Month: May 2013

Mexico’s Response to the San Pedro Xalostoc Highway Accident

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Here is a link to my latest article on AQBlog, titled “Mexico’s Response to the San Pedro Xalostoc Highway Accident“, published on May 15th, 2013. Please feel free to visit and comment. Here is a verbatim copy of it in case you prefer to read it on my personal blog, though I recommend actually going to the site because of additional content, other blogger’s articles, etc.

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It was 5:30 am on Tuesday, May 7, when a “full trailer” truck (which can carry loads up to 75.5 tons) transporting LP gas skidded off the Mexico City-Pachuca highway, exploded and caused a horrific tragedy, resulting in over 20 deaths and structural damage in the settlement of San Pedro Xalostoc, Ecatepec.

Initial investigations from authorities have determined that the cause of the accident was human error on the driver’s part. They’ve also stated that both the company and the transport unit involved were registered and verified and met maintenance and security standards. The gas company involved has already declared it will fully cooperate with the government’s investigation and, if deemed responsible for the tragedy, will pay damages.

Unfortunately, for a federal government concerned more with appearances than substance, this is not enough. Vast coverage on national media has urged President Enrique Peña Nieto’s team—through the Secretaría de Comunicaciones y Transportes (Ministry of Communications and Transport—SCT)—to seem like it is on top of things by pledging to prioritize reforms that will prevent accidents like this one in the future, no matter the collateral damage of those reforms.

Anyone who has driven down U.S. and Mexican highways can attest that Mexican highways are inferior and more dangerous. The materials used in Mexico are substandard and make roads slippery. Road development and maintenance are also terrible: highways have too few guardrails, too many potholes, poorly planned intersections, terrible signaling, and sharp inclines on dangerous curves. Many of our highways have tolls, but you wouldn’t know it from their disrepair. Moreover, there is no effective urban planning. In many cases, highway speed limits are set without consideration for residential areas near the road. Houses built within 165 feet (50 meters) of a non-protected high speed highway are normal in Mexico.

But none of these shortcomings, which cause close to 30,000 accidents a year on Mexico’s highways, have influenced the SCT’s populist response to the tragedy. Here’s why: first, mentioning them could be interpreted as an acceptance of co-responsibility in the San Pedro Xalostoc tragedy. Second, addressing these situations is hard work and would demand additional government spending. Instead, the SCT has resolved to revise NOM-12-SCT-2-2008—the norm that allows 75.5 ton trucks to transport goods throughout the country. Revisions to the regulation are expected to be in place by May 31 and will likely prohibit what are commonly referred to as “full trailers” on Mexico’s highways.

If this does happen, the federal government will have made yet another populist decision; common folk hate full trailers. They are a nuisance to drivers and are slow and hard to pass. They are also harder to control and to drive than a normal sedan. Yet, prohibiting the 75.5-ton truck will cause more damage rather than actually solving the problem.

According to SCT, full trailer trucks are involved in 3 percent of registered accidents and 2.2 percent of fatalities on highways. This is partly because drivers of any 75.5-ton vehicle need special training and certifications; on the contrary, the process to get a normal driver’s license in Mexico sometimes doesn’t even require a road test and renewals are done through simple paperwork. Experts drive trailer trucks, amateurs drive everything else.

As the Xalostoc tragedy shows, trailer truck drivers are not immune from having accidents, but the numbers put the frequency of trailer truck accidents in perspective. Outlawing full trailer trucks will not make highways significantly safer.

Moreover, given their cost efficiency, 75.5-ton trailers are used by practically all of Mexico’s large industries to transport raw materials and finished products. Changing NOM-12-SCT-2-2008 could double logistics costs for companies such as Soriana, Bimbo, FEMSA, and others. Companies will only have two options to offset cost increases: raise the prices of consumer-goods and/or cut other fixed costs (financial business jargon for massive layoffs). Neither option is good for Mexicans, but it is unlikely that many will draw the parallel to equate the SCT decision with higher prices and/or layoffs.

The suffering and loss from the Xalostoc tragedy is no small thing. Emotions are high and people want to point fingers. The Mexican people have an impulse to find someone to blame and make them pay; that’s understandable. But to solve the real problems we face, Mexico does not need a government that opts for populist decisions to put out media fires and appease its constituents. It needs a government that creates and implements effective solutions.

At a time when economic slowdown is set to burst Peña Nieto’s miracle bubble, the government should be looking for ways to catalyze industrial growth and performance, not hinder it in exchange for a positive news headline.

