Mexico News and Analysis: July 4-17, 2011

1 - NEWS FROM THE OTHER CAMPAIGN
2 - GORDILLO SCANDAL BROADENS
3 - NEW GUN REGULATIONS ALONG BORDER
4 - OIL PRODUCTION DECREASES
5 - FALLING HOUSEHOLD INCOME
6 - FAST AND FURIOUS BECOMING COMPLICATED AND CONFUSED
7 - MEXICAN TRUCKERS WILL CARRY GOODS IN U.S.

NEWS FROM THE OTHER CAMPAIGN http://enlacezapatista.ezln.org.mx/
The Junta of Good Government in La Garrucha condemns the federal government’s increasing counter-insurgency campaign, especially the private titling of recuperated lands that tends to pit campesinos against campesinos.

The Junta of Good Government in Oventic condemns threats and aggressions by political parties against Zapatistas in San Marcos Aviles.

2 - GORDILLO SCANDAL BROADENS
Elba Esther Gordillo may be in trouble.  The president-for-life of Mexico’s 1.5 million member teacher’s union faces possible extortion charges, while also trying to position herself for the 2012 presidential election.  Three weeks ago, Gordillo held a strange press conference in which she admitted to backroom negotiations with President Felipe Calderon during the 2006 election campaign.  Calderon won the presidency, likely through ballot manipulation by Gordillo’s extensive network of political operatives.  In exchange, Gordillo placed key allies in Calderon’s administration, including the assistant Secretary of Education, the head of the National Lottery, the head of the social security agency known at ISSSTE, and a key assistant in the National System of Public Security.  Miguel Angel Yunes, Gordillo’s choice for ISSSTE, is currently under investigation for misuse of public funds.  Apparently upset over lack of support from Gordillo, Yunes publicly accused her last Tuesday of demanding US$1.7 million a month in ISSSTE funds to support Panal, her newly formed political party.  Gordillo called the claim “rash, frivolous and slanderous.”  She may very well avoid an investigation herself, as the PRI and elements of the PAN are courting her support for 2012 - but maybe not.  Yunes is reportedly close to President Calderon, and it is possible the PAN is planning an assault on Gordillo’s power, including a possible investigation of her personal fortune which reportedly includes at least 17 properties around the world.  Her principal residence is in San Diego. Gordillo has faced accusations before, including the murder of several opponents within the teacher’s union, but she has never been formally charged.

3 - NEW GUN REGULATIONS ALONG BORDER
Gun dealers along the US-Mexico border will have to report sales of more than two semi-automatic weapons to the same purchaser within a five day period, an effort by the Obama administration to stem weapons exports to drug cartels in Mexico.  The rule affects more than 4,000 arms dealers in Texas, California, Arizona and New Mexico.  The National Rifle Association plans to sue the Obama administration over the new regulations.  Texas Governor Rick Perry, who may announce his own presidential aspirations shortly, characterized the measure as “targeting legal gun sales and sellers” with “little or no impact on the Mexican cartels transporting drugs, guns and cash to and from major cities throughout the US.”  More than 70% of military style weapons used by criminal gangs in Mexico are purchased in the US by “straw” buyers from legal gun shops, then exported illegally to Mexico.

In related news, the former mayor of a small New Mexico border town pleaded guilty to participating in a gun smuggling ring that sent hundreds of weapons into Mexico.  The police chief and a former trustee of Columbus, NM, were also among a dozen people charged by authorities in the federal sting operation.

4 - OIL PRODUCTION DECREASES
PEMEX, Mexico’s state-owned petroleum company, reports a one percent decrease in crude oil production in the first half of 2011 as compared to the same period last year, continuing a trend that began in 2005.  Production fell from 3.4 million barrels a day in 2004 to 2.57 million barrels a day last year.  Proceeds from petroleum sales provide about one-third of Mexico’s federal budget.

5 - FALLING HOUSEHOLD INCOME
Average household income decreased by more than 12% between 2008 and 2010, reflecting the impact of the global economic crisis on Mexican families, according to the National Institute of Statistics and Geography.  Average quarterly household income fell from US$3,400 in 2008 to US$3,000 in 2010. In 2008, 44.7 million Mexicans lived in poverty, while in 2010, 50.6 million live below the official poverty line.

6 - FAST AND FURIOUS BECOMING COMPLICATED AND CONFUSED
Congressional investigators probing the Fast and Furious “gun-walking” operation, in which Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agents allowed thousands of military style weapons to enter Mexico, uncovered a new twist this week.  As many as six of the Mexican cartel members involved in gun smuggling were paid FBI informants, yet the FBI never told the ATF.  The paid informants were among the targets that ATF agents were investigating and wanted to arrest.

7 - MEXICAN TRUCKERS WILL CARRY GOODS IN U.S.
Mexican truckers will be permitted to transport cargo on US roads under a deal signed last week in Mexico City.  For the past 17 years, the US refused to honor sections of the NAFTA agreement that allow Mexican truckers to carry goods to their final destination in the US, citing safety concerns.  After more than a decade of complaints and aborted agreements, Mexico finally took action, levying US$2.3 billion in retaliatory tariffs on US goods in 2009.  This initiated an extended period of negotiations that culminated in last week’s agreement.  Business groups supported the decision, which will reduce transportation costs for imported goods, while truckers predicted decreasing jobs in an already fragile economy.  Congressional Democrats threatened to block federal financing that authorities need to supervise Mexican trucks.  The new regulations allow transportation of goods from Mexico to any destination in the US, but not transport between US destinations.  Drivers must comply with US safety standards and, unlike US drivers, are subject to electronic monitoring to assure compliance with mandatory regular breaks.  Drivers must also pass drug screening tests and speak English.

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