NEWS AND ANALYSIS
 FEBRUARY 28 - MAR 6, 2011

1 - NEWS FROM THE OTHER CAMPAIGN
2 - AGREEMENT ON CROSS-BORDER TRUCKING
3 - PEMEX ANNOUNCES INCENTIVE-BASED CONTRACTS
4 - WIKILEAKS HURTS US-MEXICO RELATIONS
5 - US OFFICIALS ARREST 676 DRUG DEALERS
6 - JUDGE CENSORS FILM
7 - CALDERON BANKS ON GROWTH IN TOURISM
8 - BILLIONAIRES BATTLE, CONSUMERS PAY THE BILLS

1 - NEWS FROM THE OTHER CAMPAIGN

  • The ejido San Sebastian Bachajon demands release of political prisoners and organizes protests on March 7 and 8 [link
  • Acts of repression against activists from La Cuesta, Cerro Gordo Ecatepec [link
  • Report from the Fray Bartolome Human Rights Center on the participation of the state government in local conflicts over territory in Chiapas [link
  • Reports on the struggle over territory in Mitziton [#1] & [#2
  • Human rights workers from the Digna Ochoa Human Rights Center arrested [#1] & [#2]

2 - AGREEMENT ON CROSS-BORDER TRUCKING
An agreement to resolve a two decade dispute over cross-border trucking, unveiled Thursday, will require Mexican truckers to meet stricter standards than those established in NAFTA and those applied to US truckers. Mexican trucks will have to carry electronic recorders to insure they do only cross-border routes and to track US hours-of-service laws, and Mexican drivers will have to pass English proficiency exams. US truckers can often avoid strict compliance with hours-of-service laws by keeping only hand-written logs. The agreement will likely open the cross-border trucking market to large international companies but leave independent drivers without the resources to meet strict regulations. The agreement will end annual tariffs of US$2.4 billion applied by Mexico since 2009 under NAFTA on construction equipment, pork, fruits and vegetables, processed foods, Christmas trees, suntan lotion and other items. Under NAFTA rules, Mexico can increase the list of items subject to tariffs if the two countries don’t resolve the dispute through negotiations. A final agreement is expected to be signed in two or three months.

The Teamsters and other US unions oppose to the agreement, citing job losses but also mobilizing vaguely racist rhetoric describing unsafe Mexican trucks. The US Chamber of Commerce strongly supports the agreement, calling for “an end to these job-killing tariffs” while not mentioning the probable job losses among US truckers. The agreement may complicate President Barack Obama’s increasing difficult relationships with organized labor, not unlike those of President Bill Clinton who shepherded NAFTA through a belligerent Congress as perhaps the signature policy of his presidency. 

3 - PEMEX ANNOUNCES INCENTIVE-BASED CONTRACTS
Despite prohibitions in Mexico’s constitution against private ownership of petroleum, Pemex announced new incentive-based contracts on Tuesday that would increasingly privatize exploration and production, with the first contracts available in six mature oil fields in Tabasco, followed by fields in the Chicotepec basin and in the north. The contracts allow a per-barrel bonus for production above targets. The new contacts are part of a 2008 reform passed under President Felipe Calderon. Pemex production peaked at 3.4 million barrels a day in 2004, and declined to 2.6 million barrels last year. Officials hope the new contracts will attract foreign investment in marginal fields that require special technology.

4 - WIKILEAKS HURTS US-MEXICO RELATIONS
President Felipe Calderon said Thursday that State Department cables released by Wikileaks caused “severe damage” to US-Mexico relations and suggested he could no longer work with US Ambassador Carlos Pacual, who characterized the Mexican army as “risk-averse.” He spoke just before a visit with President Barack Obama in Washington, DC. Calderon was particularly upset at US efforts to play Mexican security agencies against each other by delivering intelligence on cartel activities to certain institutions but not others.” It’s difficult if suddenly you see the courage of the army questioned,” complained Calderon. “They lost probably 300 soldiers, and suddenly someone in the American embassy says Mexican soldiers aren’t brave enough.” US officials defended Pascual. If he is recalled, the Ambassador would be, by far, the most prominent casualty of the Wikileaks publications. One political cartoonist pictured President Obama contemplating a difficult decision - to fire Pascual or Calderon. While it is difficult to believe Calderon did not know about the impressions of the State Department regarding his signature policy, the war on drugs, it is possible that publication of the truth embarrassed him politically, forcing this week’s “dance of the dignitaries” in Washington.

5 - US OFFICIALS ARREST 676 DRUG DEALERS
Federal agents and police arrested 676 suspected cartel members and confiscated US$12 million, drugs, weapons and vehicles in raids from Houston to New Jersey last week, in retaliation for the murder of an ICE agent in Mexico on February 15. The raids, codenamed Bombardier and Fallen Hero, apparently netted mostly low and middle level cartel members, and were meant to send a message to Mexican cartels. One former federal prosecutor from Houston referred to the retaliatory measures as “a domestic shock and awe campaign. You would like to believe it is based on evidence they have against the various individuals that were arrested.” Another Houston lawyer who worked previously with the CIA wondered why, “suddenly, they leap into action and amazingly find 700 people to arrest.”

