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On Tuesday, the Decree that repeals the Declarations of all Special Economic Zones (“ZEEs”) was published in the evening edition of the Official Gazette of the Federation.
According to the Decree, one of the main reasons for ending this project is the omission of appointing the Integral Administrator, the person in charge of building and managing a Zone, due to the lack of compliance with legal requirements on behalf of the interested applicants; in addition, it was noted that the SEZ could not operate due to lack of both private and public investments.
The business sector in Mexico said it regrets the government’s decision since they were not consulted before officially ending the SEZ.
According to the Decree, the current administration will focus on the Mayan Train, the Tehuantepec Isthmus Development Program and the Northern Border Free Trade Zone Program.
In theory, a Mexican newspaper will share our Jr. Partner’s (Emilio Arteaga) thoughts in the following days regarding this decision. We will share the piece in our social media once published.
News outlets report that the points of disagreement regarding USMCA are now less between the Trump administration and the Democrats.
The president of the House of Representatives of the US Congress, Nancy Pelosi, said last week that an agreement on possible changes to the text of USMCA was imminent. However, Pelosi said during this week that there may not be enough time to close this agreement this year as there are still many legislative steps, such as the preparation of the implementing legislation and its voting.
The US Congress has only a few days of sessions left (there is the possibility of extending them) to resolve these pending issues and to approve the treaty in December. News outlets continue to highlight that the Democrats are not yet satisfied with the enforcement mechanism on the labor provisions, so it is possible that the “updated” USMCA will be approved next year in the US.
Everything seems to indicate that there will be a modification to USMCA’s text, these changes will obviously have to be approved by Mexico, possibly through amendment protocols.
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In a news outlet report, a member of the National Fund for the Promotion of Tourism (FONATUR, acronym in Spanish), Pablo Careaga Córdova, held that one of the most important infrastructure project of this administration, the Maya Train that will be located in the Yucatan Peninsula, would benefit from the Special Economic Zones policy, given that the statements made last week by representatives of the Ministry of Treasury about their possible elimination. According to Mr. Careaga, the SEZ and the Maya Train could create a synergy and foster investments, among other matters.
As reported by several news outlets, last Wednesday border patrol agents (CBP) were transferred to the cities that are most affected by the migration crisis. This situation has provoked a delay in the international trade operations in the border; for instance, two lanes of the Customs “Otay Mesa” have been closed temporarily. According to the media, 70% of the international trade between Mexico and the EEUU is done by land.
Meanwhile, President AMLO minimized the situation by declaring that “there are no grave problems”, notwithstanding that trucks take from 6 to 12 hours to cross the border, according to reports, which may cause exporters to have late deliveries.
Donald Trump has threatened to impose tariffs of 25% to cars and/or closing completely the border in the next year if Mexico does not stop the migration and drug flow. This action would be clearly incompatible with the auto side-letter that was signed under USMCA.
The Minister of Economy, Graciela Marquez, stated that Mexico would initiate a WTO dispute if the US closes its border.