Long 13 (Tom Long, Ph.D candidate in the School of International Service with a focus on U.S.-Latin Americanrelations, AULA Blog, Center for Latin American and Latino Studies, American University, 4-16-13, Will tensionsover security spoil the Obama-Pea Nieto Summit?, http://aulablog.net/2013/04/16/will-tensions-over-security-spoil-the-obama-pena-nieto-summit/)

.Pea Nietos political incentives do not point to the same, high-profile cooperation with the United States that occurred underPresident Felipe Caldern, who had already begun shifting priorities last year. Despite the major turnaround signified by the PRIs

signing NAFTA almost 20 years ago, Pea Nietos PRI still contains elements more skeptical of U.S.intervention than Calderns PAN. Materially, moreover, most of the U.S. aid planned under the Mrida Initiative has beendisbursed, and Congress exhibits little appetite for major new appropriations. (Even at its height, U.S. spending was a fraction of

Mexicos contribution to the drug war.) That reduction,coupled with growing awareness that the Caldernstrategy actually fueled violence, diminishes the enthusiasm in and outside of government forcontinuing his policies. Frustration from the left in both countries regarding persisting human

rights violations and the slow pace of judicial reform could also grow more serious.Whiletheseproblems may be causing tensions between U.S. and Mexican police and military at the operational level, theyseem to bemanageable so far and both Presidents are likely to emphasize intelligence-sharing and similar

bilateral cooperation that does not require resources. Upper echelons of the Obamaadministration seem to understand that Pea Nietos push to de-emphasize security andpromise to focus on violence reduction over drug interdiction is politically necessary. But the moralargument has not changed: Mexicans suffer the violent consequences spawned by U.S. drug use and counterdrug policies. Weaponssold on the U.S. side of the border continue to flow into Mexico, an issue now atop the U.S. political agenda for entirely domestic

reasons. If the two countries can manage to keep security problems at a lower decibel, they willbetter cooperate on issues that are just as vital but could pay larger dividends immigration,transboundary energy, educational exchange, and infrastructure.


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Resilient

US Mexico relations will remain strong despite complicationsSeelee 7/2/2012 (director of the Woodrow Wilson Centers Mexico InstituteHow will PRI's win change the U.S.-Mexico relationship?http://globalpublicsquare.blogs.cnn.com/2012/07/02/how-will-pris-win-change-the-u-s-mexico-relationship-not-much/)Mexico's elections have brought back the PRI, an authoritarian party that ruled Mexico for sevendecades. This possibility had worried many observers and politicians in the United States, and

yet, surprisingly, it will make little difference for the U.S.-Mexico relationship. This is largely atribute to how deeply interdependent the two countries are today, as well as the ways in whichMexican society has evolved over the past two decades.The PRI has been known in the past for its anti-American rhetoric and distrust of the UnitedStates. However, circumstances over the past 20 years have completely changed the relationship

between the two countries. Mexico has developed a vibrant export-oriented economy that isgrowing at a respectable 3-4% a year. Its major destination for exports is, of course, the United

States.Related: Fareed Zakaria on why Mexico is on the rise

At the same time, Mexico's expanding economy has allowed it to become the second destinationfor U.S. exports. States ranging from Texas to Nebraska, Michigan, Tennessee and NewHampshire depend heavily on the trading relationship with Mexico. Indeed, the growingMexican economy is helping to fuel the expansion of jobs in these states in the midst of aneconomic crisis at home. Policymakers in both countries have a vested interest in managingthese economic ties responsibly, and a new administration in Mexico is sure to make this apriority.

US Mexican Relationships Are Resilient

Jacob Fischler The Monitor 3/28/13Mexican trade and tourists are boon for U.S.businesseshttp://www.themonitor.com/news/local/article_3bf218a2-c734-11e2-b19a-001a4bcf6878.html

Whats been interesting is youve seen economic growth in Mexico even as security has worsened, ONeil

said. But she doesnt see that trend continuing. In the long term, I dont see how prosperity and growth that people hope forcan continue if you cant guarantee safety, she said. Economic growth and security have to go hand in hand.

Rosenberg believes economic growth can help bring security. Improving the economy on both sides of the border has to be seen

as part of the strategy to weaken transnational criminal organizations, he said. One of the ways to attack the cartels is to show that

Mexicans have good jobs. That the trade relationship has flourished in a period of heightened security risks

shows just how resilient and deep and broad this all is, Rosenberg said. And it shows that if

the security situation improves, my God, what is go ing to be possible?

