Mexican teachers protest education reform after government weakens stance

Thousands of Mexican teachers protested on the streets of Mexico City on Monday against a crucial part of President Enrique Pena Nieto's education reform, sensing that government support for it was crumbling.

On Friday, the Education Ministry said it would suspend the planned teacher evaluations opposed by militant teaching unions in Mexico, which fear it will curb their power.

The decision followed months of agitation from union members, and sparked condemnation from opposition lawmakers and supporters of the law, who said it would gut the reform.

Buoyed by the retreat, 10,000 teachers and opponents of what Pena Nieto has argued is his most important piece of legislation massed on the Paseo de la Reforma, one of the capital's main boulevards, in an effort to kill off evaluations altogether.

"The evaluations are punitive," said Juan Carlos Lopez, 42, a primary school teacher. "It's a justification to fire teachers on a massive scale."

Supporters of the reform said it was urgently needed to improve flagging educational standards and root out corruption in teaching unions. Its critics argue that many poorer teachers lack the financial support to meet required standards.

Opposition to education reform has been strongest among teachers in the southwest of Mexico, where some surrounded a facility of state oil company Pemex in Oaxaca state with cargo trucks and burnt ballot papers in state capital Oaxaca City.

Some protesters have threatened to interfere with nationwide elections due to be held next Sunday, and opposition lawmakers accused the government of sacrificing the reform to protect the ruling Institutional Revolutionary Party, or PRI.

The need for improvement is clear, and only two weeks ago, Pena Nieto hailed the education reform as the one that would "without doubt" have the biggest impact on Mexico's future.

In the World Economic Forum's latest annual competitiveness survey, Mexico ranked 118th out of 144 countries in quality of primary education, behind many poorer countries, including Honduras, El Salvador, Bolivia, Bangladesh and Sierra Leone.

The government's reasons for suspending the teacher evaluations have not been clearly explained. The Education Ministry said only that it had "new elements to consider" and declined to comment further when contacted on Monday.

Its decision had sent out a "terrible message" about the government and was a betrayal of teachers backing reform, said Juan Carlos Romero, head of the Senate education committee and a member of the center-right National Action Party (PAN).

"We're going from illusion to disillusionment," he said. "Once you've lost confidence it's very hard to re-establish it."

(Writing by Dave Graham; Editing by Richard Chang, Toni Reinhold)

Exclusive - Toyota set to approve Mexico plant within weeks - sources

(GNN) - Toyota Motor (7203.T) is finalizing plans for its first passenger car assembly plant in Mexico that could be approved by its board as early as next month, according to three people with knowledge of the matter.

The plant would make the popular Corolla compact sedan and begin production in 2019. Based on recent investments by rivals, including Volkswagen (VOWG_p.DE), a new assembly plant would represent an investment of over $1 billion for Toyota.

A green light for the plant would signal an end to a 3-year expansion freeze imposed by the Japanese automaker's president Akio Toyoda, who has blamed aggressive expansion a decade ago for contributing to quality lapses and a 2009 recall crisis.

Toyoda last year asked planners scouting for a site in Mexico to hit 'pause' and review the rationale for the project, executives familiar with the matter said then. He urged executives to squeeze more production from existing factories.

Toyota is the last mass-market automaker without a major production hub in Mexico, which has lured car makers and suppliers through its low labor costs and tariff-free access to the United States, Toyota's largest single market. The Japanese firm has a plant in Mexico's Baja California that produces the Tacoma pickup truck, but it has no passenger car plant.

Last year, Mexican officials pitched half a dozen potential sites for a new plant, and Toyota executives have zeroed in on a site in the central state of Guanajuato, two people with knowledge of the deliberations said.

A delegation of Toyota executives recently spent a week in Guanajuato and remain in talks with local government officials over a potential plot of land that would give the automaker a big enough footprint to expand in the future, a source said.

"We are always evaluating our production capacity in Mexico, and in North America generally, to keep it in line with local market demand, but no such decision has been made at this time," Toyota spokesman Itsuki Kurosu told Reuters.

An official at Mexico's economy ministry had no immediate comment on Toyota's plans in the country. A spokesman for Guanajuato's economic development department declined to comment.

MEXICAN WAVE

The Mexico plant would produce a new generation of the Corolla, which will also be made at a factory in Japan, people with knowledge of the company's plans said.

Toyota said it sold close to 340,000 Corollas last year in the United States alone.

