News and Analysis: Jan 28 - Feb 10

228 1 - SUPREME COURT RULES AGAINST SME WORKERS
2 - PEMEX EXPLOSION MAY LEAD TO PRIVATIZATION
3 - LAST MINUTE AGREEMENT REACHED ON TOMATO TRADE
4 - MARCOS ANNOUNCES AUGUST GATHERING IN CHIAPAS
5 - OBAMA ADMINISTRATION VETOED PREFERRED DEFENSE SECRETARY
6 - UNPRECEDENTED WEALTH CONCENTRATION 

On January 30, Mexico’s Supreme Court handed down a unanimous decision against the Electrical Workers Union (SME), ending all legal avenues for SME workers to recover their jobs.  About 16,000 SME workers, from a total workforce of 44,000 plus 15,000 retirees, maintained a struggle to recover their jobs after former President Felipe Calderon orchestrated the closing of Central Light and Power (LFC) three years ago in an effort to destroy one of Mexico’s most active unions.  The judges ruled Calderon was not responsible for the closure of the state-owned company, despite the fact he ordered the federal army to occupy LFC installations and expel all SME workers.  The Justices' ruling overturns a lower court decision.  The judicial debacle follows closely on the heels of another defeat for labor with the passage late last year of a regressive labor reform law.

2 - PEMEX EXPLOSION MAY LEAD TO PRIVATIZATION
An explosion last Thursday at the Pemex headquarters in Mexico City killed 37 people and left over 120 hospitalized.  After five days of silence, authorities reported the explosion was caused by a gas leak in the basement.  Pemex, the state-owned petroleum monopoly and one of the world’s largest oil producers, is no stranger to disasters, with major pipeline explosions recorded nearly every year over the past decade.  Recently anointed President Enrique Pena Nieto has been pushing for privatization of the oil giant, and the explosion may well provide the political capital to sell parts of the company to foreign investors.  Pemex currently provides nearly 40% of the federal budget.  While privatization would provide a one-time windfall and open the doors to massive government corruption on a scale not seen since the privatization of the national telephone company, it could also leave empty government coffers in the medium term and provide a convenient excuse for cuts in social spending, as well as yet another attack on organized labor.

3 - LAST MINUTE AGREEMENT REACHED ON TOMATO TRADE
The US and Mexico reached an agreement on the US$2 billion bi-national trade in tomatoes.  Almost all of the trade is south to north, with US consumers preferring Mexico’s vine-ripened fruits over Florida’s gas-ripened varieties.  US producers have complained for years that Mexican exporters sell their products at less than the cost of production, a scheme that might work occasionally for dumping excess produce but would be impossible on a consistent basis over the long term.  The agreement sets a minimum price for Mexico’s imported tomatoes, sometimes double the previous “reference” price, meaning US consumers will be paying more for all kinds of tomatoes in coming years.   The tentative agreement is open for public comment until February 11, with an estimated implementation schedule of March 4.  About half the tomatoes consumed in the US come from Mexico, while the majority of US-produced tomatoes are grown in Florida and picked by migrant workers from Mexico.  While we can hope that workers on both sides of the border will benefit from the new agreement, the most likely result is wealthier growers and a demand for more seasonal migrant workers in the US.

4 - MARCOS ANNOUNCES AUGUST GATHERING IN CHIAPAS
Subcomandante Marcos issued two post scripts this week to the recent messages from the EZLN, taking well-justified political shots at one unnamed but easily identified critic, and announcing a gathering in August, 2013 to celebrate the tenth anniversary of the Juntas de Buen Gobierno.  Apparently all adherents to the Sexta are welcome, with the suggestion that you come equipped to deal with lots of rain and mud.  

5 - OBAMA ADMINISTRATION VETOED PREFERRED DEFENSE SECRETARY
The Obama administration apparently vetoed newly elected President Enrique Pena Nieto’s preferred choice for Defense Secretary, General Moises Garcia Ochoa, according to an extensive but poorly sourced New York Times article.  US Embassy officials met with leaders of Pena Nieto’s transition team only a week before the President announced his cabinet appointments to express concerns about the General.  Garcia is suspected of ties to drug cartels and of skimming US military aid funds, though he is also recognized for candid assessments of the drug war and government corruption, and unparalleled cooperation with US intelligence authorities.  He has been both a student and instructor in US military training programs, but later became known as Mr. Ten Percent for his handling of US aid contracts.  Perhaps most concerning to US officials, and most appealing to President Pena Nieto, is the suspicion that Ochoa was involved in government negotiations with Mexico’s most powerful cartel leaders in the mid 1990s under the last PRI presidency.  General Salvador Cienfuegos Zepeda was eventually appointed as Defense Secretary.

6 - UNPRECEDENTED WEALTH CONCENTRATION
About 200,000 investors control 40% of Mexico’s gross domestic product, according to the National Banking and Assets Commission, a government agency.  While more than half the country lives in poverty, 0.18% of the population has assets worth US$80.1 billion dollars, with assets growing at an annual rate of 13.8%.  People living in poverty increased from 45.5 million in 2006 to 57.7 million in 2012, covering the years of the Calderon administration.
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