Mexico is making every effort to safeguard its regional trade agreement with the United States and Canada, according to the country’s Deputy Economy Minister, Luis Rosendo Gutierrez, in an interview published Friday.
The three neighboring countries, key trading partners, are currently embroiled in a trade dispute after U.S. President-elect Donald Trump warned of imposing tariffs on both northern and southern neighbors unless stronger actions are taken to curb drug trafficking and illegal migration into the United States.
In response, Mexico is addressing these issues to ensure smooth negotiations, Gutierrez told Inside U.S. Trade.
Since Trump’s tariff threats, Mexico has ramped up efforts to combat contraband goods entering the country from Asia and seized a record amount of fentanyl. Authorities have also detained thousands of migrants, pledging to prevent their journey northward.
Late Friday, U.S. President Joe Biden issued a statement thanking Mexican President Claudia Sheinbaum, along with the country’s military and law enforcement, for confiscating over 20 million doses of illicit fentanyl.
Gutierrez noted that Mexican officials have engaged with Trump’s allies but have yet to meet representatives from the incoming administration. An exception is Jamieson Greer, Trump’s nominee for Trade Representative, with whom Gutierrez held discussions prior to his nomination.
While Trump and some U.S. business leaders have accused Mexico of serving as a “backdoor” for Chinese goods and investments, claims Mexico has refuted, the country is taking steps to strengthen its trade defenses.
Screening Investments
Gutierrez revealed that Mexico is exploring a process similar to the U.S. Committee on Foreign Investment to better screen foreign investments entering the country, aligning its approach with that of its northern neighbor.When asked about the potential impact on Chinese automaker BYD (SZ:002594)’s plans to establish a factory in Mexico, Deputy Economy Minister Luis Rosendo Gutierrez stated that Mexico aims to “play by the same rules” as its trade partners.
Trump had previously threatened to impose a 100% tariff “on every single car crossing the Mexican border” in response to BYD’s plans. However, the automaker has repeatedly clarified that its plant would cater to the local market rather than exporting vehicles to the United States.
Gutierrez also mentioned that Mexico is considering offering incentives to attract manufacturing investments. He suggested the country could focus on producing batteries sought by the U.S. to bolster regional supply chains.
Corn Dispute
Mexico is awaiting the outcome of a dispute panel under the USMCA trade agreement regarding its restrictions on imports of genetically-modified (GM) corn.
Gutierrez affirmed that Mexico would adhere to the panel’s ruling, even if it is unfavorable. Depending on the decision, the government will evaluate whether adjustments are needed to a proposed constitutional reform that seeks to ban GM corn for human consumption, he added.
