US, Canada, and Mexico Summit Discusses Establishing US Electric Vehicle Manufacturing Base

[Asia Economy Reporter Yujin Cho] Amid the ongoing supply chain restructuring following the COVID-19 pandemic, Mexico is rapidly emerging as the United States' new manufacturing base, replacing China. In this context, a North American leaders' summit involving the United States, Mexico, and Canada is set to take place. Alongside bilateral talks between the U.S. and Mexico, attention is focused on whether concrete discussions related to building an electric vehicle manufacturing base will be held in addition to the usual agenda of strengthening economic and military cooperation.

According to the Associated Press on the 8th (local time), Mexican President Andr?s Manuel L?pez Obrador announced that from the 9th to the 10th, he will host U.S. President Joe Biden and Canadian Prime Minister Justin Trudeau in Mexico City for the trilateral summit and bilateral meetings.

President Biden will become the first U.S. president in 10 years to visit Mexico. Before attending the summit, Biden visited El Paso, Texas, a border city, in the afternoon to inspect illegal immigration enforcement and receive reports on drug trafficking.

On the afternoon of the 9th, President Biden will arrive at the National Palace in Mexico City and begin the meeting schedule with a dinner. John Kirby, White House National Security Council (NSC) Coordinator for Strategic Communications, expressed hope that the summit will "expand the competitiveness of the North American economy and promote inclusive growth and prosperity."

U.S. President Joe Biden stopped by the Texas El Paso border on the 8th (local time) before his visit to Mexico City to directly observe the situation of illegal immigrants. This is President Biden's first visit to Mexico since taking office. [Image source=AP Yonhap News]

The AP reported that the issue of establishing an electric vehicle manufacturing base, a key agenda for President Biden, is expected to be a major topic at the summit. Following the announcement of the U.S. Inflation Reduction Act (IRA), American automakers have been expanding new electric vehicle production bases in Mexico and other locations, and it is anticipated that incentives may be discussed during this meeting.

As Mexico, geographically adjacent to the U.S. and with lower labor costs, emerges as a beneficiary in the supply chain restructuring process, trade volume between the two countries is rapidly increasing. As of the end of October last year, the cumulative value of U.S. imports from Mexico was $380 billion (approximately 479 trillion KRW), ranking third after China and the European Union (EU).

Regarding one of the U.S. government's biggest challenges?illegal immigration from Latin America?attention is also on Mexico's response to President Biden's recent announcement to expand the so-called 'Title 42' policy, implemented during the Trump administration to curb migrant caravans. Additionally, there is interest in whether concrete measures will be devised to combat drug trafficking, including fentanyl, which causes over 100,000 deaths annually in the U.S.

The Mexican government officially denied any connection to the summit. However, recently, the son of 'El Chapo,' the drug lord and de facto leader of the Sinaloa Cartel, one of the main fentanyl suppliers to the U.S., was arrested following a large-scale operation by Mexican military and police forces.

Mexico's policy to strengthen protection of its domestic energy companies, which has led to disputes over potential violations of the United States-Mexico-Canada Agreement (USMCA), remains a difficult topic to reconcile.

The Mexican government is promoting policies favorable to the state-owned oil company PEMEX and the state-owned electricity company CFE, which mainly rely on fossil fuels, under the rationale of protecting domestic industries. This has caused strong opposition from U.S. companies heavily invested in Mexico's energy sector.

Canadian Prime Minister Trudeau also stated ahead of the meeting, "President Biden and I will clearly convey to the Mexican president that compliance with energy trade rules helps attract foreign investment in Mexico."

The North American leaders' summit began in 2005 during the administration of U.S. President George W. Bush and was held every one to three years until 2016. It was suspended during the Donald Trump administration due to friction with the two countries but resumed in November 2021, five years later, after President Biden took office.

This content was produced with the assistance of AI translation services.