Trade Dispute Over Meat Between Mexico and USAdriana Barrera 5/24/13 Mexico eyeing retaliatory measures in U.S. meat labeling disputehttp://www.reuters.com/article/2013/05/24/us-mexico-usa-meat-idUSBRE94N0XQ20130524
http://globalpublicsquare.blogs.cnn.com/2012/07/02/how-will-pris-win-change-the-u-s-mexico-relationship-not-much/http://globalpublicsquare.blogs.cnn.com/2012/07/02/how-will-pris-win-change-the-u-s-mexico-relationship-not-much/http://globalpublicsquare.blogs.cnn.com/2012/07/02/how-will-pris-win-change-the-u-s-mexico-relationship-not-much/http://www.themonitor.com/news/local/article_3bf218a2-c734-11e2-b19a-001a4bcf6878.htmlhttp://www.reuters.com/article/2013/05/24/us-mexico-usa-meat-idUSBRE94N0XQ20130524http://www.reuters.com/article/2013/05/24/us-mexico-usa-meat-idUSBRE94N0XQ20130524http://www.themonitor.com/news/local/article_3bf218a2-c734-11e2-b19a-001a4bcf6878.htmlhttp://globalpublicsquare.blogs.cnn.com/2012/07/02/how-will-pris-win-change-the-u-s-mexico-relationship-not-much/http://globalpublicsquare.blogs.cnn.com/2012/07/02/how-will-pris-win-change-the-u-s-mexico-relationship-not-much/


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(Reuters) - Mexico is considering imposing retaliatory trade measures on the United States in

a dispute over the fairness of U.S. rules requiring meat to carry labels that specify its origin ,

the country's economy ministry said on Friday.

Mexico said new U.S. rules for meat labeling were even more onerous than a set of regulations

that the World Trade Organization (WTO) declared were unfair in June 2012, the ministry said

in an emailed statement.

The Obama administration unveiled the new rule on Thursday, the final day to comply with the

WTO decision that upheld complaints by Canada and Mexico. Canada has also has said it will

fight the new version of the U.S. country of origin labeling rules (COOL).

"Mexico is convinced that the new COOL rule does not comply with the WTO requirements and

will cause even more damage to Mexican meat exports," the economy ministry said.

"Mexico will keep exercising its rights within the WTO framework, including the imposition of

retaliatory measures, until the United States complies with its international obligations," it said.

Under the new regulation, labels will carry labels such as "Born, Raised and Slaughtered in theUnited States" for U.S. animals. Meat from other countries could carry labels such as, "Born in

Mexico, Raised and Slaughtered in the United States."

United States and Mexico Dispute Truck TradeTom Gjelten Correspondent for NPR 3/17/09 Trade Disputes Between U.S, Mexicohttp://www.npr.org/templates/story/story.php?storyId=102015890

If there's one thing that just about every economist agrees on right now,it's this: Rising protectionism is a bad thing and ought to be avoided.

Yet, that is just what is developing between the U.S. and Mexico.The firstshot in this trade skirmish was fired last week by Congress when it shut downa program under which Mexican trucks were allowed on U.S. highways. Inretaliation, the Mexican government said Monday that it would impose tariffson a variety of U.S. products entering Mexico.The issue of Mexican trucks onU.S. highways goes back 15 years to the signing of the North American FreeTrade Agreement, NAFTA, in 1994. A provision allowing U.S. and Mexican trucks tooperate across the border was part of NAFTA but, from the beginning, that provision was vigorouslyopposed by the Teamsters union, which represents U.S. truck drivers.At the time, the Teamsters saidMexican trucks weren't safe. So, then-Transportation Secretary Federico Pena went to the border toinvestigate and reported back to the Clinton White House that he saw no reason to block Mexican

trucks. But U.S. Trade Representative Mickey Kantor, after hearing from the

Teamsters, intervened and got the White House to suspend the truckingprovision."I was very distressed, because I thought this was an integralpart of the agreement," says Richard Feinberg, the Latin America specialiston the White House staff. He spearheaded Clinton administration efforts to promote NAFTA. "Iremember that night running around and looking for other senior policymakers in the area ofinternational economics. They all agreed with me that this was very lamentable, but they said, 'Well,

Richard,that's the reality of domestic politics and the way it impinges oninternational economics.' Lesson learned."
http://www.npr.org/templates/story/story.php?storyId=102015890http://www.npr.org/templates/story/story.php?storyId=102015890


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US Mexican Relations Strained Over Drug WarMcCarton Akerman 2/5/13 US Mexico Drug War Relations Remain Tensehttp://www.thefix.com/content/us-mexico-drug-war-relations-remain-tense91235

Although the US haspledged to work together with Mexico towards a solution to the

country's ongoing drug war, relations between the countriesremain strained,the NewYork Times reports. Recently, the US stepped in to intervene over the possible promotion of