Mazda Motor (7261.T) opened an assembly plant in Guanajuato early last year, which will also produce vehicles for Toyota under an agreement between the automakers. In June last year, Daimler (DAIGn.DE) and Nissan Motor (7201.T) announced plans to build a new small car joint-venture plant in Mexico at a cost of $1.4 billion.

The wave of new investment by automakers has brought hundreds of Japanese auto parts suppliers to Mexico over the past few years. Auto production in Mexico doubled to more than 3 million vehicles a year in the five years to 2014.

Toyota's Corolla plant in Blue Springs, Mississippi, which opened in 2011, was the automaker's most recent assembly plant to come on line in North America.

With production capacity in Mexico, Japanese automakers avoid the risk of a stronger yen JPY= cutting into profits on exports and minimize the risk of a disruption to sales from events like the labor dispute that slowed trade through the U.S. West Coast earlier this year.

(Reuters)(Additional reporting by Chang-Ran Kim, Norihiko Shirouzu and Luis Rojas; Writing by Kevin Krolicki; Editing by William Mallard and Ian Geoghegan)

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Mexico's Pemex launches ethanol biofuel program to cut emissions

(GNN) - Pemex is set to launch its first-ever sales of gasoline mixed with cleaner-burning ethanol to reduce greenhouse gas emissions, the Mexican state-run oil company said on Thursday.
Pemex has awarded contracts to be supplied with as much as 123 million liters of ethanol per year, which will be derived from locally-produced sugar cane and sorghum.

Over the course of the 10-year contracts, the value of the ethanol purchased would range between $524 and $750 million, Pemex said in a statement.

The 5.8 percent ethanol will be mixed with Pemex's top selling Magna gasoline brand and lower emissions by 35 percent.

Four contracts were awarded to Mexican companies on Tuesday, but tenders for two others were declared void.

A company spokesman said several more contracts will be bid out, but did not provide further details on the timeline.

The new gasoline sales will begin in the states of Tamaulipas, San Luis Potosi and Veracruz before expanding further, although the precise timing was unclear.

Pemex will invest about $58 million to build necessary infrastructure for the project at its Ciudad Madero and Minatitlan refineries.

Citing the need to cut costs due to slumping oil prices, Pemex first delayed, then canceled a planned $2.8 billion investment to boost ultra-low sulfur diesel production announced in September also designed to reduce pollution.

A sweeping energy reform finalized last year and championed by President Enrique Pena Nieto gradually ends the retail monopoly enjoyed by Pemex's nearly 11,000 franchise gas stations scattered across the country.

Beginning in 2017, companies that operate startup non-Pemex stations will be able to import outside gasoline, and then in 2018, gasoline and diesel prices will no longer be set by the government.

(Reuters)(Reporting by David Alire Garcia and Ana Isabel Martinez; Editing by Bernard Orr)

Exclusive; China Telecom plans bid to build Mexico broadband network - sources

(Asia Times) - China's third-largest carrier China Telecom is preparing a possible bid for a contract to build and run a new mobile broadband network in Mexico and is seeking local partners to join it in a consortium, three people with knowledge of the matter said.

It has already secured up to several billion dollars of financing from Chinese state-controlled banks, including the China Development Bank, for the project, which Mexico estimates will cost $10 billion over 10 years, one of the people said.

The proposed network is part of a sweeping reform designed to break billionaire Carlos Slim's hold on the Mexican telecoms business, but the Chinese involvement could prove controversial and trigger concerns from the U.S., some Mexican officials say.

Mexico's government is trying to ease its economic dependence on the United States and ramp up Chinese investment. A Chinese-led consortium looks poised to win a $3.75 billion contract to build a high-speed train system, sources with knowledge of the plan say. This is despite the group's previous winning bid being revoked late last year amid a political scandal.

Representatives for China Telecom did not return requests for comment, and representatives for China Development Bank could not be reached for comment.  A spokesman for Mexico's Communications and Transport Ministry (SCT) declined to comment.

On a trip to China in November to reduce tensions caused by the train contract cancellation, Communications and Transport Minister Gerardo Ruiz Esparza also discussed the mobile network plan with the Chinese government, according to a ministry press release.

State-owned China Telecom's international subsidiary China Telecom Global wants to be an operating partner in the network and not just an investor, said the people, who requested anonymity.

It is still looking for Mexican partners, the people said. It was unclear who had been approached.

