July 2021, Volume 27, Number 3
The Canada-US border has been closed to non-essential travel since March 2020, and may remain closed through the summer of 2021. Over 55 percent of Canadians had received one vaccine dose and 20 percent were fully vaccinated by June 2021, compared with 65 and 55 percent in the US. Canada’s Atlantic provinces and British Colombia want to reopen borders with the US, but the leaders of Ontario and Quebec want to wait to reopen borders.
Canada legalized marijuana use in 2018, setting off a green rush as investors bid up the prices of businesses that grow and distribute legal cannabis. Canopy Growth, the largest Canadian producer, lost $1 billion in 2020 when buyers for marijuana failed to materialize. British Columbia-based Tilray and Ontario-based Aphri plan to merge in 2021 to create the world’s largest legal cannabis grower.
Investors blame strict government regulation for slowing sales, emphasizing the high taxes they pay and the relatively few government-licensed retail stores that sell marijuana products. Mexico legalize marijuana in June 2021, which may allow lower cost Mexican cannabis to replace Canadian-grown marijuana. Mexico’s marijuana farms are concentrated in the mountains surrounding Badiraguato, Sinaloa, the state that leads in exports fresh vegetables to the US.
Mexico. Over 9,000 foreigners applied for asylum in Mexico in March 2021, putting the country on track for 100,000 asylum applications in 2021; more Central Americans who cannot get into the US are applying for asylum in Mexico. Over 70,400 foreigners applied for asylum in Mexico in 2019, and three-fourths received asylum or other protections.
Mexican President Andrés Manuel López Obrador in April 2021 asked the US to grant six-month work visas to some of the 400,000 Mexican farmers who have participated in AMLO’s tree-planting program for at least three years. The program pays rural Mexicans about $225 a month to plant and tend fruit and timber trees. A million trees were planted as of May 2021, and critics allege that some rural Mexicans have cut down trees to qualify for the subsidy to replant. AMLO wants US support to expand the tree-planting program to Northern Triangle countries.
Mexicans on June 6, 2021 elected a new 500-seat lower house of Congress, electing 15 of the 32 state governors and 21,000 local officials. AMLO’s Morena party won about 200 seats in Congress, and can count on the support of another 100 representatives of coalition parties, less than the two-thirds majority desired. Morena won 11 of the 15 governorships, but lost the mayor’s offices in the three largest cities, Mexico City, Monterrey and Guadalajara.
At least 35 candidates were killed by gangs; most worker running for mayor. Gangs have diversified from trafficking drugs to the US to selling black market gasoline, smuggling migrants into the US, and investing in legitimate business, including avocado farms and other agribusinesses. Many candidates for local office stopped challenging incumbents after being threatened.
Mexico had 27 homicides per 100,000 people in 2020, compared with five homicides per 100,000 people in the US. There are an estimated 200 criminal groups operating in Mexico, where only one percent of crimes are solved.
The National Agricultural Council (CNA) in April 2021 estimated there were 2.4 million migrant farm workers who, with dependents, totaled 8.5 million people. The CNA promised to work with the Mexican DOL to ensure that farm employers register and pay taxes on the wages of migrant farm workers to IMSS so they are eligible for health and pension benefits, CNA estimated that 20 percent of migrant farm workers or 480,000 are currently registered with IMSS.
Mexico exported 207,000 tons of strawberries worth $851 million in 2020, up from 140,000 tons worth $368 million in 2015. Jalisco is the leading producer of raspberries, with 6,300 hectares that produced 104,000 tons in 2020; two-thirds of Jalisco’s raspberries are in Zapotlan El Grande and Jocotepec. Mexico exported over 500,000 tons of romaine lettuces in 2020, up from an average 200,000 tons in previous years. Half of the export lettuce is from Guanajuato and Zacatecas.
Sinaloa is Mexico’s leading farm state, producing commodities worth $17 billion or 16 percent of Mexico’s total $104 billion in farm sales in 2019. A survey of 400 farm workers in Elota found that most were young and married, a sixth spoke the indigenous Nahuatl language, and family incomes averaged $540 a month, or 4.2 times the minimum wage. Some 55 percent of the workers interviewed were born in Sinaloa, followed by 25 percent in Guerrero and six percent each in Veracruz and Oaxaca. Almost 87 percent of the Elota farm workers reported that their employers enrolled them in IMSS.
The Mexican government in December 2020 announced plans to ban imports of GMO corn by 2024. Mexico imported 16 million tons of GMO corn in 2020 from the US for animal feed, and the GMO ban is expected to exempt GMO crops used for animal feed. Some Mexicans want to ban all GMO crops, including corn used to feed animals.
Michoacán is Mexico’s leading producer of avocados and strawberries, and is a stronghold of the Jalisco New Generation Cartel (CJNG) and the Los Viagras gangs. Avocado farmers in the municipalities of Salvador Escalante, Ario de Rosales, Nuevo Urecho and Taretán formed militias and established 54 roadblocks to counter kidnappings and demands for protection payments of 50,000 pesos ($2,500) per hectare of avocados.
USMCA requires Mexico to allow workers to choose unions to represent them via secret ballots. Some 400 workers at the Tridonex auto-parts plant in Matamoros tried to switch from the SITPME union to the independent union SNITIS formed by activist Susana Prieto in 2020.
The regional labor board did not authorize a vote at Tridonex and 45 other Matamoros factories where workers wanted to switch unions. Some of the Tridonex workers who supported SITPME lost their jobs, which Tridonex attributed to reduced demand. The AFL-CIO filed a complaint against Tridonex in May 2021, and sought quick action under the USMCA’s rapid response mechanism. The US government backed the AFL-CIO complaint in June 2021.
