Assassination attempt.

In an attack that some observers fear presages a bloody electoral campaign in 2006, an attempt was made on the life of Oaxaca Gov. Jose Murat, with eight assailants peppering his vehicle with submachine gun rounds as the governor headed to breakfast at an exclusive Oaxaca City hotel on March 18.

Murat, a member of the Institutional Revolutionary Party (PRI) and considered a possible candidate for the presidential election in 2006, sustained only minor injuries, but two of his bodyguards were shot, one of whom later lapsed into a coma.

Although Oaxaca is the home of the Popular Revolutionary Army (EPR), the rebel group's power has declined since the 1990s, and the investigation into the attack was following "a political line," according to a spokesperson for the governor.

Leaving the hospital where he was treated for minor injuries, Murat said "two or three federal organizations" or "local mafias" were his best guesses as to who was behind the hit attempt. He also remarked that there was an attempted kidnapping of his daughter eight months ago and that he has received 15 death threats since taking office in 1998.

Calling his attackers "cowards"--the assailants cut off his vehicle some 50 meters from the entrance to the famed Hotel Victoria at 8:30 a.m. and were repelled when his lead bodyguard returned fire--Murat vowed to find the mastermind. Immediately following the attack, President Fox called the Oaxaca governor to offer his support and pledge federal resources to the investigation.

Murat, whose successor will be determined in an August election, has been an outspoken member of the PRI, saying the party must reform itself if it is to survive in the nation's new political climate.

In addition to the simmering rebel conflict, Oaxaca is heavily connected to the drug trade, both in production in its mountains and smuggling along the coast. "Rural strongmen" are also suspected in the assassination attempt, according to Murat's office.

But most observers agree with initial reports that the assassination attempt was political and brought back memories of the assassination of PRI presidential candidate Luis Donaldo Colosio in 1994.

"Obviously, this is a very worrying signal," said high-ranking Interior Secretariat official Francisco Paoli Bolio.

PIGS AND STEEL

After 16 months of negotiations, Mexico and Japan reached a free trade agreement in early March.

The deal opens up a valuable market to Mexican exporters. Pork and orange juice are at the center of the deal, and Mexican exporters will be allowed to export 80,000 tons of pork and 6,500 tons of orange juice annually under preferential tariffs.

Japanese investment as a result of the trade agreement is expected to go up by at least US$1 billion annually.

It is considered a coup for Mexican negotiators, as Japan is a notoriously closed market, particularly in agriculture. Japan has only one other free trade agreement (with Singapore) and that does not cover the agriculture sector.

From Japan's perspective, the deal will help its major companies, particularly those in electronics, automobiles and steel, and allow it to gain greater access to the U.S. market via Nafta.

--M.B.