Obama and Peña Nieto Focus on the Economy Over Immigration and Security

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Here is a link to my latest article on Americas Quarterly, titled “Obama and Peña Nieto Focus on the Economy Over Immigration and Security“, published on May 7th, 2013. Please feel free to visit and comment. Here is a verbatim copy of it in case you prefer to read it on my personal blog, though I recommend actually going to the site because of additional content, other articles, etc. Thanks for visiting my blog!

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Building up to their meeting in Mexico City on May 2, the administrations of both U.S. President Barack Obama and Mexican President Enrique Peña Nieto hinted that economic ties would be the focal point of their one-on-one meeting. In an interview with Americas Quarterly prior to the trip, Obama reiterated this, saying that he would “be discussing with President Peña Nieto how we can continue to reduce barriers to trade and investment.”

With commerce and economic cooperation pushing immigration and security to the backburner of the agenda, the two leaders made a strategic decision to avoid some of the more difficult issues gripping each country.

It comes as no surprise that the two leaders would want to play it safe. There is just too much at stake in the countries’ economic interdependencies: Mexico is the United States’ third-largest trading partner, while the U.S. is Mexico’s largest trading partner. These ties have grown stronger (and Mexico’s asymmetrical dependence on the U.S. economy has grown larger) since the North American Free Trade Agreement (NAFTA) was put into place, and pave the way toward even greater cooperation under the auspices of the Trans-Pacific Partnership, which could be completed by the end of this year.

Moreover, there would be no political gain for either Obama or Peña Nieto with a focus on security and/or immigration.

On immigration, President Obama does not have the leeway to promise anything or deliver on that promise as comprehensive immigration reform will depend on the extent to which the U.S. Congress can continue to work in a bipartisan manner in the months ahead.

In Mexico, Enrique Peña Nieto has not been as vocal as his predecessors about the urgent need to tackle the immigration problem perhaps because he understands that a vocal push for reform from the Mexican president may be seen as foreign meddling in what is often seen as a domestic issue. Like all Mexican presidents, he has used the scripted language about defending our countrymen’s rights outside of our borders. But he has not committed to steps such as requiring proper documentation for travelers along Mexico’s southern border that would help reduce the number of Central Americans who illegally cross into Mexico on route to the United States.

At the same time, agreement and mutual understanding on how to improve security is not the same as when the Partido Acción Nacional (National Action Party—PAN) was in power. Former Mexican President Felipe Calderón was more willing to work hand-in-hand with U.S. authorities on security issues, with U.S. drone planes often flying over Mexico’s national borders and information exchange and training common between U.S. and Mexican law enforcement officials. These practices are now under scrutiny by Peña Nieto. His administration has recently announced plans to reevaluate Calderón’s war on drugs strategy, including an intention to “restrict U.S. involvement in [Mexico’s] security efforts.”

Peña Nieto’s stated reason for reassessing Mexico’s security strategy is to focus on reducing violence rather than continuing a head-on war against the cartels. However, for a president still struggling with establishing legitimacy, and aware that the largest stain in Calderón’s legacy was the close to 70,000 deaths related to the war on drugs, it is also an intelligent political choice to throw a disappearing cloak over the issue of security. His priority is to focus the public’s attention on quick wins and success stories.

Obama, for his part, faces few domestic pressures when it comes to Mexico’s security issues and must justifiably focus his attention on Syria, North Korea and domestic challenges. When Obama was asked about security collaboration after his meeting with the Mexican president, his statement that “the nature of that cooperation will evolve” and that Mexico and the U.S. would “cooperate on a basis of mutual respect” is no coincidence. This is definitely a step back from what Obama referred to as “a shared responsibility” in 2009.

During their photo-op after Thursday’s meeting, Obama tried to focus on the commitments that he and Peña Nieto made for economic development. “Too often, two issues get attention: security or immigration,” he said. Unfortunately for both Mr. Obama and Mr. Peña Nieto, there is a reason for that: these issues are closer to constituents’ hearts than the promise of better macroeconomic levels, which may or may not trickle down and actually improve their daily lives.

The promise of a closer trade relationship, joint investment on competitiveness and a forecast of economic growth for both countries should positively affect the security environment in Mexico and the future flow of undocumented immigrants to the United States. But bilateral agreements on how to frame a common strategy to tackle both of these critical issues will have to wait for another day.