Houston Chronicle on Mexican Reform and Valley Boom

EDINBURG – Samuel De Los Santos wound his way through pallets of avocados stacked three stories high and talked about his company’s plans for expansion.

On a good day, he and his team of 18 at Don Hugo Produce will unload about $7 million in fare from Mexican farms before sending it on to supermarkets in the United States. The operation is expected to double soon, De Los Santos said, and then grow again after that.

As he talked, De Los Santos described massive highways under construction and an economic revival coming on the heels of an energy industry boom. The numbers had the same scale as the ones used to describe the energy-driven economic surge that has lifted much of Texas since the end of the past decade – but this one would take place in Mexico, with the products headed north.

“Imports are expected to triple,” De Los Santos said. “It’s going to create a ton of work for us.”

In the Rio Grande Valley, at the southernmost tip of Texas, De Los Santos isn’t the only one talking about what’s going on south of the border.

Over the past year, President Enrique Peña Nieto has led his country’s lawmakers into passing a high-profile and contentious package of economic reforms. That has prompted American policymakers and businesses to look for increasing opportunity in the country that already is Texas’ largest trading partner.

If Peña Nieto’s measures work, they could reverse years of sluggish growth that have weighed both on Mexico’s economy and the border regions of Texas. The overhaul also could be a chance to rewrite the narrative of drug violence, immigration and poverty that has so often been used to describe the states of northern Mexico – and, by proximity, South Texas.

The centerpiece of Mexico’s landmark reforms is the privatization of its energy sector. The country’s electricity generation, oil and gas exploration and energy infrastructure have been owned and run by the government since 1938.

Gus Garcia, Edinburg EDC

Gus Garcia, Edinburg EDC

The state-owned oil company, Petróleos Mexicanos or Pemex, has struggled to attract enough investment and expertise to maintain its production, despite the presence of large reserves in the Gulf of Mexico and shale formations that cross the U.S. border and extend south.

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