VZCZCXRO9230
RR RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #0973/01 0931602
ZNR UUUUU ZZH
R 031602Z APR 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 5929
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE

UNCLAS SECTION 01 OF 03 MEXICO 000973 
 
SIPDIS 
SENSITIVE 
 
STATE FOR WHA/MEX, WHA/EPSC 
STATE FOR EEB 
USDOC FOR 4320/ITA/MAC/WH/ONAFTA/GWORD 
TREASURY FOR IA 
ENERGY FOR WARD, LOCKWOOD AND DAVIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ETRD ENRG ELTN EAIR PGOV SENV MX
SUBJECT: Mexico Economic Weekly - April 3 
 
¶1.  (U) The Mexico Economic Weekly supplements reporting from 
Mission Mexico Consulates and the Embassy Mexico Economic Section to 
provide a sense of ongoing trends.  Please contact Adam Shub 
(shubam@state.gov) or Jonathan Austin (austinjt@state.gov) for 
questions or comments about this report. 
 
¶2.  (U) Table of Contents: 
 
ECONOMY AND FINANCE: 
-------------------- 
 
UNEMPLOYED NOT RECEIVING EXPECTED ASSISTANCE - Matamoros 
 
BAJA CALIFORNIA OPTIMISTIC ABOUT ECONOMIC RECOVERY - Tijuana 
 
SALES SURPASS OF USD4.5 BILLION AT AGROBAJA 2009 - Tijuana 
 
WORK STOPPAGES TO BEGIN AT HONDA'S MEXICO PLANT - Guadalajara 
 
GRUMA SALES UP DESPITE RECESSION - Monterrey 
 
 
TRADE AND INVESTMENT: 
--------------------- 
 
CANACAR VP: CROSS-BORDER PROGRAM DISPUTE A "NON-ISSUE" FOR MEXICAN 
BORDER TRUCKERS - Ciudad Juarez 
 
RETALIATION'S IMPACT AT THE BORDER - Tijuana 
 
BAJA CALIFORNIA HIGHLIGHTS ADVANTAGES OF STATE TO SPANISH 
ENTREPRENEURS - Tijuana 
 
STRIKE CRISIS AND INSECURITY FOR CUSTOMS BROKERS - Tijuana 
 
NUEVO LEON CLOSE TO LANDING KEY FOREIGN DIRECT INVESTMENT - 
Monterrey 
 
 
TRANSPORTATION AND INFRASTRUCTURE: 
---------------------------------- 
 
CANACAR BRIDGE BLOCKADES CANCELLED - Matamoros 
 
CARRIER STRIKE IN TIJUANA-MEXICALI - Tijuana 
 
 
-------------------- 
ECONOMY AND FINANCE: 
-------------------- 
 
¶3.  (U) UNEMPLOYED NOT RECEIVING EXPECTED ASSISTANCE:  According the 
Secretary of Economic Development and Employment for the State of 
Tamaulipas, Alfredo Gonzalez, "The Mexican Federal Government 
promised support for the unemployed but so far in Tamaulipas only 
8,000 jobless people are actually getting it."  By Gonzalez' count, 
this accounts for only eight percent of those currently unemployed 
in the state.  (Matamoros) 
 
¶4.  (U) BAJA CALIFORNIA OPTIMISTIC ABOUT ECONOMIC RECOVERY: 
According to a survey developed by the Instituto Nacional de 
Estadistica, Geografica e Informatica (INEGI), an estimated four 
thousand jobs were lost during the first quarter of 2009.  The 
Secretary of Labor and Social Welfare said that the economic crisis 
is abating in Baja California, and that announcements of new 
investments have generated optimism that the state's economy will 
improve in the second quarter.  (Tijuana) 
 