Gen. Moiss Garca Ocho, who was poised last fall become Mexico's next minister of defense. The

Obama administration was concerned over unconfirmed suspicions from the DEA and thePentagon that

the general was tied to drug traffickers, and that he had misused military supplies and skimmed

money from multimillion-dollar defense contracts. So in the lead-up to Mexico's Presidential

inauguration on Dec. 1, the US ambassador to Mexico,Anthony Wayne, met with senior aides

to new President Enrique Pea Nietoand expressed concerns over Ocho's rise to power. The

general ultimately was not promoted, but the intervention highlights a lingering mistrust between the two countries,

even as they proclaim their partnership. When it comes to Mexico, you have to accept that youre

going to dance with the devil, says an anonymous former senior DEA official. You cant

just fold your cards and go home because you cant find people you completely trust.

You play with the cards youre dealt.There is mistrust on the other side of the border as

well.The running complaint on the Mexican side is that the relationship with the United States

is unequal and unbalanced, says an anonymous former senior Mexican intelligence official.

Mexico is open with its secrets. The United States is not. So theres a lot of resentment. And

theres always an incentive to try to stick it to the Americans. During former President

Felipe Caldern's run as President, the US and Mexico collaborated on military operations that resulted in the arrest

or killing of several dozen major cartel leaders.However, the aggressive tactics contributed to a surge of

violence left63,000 dead.Nieto hasdeclared he will focus more on reducing violence and less

on capturing cartel kingpins. But many US officials remain unconvinced.

US and Mexico are cooperating stronglyFox News, 7/05/13 (Staff writer,U.S. Wants More Intelligence Cooperation With Mexico,

White House Report State, http://latino.foxnews.com/latino/news/2013/07/05/us-wants-more-intelligence-cooperation-with-mexico-white-house-report-states/)President Barack Obama and Mexico's President Enrique Pena Nieto in Mexico City, May 2, 2013.A newly releasedWhiteHouse reporton the U.S. border with Mexico highlights the Obama administration'sstrategic shift towardforgoing a closerworking relationship with its southern neighbor. This, despite recent restrictions by EnriquePea Nieto's government on who American intelligence services can contact in Mexico. The White House's2013 NationalSouthwest Border Counternarcotics Strategy illustrated nine points that focus on interdiction, tacklingdrug cartelsalong the border, halting money laundering, building up stronger communities andstrengthening ties between the two nations in terms of counternarcotics. The U.S.-Mexican bilateralrelationship continues to grow based on strong, multi-layered institutional ties, the report stated.Based on principles of shared responsibility, mutual trust, and respect for sovereign independence, the two countries effor ts havebuilt confidence that continues to transform and strengthen the bilateral relationship in 2013 and beyond.
http://www.thefix.com/content/us-mexico-drug-war-relations-remain-tense91235http://www.thefix.com/content/military-partnership-us-mexico91166http://www.nytimes.com/2013/02/05/world/americas/us-stepped-in-to-halt-mexican-generals-rise.html?pagewanted=all&_r=0http://www.nytimes.com/2013/02/05/world/americas/us-stepped-in-to-halt-mexican-generals-rise.html?pagewanted=all&_r=0http://www.thefix.com/content/calderon-leaves-drug-war-behind90972http://www.thefix.com/content/mexico-new-president-drug-war90353http://www.thefix.com/content/mexico-new-president-drug-war90353http://www.thefix.com/content/calderon-leaves-drug-war-behind90972http://www.nytimes.com/2013/02/05/world/americas/us-stepped-in-to-halt-mexican-generals-rise.html?pagewanted=all&_r=0http://www.thefix.com/content/military-partnership-us-mexico91166http://www.thefix.com/content/us-mexico-drug-war-relations-remain-tense91235


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Alt cause

US Mexican relations hurt by drug warAssociated Press 4/3/12(Staff writer, Obama says Mexican drug war could hurt relations,http://www.sfgate.com/world/article/Obama-says-Mexican-drug-war-could-hurt-relations-3454377.php)

Washington -- Theexplosion of drug-fueled violence along Mexico's border with the United States could harmrelations between the two nations, President Obama said Monday; Mexico's leader retorted that much of theproblem of drugs and guns begins on the U.S. side of the line. In the thick of political contests in both the United States and Mexico,

Obama and Mexican President Felipe Calderon traded unusually direct claims about the causeand effect of the drug violence that has consumed a swath of northeastern Mexico. They were cordial andcomplimentary to one another, but did not hide the degree of worry on both sides about a six-year spasmof violencethat had killed more than 47,000 people. "It can have a deteriorating effect overall on the natureof our relationship," Obama said. "And that's something that we have to pay attention to." Calderon made a governmentcrackdown on warring drug cartels the hallmark of his six-year term, which expires later this year. His center-right party has seen itselection chances fall in the face of a wide perception in Mexico that the crackdown has not worked. The Mexican presidential election

that formally began last week will culminate with elections July 1. Beyond the terrible human cost, the battling drug cartelsin Mexico and in Central America cause economic problems and political and security concerns for theUnited States, Obama said. "If they're undermining institutions in these countries, that willimpact our capacity to do business in these countries," Obama saidfollowing meetings with Calderon andCanadian Prime Minister Stephen Harper.

