On Monday and Tuesday of this week, President Joe Biden, President Andrés Manuel López Obrador, and Prime Minister Justin Trudeau met in Mexico City for the North American Leaders Summit (NALS). While NALS launched in 2005, this week marked only the 10th so-called “Three Amigos” summit.
With so many pressing issues on immigration, security and trade facing the region, the summit could not have come at a more crucial moment for trilateral relations. Despite modest expectations prior to NALS and some tense moments, the three governments concluded their meetings on a largely positive note, announcing plans to work more closely on irregular migration, fentanyl trafficking, and increasing investment in semiconductor supply chains.
President López Obrador’s objective appeared to be keeping energy, democracy, as well as issues such as violence against journalists off the trilateral agenda. And going into the summit, the priority for President Biden was to address irregular migration. Yet, significant bilateral migration announcements were made in the days before the summit, creating more space on the agenda for security and trade issues.
On Thursday, January 5th, President Biden made his first major speech on border security, announcing new measures amid a record number of border crossings. Over the last year and a half, an increasing number of migrants arriving at the border are fleeing repressive regimes and deteriorating economic conditions in Cuba, Venezuela and Nicaragua. These nationals now make up more than half of the US Custom and Border Protection encounters. This is a shift from past years, when Mexicans and more recently Guatemalans, Hondurans, and Salvadorans, made up the majority of apprehensions.
With the cooperation of Mexico, the Biden administration announced the expansion of the still contested Title 42 policy to Haitians, Cubans, and Nicaraguans, which will now allow US authorities to swiftly return these nationals to Mexico. Simultaneously, the administration created a new legal pathway for up to 30,000 nationals from those countries per month, building upon the parole model created for Ukrainians and Venezuelans. Finally, the Biden administration plans to propose a transit rule, which would block certain individuals from requesting asylum.
In the wake of these announcements, President Biden took his first visit to the border as president, traveling to El Paso, Texas to meet with local leaders, officials, and humanitarian workers.
On the security front, just days before the summit, Mexican authorities captured Ovidio Guzmán, the son of Joaquin “El Chapo” Guzmán and a notorious fentanyl trafficker wanted by US authorities. Yet, Ovidio Guzmán’s extradition to the US has been halted by a Mexican judge.
While in Mexico City, the Biden administration sought to broaden Mexico’s support in curbing the flow of fentanyl, which is now the leading cause of death for Americans ages 18-49. Some initial steps were announced at the summit such as increased information sharing on the chemicals used to manufacture fentanyl. This should build on the progress that Mexico has made to increase fentanyl seizures and expand the chemical watchlist.
At the summit, the three countries also committed to cooperate more closely on other security issues, including labor and sexual trafficking, advancing on nuclear security collaboration, and sharing intel on cyber security best practices.
Trade tensions had been mounting in the months leading up to the summit. Little progress has been made on the US-Mexico-Canada (USMCA) agreement complaint filed by the US and Canada last July asserting that López Obrador’s energy policies favored state-run companies. It was clear that Mexico did not want to discuss energy matters publicly at NALS. Officials failed to make any announcements, suggesting an arbitration panel may be imminent.
At NALS, there were several other key trade disputes in the background. First, the US has considered filing a formal USCMA complaint against Mexico’s proposed ban on genetically modified corn, though Mexico agreed to delay the ban until 2025. And second, a decision on another USCMA dispute against the US on automobile rules of origin has been announced, favoring Mexico and Canada.
On the heels of the World Bank lowering its economic growth projection for this year, all three leaders came into the summit wanting to appear committed to efforts to make the region more competitive. The governments announced plans to increase investment in semiconductor manufacturing, including establishing a trilateral forum and coordinating on supply chain mapping. The US will also work with Mexico to finance an ambitious solar energy project in the state of Sonora.
While this year’s North American Leaders Summit was more than a photo op, there remain some very real challenges that will need to be addressed in the coming months. Moving forward, the three countries would greatly benefit from formally incorporating the private sector into their discussions on trade and competitiveness. This will be key to ensure continuity beyond election cycles. For a more general look at US-Latin America trade relations, I recommend this piece authored by three of my White & Case colleagues, including our Executive Partner here in Mexico City, Franscisco de Rosenzweig.
In my last newsletter, I suggested that the best characterization of what to expect in 2023 is Adam Tooze’s notion of polycrisis. We continue to face implications from the war in Ukraine, tensions in China, and inflation. For an insightful look at the challenges 2023 may bring, you might be interested in Ian Bremmer and the Eurasia Group’s top political risks for this year.
As always, I hope you’ll stay in touch throughout the year and I encourage you to reach out via Facebook, Twitter, or LinkedIn.
Sincerely,