Research Library

Trade and financial shocks have worsened Latin America’s economic prospects in the past year. Latin America — and South America in particular — are expected to perform poorly into 2016.

Pedro da Motta Veiga, nonresident fellow for the Latin America Initiative, and Sandra Polónia Rios, director of the Centro de Estudos de Integração e Desenvolvimento, discuss the shift away from protectionism in Brazil's trade negotiations.

This issue brief explores the relationship between the opening of Mexico’s energy sector and the future of the country’s automotive industry.

The relationship between Mexico and Texas is in dire need of reassessment, given the chasm between the reality of the countries’ economic and cultural relationship and the political rhetoric that surrounds it.

With two corporate groups dominating Mexico's television sector, the country’s 2014 telecommunications reform established constitutional “must carry” and “must offer” (MC/MO) regulations. These regulations mandate that free-to-air broadcasters must allow pay TV companies to retransmit in the same coverage area without payment (must offer) and that pay TV companies must provide audiences with these free-to-air broadcasts without passing fees along to subscribers (must carry). While the reform legislation places rhetorical importance on promoting culturally diverse and pluralistic content for all broadcast audiences, there is little substantive commitment to these ideals. The Mexican variation of MC/MO is an ad hoc policy with many flaws. Ultimately, the Supreme Court will determine the future of MC/MO in Mexico. Given the reform’s legal framework, however, content diversity and pluralism will not be enhanced by MC/MO in Mexico.

As the implementation of Mexico’s historic energy reform gets underway, the debate has tended to overlook a key question at the intersection of technology and the new legislation: How can Mexico create an institutional framework supported by policies, laws and organizations to facilitate technology transfers and foster local innovation? Simply put, how will international oil companies transfer technology to Mexican companies and research facilities?

A growing number of Brazilian companies are expanding internationally. These companies are part of the transformation reshaping the global investment environment. They have shifted their international strategy from being based exclusively on exports to becoming foreign investors in countries such as Peru, Chile, Colombia and Mexico.

Although there are enormous potential benefits for Mexico's energy sector in the future, there are also important challenges the country must overcome to fully realize its energy potential. One of them has to do with the land ownership and land use regime in Mexico. As the legislative debate on the new Ley de Petróleos and the Ley de la Comisión Federal de Electricidad (Petroleum Act and Federal Electric Utility Act) proceeded in the summer of 2014, the Mexican Congress anticipated potential land-related conflicts associated with exploration and production activities related to hydrocarbons and new energy-related infrastructure projects. These potential conflicts stem from the fact that all of these projects will necessarily require the right of way to access and work on the resources in the subsoil of privately owned as well as on so-called “socially owned” lands in regions targeted for energy development. Thus, the Mexican Congress sought to avoid land-related conflicts by including language related to land ownership and use in the new energy legislation. The legislation, however, may not be able to prevent such conflicts.

The decade 2003-2013 was an exceptional one for Latin America in social terms, but less clearly so in economic terms. Growth slowed down significantly after the exceptional factors that fed the 2003-2007 boom came to an end. The possible unwinding of the super-cycle in commodity prices and, to a lesser extent, of the expansionary monetary policy of the United States, has added new challenges. But the major issue is the need to overcome the poor long-term economic performance that has characterized the region in the post-market reforms period, particularly by adopting active production sector development strategies.

The Trans-Pacific Partnership Agreement offers an opportunity to deepen U.S.-Mexico economic ties without reopening the still contentious North American Free Trade Agreement for negotiation. It may also serve as a vehicle for advancing the current Mexican government’s economic reform agenda. The leaders of the U.S. and Mexico believe that the TPP will bolster domestic economic growth.