Mexico relations tense from US border militarizationBeckhuzen 12 (Robert Beckhusen, NatSec writer at Medium. Contributor to Offiziere.ch, 7-3-13, As U.S.Prepares For Border Build-Up, A Risk of Tensions With Mexico, http://www.offiziere.ch/?p=12617)

When the United StatesSenate passed sweeping reforms of American immigration laws last month, the United States came

one step closer to allowing millions of undocumented immigrants to become citizens. But the reforms, are they to eventuallybecome law,would also mean pouring billions of dollars into beefed-up border security to theconsternation of Mexican officials and to the benefit of major defense contractors.The reforms have the potentialto improve the lives of millions of Mexicans living in the U.S. today, the Mexican Ministry of Foreign Affairs noted in a statement.

But Mexicos foreign minsiter,Jose Antonio Meade, didnt spare criticism for the billions ofdollars in border fences and military hardware. Fences are not a solution to the migrationphenomenon, and they are not congruent with a safe and modern border, Antonio Meade told reportersin late June. He added: fences dont unite.Among the requirements imposed by the immigration plan which passed the U.S.Senate in late June but has not been introduced in the House of Representatives are 15 Black Hawk helicopters, eight AS-350Eurocopter choppers and 17 UH-1N Twin Huey choppers; slated for the U.S. Border Patrol. Those details, revealed by theWashington Post on Monday, amount to bonanza of contracts, and also include eight of the U.S. militarys VADER (Vehicle andDismount Exploitation Radar) system, which was designed to operate from drones in Afghanistan and automatically detect andtrack ground movement by vehicles and individuals.Among other measures included in the bill are 18,000 more Border Patrolagents for the U.S. southwest border, boosting the number to more than 38,000. Four more drones are added to the Department ofHomeland Securitys existing fleet of 10 MQ-9 Reapers. Also, according to the Post, the legislation is to add more than 4,500 groundsensors, more than 100 radiation detectors and 53 scopes used to inspect container trucks for smuggled drugs. Physical fencing

350 miles worth is also included at a cost of $7.5 billion.In total, the border spending from the proposed billwould amount to $38 billion. Overall, a militarized border would become even more militarized.Our country has let the United States government know that measures which affect links

between communities depart from the principles of shared responsibility and goodneighborliness, Antonio Meade said. Speaking on radio program MVS Noticias, Jorge Castaneda Mexicos former foreignminister under the presidency of Vicente Fox called the border build-up more like North Korea and South Korea, not France and

Germany.Mexican officials have several reasons for hesitance about military hardware on theborder. For one, a heavily defended border risks discouraging cross-border trade, with impacts felt most


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on a Mexican economy dependent on exports to the United States. Central American migrants also pass through Mexico on their

way to the U.S., and clamping down on migration could mean thousands of migrants stranded withinMexican territory a situation the Mexican government would prefer to avoid. But primarily,the perception in Mexico City is that a militarized border is bad for business.Tensions resulting fromincreased border security would be nothing close to Korea. Nonetheless, We have things we can shut down, too,Mexican journalist and historian Lorenzo Meyer said, according to ABC News. Mexico has relatively

restrictive laws involving foreign property ownership, owing to a history of land speculation by foreigncompanies and repeated military invasions during the 19th century. Meyer suggested if Mexican officials were inclined, they couldfurther restrict the ability of U.S. citizens and companies to buy and invest in the country.