¶5.  (U) SALES SURPASS USD4.5 BILLION AT AGROGROBAJA 2009: AgroBaja 
2009 will be remembered as one of Mexico's largest exhibitions of 
agriculture- and fisheries-related products and services. Last 
week's exhibition at kilometer 7.5 of the Mexicali-San Felipe road 
brought together producers and suppliers from Mexico and the United 
States interested in agriculture, aquaculture, livestock and 
fisheries.  Producers from several states participated in the 
non-traditional pavilions promoted by SEGARPA.  Sales at the 
exhibition surpassed USD4.5 million. (Tijuana) 
 
¶6.  (U) WORK STOPPAGES TO BEGIN AT HONDA'S MEXICO PLANT:  Unable to 
avoid the fate of the other auto manufacturers in the country, Honda 
announced that it would begin work stoppages for the first time in 
the plant's history.  Starting May 16, Honda will close the doors of 
 
MEXICO 00000973  002 OF 003 
 
 
its plant just south of Guadalajara to all of its 1,800 
manufacturing employees for 13 days over a period lasting until 
September.  The stoppages will cut the assembly of its CR-V model by 
2,000 units, or 4% of its annual production.  Sales in the first two 
months of 2009 from the plant fell about 28% on last year due to a 
drop in sales in the US, destination of 40% of the plant's 
production.  (Guadalajara) 
 
¶7.  (SBU) GRUMA SALES UP DESPITE RECESSION: First quarter sales of 
large Monterrey companies are expected to be down sharply due to 
falling exports to the United States.   However, milling and 
tortilla company Gruma is weathering the recession well, according 
to a Roberto Gonzalez Alcala, Director General of Gruma Mexico.  In 
a March 30 meeting, Gonzalez told Consulate General Monterrey that 
notwithstanding the economic recession, Gruma was in reasonable 
shape.  Like CEMEX, Alfa, and Vitro, the company had suffered losses 
in the derivatives market but had been able to restructure its 
obligations with its creditor banks into long-term debt.   As half 
of Gruma's revenues came from its 18 tortilla and 5 milling plants 
in the U.S., the recent devaluation of the peso had not hurt the 
company.  Meanwhile, sales in Mexico were up nearly 7 percent, a 
pleasant surprise given that Gruma operates in a fairly mature 
market.  (Monterrey) 
 
 
--------------------- 
TRADE AND INVESTMENT: 
--------------------- 
 
¶8.  (U) CANACAR VP: CROSS-BORDER PROGRAM DISPUTE A "NON-ISSUE" FOR 
MEXICAN BORDER TRUCKERS:  The recent cancellation of the US/Mexico 
Cross-Border Trucking Demonstration Project has led to charges of 
protectionism by the GOM and retaliatory tariffs ranging from 10 to 
45 percent levied on 89 U.S. exports.  Until Congress zeroed out 
funding for the project in the FY 2009 Omnibus Appropriations Act, 
the program had authorized up to 100 Mexican trucking companies 
access to US highways beyond the 25-mile U.S. border commercial 
zone.  According to Manuel Sotelo, Vice President of CANACAR 
(Mexico's National Trucking Chamber Union) for the Northwest zone, 
the cancellation of the Demonstration Project is of little 
consequence to Mexican truckers.  Sotelo asserted that "none of the 
7,000 truckers affiliated with CANACAR participated in the pilot 
program because of the high investment required to bring trucks and 
drivers to US standards, as well as the disproportionate scrutiny 
from US law enforcement on Mexican trucks in the US."  He claimed 
that "even if the sector were completely liberalized, Mexican 
truckers would not want to operate in the US."  Sotelo cited low 
subscription rates in the pilot program -- e.g., 26 trucking 
companies from Mexico -- to support his point.  For its part, the 
Juarez Chapter of the National Chamber of Commerce (CANACO) is 
complaining about the GoM's decision to impose retaliatory tariffs 
on US exports, claiming the tariffs create distortions and reduce 
the welfare of consumers in Juarez.  CANACO-Juarez President Daniel 
Murguia Lardizabal commented to local press that as prices rise on 
imports, Mexican consumers will most likely increase their purchases 
of these products in El Paso.  (Ciudad Juarez) 
 
