MEXICO CITY, Jan 9 (Reuters) – U.S. President Joe Biden and his Mexican counterpart on Monday aimed to strengthen economic integration, combat drug cartels and make progress in managing immigration, even as a clash over Mexico’s energy policies weighed on joint cooperation.
In opening remarks at the start of a US-Mexico bilateral meeting on Monday evening, President Andrés Manuel López Obrador urged Biden to deepen integration and investment in the region.
“Our continent has unparalleled conditions to launch a new policy of economic and social integration,” he said.
“The two will discuss how we can deepen our relationship not only with Mexico, but also with the Western Hemisphere. This includes strengthening our supply chains to make us more competitive,” Biden responded.
Biden emphasized the substantial aid the US provides to other countries in the Americas.
López Obrador is hosting Biden and Canadian Prime Minister Justin Trudeau from Monday to Wednesday for the first summit between the three since late 2021.
Earlier Monday, US National Security Adviser Jake Sullivan said Biden believed he would come out of the summit with “commitments for strong cooperation” to tackle the synthetic opioid fentanyl, which has caused thousands of US deaths.
Essentially, the plan is to reduce the amount of fentanyl being smuggled across the border by Mexico, two Mexican officials said.
Mexico last week arrested Ovidio Guzman, a key cartel leader wanted in the United States. A Mexican official said the weapons used by the Guzmán gang came into the country from US border states.
Talk of deepening economic ties comes even as disagreements over López Obrador’s nationalist energy policies, which led Washington and Ottawa to launch a formal trade complaint in July, continue.
Sullivan told reporters that subsequent consultations had identified “potential ways forward” on the crisis.
“But we’re not there yet,” he said. “And we’ll make decisions about next steps based on how things unfold here.”
López Obrador later said the trade agreement had proved a valuable tool for consolidating “production processes”, but continued growth in its Pacific ports with Asian goods, indicating the countries’ dependence on Asian industrial output.
“Can’t we produce in America what we consume? Of course, this is the definition and joint plan of our future development,” he said in a meeting with Biden.
With supply chains battered by the COVID-19 pandemic, policymakers have stepped up calls for firms to relocate business from Asia to boost the economy through the United States-Mexico-Canada regional trade agreement.
López Obrador has warned the United States with plans to ban imports of genetically modified corn. Mexico agreed to delay the ban until 2025, but the issue is likely to emerge. The three business partners also quarreled over the auto terms of origin.
“Trade tensions over vehicles, customs regulations, genetically-modified corn and Mexico’s energy policies are already high and could intensify,” said Jake Colvin, president of the Washington-based National Foreign Trade Council.
“To create a North American corridor to outpace China, the United States, Canada and Mexico must be on the same economic page,” he said.
López Obrador, a militant leftist, says his energy policy is a matter of national sovereignty, arguing that previous governments manipulated the market to favor private interests.
The United States and Canada say their institutions have been disadvantaged by López Obrador’s campaign to give control of the market to cash-strapped state energy companies, and the row has taken a shine from an investment perspective.
Trudeau told Reuters on Friday that resolving the energy dispute would help bring more foreign capital to Mexico and he was confident progress would be made.
As part of that drive, López Obrador — who turned down Biden’s invitation to a summit of the Americas in Los Angeles in June to protest the exclusion of the leaders of Cuba, Venezuela and Nicaragua — wants to discuss his plan to boost solar power. in northern Mexico and secure US financial support for it.
Mexico has urged the United States to give money to Central America and southern Mexico to boost development and curb migration from the long-impoverished region and make it easier for immigrants to get US jobs.
Christopher Landau, the US ambassador to Mexico under former President Donald Trump, said domestic politics meant compromises on energy and immigration were difficult to find.
“There’s no clear agreement that satisfies all of their domestic interests,” he said, “but I think it’s in all of their domestic interests to say they’re going to get along.”
Reporting by Dave Graham and Jarrett Renshaw Additional reporting by Andrea Shalal Editing by Chizu Nomiyama, Alistair Bell and Leslie Adler
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