Border Surge alienates MexicoPeterson 7-14 (Kristina Peterson, Congressional reporter at The Wall Street Journal , 7-14-13ImmigrationSecurity Push Chafes Border Lawmakers,http://online.wsj.com/article/SB10001424127887323664204578606162973151482.html#articleTabs%3Darticle)

Efforts in Congress to beef up border security are drawing criticism from a group with an ear close to the ground: the lawmakers who

represent House districts along the border with Mexico.The Senate recently included what many called a"border surge" of new federal agents, fencing and other measures as part of an immigration-law

overhaul it passed, and the House is expected to call for additional security provisions. Thosemeasures show that the border discussion has taken a wrong turn, say some of the eight HouseDemocrats who, along with one Republican, represent communities on the nearly 2,000-mileSouthern border.These lawmakers, whose districts tilt more Democratic and Hispanic than many others in borderstates, worry that a crackdown, and the tone of debate surrounding it, will alienate Mexico, one of the country'smost important trading partners. They argue that instead of pumping billions of dollars into efforts that they say wouldmilitarize the border, the government could divert some of that money to make legal crossings easier and cut down on delays at land

crossings, which they say create a drag on the economy."All other arguments about defense aside,just the symbolic natureof constructing more fence along the border of a country with whom we have such great

business relationships doesn't make any sense," saidRep. Filemon Vela, one of five Democrats torepresent the Texas border with Mexico.Most House Republicans argue that tighter border enforcement isnecessary to halt the flow of illegal immigrants before lawmakers can consider a pathway to citizenship to people already in the U.S.

illegally.Rep. Henry Cuellar (D., Texas) said he recently returned from a three-day trip to Mexico,

where lawmakers and business officials were astounded by the tone of the border debate. "Thefirst thing they said was, 'What are you all up to there in the United States? What are you tryingto do to us?' " he said.The border-security provisions of the Senate bill have caused tensions among Democrats in the House.Earlier this month, Mr. Vela resigned from the Congressional Hispanic Caucus in protest of itssupport for the Senate bill."The Senate bill perpetuates an environment of fear and separation,"Mr. Vela wrotein the Houston Chronicle.The sole Republican to represent a border district also has concerns. Adding morefencing "just doesn't work," said Rep. Steve Pearce of New Mexico. However, strengthening border security through other methods,including more sophisticated technology, is popular at home, said Mr. Pearce, whose district is more than half Hispanic."Prettymuch everybody in our district would like to see [more] border securityHispanics and non-Hispanics alike," he said in aninterview.The "border surge" amendment added to the Senate bill to generate more GOP support would double the number ofBorder Patrol agents to nearly 40,000 and require 700 miles of fencing to be completed, among other measures. The CongressionalBudget Office said those provisions would cost about $40 billion over 10 years.House Republicans made clear last week that theirfirst step in passing any roster of immigration bills would begin with attempts to reduce illegal immigration at the border. Many saythe Senate measure doesn't do enough to tighten the flow of immigrants, with some on Capitol Hill citing continued illegalimmigration after a 1986 law that legalized many immigrants and included measures to stop illegal crossings. "The question is can

we actually get the border secure and not have this happen again?" Senate Minority Leader Mitch McConnell (R., Ky.) said on NBCSunday. "We need to seriously beef up the border security part."Several House Republicans are focusing on curtailing illegalimmigration by giving state and local authorities new powers to enforce federal immigration laws. States have certain, limitedpowers to enforce federal immigration law, but courts have voided some of their efforts.Expanding the scope of state powers wouldhelp enforce the law, some lawmakers say. More fencing alone won't, for example, help winnow the number of people remaining

illegally in the U.S. after overstaying their visas, said Rep. Trey Gowdy (R., S.C.), a member of the House Judiciary Committee.Mr.Gowdy, a former federal prosecutor, said he was sensitive to concerns that some might perceiveofficers' actions as racial profiling."I have seen the destructiveness when any constituency does not trust lawenforcement," he told Bloomberg on Friday. But Mr. Gowdy didn't see that concern as a reason to cordon off immigrationenforcement from local authorities. "We trust state and local law enforcement with every other category of crime," he said.Border-district Democrats have stepped up efforts to shift the focus of the immigration debate to the economic impacts of actions along the


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border. "We have to dispel this myth that the border is primarily a threat," said Rep. Beto O'Rourke (D., Texas), whose officedispatched to every House lawmaker an analysis of how U.S.-Mexico trade affects all U.S. states.Spending money to speed legalcrossings at border entry-points would help commerce and boost the flow of people trying to enter the U.S. to shop, said Rep. RonBarber (D., Ariz.). He said entrance points on the Arizona border can have waits of nearly three hours."We have to do better thanthat," said Mr. Barber, who has invited a bipartisan group of lawmakers to come visit part of his 84-mile stretch of Arizona bordernext month.