¶9.  (U) RETALIATION'S IMPACT AT THE BORDER:  In March, COLEF 
economic researcher Alejandro Diaz Bautista said that the economic 
impact of Mexico's commercial reprisals against the U.S. will not 
only damage exporters and importers, but also will stick the end 
consumer north of the border, with increasing costs for a number of 
products.  (Tijuana) 
 
¶10.  (U) BAJA CALIFORNIA HIGHLIGHTS ADVANTAGE OF STATE TO SPANISH 
ENTREPRENEURS:  Governor Osuna Millan was received by Club Yeccan, a 
group of Spanish businessmen with interests in Mexico.  The Governor 
outlined the political, economic and social development of Baja 
California, showcasing the state's big infrastructure projects, such 
as Punta Colonet.  Thirty Spanish businessmen, researchers, and 
reporters attended the event.  Many noted their surprise at the 
quality of services and infrastructure that Baja California offers. 
(Tijuana) 
 
¶11.  (U) STRIKE CRISIS AND INSECURITY FOR CUSTOMS BROKERS:  Pedro 
Garcia Hernandez, president of the Confederation of Associations of 
Customs Agents, commented in Ensenada that the flow of imports and 
exports has fallen by almost fifty percent because of the economic 
crisis and public security problems in Baja California. The customs 
agencies have sought ways to maintain economic activity to avoid 
layoffs and cutbacks in work hours of customs brokers.  (Tijuana) 
 
 
MEXICO 00000973  003 OF 003 
 
 
¶12.  (SBU) NUEVO LEON CLOSE TO LANDING KEY FOREIGN DIRECT 
INVESTMENT:  Nuevo Leon and its Secretary of Economic Development 
have been working hard to win foreign direct investment in high 
value added fields, especially in renewable energy and aerospace. 
Nuevo Leon is currently contending for a USD700 million renewable 
energy investment from American company First Solar.  First Solar 
has already decided on Monterrey if they chose Mexico for their next 
free field solar project; Monterrey and a site in Malaysia are 
competing in the final rounds of the decision process.  Spirit 
Aerospace, a first tier supplier for Boeing Corporation, is also 
considering a substantial investment in the area.  Spirit is looking 
to build a new plant in Nuevo Leon Chihuahua, Coahuila or Queretaro. 
 (Monterrey) 
 
 
---------------------------------- 
TRANSPORTATION AND INFRASTRUCTURE: 
---------------------------------- 
 
¶13.  (U) CANACAR BRIDGE BLOCKADES CANCELLED:  Cross-border shippers, 
especially maquiladora managers, breathed sighs of relief on 
Saturday, March 21, when a two-day blockade of border crossings 
(planned for March 23-24) by transportation union CANACAR was called 
off.  The blockade, announced by the union weeks ago, had been a 
tense subject among manufacturers and labor unions, as the flow of 
commercial traffic across international bridges is critical for both 
manufacturing supplies and finished-goods deliveries that keep 
thousands of people working in northern Mexico.  According to 
Roberto Mattus, director of the Matamoros Maquiladora Association, 
the blockade could have cost regional manufacturers many days in 
manufacturing delays, work stoppages, and millions of dollars in 
lost revenues.  (Matamoros) 
 
¶14.  (U) CARRIER STRIKE IN TIJUANA-MEXICALI:  Affiliates to the 
National Confederation of Mexican Carriers (CONATRAM) remain on 
strike, with nearly 300 units stationed in kilometer 20 of the 
Tijuana-Mexicali corridor.  The demands of the transportation sector 
are to reduce and stabilize the price of diesel at 5.50 pesos a 
liter, improve road safety, lower cost of tolls and suspend payment 
of the Single Rate Business Tax (IETU).  Carriers are pending a 
response from the federal authority on their requests.  (Tijuana) 
 
BASSETT