In related news, the gun used in the February 15th attack on the ICE agent was traced to a Texas man with a history of arms sales to Mexican cartels. And a US federal agent told CBS News he was ordered to allow trafficking of guns to Mexico in an effort to build legal cases against smugglers. Agent John Dodson, working for the Phoenix office of Alcohol, Tobacco and Firearms (ATF), complained to his superiors, who responded, “If you're going to make an omelet, you've got to break some eggs.” US officials, who deny existence of the program, never informed their Mexican counterparts of the investigation. CBS reported, “The guns that ATF let go began showing up at crime scenes in Mexico and as the ATF stood by watching thousands of weapons hit the streets.” In the past four years, Mexican authorities confiscated 110,000 weapons, including 50,000 assault rifles, 11,000 grenades and more than 10 million rounds of ammunition, with 85% smuggled from the US. Perhaps Wikileaks will eventually provide “official” confirmation of the program.

And in somewhat related news, Point Loma Nazarene University, a private Christian college in San Diego, rescinded its invitation to former President Vicente Fox after the Dean discovered Fox favors decriminalization of drugs. In a recent blog, Fox said, “Radical prohibition strategies have never worked. Legalizing in this sense does not mean drugs are good and don't harm those who consume them. Rather we should look at it as a strategy to strike at and break the economic structure that allows gangs to generate huge profits in their trade, which feeds corruption and increases their areas of power.” Apparently the university is content with current drug laws, as long as the attendant violence remains south of the border.

6 - JUDGE CENSORS FILM
A judge ordered officials to stop the showing of a popular new documentary movie about the failings of Mexico’s justice system after a prosecution witness who appears in the film filed a complaint. “Presumed Guilty” opened February 18 to widespread critical acclaim, but apparently the notoriously corrupt and incompetent judges are upset. In 1999, the film “La Ley de Herodes,” a satire on the long ruling Party of the Institutional Revolution (PRI), was banned, eventually making it one of the most popular movies in Mexican history. “Presumed Guilty” is already being sold in pirated DVD format by thousands of street vendors.

7 - CALDERON BANKS ON GROWTH IN TOURIST
President Felipe Calderon signed a National Tourism Accord this week with leaders of Mexico’s tourism industry hoping to position the country as the world’s fifth most desirable tourist destination by 2018. Despite what Calderon described as Mexico’s “real and perceived problems,” officials hope the agreement will generate “more than four million direct jobs, perhaps 12 million more indirect jobs and increase income to US$40 billion,” up from current levels of about US$18 billion. Mexico is currently the world’s tenth leading tourist destination, attracting 22.3 million visitors in 2010, plus another 6 million arriving by cruise ship. The agreement promises federal investment in infrastructure including ports and highways, stronger urban building codes in tourist destinations, increased international advertising to improve the country’s image, and easier “arrival, transit and exit of tourists along the main routes.” This apparently excludes easier entry for an estimated 200,000 Central American migrant workers entering annually by land along the southern border. 2011 is “year of the tourist” and new federal initiatives will be announced each month.

In related news, while federal officials invest in tourism, the National Statistics Institute (Inegi) reports 5.3 million Mexicans over the age of 15 are illiterate. Chiapas leads the nation with a 17% illiteracy rate, followed closely by Guerrero and Oaxaca.

8 - BILLIONAIRES BATTLE, CONSUMERS PAY THE BILLS

Three of Mexico’s richest and most politically powerful capitalists are fighting over the country’s US$35 billion-a-year TV and telecommunications market. Carlos Slim, the world’s wealthiest man and owner of telephone and wireless companies, mining concerns, Sears of Mexico, the restaurant chain Sanborns, much of downtown Mexico City and almost 10% of the New York Times (to mention only a few of his investments), is taking on Mexico’s powerful media duopoly - Televisa, controlled by Emilio Azcarraga, and TV Azteca, owned by Ricardo Salinas. The technological merger of telephone, internet and television, known in Mexico as the “triple play,” is at the root of the dispute. To date, Slim is legally prevented from entering the TV market because of the terms under which he operates Telmex, a former state telephone monopoly he bought in the early 1990s for pennies on the dollar. Slim converted the company into Latin America’s largest phone service. His vast array of companies accounts for a third of the wealth in Mexico’s stock market. Telmex is typical of much of Mexico’s monopoly economy, controlling 80% of fixed line service and 70% of the cell phone market. But his monopoly is threatened by cable TV operators who are bundling cable with internet and phone service.

In recent weeks, the fight turned ugly and public. Slim canceled advertising on Televisa, where his companies account for perhaps 4% of ad sales. Salinas then prohibited Slim’s television ads on TV Azteca until Telmex reduces costs for smaller phone companies to complete calls on his network, clearly an effort to better position Salinas’ Iusacell service. And on Wednesday, two dozen smaller cable and telephone companies, including TV Azteca and Televisa, called on the government to cut Telcel’s connection rates. The Federal Competition Commission, a largely powerless antitrust regulator, is standing by in hopes the three companies will resolve their own differences. In a carefully worded statement, the Commission refused to take sides or adopt legal measures: “The current conflict between concessionaries is an opportunity to resolve two of the main problems in telecommunications: interconnection and insufficient competition in television.” The vigorous battle for market share is a textbook example of a Mexican State unable to play an effective role as “collective capitalist” defending the overall interests of ruling elites. And while monopolies battle for new markets, Mexican consumers pay some of the highest telephone, internet and cable bills in the world, marking yet another failure of the State.