The presidents of Mexico, US, and Canada met in Mexico City on 9-10 January at the 2023 North American Leaders Summit, popularly known as the “Three Amigos Summit”, to discuss diplomacy, politics, and trade between the North American nations. The summit, which was last held in 2014, covered the war on drugs, illegal immigration, environment, inflation, health, and wealth distribution.
Relations between the three countries have been strained in recent years after former US President, Donald Trump, criticised the North American Free Trade Agreement (“NAFTA”) as “the worst agreement the US ever signed”, Mexico was accused of protectionist energy policies and the US was criticised for favouring domestic automotive suppliers.
It didn’t start well – critics immediately jumped on the fact that Biden flew into the new Felipe Angeles airport, AMLO’s pet project that is still without international certification, and in a context in which Mexico’s air safety rating has been downgraded for almost two years. Consequently, many analysts predicted a further deterioration of relations but in fact expectations were exceeded. One political analyst in Mexico commented, “The summit was a representation of the real interests of the three countries in the face of two realities: the three countries need each other over and above their natural differences, and two, it is a strong message against the false policy of Trump and his movement that the United States can solve its major problems on its own.”
“The three countries need each other over and above their natural differences.”
Political analyst, Mexico
President Justin Trudeau said that the three parties were renegotiating a better deal which, according to the US President Joe Biden, will include significant investment in supply chains, chip fabrication, and critical minerals like lithium to build technologies of the future in the region.
The objectives for each country were clear, according to a former Mexican NAFTA negotiator, “Mexico, wanted to take advantage of nearshoring and to appear open to dialogue beyond AMLO’s domestic radicalism; the US wanted security over its vital interests in migration and security, and Canada wants to guarantee its investment interests as well as its energy agenda in Mexico.”
Concessions will need to be mutual if the new trade agreement between Mexico, US and Canada (“T-MEC”) is to have any chance of success, according to the former negotiator: “Biden and Trudeau, anticipating AMLO’s exit in 2024 came to sow a clear message with any potential successor, who at present is likely to be from the same political party as AMLO. Mexico knows that it must rethink its relationship with the business and energy sectors and that Mexico’s strategic commercial interests lie to the North even if cultural interests lie to the South. Meanwhile, Mexico made it clear that in the face of Asian and European competition in several strategic industries, the US must work more closely with its North American neighbours.”
“Biden and Trudeau, anticipating AMLO’s exit in 2024 came to sow a clear message with any potential successor, who at present is likely to be from the same political party.”
Former NAFTA negotiator, Mexico
What industries are set to benefit? “Without hesitation, the biggest beneficiary will be the Mexican automotive industry,” explained the former Mexican NAFTA negotiator, “and it will start from a new reality: vehicles are no longer Mexican, nor from Detroit or Canada, they are North America.”
Elsewhere, the future is bright for Mexico’s semiconductor industry, a seasoned sector executive explained, “COVID highlighted to political powers that less than 20% of the world’s semiconductor capacity is in North America. Dependence on South Korea and Taiwan seems unwise given the current geopolitical tensions surrounding both countries and this exposure is forcing educational institutions in the three North American countries to strengthen their knowledge of chips and electronics. The process will not be immediate, but it has already begun in addition to new South Korean investments in the southern US states. The effect will spill over to all three countries and that is a victory for the region.”
The other major issue on the table was immigration and the nature of the relations between the three North American states continues to have a significant impact on Central America. For example, in a recent agreement, with the aim of limiting the activities of human traffickers, the US will offer legal status to 30,000 people per month from Cuba, Haiti, Nicaragua, and Venezuela.
“North America’s Achilles’ heel is the movement of people,” explained a migration expert in Washington, “and sooner rather than later we need to fix the problem. The US economy needs migration, there is a shortage of men and women for various jobs, and there is plentiful supply of workers wanting to enter from the South. It seems like there should be a way to formalise this.”
“North America’s Achilles’ heel is the movement of people and sooner rather than later we need to fix the problem.”
Migration expert, Washington DC
In the American hemisphere, the division between the North and the South, now captained by the return of Lula in Brazil, is growing stronger. Erratic governance in the South could provoke more undocumented migration to the North placing further migratory pressure on Mexico. Including Central and South America in this immigration matrix is one of the greatest challenges facing North America as leaving the region alone will create a gap for dictators like Daniel Ortega and wild populism.