What's Going On In This Country?

February 7, 2017 Edition

Scary stuff. Corruption in Mexico has become a whole lot worse according to the latest study by Transparency International.

Mexico plummeted 28 places on the 2016 Corruption Perceptions Index, scoring out of a possible 100 points, five points fewer than the previous year. That difference was enough for the country to drop from 95th to 123rd place. Even India and Brazil are less corrupt than us. On the positive side, we beat out Somalia, South Sudan and North Korea.

However, Mexico was not alone in its poor showing on the index. More countries declined than improved in this year’s results.

In related news. Veracruz governor Javier Duarte, who looted his state of millions and is currently on the lam, is responsible for switching out the medicine of children. The chemotherapy drugs the young cancer victims were supposed to be receiving had been substituted with water.

 “We’ve already gotten the results from a laboratory that indicated that the drug given to the children, the chemotherapy administered to them, was not really a drug, but an inert compound, literally distilled water,” said current Governor Yunes. He declined to say how many children might have been affected.

Duarte has become one of the most hated men in Mexico. His administration was marked by corruption accusations, hundreds of bodies found in mass graves, human right violations, thousands of disappeared people, hundreds of femicides and, at least 18 journalists killed. Interpol has been alerted and is looking for him so he can be brought back to Mexico and get his slap on the wrist.

Ha ha ha!  Donald Trump bought his fancy pants private jet used, from a Mexican!

‘Trump Force One’– as he likes to call the plane these days, was operated by Mexican airline TAESA Lineas Aéreas in a previous life. The low-cost carrier had the plane from July 6 1994 until March 31 1995.

Trump bought the Boeing 757, registered N757AF, in 2011 from Microsoft co-founder Paul Allen. It’s now almost 26 years old, so no spring chicken, and a quick registration search reveals its colorful history.

It was originally leased in 1991 by Sterling Airways, a now defunct low-cost outfit based in Copenhagen. A few years later it passed to TAESA before being snapped up by Vulcan Northwest Inc – which represents the investments and business affairs of Allen.

In 2011, the aircraft was bought by DJT Operations – which is owned by Trump, who redecorated it.

Trade between friends. NAFTA is the world’s largest trade agreement, and yes the U.S. has a trade deficit with its Mexican and Canadian partners. In fact the trade deficit with Canada is a not insignificant US $15.5 billion. Why has Trump focused on only one side of this trilateral agreement?

After all, General Motors and Ford, among many other international corporations, have manufacturing operations in Canada, and export to the U.S., accounting for $302 billion in products sold there. But barely a peep about Canadian trade, only Mexico is being picked on.

And what would happen if Canada and Mexico simply said “no” to a NAFTA renegotiation? President Trump could withdraw without congressional approval upon six months’ written notice to Mexico and Canada, causing a catastrophic economic calamity for everybody involved, and many not involved.

Here comes Timmy! Tim Horton’s, the iconic Canadian fast-food restaurant famous for coffee and doughnuts, is coming to Mexico.

Restaurant Brands International (RBI), owner of the multinational restaurant chain, announced today it would expand into Mexico by entering into a joint venture with a group of unnamed Mexican investors. The company did not say when the restaurants would open or how many there would be. There are currently some 4,500 Tim Hortons restaurants in nine countries.

The restaurant chain was founded by and named after a former professional ice hockey player. Defence man Tim Horton played for 24 seasons in the National Hockey League (NHL).

Car trade between friends. If President Trump goes ahead with his threat to tax Mexican-made cars sold in the U.S. it will throw the auto industry into disarray, analysts say.

But after closing 13 U.S. assembly plants during the recession to deal with excess capacity, Detroit automakers aren’t eager to open new ones, especially now that U.S. sales of new vehicles are slowing after reaching record levels. The three automakers currently operate 27 assembly plants in the U.S. and seven in Mexico.

Detroit automakers can’t build small cars profitably in the U.S., where a unionized auto worker can make $58 an hour in wages and benefits. By comparison, a Mexican auto assembly worker makes a little more than $8 an hour.

Vehicles worth $50.5 billion and auto parts worth $51 billion were shipped to the U.S. from Mexico in 2015, U.S. government data show.

Automakers could stop selling some Mexican-made cars in the U.S. altogether. They could also try to sell the cars elsewhere. Mexico has free trade agreements covering 45 countries, including agreements with the European Union, Japan and South America. The U.S. has agreements with 20 countries.

Bad credit. Debts adding up to millions of pesos owed by the state of Oaxaca are in the hands of a collection agency.

Current Governor Alejandro Murat said his administration, which took office last month, had sought credit from the World Bank for water projects in marginalized communities and other needs, but was turned down because the state has bad credit.

He claimed that long-term debt is more than 16 billion pesos (US $744 million), while another 2.2 billion pesos is owed to suppliers, debts that are six months to a year old. Four national firms have turned over their Oaxaca government bad debts to an agency, which is demanding the immediate payment of 11 million pesos.

Did you know? Mexico was the U.S.'s second largest export market in 2015 and Mexico is the U.S’s third largest goods trading partner with $531 billion in total (two way) goods trade during 2015. Goods exports, $236 billion; goods imports, $295 billion. But 6 Million American jobs rely on trade with Mexico.  Yes, there is that famous $60 billion trade gap that’s been much talked about.

Texas in particular is highly dependent on NAFTA and Mexico. Mexico accounts for 60% of U.S. gasoline exports....and 65% of U.S. natural gas exports.

Maybe the United States  should try to sell more to Mexico instead of buying less from Mexico? Are we the only ones who have thought of that