The US government in May 2021 complained that the incumbent employer-friendly union interfered with an April 2021 union vote at a GM truck plant in Silao, Guanajuato, prompting the Mexican Labor Ministry to order a new vote before the end of August 2021 with over 30 observers to ensure a secret ballot vote.
A Mexico City subway bridge on Line 12 collapsed in May 2021, killing at least 24 people. The subway system handles over four million passengers a day, second only to New York City in the Americas. Line 12, opened in 2012 at a cost of $2 billion, was plagued by construction defects that could taint both the current foreign secretary, Marcelo Ebrard, who was mayor when Line 12 was built, and Carlos Slim’s Carso Infrastructure, which built the bridge that collapsed, likely due to bad welds on the steel studs that supported the bridge.
Northern Triangle. The US released a list of 16 high-level officials in Guatemala, Honduras and El Salvador who were deemed corrupt in May 2021, highlighting the challenges facing Vice President Kamala Harris, who is leading an effort to provide $1 billion a year in US aid to tackle the root causes of migration from Guatemala, Honduras and El Salvador. Harris attributed emigration to the “the violence, the corruption, the gangs and the political instability, hunger, hurricanes, earthquakes, natural disasters.”
Harris visited Guatemala in June 2021, a country that received $1.6 billion in US aid since 2010, a period of rising poverty and outmigration. She said: “Do not come. Do not come. The United States will continue to enforce our laws and secure our border…if you come to our border, you will be turned back.”
Between 2019 and mid-2021, some 400,000 Guatemalans, over two percent of the population, were apprehended just inside the Mexico-US border.
Most experts believe it will be hard for US assistance to change the narrative from hopelessness and a need to emigrate to opportunity at home. Because local government agencies are often corrupt, foreign aid flows via foreign NGOs whose operations cease when the aid stops flowing. Over 80 percent of US aid goes to US contractors capable of satisfying reporting requirements, such as how many people attended training meetings.
Many NGOs print brochures and hire local trainers to provide training that may not be relevant to the target audience, while others build toilets and other facilities that are quickly dis-assembled and used for building materials. There were at least three US-funded projects in the coffee-growing village of San Antonio Huista near the Mexican border that involved trainings but no tangible benefits, since coffee farmers still sell their unprocessed beans to a few wholesalers who set prices.
Meanwhile, the spread of microcredit and the development of a migration infrastructure makes it easier to borrow money to migrate to the US than to fund new local businesses. There are fears that giving US aid directly to Central Americans could encourage some to pay smugglers rather than invest at home.
Colombia. Some 5.6 million Venezuelans have left their country since 2017, making Venezuela second only to Syria as a source of refugees. Some 31 percent moved to Colombia and 18 percent to Peru.
Colombia in January 2021 granted ten-year work and residence permits to Venezuelans in the country before January 1, 2021, and promised similar ten-year permits to Venezuelans who arrive via official ports of entry when borders reopen after Covid. The government estimates that there could be three million to five million Venezuelans in the country by the end of 2022, and is seeking foreign assistance to care for them.
Ecuador. One of the longest-running environmental suits continues between Chevron and Ecuador’s government. Texaco was sued in New York 1993 for damaging the environment in the Lago Agrio region of the Amazon where it drilled for oil with state-owned Petroecuador. Texaco obtained a release of liability from the Ecuadoran government in the 1990s, and Chevron inherited the suit when it bought Texaco in 1991.
Steven Donziger, the plaintiffs’ lawyer, refiled the suit in Ecuador in 2003 after it was dismissed in New York, and turned it into a cause célèbre for environmental activists. Donziger’s team wrote most of the report of an outside expert who said that Chevron owed $27 billion for environmental damage. An Ecuadorean judge in 2011 ordered Chevron to pay $19 billion, later reduced to $9.5 billion.
In 2014, a US judge found that Donziger and his team submitted false evidence and promised money to the Ecuadorean judge in exchange for the verdict, and ruled that the Ecuadorean judge’s order could not be enforced in the US and that Donziger could not benefit from the judgement. Chevron in 2018 won a verdict from the Permanent Court of Arbitration at The Hague nullifying the Ecuadorian court order. Chevron objected to Ecuador roses obtaining duty-free access to the US until the judgement against it is withdrawn.
Peruvians gave Pedro Castillo, a far-left teacher, slightly more votes than far-right Keiko Fujimori in the June 2021 presidential election. Peru adopted free-market policies in the 1990s and experienced rapid economic growth, but corruption and poor handling of Covid left many voters disillusioned with mainstream parties. The priorities of the richer coastal areas of Peru that voted for Fujimori often conflict with those of poorer residents in the Andes mountains who voted for Castillo.
Argentina received the largest bailout in IMF history, some $57 billion in 2018, and found it hard to repay the $45 billion debt remaining in 2021. Argentina defaulted on its government debt nine times, which limits foreign investment. Interest rates in Spring 2021 were almost 40 percent, and taxes on farm exports aim to help the government avoid printing more pesos.
Covid devastated Latin America, which has less than 10 percent of the world’s people but a third of the world’s Covid deaths. Public schools were closed for 16 months in 2020 and 2021, and 100 million children dropped out of school. Teachers’ unions are especially powerful in many Latin American countries, and many unions refused to allow teachers to return for in-person instruction.
Haiti was in turmoil in July 2021 after the president was assassinated and two men competed to replace him. Initial reports suggested that Christian Emmanuel Sanon, a Haitian-born doctor living in Florida, hired the Colombian mercenaries accused in the assassination.
Political intrigue, gang violence, lawlessness, and a public health crisis could fuel another wave of migration toward Florida; by some estimates, gangs control 60 percent of Haiti. As the poorest country in the Western Hemisphere, Haiti never fully recovered from a 2010 earthquake that devastated the western half of Hispaniola island. One of the men competing to become the new president asked for US troops to keep order.