Food trading dispute has angered MexicoGoad 7/16 (Ben Goad, Reporter for The Hill, 7/16, US, Mexico clash over tuna can labels,http://thehill.com/blogs/regwatch/pending-regs/311191-us-mexico-clash-over-labels-for-canned-tuna)

New regulations for canned tuna labels are ratcheting up a bitter, years old dispute between theUnited States and Mexico, with both sides accusing the other of killing large numbers of dolphins in the Pacific.Morestringent requirements kicked in Saturday for companies that want to sell their tuna as dolphin

safe in theUnited States.The revision to the Dolphin Protection Consumer Information Act (DPCIA) expands labelingrules for tuna products that are either exported from or sold in the United States.The move is meant to bring the United States intocompliance with international standards following a 2012 World Trade Organization (WTO) ruling that previous U.S. labeling policy

discriminated against the Mexican tuna industry.But the Mexican government blasted the new rules, sayingthey dont remedy the violation. The country, one of the United States top trading partners, isthreatening to impose damaging retaliatory tariffs. Mexico will challenge before the WTO thatthe United States has failed to comply with its WTO obligations,the Mexican government said in a writtenstatement it issued in response to the new regulations. Once the U.S. violation is confirmed by the WTO,Mexico will be in a position to impose trade sanctions against the United States.While they have notdetailed the tariffs, Mexican officials said they would consider suspending trade benefits across a

variety of sectors. The dispute centers on differing fishing methods employed by the two nations tuna industries. TheMexican chase and encircle practice involves the tracking of dolphins,which often swim above large schools of yellow fin tuna.The fish are then corralled by giant nets designed to allow the dolphins, which swim closer to the surface of the ocean, to spill out

the top and swim free.Critics of the method argue that the Mexican industry often uses explosives to slow down the schools andspeedboats to catch them, endangering the dolphins.It results in significant dolphin mortality, said Dave Phillips, executivedirector of the environmentalist group Earth Island Institute. You cant in good conscience call that dolphin-safe.Under the 1990DPCIA, tuna harvested in the eastern tropical Pacific via chase and encircle practices cannot be labeled dolphin-safe in the UnitedStates.Since then, the Mexican tuna industry has made great strides in curbing the danger and has cut dolphin deaths by 99

percent, said Mark Robertson, a spokesman for the Campaign for Eco-Safe Tuna, which represents Mexicos tuna industry.In2009, the Mexican government challenged U.S. labeling regulations before the WTO andprevailed last year, when the body found that the regulations create a trade barrier for theMexican tuna industry.The United States issued the new rule last week, days ahead of a July 13

WTO-imposed deadline. The rule effectively expands the requirements that tuna producerswishing to obtain the dolphin-safe label verify that chase and encircle methods were notemployed regardless of where the fish were harvested.By broadening the regulations beyond the easterntropical Pacific to areas where the U.S. tuna industry and other interests primarily operate, the new rule puts all sides on evenfooting without weakening the restrictions, said Sen. Barbara Boxer (D-Calif.), who penned the original law.Numerous times overthe last 20 years the Dolphin-Safe label has been in great jeopardy, and this new rule will help ensure that the label that customers

have come to trust and rely on is protected, Boxer said in praise of the new rule.But the Mexican governmentcontends that the methods used should not be a factor, contending that U.S. methods that aredeadly to dolphins.Among the techniques employed by the American industry is the use of fish aggregating devices orFADs.The process involves the use of an artificial float orbuoy tethered to the oceans floor. Small fish tend to congregatebeneath its shade, attracting larger fish, including tuna, which are scooped out with large nets.


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Alt cause to damaged relations: Tuna conflictReuters 7-11(Reuters, 7-11-13, Mexico vows WTO challenge, mulls sanctions in U.S. tuna spat,http://www.reuters.com/article/2013/07/11/mexico-usa-tuna-idUSL1N0FH26020130711)

"Mexico will take its case to the WTO, arguing that the United States has not met itsinternational obligations," the ministry said in a statement."If the violation is confirmed, Mexicocould impose trade reprisals against the United States."The decades-old spat appeared to turn a corner in Maylast year when the WTO backed Mexico in its dispute with its northern neighbor, saying the U.S. requirement that tuna be labeled"dolphin-safe" disadvantaged Mexico's fishing industry.The WTO, which has no enforcement power, gave Washington 13 months

to comply with its ruling, due to expire on July 13.On Tuesday, the United States published its updated guidelineson tuna labeling, but Mexico's government argued this fell short of what the WTO haddemanded.The dispute centers on the technique of using dolphins to round up tuna, which theUnited States says disqualifies some Mexican tuna from being labeled dolphin-safe.Mexico saysthe methods its companies use to harvest tuna do not harm dolphins and the way the UnitedStates defines dolphin-safe tuna unfairly restricts trade.