GOVERNMENT ASSETS
The people did not say how big a stake the Chinese would take in the consortium that would make the bid. Under a government timeline published last year, the tender should have begun last month, with a winner due to be chosen in August this year.  

Creation of the wholesale network was written into Mexico's constitution as part of telecom market reforms in 2013. It aims to allow Slim's mobile competitors better coverage without using the network of his company America Movil, or bearing the cost of building their own.

Under current plans, Mexico's government will not take a stake in the company that runs the network, according to two of the sources.

Instead, the winning group will have a public-private partnership contract with the government which will allow it use of some state infrastructure, such as sites to build towers on and a fiber optic network owned by the state electricity firm.

It will also have a concession for use of 90 MHz of the valuable 700 MHz spectrum.

In exchange the network will have to cover large parts of the country with the exact coverage to be decided in the tender. The winning company would then subcontract telecoms equipment makers to build and maintain the network.

If the Chinese bid wins, it would mean the Chinese government indirectly owning part of a telecoms network that would cover most of Mexico right up to the U.S. border. Many large U.S. companies also have operations in Mexico.

Chinese telecom equipment maker Huawei [HWT.UL] has expressed interest in the project and would be more likely to supply parts to the network if it is Chinese-led and financed, as has happened in other deals outside China.

Huawei has been largely locked out of supplying network equipment to the U.S. because of opposition from U.S. lawmakers who allege the company maintains ties to the Chinese authorities and could use its equipment to spy on U.S. communications.

Huawei has consistently rejected the allegations.

Representatives for Huawei did not respond to a request for comment.

The SCT already received an unsolicited bid proposal from a group of ex-telecoms executives, lawyers and bankers supported by equipment makers Ericsson and Alcatel-Lucent.

The ministry chose not to accept it in order to keep the competition level, one person said. Accepting it would have meant giving the team an edge in the bidding process.

Finland's Nokia and U.S. equipment maker Cisco Systems Inc. have also had meetings with the Mexican government about a possible bid, one person said. Spokesmen for the both companies declined comment.

(Additional reporting by Beijing Newsroom; Editing by Simon Gardner and Martin Howell)(GA, Reuters, Asia Times)

Mexico could seek hefty damages against U.S. over meat laws: official

GNN Mexico - Mexico would seek "hundreds of millions" of dollars in trade retaliation against the United States if Washington does not change meat labeling laws, a Mexican official said, as Mexico and Canada kept up pressure on the United States to act.

The World Trade Organization ruled last month that the United States had failed to bring its meat labeling regulations fully in line with international fair trading rules after a complaint by its two neighbors. The ruling would be a step toward potential retaliation if packaging laws are not changed.

Canada estimates U.S. rules requiring retailers to list the country of origin on meat cost its farmers and processors $1 billion a year in lost sales and lower prices, and warned on Friday it would pursue all available remedies.


Studies on the damage to Mexico had not yet been finalized but would run into the "hundreds of millions," the Mexican official said on Tuesday. This could take total retaliation from Canada and Mexico to as much as $2 billion.

"Neither Mexico nor Canada will accept anything less than a full solution," said the official, who is familiar with the WTO case and who spoke on condition of anonymity. Acceptable options include scrapping the labeling law or replacing labels such as "Born in Mexico, Raised and Slaughtered in the United States" with a generic "North American" source, the official said.

The United States has said it may appeal the decision on country-of-origin labeling, or COOL, and in that case a final WTO ruling is likely between April and June 2015.

Under WTO rules, retaliation is linked to the level of damage done by the offending actions, with the exact amount worked out in negotiation with the parties.

The Canadian Cattlemen’s Association said on Wednesday the COOL law forced Canadian and Mexican cattle to be segregated, adding costs along the supply chain.

"For the U.S. to come into compliance it has to make a legislative change and that legislative change has to be significant enough to eliminate the need to segregate," CCA counsel Edward Farrell said at a Heritage Foundation event on Wednesday.

U.S. Chamber of Commerce Senior Vice President for International Policy John Murphy said at the event that Congress should act soon to make sure the relevant sections of the law could be quickly rescinded once the WTO made its final ruling.

Advocates would be looking for opportunities to get such provisions before Congress this year or early next year, he said, noting there would be funding bills that must come up for a vote before the end of the year.

