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Mexico News Daily, Jan.15,2013

Posted by The Generals on January 15, 2013, 2:13 pm

Subject: Mexico News DAILY January 15, 2013


PRD provides opening on Pemex reform

Development: On 14 January the Partido de la Revolución Democrática (PRD) presented proposals to reform Mexico’s energy sectorm including the introduction of changes to the state-controlled oil monopoly, Pemex.
Significance: Energy sector reform was one of the most ambitious proposals floated by President Enrique Peña Nieto in his campaign last year. In order to revive the depressed Pemex and turn it into an engine for growth, Peña Nieto advocated opening up the state-run oil firm, which has exclusive exploration and production rights in Mexico, to increasing levels of private investment. Mexico’s Left, led by the PRD, rejected Peña Nieto’s proposal, accusing him of planning a “covert privatisation” of Pemex which would only benefit personal interests. The PRD’s proposal does not contemplate the possibility of privatisation but it does recognise that changes need to made to Pemex in order to make it successful once again. This suggests that Peña Nieto may find it easier to introduce changes to Pemex, given a growing political consensus on this necessity.
Key points:
• The proposal, based on eight main points, was presented by the historic PRD leader, Cuauthémoc Cárdenas, who said that it would require nine minor legal changes but no constitutional amendments, making it easier to implement. He said the proposal rules out any privatisation but calls for increased private investment in areas which are currently permitted by law, which would ensure security in the sector in the future.
• Cárdenas said that one of the proposal’s main goals was to grant Pemex full autonomy over its budget, which would only be achieved via a comprehensive tax reform that would free Pemex of some of the onerous obligations it has to the Mexican State. This would provide Pemex with more resources to carry out “more aggressive” investment in exploration and development, with the aim of boosting production.
• Peña Nieto and the ruling Partido Revolucionario Institucional (PRI) have already announced that they are preparing a comprehensive fiscal reform proposal to be presented to congress this year, so the PRD’s proposal could be incorporated into the PRI’s plan.

Main Briefing

Obama re-engages with the region

Development: On 14 January in Washington President Barack Obama met Mexico's new US ambassador, Eduardo Medina Mora.
Significance: Ahead of his 20 January inauguration for a second term Obama has pledged to re-launch relations with Latin America. Despite the same pledge in 2008, relations with the region took a backseat, but this time round the panorama may be more favourable, at least for Mexico-US relations. Comprehensive immigration reform has long been a key priority for Mexico; stricter US gun-control another. Typically, US foreign policy is held hostage to domestic issues. Gun control has now returned to the top of the US domestic agenda. So too has immigration reform; the Latino vote (dominated by Mexicans) was key to Obama’s victory in November and he owes them.
Key points:
• According to the Mexican embassy, Obama said that the “economic prosperity and growth of our countries will increasingly depend on our capacity to work together”, adding that the objective of such cooperation must be “increasing trade, strengthening competitivity and the effective management of our border”.
• Mexico’s new president Enrique Peña Nieto likewise wants to expand the scope of Mexico-US relations beyond security cooperation to include more economic and social integration. In his first meeting with Obama (27 November), Peña Nieto offered Mexico’s assistance in promoting immigration reform. In his congressional ratification hearings, Medina Mora also cited immigration reform as a key point of interest. Notably, in the White House daily press conference yesterday, held after the president's meeting with Medina Mora, Obama stated, “We’ve got to reform our immigration system”.
• Obama also addressed the main domestic political issue on Capitol Hill: gun control, declaring that the imposition of new restrictions to limit the public sale of military and assault weapons, as well as stricter background checks on individuals looking to buy firearms, must be debated by the US Congress. An executive proposal being prepared by Vice-President Joe Biden will be unveiled this week. Obama admitted that some of the proposed measures would not be “to everyone’s liking in congress”, but he urged congressmen to “conscientiously” analyse them.
• The last Mexican government led by Felipe Calderón (2006-2012) repeatedly called on the US to adopt stricter gun control laws to reduce the flow of high-powered weapons from the US into Mexico. Peña Nieto shares this point of view. A prominent Mexican peace activist, Javier Sicilia, who last year toured the US calling for it to withdraw its support for Calderón’s ‘war’ on organised crime, yesterday delivered in person at the US embassy in Mexico a letter to President Obama, again calling for the US government to take measures to restrict the flow of weapons into Mexico. The letter, which Sicilia claimed had over 50,000 signatures, also backs the Obama government’s efforts to impose tougher US domestic gun control laws. Sicilia remarked, “Now is the time to seize the bilateral agenda with the guns issue… It is not just the many deaths in Mexico, but also the massacres in the US”.
Pointer: Yesterday in Madrid, Spain, the US Assistant of State for Western Hemisphere Affairs Roberta Jacobson echoed Obama, saying that the US wanted to continue cooperating with Mexico in the fight against organised transnational crime, an issue that, in Jacobson’s view, goes “beyond drug trafficking alone”. Asked if she considered the security strategy adopted by Calderón, which received strong backing from the Obama administration, to have been successful, Jacobson refused to label it a failure, but said, “We can never call it a success given the high number of deaths seen during that period”. She added that the US was ready to assist the new Peña Nieto government to develop an improved strategy.

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