Mexico ready to place trade sanctions on US

STTAS 7-16(STTAS, Sandler and Travis Trade Advisory Services, 7-16-13, Mexico Threatens SanctionsAgainst U.S. in Tuna Labeling Case, http://www.strtrade.com/publications-Mexico-dolphin-safe-tuna-retaliation-071613.html)

U.S. Trade Representative Mike Froman announced July 12 that the U.S. has fully implementedthe recommendations and rulings of the World Trade Organization in a dispute brought byMexico against the U.S. dolphin-safe tuna labeling program. Froman said a July 9 final ruleissued by the National Marine Fisheries Service responds to a WTO ruling that its previousdolphin-safe labeling requirements were not even-handed by requiring a certification that nodolphins were killed or seriously injured during any tuna fishing operations, regardless of

whether they take place within or outside the eastern tropical Pacific Ocean. Mexico, which hasbeen seeking to weaken the NMFS dolphin-safe regulations for years, has objected to the new

stricter standards. A July 11 statement from the Agriculture Ministry said Mexico will seek aWTO determination that the U.S. has not met its international obligations, which would allowMexico to impose retaliatory trade sanctions. The ministry said it has already begun the processof establishing an amount for such retaliation, which would likely comprise the suspension oftrade benefits from a number of productive sectors in the U.S.
http://www.reuters.com/article/2013/07/11/mexico-usa-tuna-idUSL1N0FH26020130711http://www.reuters.com/article/2013/07/11/mexico-usa-tuna-idUSL1N0FH26020130711


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A2 Drugs Impact

Mexican- US cooperation drug cooperation failsHildebrand 7-9(Ryan Hildebrand, college instructor in New Orleans with PHD, The Canal, 7-9-13, The MexicanNarco-State: Americas Failure, http://blog.panampost.com/2013/07/the-mexican-narco-state-americas-failure/)

As a result of American farm subsidies, in particular, many Mexican farmers can no longercompete, leading to massive unemployment in what was once a large segment of the Mexican economy (corn, wheat, cotton, soy, and rice).Couple this with the American War on Drugs, particularly marijuana in this instance, and theUnited States fostered the development of a Mexican narco-state.With the never-ending demand forrecreational drugs such as marijuana, and a prohibition against their legal sale in the United States, a black market, which is unregula ted and oftenviolent, would inevitably spring up, and indeed it did. The history is exceedingly easy to trace, with initial black market supplies of these drugs coming

from Colombia primarily.But, like a weed that has had the top cut off, the demand in the United States and lack of legalsupply there led to the growth of a secondary supplier in Mexico. The actual root problem is theprohibition of such substances, something which American leaders continually fail to address atthe federal level, even as prohibitions at the state level have begun to crumble. Just like the Prohibition ofalcohol, it does not make sense to attempt to legislate or enforce victim-less crimes (a misnomer in itself as the populace is the victim of the state). In

fact, all this does is feed the prison system.To make matters worse, a failed United States program to track where weapons were being provided toblack marketeer drug cartels, named Fast and Furious, has been an abysmal failure. It is amazing that the Obama administration is still functional

after this and other fiascoes which have come to light over the past few years. The Mexican government, at the behest of theUnited States government, even deployed its military within its borders, only to inflame thesituation. The people of Mexico are fed up. The federal governments of Mexico and the UnitedStates are missing the point. The governments of both Mexico and the United States are moving in the exact wrong direction fromwhat would seemingly be an easy issue to solve; that is, they have become more authoritarian, attempting to hold water in their hands, only to have itslip between their fingers.The militarization of police forces, deployment of military within their borders, restriction of free trade, and the needlessimprisonment of drug users (which does little to rehabilitate, if not outright debilitate) must stop. The people of Mexico deserve better; the governmentof the United States knows better. End the War on Drugs today.

Drug War strategies conflict between US and MexicoMatsangou 13 (Elizabeth Matsangou, Staff writer for Global Risk Insights, 6-10-13, Pea Nieto Policies to

Change Mexican-US War on Drugs, http://globalriskinsights.com/2013/06/10/pena-nieto-policies-to-change-mexican-us-war-on-drugs/)

Shortly after Enrique Pea Nietowas sworn in as Mexicos new President in December 2012, he announced a newstrategy in Mexicosdrug war. His policy reverts from cross-border policing and capturing cartelleaders and instead focuses on suppressing violence and protecting civilians. Pea Nietosobjectives are more proactive than reactive as they aim to encompass the economic and socialissues that encourage drug trafficking in the first place. By making reforms to the education system,implementing youth programmes, closely monitoring schools and expanding the employment market, those individuals so easilypicked from the streets of cities such as Uruapan will be less available to be used as pawns in the drug trade. Pea Nieto explains thatwithout job opportunities and social programmes in place, countless Mexicans have no option other than to dedicate themselves

sometimes to criminal activity.Pea Nietos shift in Mexicos drug war strategy comes to thedisappointment of US officialsdespite criticism for their unsuccessful attempts in reducing the

flow of drugs into the US.Many believe that the role of the US in the war on drugs should be that of reducing domesticdemand. This is of course no easy feat, but improving health services, making drug rehabilitation programmes more accessible andimplementing decriminalization policies would have a significant effect on reducing demand. Recent success includes WashingtonState and Colorado where, following decriminalization in November 2012, the use of drugs is declining, mirroring the success storiesof Portugal and Australia. The theory rests on simple economics; reduced demand equals reduced supply. Removing the mid levelsof the cartels hierarchy will also help to reduce supply as these individuals manage the operational side of the business and are lesseasy to replace than the previously targeted bosses and foot soldiers.


