Summer’s over. And its last few weeks were certainly noteworthy for U.S.-Mexico affairs and White & Case Mexico City. Of particular note, congratulations to my colleagues at White & Case who ranked number one in Latin America for project finance, banking, and arbitration.
Yesterday, the U.S. and Mexico restarted the High Level Economic Dialogue (HLED) after a four-year hiatus under former President Trump. Vice President Kamala Harris opened the one-day talks in Washington D.C., which were led by U.S. Secretary of State Blinken and Mexican Foreign Minister Ebrard. The goal was to reset economic priorities with top agenda items including supply chains, investment in Central America, cybersecurity, and workforce development. While much remains to be resolved, this multi-agency dialogue was a significant step in broadening the bilateral agenda, and the United States and Mexico committed to meeting annually at the cabinet level and semi-annually at the sub-cabinet level. You can find the statement from the White House here, and for a good readout of the engagement, click here.
On September 2, Harris had sworn in Ken Salazar as the United States’ Ambassador to Mexico. Salazar, who participated in the HLED meetings, is a former U.S. Senator to Colorado and the Secretary of the Interior under President Barack Obama. Ambassador Salazar has been central or privy to discussions on key issues in U.S.-Mexico relations for most of his career. I can think of no one more qualified for this role amid the extraordinarily challenging times we face.
In the days leading up to the dialogue, Canada and Mexico took a firm posture on rules of origin for automobiles under USMCA. The two countries’ flexible interpretation of regional-based content has become a source of contention with the Biden administration, who favors a stricter approach. The dispute remains unresolved, creating uncertainty for investors in the region.
In D.C., the Mexican and U.S. delegations also discussed cross-border trade. Both sides agreed to work together to build more resilient supply chains to better prepare for future crises and robust border infrastructure in order to attract investment in critical sectors. Mexico’s Minister of the Economy Clouthier held meetings to urge logistics, technology, and semiconductor firms to relocate their supply chains to Mexico.
Following on yesterday’s high-level engagement, cabinet-level security talks anticipated for November are expected to prove challenging. President Andrés Manuel López Obrador has repeatedly criticized the Merida Initiative, a $3 billion effort that provided the framework for security cooperation for over a decade. And recently, Ebrard deemed the initiative “dead”. The two governments will now be tasked with reimagining collaboration post-Merida.
During the dialogue, the U.S. and Mexico also discussed economic development to southern Mexico and Central America to address the root causes of migration.
On Thursday of last week, López Obrador had said that he would urge President Biden to offer temporary work visas to Central Americans, yet this request remains pending.
The bilateral dialogue occurred two weeks after the U.S. Supreme Court refused to block a federal district court’s order to reinstate the Trump-era Migrant Protection Protocols (MPP), which returned individuals requesting asylum to dangerous conditions in Mexico to await their U.S. immigration hearings. To comply, the U.S. has begun talks with Mexico about a “lite” version of the program, but the two sides did not announce any agreement yesterday.
In July, the number of migrant crossings at the U.S.-Mexico border hit a record level. Under the Title 42 public health measure, the Biden administration continues to rapidly expel arriving migrants. Pressured by the U.S. to do more to contain migration, Mexico has also increased its deportations.
Leaders also addressed recovery from the COVID-19 pandemic in the meeting. Last month, the U.S. pledged to send 8.5 million additional doses to support Mexico’s vaccination drive. According to Bloomberg’s tracker,Mexico has fully vaccinated 28 percent of individuals and inoculated 47 percent with one shot. Riding on the curtails of the U.S. stimulus, Mexico estimates its economy will grow by 4.1 percent in 2022 after its rebound in 2021.
Though López Obrador appears to be open to a slightly more institutionalized bilateral relationship, he remains unwilling to engage on some of the thornier issues, such as energy. In fact, the president recently announced that he planned to move forward with a constitutional amendment that would favor the state-owned electricity company over private competitors.
While yesterday’s engagement was encouraging that relations are heading in the right direction, what’s missing is a clear strategic vision for the bilateral relationship and North America.
Lastly, I’d like to acknowledge several individuals here in our Mexico City office. This summer, Enrique Espejel was named Mexico’s litigator of the year, Rafael Llano received the award for Mexico’s arbitration lawyer of the year, and Ismael Reyes’ work on regulatory matters and administrative litigation was also recognized. I feel very fortunate to work alongside such esteemed attorneys, and most importantly our clients are truly the beneficiaries of their great work.