Trade Facilitation, Semiconductor Supply Chain Prominent at US-Mexico Economic Dialogue

In a strategic meeting called a high-level economic dialogue, Mexico and the U.S. talked about ways to facilitate the movement of goods at the border and ways to use Mexico in a North American-centric semiconductor supply chain, officials said after the Sept. 9 meeting. Mexico could become a place for packaging and testing chips, Mexico's Economy Secretary Tatiana Clouthier said at a press conference at the Mexican Embassy.

The meeting was attended by the vice president, the commerce secretary, the secretary of state, the U.S. trade representative, the secretary of homeland security and other sub-Cabinet officials, along with Mexico's foreign secretary and economy secretary, as well as sub-Cabinet officials.

In a fact sheet released by the White House, officials said the dialogue is building on the 21st Century Border Management Initiative, and is seeking to improve land border crossing and marine port infrastructure, by "better understanding and expediting cross-border trade flows."

Clouthier said in Spanish that reviving the dialogue after a number of years was a very important step. She said they are seeking to take concrete steps on important priorities such as advancing a cross-border supply chain for semiconductors. She also said that ministers are working and fighting to strengthen commercial facilitation in various aspects. She said they talked both about using technology and infrastructure to facilitate trade and also to reform regulations to make them simpler.

In a press release, Mexico said that Clouthier and Commerce Secretary Gina Raimondo plan to "create a Bilateral Working Group on Supply Chains to identify areas of complementarity in new and existing chains, in order to maintain their proper operation in the face of possible disruptions, increase competitiveness, attract production lines from other regions in the world and reduce vulnerabilities in critical sectors.... They also agreed on the importance of having modern, efficient and safe border infrastructure and trade facilitation procedures."

In a press release from the office of the U.S. Trade Representative, Raimondo said, "The more our two countries become a seamless marketplace, the more competitive we will be globally." There will be another meeting in about three to six months, Foreign Secretary Marcelo Ebrard said. He also called this meeting a success.

Before the meeting, reporters asked senior White House officials if some of the commercial tensions that are addressed in the USMCA would be talked about, such as the halt on approvals of biotechnological agricultural products in Mexico, or the U.S. insistence on a stricter approach to auto rules of origin than Mexican negotiators thought they were agreeing to.

The auto rules of origin question was not on the agenda, the official said. "I think it's also right to acknowledge that, fundamentally, the [high-level economic dialogue] is not a dispute resolution mechanism. It's certainly a space for dialogue engagement and hopefully it helps to stave off any such, you know, issues from getting even bigger." Clouthier confirmed at the post-meeting press conference that the topic was not raised, saying that the dispute conversations were happening in another forum, and that this wasn't the place for that.

The Alliance for Trade Enforcement raised the issues of energy, biotechnology approvals and nutritional labeling requirements before the meeting. “It’s unfortunate that more than one year after USMCA was supposed to be fully implemented, Mexico is still not adhering to many of its provisions,” said Brian Pomper, Executive Director of the Alliance for Trade Enforcement. “Mexico’s actions impact a range of industries and put U.S. companies and workers at a disadvantage.”