Mexico works to preserve trade deal with US, Canada amid border tensions

Mexico is doing everything it can to protect a regional trade agreement with the U.S. and Canada, the Latin American nation’s deputy economy minister said in an interview published on Friday.

The three neighbouring nations, and major partners in commerce, have entered a trade tussle after U.S. President-elect Donald Trump threatened to slap tariffs on the countries to the north and the south if they did not clamp down on drugs and migrants coming into the U.S.

Mexico is working on both issues in order to “come to the table” to negotiate without obstacles, Luis Rosendo Gutierrez told outlet Inside U.S. Trade.

Since Trump’s tariff threat, Mexico has launched an offence on contraband goods from Asia coming into the country, and officials seized a record amount of fentanyl. They have also detained thousands of migrants, vowing to prevent them from making it north.

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In a statement issued late Friday, U.S. President Joe Biden thanked Mexican President Claudia Sheinbaum and the country’s military and law enforcement officials for seizing over twenty million doses of illicit fentanyl.

Mexican officials have been in touch with Trump allies, Gutierrez added, though they have not met with incoming administration officials. The exception is Jamieson Greer, Trump’s tapped trade representative, with whom Gutierrez met before his nomination.

Trump, as well as some U.S. industry leaders, have accused Mexico of being a “backdoor” to Chinese goods and investment, which Mexico has denied.

Screening investments

Mexico is looking to take a cue from the U.S., however, in screening investments coming into the country, Gutierrez said. Mexico is looking to develop a process similar to the U.S.’ Committee on Foreign Investment, he explained.

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When asked if that would affect Chinese automaker BYD’s plans to build a factory in the Latin American country, Gutierrez responded that Mexico wants “to play with the same rules” as its trade allies.

Trump had threatened to put a 100% tariff “on every single car coming across the Mexican border” in response to BYD’s plans, though the carmaker has repeatedly said its plant would serve the local market and not the United States.

Mexico is considering doling out incentives to draw manufacturing investments, Gutierrez said, suggesting Mexico could produce batteries that the U.S. wants to be made regionally.

Corn complications

Mexico is also awaiting the result of a dispute panel under the USMCA trade deal regarding Mexico’s restrictions on imports of genetically-modified corn.

Mexico will comply with the panel’s ruling even if unfavorable toward the nation, Gutierrez said. And depending on the outcome, Mexico will weigh whether it must make changes to a proposed constitutional reform that would bar the use of GM corn for human consumption, the official added.