(GNN,AIP,Reuters,ga)(Reporting by Krista Hughes; Editing by David Gregorio)

Fugitive Mexican mayor suspected in abduction of 43 students captured

GNN - Mexican police on Tuesday captured a fugitive former mayor and his wife suspected of being the probable masterminds behind the abduction of 43 student teachers feared massacred in September, officials said.

Police working with a local drug gang in the southwestern city of Iguala abducted the students after clashes there on the night of Sept. 26, seriously undermining President Enrique Pena Nieto's claims that Mexico has become safer on his watch.
Jose Luis Abarca, who at the time was mayor of Iguala, and his wife, Maria de los Angeles Pineda, were captured by federal police in a house in Mexico City early Tuesday and were being questioned by prosecutors, a government official said.

The run-down concrete house, its windows blacked out with cardboard, was in the eastern district of Iztapalapa, one of the most crime-ridden parts of the capital, and a far cry from the comfortable lifestyle they had led before.

Housewife Elia, 46, who lives opposite the building and declined to give her last name for fear of reprisals, said she was glad the couple had been captured.

"I have children who are students and I just think of the parents (of the missing students) and what they must be feeling," she said. "They have to say where they have them and if they're still alive."

Mexican media said the couple had been hiding out in Iztapalapa for several weeks.

"I hope this arrest makes a decisive contribution to clearing things up," said Pena Nieto in a speech.

A spokesman for Attorney General Jesus Murillo said more details would be released later on Tuesday.

The Mexican government is still searching for the students, whose disappearance shocked the country.

The government said last month that Abarca and his wife had ordered local police to stop a group of about 80 students from disrupting a political event on the night of Sept. 26.

Six people, including three students, died in the ensuing clashes in the violent state of Guerrero. Three days later, the mayor and his wife Pineda went underground. The government says Pineda comes from a family of high-profile drug traffickers.

Pineda was the boss of Guerreros Unidos, a local drug gang, within the Iguala government, according to evidence from a suspect arrested in the case that was made public by the attorney general's office.

Investigators in Iguala said the police handed over the students to Guerreros Unidos. According to testimony from captured gang members, the gang killed the youths, then buried them in mass graves.

But despite dozens of arrests and the discovery of the remains of at least 38 bodies buried in the hills around Iguala, none have yet been identified as those of the students, who belonged to a leftist all-male college in Guerrero.

The case has sparked mass street protests, civil unrest in Guerrero and anger over the government's failure to crack down on links between politicians and organized crime.

It has also derailed Pena Nieto's efforts to turn public attention to his efforts to revive Mexico's misfiring economy and attract investment after years of gang violence that has claimed about 100,000 lives since the start of 2007.

Parents of the missing students have attacked the government for failing to find them. One of them, Epifanio Alvarez, said their patience was running out.

"We've reached the limit," Alvarez told Mexican television following news of the capture of the mayor and his wife. "We want answers, otherwise we will take action ourselves."

(GNN,AIP,Reuters,ga)(Editing by Simon Gardner, Jeffrey Benkoe and Andrew Hay)

Small Telecom Italia investors call for Brazil unit merger, not sale

GNN - Small shareholders at Telecom Italia (TLIT.MI) on Tuesday called on the Italian phone group's board to consider a potential merger between its Brazilian unit TIM Participações SA (TIMP3.SA) and Brazil's Grupo Oi SA (OIBR4.SA).

Shareholder group Asati, which says it represents around 6,000 small Telecom Italia investors with a combined stake of around 1 percent, said in a letter to the board that such a deal could include a "modest" capital increase.

Asati also said that should a merger between TIM and Oi not come about, no offer for the unit should be considered if it values TIM at less than 8.5 times its core earnings.


Sources with direct knowledge of the matter told Reuters on Friday that Oi, Mexico's America Movil (AMXL.MX) and Spain's Telefonica (TEF.MC) agreed to place a joint bid worth around 32 billion reais ($12.8 billion) for TIM Participações.

Oi said on Monday it had not entered into any agreement to join a group of rivals to buy Telecom Italia's stake in TIM.

In August Oi announced that it had hired Grupo BTG Pactual to act as its representative and develop plans for a possible purchase of Telecom Italia's stake in TIM Participações.

Telecom Italia's board will meet on Thursday to approve quarterly results. The Rome-based company owns about 67 percent of TIM Participações, Brazil's No. 2 wireless carrier.

(GNN,AIP,Reuters,ga)(Reporting by Agnieszka Flak and Danilo Masoni; editing by Keiron Henderson)