MEXICO CITY – Biden administration officials on Monday touted the benefits the coming wave of investment in U.S. manufacturing could bring to Mexico, saying new plants that make semiconductors, Clean cars and other products in the United States can go to Mexico for materials and assembly. .
During meetings with President Andrés Manuel López Obrador and other senior Mexican officials on economic ties, Secretary of State Antony J. Blinken and Secretary of Commerce Gina Raimondo discussed how countries could work together. take advantage of each other just passed law that will direct tens of billions of dollars in new investment into U.S. facilities in the semiconductor and green technology industries in the coming years.
Economists say Mexico is missing out on billions of dollars in potential foreign investment as companies seek to diversify their operations outside of China and East Asia because of supply chain problems caused by the pandemic cause.
But the Mexican president’s nationalist policies have spooked investors, economists say, and levels of foreign investment have yet to return to pre-pandemic levels at a time when foreign companies Foreigners – especially the US – are looking for nearly exhausted opportunities like Mexico to relocate their factories closer to Home.
US officials point to the deep integration of the countries’ auto industries as a foundation for the production of clean cars. With semiconductors, the opportunity for Mexico will be testing, packaging and assembly, which she says is a $60 billion industry in China and Taiwan, but only $3 billion, Raimondo said. in North America.
Marcelo Ebrard, Mexico’s foreign minister, said in a translated comment: “This is a big door opening for Mexico, for the Mexican economy.
However, even as the leaders of both countries expressed optimism about their future partnership, an ongoing commercial dispute Mexican government interventions in the energy market continue to cast some doubt on Mexico’s credibility as a destination for foreign investment.
Mr. López Obrador has attempted to cement the dominance of Mexico’s state-owned energy companies in what he describes as promoting energy sovereignty. But some US energy companies have complained about the less favorable treatment they receive on issues such as prices, emissions standards and contract terms.
The United States challenged Mexico on their behalf, taking first step proceeding to bring the trade dispute under the free trade agreement of the countries. The final action could result in the US imposing tariffs on Mexico if the matter is not resolved otherwise.
However, in remarks on Tuesday, López Obrador remained optimistic about the discussions, saying the United States had adopted a more respectful approach.
Mr. López Obrador said in a press conference: “I was very impressed by the proactive and friendly attitude of the Trade Minister. “The words ‘tariff’ or ‘sanctions’ are not even used.”
Officials on both sides said Monday that the dispute is being handled according to that formal process. But Tatiana Clouthier, Mexico’s Economy Minister, said at a press conference that the topic was discussed Monday afternoon as part of a two-hour conversation between the Mexican president and his American guests. he.
Raimondo said the two sides do not discuss energy conflicts extensively, but added, “What businesses are looking for is predictability, fairness and transparency. And I think that’s true for every business everywhere in the world.”
The remarks followed a day of high-level meetings at the National Palace and the economy ministry in Mexico City, also addressing cybersecurity, regional competitiveness, and efforts to address climate change. climate change and supply chain resilience in areas such as pharmaceuticals, among others.
But the excitement of the meeting revolved around the opportunities that will arise when Biden officials Billion Dollar Disbursement in the coming months to try to revive American manufacturing.
The CHIPS Act, which sets aside $50 billion for semiconductor manufacturing and research, and the Inflation Reduction Act, provide $369 billion in incentives to mitigate climate change, aimed at stimulating domestic investment by USA.
But both have provisions that could benefit Mexico, including funding for the United States to work with partner countries to make semiconductor supply chains safer and incentives for consumers. used to buy clean cars with parts made in countries with which the United States does commerce. deal, such as Mexico.
While Democrats and Republicans oppose sending the United States to Mexico, many economists have argued that the country’s economy complements that of the United States, due to a large amount of Large numbers of lower-wage workers can do more labor-intensive jobs. economy in the United States has higher wages.
One argument in favor of a closer partnership between the US and Mexico is that it would allow North America to produce better quality products and lower costs so that it can better compete in international markets. with products made in China.
The United States and Mexico have vibrant trade in materials and inputs for a wide variety of products, and many companies have designed their supply chains to run back and forth between countries, taking advantage of the resources available to them. nature, skill of workers or favorable. government policies.
However, the economic partnership between the two countries has not always been as smooth as some had hoped. As the pandemic broke out, American automakers protest against the shutdown of Mexico of its auto parts factories. Mexican cartels also have expand their reachconcentrated on the licite trade for lemons and avocados.
The energy controversy has increased tensions and some businesses have found it easier to continue to import products and parts from Asia, despite the longer distance.
Officials have not provided any timeline for when the energy dispute could be resolved. In July, the Biden administration said it believed Mexico’s action violated the terms of the United States-Mexico-Canada Agreement, which went into effect two years ago and prohibits members from discriminating against businesses. each other’s. Canada later joined the United States in saying that Mexico’s actions violated the agreement.
If the dispute is not resolved by early October, the United States, under the trade agreement, is allowed to request a panel of commercial and legal experts to review the matter. And if the panel comes up with rules in favor of the United States, American officials say they could impose tariffs on Mexico, even though their goal is to resolve the dispute before that time.
Maria Abi-Habib and Oscar Lopez contribution report.
