Ana Isabel Martinez and Alonso Soto – Reuters, 2/12/2015
Grappling with tumbling auto sales and weak economic growth, Brazil wants to derail a pact that would allow unlimited imports of cars from Mexico, sources familiar with the situation say, in a move that could stoke trade tensions between Latin America’s largest economies.
A treaty between the two nations and auto manufacturers, which sets quotas on how many light vehicles Mexico and Brazil can sell each other, expires in March. Auto trade between the two was then supposed to be fully liberalized.
Brazil this week invited a Mexican government delegation to a meeting in Brasilia between Feb. 20 and 25 for talks to revamp the treaty.
Brendan Case and Christiana Sciaudone – Bloomberg Businessweek, 7/10/2014
Remember in the 1990s when some Cassandras feared the North American Free Trade Agreement would someday help Mexico eclipse car production of its higher-cost rivals north of the border? Two decades later, Mexico is making its move, but against another competitor: Brazil.
The country is poised to overtake South America’s largest nation as the top Latin American automobile producer for the first time in more than a decade. Mexico’s ascent is fueled in part by auto sales running at the fastest pace in almost eight years in the U.S., its largest market. The boom coincides with a slump in Brazilian production through June as its domestic demand cools.
“People talk about the energy and telecom industries in Mexico, but the auto industry is going to continue as the icon of this country,” says Luis Lozano, lead automotive partner at PricewaterhouseCoopers in Mexico City. Passing Brazil, where output has fallen 17 percent this year, would vault Mexico to No. 7 among the world’s auto producers. China is No. 1, followed by the U.S.
Brendan Case and Christiana Sciaudone – Bloomberg, 7/7/2014
Mexico is poised to overtake Brazil as the top Latin American automobile producer for the first time in more than a decade as surging exports to the U.S. spur factory openings and record output.
After nosing ahead of Brazil in the first five months of the year, Mexico is projected to hold its advantage through 2014, for the first full-year lead since 2002, according to consultant IHS Automotive.
Mexico’s ascent is being fueled in part by auto sales running at the fastest pace in almost eight years in the U.S., the country’s largest market. The boom coincides with a slump in Brazilian production through May as domestic demand cools, setting up a shift in leadership of the Latin American industry faster than analysts predicted.
David Agren – Fox News Latino, 6/17/2014
Brazil and Mexico meet in a World Cup match on Tuesday, pitting a perpetual soccer power against an oft-anguished underachiever. But the match comes as Brazil underwhelmed in its opening match and Mexico sees an opportunity for an upset – and a chance to outperform its previously poor expectations.
The same could be said for the off-the-field rivalry between the two countries – the two largest economies in Latin America. It’s something noted by former Brazilian president, Luiz Ignácio Lula da Silva, who recently commented on the notion that Mexico’s economic outlook burns brighter that of Brazil’s, “Those that believe Brazil will recede are wrong.”
Lula ramped up the rivalry further by telling a forum organized by the Spanish newspaper El País in Porto Alegre earlier this month, “I went to find out [the Mexican economic fundamentals], and everything is worse than in Brazil.”
Anabel Hernandez & Philippe Engels – In Sight Crime, 2/21/2014
US security forces have identified a Brazilian businessman as an important money laundering connection for Mexico‘s most powerful criminal organization the Sinaloa Cartel — which appears intent on extending its tentacles into Brazil.
From his home in Florida in the United States, Daniel Fernandes Rojo Filho operates a network of shell companies discovered in 2008 during an investigation by US agencies the Drug Enforcement Administration (DEA), the Internal Revenue Service (IRS), and Immigration and Customs Enforcement (ICE).
Official documents declassified by the US government show that Rojo Filho, along with his accomplice, the Portuguese businessman Pedro Benevides, was identified in a report sent to the State Department in 2012 as a “financial component of the Sinaloa Cartel” and was accused by the DEA of conspiring to traffic and distribute drugs in the United States.
Larry Brainard – Financial Times, 10/07/2013
On a two-week visit to Brazil and Mexico last month I had an opportunity to test claims that Mexico had leapfrogged Brazil as the most dynamic economy in Latin America. I found that political risk is still the key to each country’s prospects and that a simple answer to who is ahead of whom is unattainable.
In Brazil I found no shortage of pessimism about President Dilma Rousseff’s management of the economy, but I returned home more optimistic because the possibility that Dilma will fail to be re-elected next October is growing. In particular, political dynamics have been upset by the alliance between the environmentalist Marina Silva and Eduardo Campos, governor of Pernambuco state and the president of Brazil’s socialist party.
This development creates a realistic option for the many voters who are fed up with Brazil’s traditional political parties. Marina has assembled a team of respected economists to advise her so there is hope that a more market friendly, left-of-centre government will take office in 2015. Campos has a reputation for personal engagement and for knowing how to listen – in other words, he is the non-Dilma progressive option.
James Bosworth – Christian Science Monitor, 10/03/2013
Brazil‘s Odebrecht plans to invest $8.1 billion in Mexico‘s infrastructure in the next five years (Reuters, FT).
Brazil hasn’t invested much in Mexico previously. Since 1999, Brazilian companies have only invested $1.2 billion total including $61.3 million last year. The Odebrecht, [which works in fields including construction, chemicals, and engineering], investment by itself will be an increase by an order of magnitude in the economic links between the two countries.
So, even as short term economic news about both Mexico and Brazil appears to be pessimistic (confounding the whole Mexico vs Brazil debate), this investment is good news for both and a big bet on each other.
Brazilian conglomerate Odebrecht ODBES.UL plans to spend $8.1 billion in Mexico in the next five years in what appears to mark the biggest investment pledge yet from a Brazilian firm in Latin America’s No. 2 economy.
Odebrecht, one of Latin America’s biggest family-owned companies, will invest in petrochemicals, renewable energy, ethanol and sugar production and highway concessions, according to a statement put out by the office of Mexico’s president.
Marcelo Odebrecht, the company’s chief executive, on Tuesday met Mexican President Enrique Pena Nieto, the statement said.
Andres Oppenheimer – The Miami Herald, 09/15/2013
In simultaneous moves that went almost unnoticed in the rest of the world, Mexico and Brazil passed historic education reforms last week that, if carried out as planned, could help propel Latin America’s biggest countries to the First World in coming decades.
Granted, the new laws signed by Mexican President Enrique Peña Nieto and Brazilian President Dilma Rousseff could be watered down at the state level, where they will have to be implemented. But they amount to the most important step on education by both countries in more than five decades.
Peña Nieto signed into law an education reform law on Sept. 10 that introduces nationwide teacher evaluations, increases classroom hours and significantly reduces the powers of the country’s powerful teacher unions.
Anthony Boadle – Reuters, 09/21/2012
Latin America’s two largest economies should be expanding rather than curbing trade flows, Mexico’s President-elect Enrique Pena Nieto said on Thursday in veiled criticism of a Brazilian restriction on Mexican car imports.
Brazil modified an auto pact with Mexico in March to slap a quota on surging imports of Mexican-made cars, a move that many saw as a return to protectionist policies of the past.
Mexico agreed to cut its auto sales to Brazil to about $1.55 billion a year between 2012 and 2014. Vehicles within quota can enter Brazil tax free; those above quota are subject to a 35 percent tax.