US, Canada Raise Concerns About Investment in Mexico

Leaders from the US, Mexico, and Canada met in Vancouver for the second anniversary of the USMCA. During the meeting, representatives from the US and Canada shared their concerns about Mexico’s energy policies and unresolved labor issues, which they claim threaten investment in the country.

During the meeting, Mexican Economy Minister Tatiana Clouthier was joined by US Trade Representative Katherine Tai and Canadian International Trade Minister Mary Ng. The representatives from Canada and US have raised concerns about Mexico’s state-centered energy policies since March, claiming that those policies threaten foreign investment.

Tai also raised concerns about Mexico’s investment climate and its treatment of US investors, which she said “impacted manufacturing in the southeastern US,” according to Reuters. These criticisms focus on the energy policy of the government of Mexican President Andrés Manuel López Obrador, which limits foreign investment in the sector and favors state-owned companies. After the meeting, Tai commented, “I have made very clear that all options are on the table and that we will continue to explore those options,” when asked whether she would seek formal consultations with Mexico as a violation of the USMCA on trade. 

According to the International Chamber of Commerce (ICC), Mexico is one of the countries with the highest number of disputes involving companies and the government, specifically in the energy and infrastructure industries. To date, the disputed projects are estimated to be worth over US$30 billion, which led Mexico to review its energy policies in order to avoid international conflict, as reported by MBN. 

Canadian representatives also expressed concerns about investments but added some about Mexico’s process to approve biotechnological products. This concern comes after the Mexican government announced that by 2024 it would ban the planting of genetically modified corn and the use of glyphosate, a popular herbicide. Ng told Clouthier that Canada was committed to the full implementation of the USMCA and to working with Mexico to “maintain resilient supply chains, support stable and predictable trade, and enhance competitiveness,” as reported by Reuters. 

The next step is the meeting between US President Joe Biden, Canadian Prime Minister Justin Trudeau and Mexican President Andrés Manuel López Obrador in November 2022, which will be the second trilateral meeting between the leaders of the three countries in just over a year.