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Solvency


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1NC Solvency

No solvency even if they ratified it treaty language prevents PEMEXfrom being the unit operator

George BakerJanuary 2013; Panel Presentation on the US-Mexico Transborder Hydrocarbon Agreement, United StatesAssociation for Energy Economics, USAEE Dialogue

George Baker observed that the Obama administration has not yet submitted the agreement for approval, either as a treaty to beratified by the Senate (it has already been approved by the Mexican Senate) or as implementing legislation to be approved by bothhouses. From the U.S. perspective, the text of the treaty was crafted in such a way so as to serve as a generic template for similar

agreements with Russia, Canada and Cuba. Baker cautioned that the agreement, even when(presumably, not if)approved on the US side, cannot presently be implemented. He noted that thewhile theagreement calls for the unitization of cross-border oilfields, there is no definition of unitoperator in the agreements definitions.As Pemex is neither certified, nor (as yet) qualified, as adeepwater operator in US waters, it cannot be the unit operator for a unitized field. It follows thatthe unit operator must be a company other than Pemex and that, in that capacity, must haveinvestment and operational authority in Mexican waters. He observed that the language of the treaty is aheadof both law and public opinion in Mexico; and unless adjustments are made in both realms, the treaty cannot beimplemented, as unitized field cannot have two unit operators, one on each side of the border.


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2NC Moratorium

Several areas of the Gulf of Mexico are protected under moratoriaand not open to drilling even with passage of the THABureau of Ocean Energy Management 13 (Areas Under Moratorium, Oil and Gas Energy Programs,

http://www.boem.gov/Oil-and-Gas-Energy-Program/Leasing/Areas-Under-Moratoria.aspx)

Areas Under Moratoria Area Restricted by the Gulf of Mexico Energy Security Act (GOMESA) A portion of the Central Gulf of Mexico Planning

Area (CPA) andmost of theEastern Gulf of Mexico Planning Area(EPA) is under restriction until 2022 as part of

theGulf of Mexico Energy Security Act of 2006.The area restricted is that portion of EPA within 125 miles of Florida, all areasin the Gulf of Mexico east of the Military Mission Line (86 41 west longitude), and the area within the CPA that is within 100 miles of Florida.

GOMESA Map Presidential Withdrawal The President has withdrawn all marine sanctuaries from future oil and

gas leasing activities. On March 31, 2010, the President withdrew Bristol Bay, offshore Alaska, from

leasing consideration through June 30, 2017.Presidential Withdrawal Map Annual Moratoria (also referred to as Congressional

Moratoria) In the past, Congress has imposed a restriction on what areas the Bureau could offer for OCS oil

and gas leasing. This restriction (also called a moratorium) limited the Bureaus latitude in spending

appropriated funds for pre-lease and leasing activities. Congressional moratoria prohibited future oil

and gas leasingbut it did not apply to activities on existing leases. These moratoria were enacted annually as part of

the Department of the Interiors appropriations legislation. Currently, no OCS areas are affected by annual moratoria.
http://www.boem.gov/Oil-and-Gas-Energy-Program/Leasing/Areas-Under-Moratoria.aspxhttp://www.boem.gov/uploadedFiles/BOEM/Oil_and_Gas_Energy_Program/Energy_Economics/Revenue_Sharing/GOMESA.pdfhttp://www.boem.gov/uploadedFiles/BOEM/Oil_and_Gas_Energy_Program/Energy_Economics/Revenue_Sharing/GOMESA.pdfhttp://www.boem.gov/uploadedFiles/BOEM/Oil_and_Gas_Energy_Program/Leasing/GOMESA_Phases.pdfhttp://www.boem.gov/uploadedFiles/BOEM/Oil_and_Gas_Energy_Program/Leasing/Map_Alaska.pdfhttp://www.boem.gov/uploadedFiles/BOEM/Oil_and_Gas_Energy_Program/Leasing/Map_Alaska.pdfhttp://www.boem.gov

mexico tha neg - michiganclassic 2013 dw

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