February 11th, 2022
1. The US and Mexico agree on a clean energy generation plan
President Andrés Manuel López Obrador met with the United States Presidential Special Envoy for Climate, John Kerry, who proposed accelerating the use of technology to jointly develop clean energy in North America. The Ministry of Foreign Affairs (SER) will oversee the work groups between the two countries to build channels of communication and cooperation on the matter.
Within the framework of the Open Parliament to discuss the energy reform, official visits, as well as statements by US officials have increased due to the need to protect investments in the country and comply with the requirements established in the T-MEC. The energy agenda will remain a point of tension for the relationship between the two countries due to the prolongation of parliament and the fact that the constitutional changes have not yet been discussed in the legislative commissions of Congress.
2. Mexico’s foreign policy and its trade relations
Mexico became the second largest trading partner of the United States, despite the entry into force of the USMCA in 2020. With an accumulated value of USD $2.83 billion, the largest suppliers of US imports depend on China with 17.9%, Mexico, with 13.6% and Canada up to 12.%. The United States Census Bureau reported that Mexico reduced its share of the number of imported products, going from 13.9% in 2020 to 13.6% in 2021.
At the same time, Mexican foreign relations are going through a tense climate, specifically with the Spanish government. This after a statement by President Andrés Manuel López Obrador to put relations between Spain and Mexico “on pause”. In this sense, the position of the Mexican government could permeate other diplomatic channels both in Europe and in North America, causing alterations to the certainty of investments and the rule of law itself in the short term.
3. Inflation reaches the highest levels in 20 years
Inflation recorded its second slowdown in January. The level reported by the National Institute of Statistics and Geography (Inegi) was the highest for the beginning of the year since 2001. The National Consumer Price Index (INPC) stood at 7.07% per year, consumer prices showed an increase of 0.59% compared to last month. This data exceeded the expectations of the Mexican market itself.
The Bank of Mexico (Banxico) raised the reference interest rate by 50 basis points, up to 6%, the sixth time that Banxico has raised this rate and the second time it determined 50 points. The outlook for consumer prices is for them to increase an average annual 4% in the last quarter of 2022. Likewise, the Mexican peso strengthened against the dollar, closing at 20.48 units per dollar derived from the anticipated forecast of the increase in the rate of Central bank.
4. IFT authorizes 5G use to América Móvil
The Federal Telecommunications Institute (IFT) authorized Telcel, a company owned by engineer Carlos Slim, to offer 5G technology services. The decision allows the use and exploitation of the frequency bands of the radioelectric spectrum to increase the coverage of the range of mobile wireless access services in Mexico. For this operation, the Mexican state will receive resources for the payment of rights more than MXN $900 million per month.
In addition, Daniel Hajj, CEO of América Móvil, pointed out that Telcel plans to launch its 5G network in 90% of the countries in which it operates. The institute’s decision will allow the design and use of the infrastructure to be increased, which will make this company’s infrastructure the largest commercial 5G network in Latin America.
5. Digital information theft increases in Mexico
The general director of Metabase Q, Mauricio Benavides, explained that the kidnapping of information from companies increased 400% in 2021. The most affected sector was small and medium-sized companies. A study carried out by the Internet Association in Mexico revealed that last year five out of 10 users were victims of fraud, among the most common being information theft, financial fraud, identity theft and leaks of sensitive information.
The study places Mexico in 11th place worldwide in Mexico for the number of cyberattacks, and in second place in Latin America. In the financial stability report of the Bank of Mexico (Banxico) it stands out that since 2020, ransomware has remained one of the highest cyber risks for financial institutions in the country, which has even increased company spending.