North American Leaders Summit: Back to the Future

By Andrés Torres-Scott

Regional integration makes North America the world’s economic powerhouse accounting for a third of global GDP in 2022. This amount more than doubled in this century alone.

Mexico is still a rogue member of the USMCA (the free trade agreement between the US, Mexico, and Canada). It is still afraid to support Ukraine and condemn Russia while favoring a nationalist energy policy on coal and oil, even though it goes against the economic interests of the US and Canada.

Canada still keeps a position far away from Mexico. It declines to commit to any trilateral immigration position regarding the thousands of migrants stationed on the US-Mexico border. It treats drug cartel crime and drug trafficking as something from another world. Notwithstanding, these positions go against US and Mexican national security aims.

The US priority is still economic integration and taking advantage of Canadian resources and Mexico’s low wages. Furthermore, the US is willing to negotiate anything to keep the economic integration growing, even though it allows Mexico and Canada to maintain policies that distance them from a more robust political union.

What was the North American Leaders Summit About?

From Jan. 9 to 11, Mexico hosted the tenth edition of the North American Leaders Summit (NALS) between Mexico, Canada, and the US leaders. The first in-person encounter since late 2021 and the first after the COVID-19 pandemic. What was discussed in the meeting?

Economic integration derived from the USMCA

Nearshoring and the Mexican energy law were ready to be debated. Nearshoring means moving production and supply chains from China to Mexico, primarily based on political issues and a global rise in protectionism. Nearshoring took a boost in 2022 from China’s health crisis as the country cannot control the sixth COVID wave of the Omicron variety—an irrelevant issue in the West—; the European Union fears a cruel winter without Russian gas; and Putin’s war threatens to extend without a clear victory for any side.

Thanks to former President Trump’s tweets, the move of money from China to Mexico began as early as 2017. Still, it is now more significant as Mexico breaks foreign direct investment (FDI) records in a post-pandemic world that’s still recovering mode.

The Mexican energy reform was fostered by AMLO and took place in 2022. Although Mexico’s Supreme Court suspended it, parts of the law favor petroleum and coal before renewable energies.

Nearshoring practically dominated the agenda, so the leaders agreed on four essential points:

Establish an Import Substitution Committee to substitute one-quarter of imports from other regions—a Mexican proposal. North America will focus on productive and competitive supply chains to make electric vehicles, lithium and cobalt batteries, semiconductors, and chips.
Survey critical mineral resources jointly. Lithium, cobalt, nickel, and other “green mining” metals are used to produce renewable energy power facilities such as solar panels, EVs, and wind plants.
Build EVs charger stations across the border.
Not to discuss Mexico’s energy reform outside the established USMCA mechanisms and promote a market for hydrogen as fuel.

Security

Security cooperation was reframed in 2019 when Andrés Manuel López Obrador (AMLO) left aside the Mérida Initiative—a Mexico-US program— that ran since 2008 and provided Mexico with dollars and weapons to fight the cartels. A demanding position from Joe Biden concerning Mexico’s low success rate against the drug lords was expected. Still, the surprising capture of Ovidio Guzmán—the son of El Chapo—on Jan. 5 deactivated any complaints. However, deadly fentanyl keeps flowing from Mexico’s labs to the streets of North America.

The security agreements were innocuous and irrelevant:

Collaborating with the North American Drug Dialogue (NADD) to address illegal drug threats and strengthen public health approaches.
Developing the collection, storage, use, and exchange of air passengers’ name records (PNR).
Sharing information on cyber security best practices.

Immigration

The humanitarian crisis on the US-Mexico border needs new immediate dynamics, but they are not coming. Just on Thursday before the NALS, Biden announced in El Paso the US will admit 30,000 migrants per month, and that Mexico will keep another 30,000 arriving from four countries, these are Cuba, Haiti, Nicaragua, and Venezuela. Details on how Mexico would finance these new arrivals were expected during the NALS, as well as monetary US help. None of these came. Expect Mexican northern border cities to be crowded with immigrants that will not get any kind of programmed support from the state and not even get a change in their migrant status to be able to work or study in Mexico.

The NALS was different than expected. Security and immigration were ignored by the three leaders, and of course, nobody was expecting Canada to offer a hand in helping immigrants or fighting crime and drug trafficking, though Canadian politicians, academics, and media are constantly feeling sad about these two issues, as can be read on their national newspapers.

The only agreement was, again, as in 1994 when NAFTA began, on economic convergence. Not bad, but still, a more comprehensive political union is needed between the three states. Items such as a full customs union, trilateral working permits, a financial integration that facilitates individual transactions are needed, and an international police force or agreement to fight drugs such as fentanyl while simultaneously marijuana, peyote, mushrooms, and some amphetamines are liberalized, is due.

Andrés Torres-Scott is a public policy analyst and author. He has 25+ years of experience in public policy analyses and implementation having worked for the US Dept. of State, the provincial government of Alberta, Canada, and the Mexican federal government and Senate. Follow him on Twitter: @esandresmx