President Joe Biden traveled to Mexico on Sunday night and spent Monday meeting with Mexican President Andres Manuel Lopez Obrador. On Tuesday, Biden will attend the summit of North American leaders with Obrador and Canadian Prime Minister Justin Trudeau.
Why do these meetings matter, and what will the leaders discuss? Mateo Haydar, a research assistant on Latin America in the Douglas and Sarah Allison Center for Foreign Policy Studies at The Heritage Foundation, says the immigration crisis and “record numbers of fentanyl deaths” will likely be front and center in the conversations among the leaders. (The Daily Signal is the news outlet of The Heritage Foundation.)
Haydar joins “The Daily Signal Podcast” to explain three of the biggest issues Biden should address with Mexico’s Lopez Obrador and to offer his analysis of the likely results of the meetings.
Listen to the podcast below or read the lightly edited transcript:
Virginia Allen: Mateo Haydar is a research assistant on Latin America in the Douglas and Sarah Allison Center for Foreign Policy Studies here at The Heritage Foundation. Mateo, thanks so much for being here today.
Mateo Haydar: Thank you so much for having me.
Allen: So, we’re hearing a lot about [President Joe] Biden this week. Biden is experiencing a lot of firsts. Of course, he traveled to the border for the first time during his presidency on Sunday, and then he took his first trip to Mexico as president that night, and is still in Mexico. So talk a little bit about what some of these central issues are that Biden is discussing, first off, with the president of Mexico.
Haydar: Yes, Virginia. As you mentioned, top line, obviously, for American interests in the summits—first of all, you mentioned that these are technically annual summits that occur. And it is a great question to ask, what exactly should be coming out of these summits, or whether their importance merits or matches the outcomes, whether expectations match the outcomes, because as we saw, for example, last year, it actually took a bit over a year. So, it was in the fall of 2021, was the last time we had the summit, and little came out of it.
We’ve seen, unfortunately, AMLO [Mexican President Andres Manuel Lopez Obrador] run circles around the Biden administration. Ad I would add, in [Canadian] Prime Minister [Justin] Trudeau’s case as well, their hands appear to be tied for a lack of a strategy, in response to a number of issues that we’ll talk about.
But going back to your first question, top-line American interests in these summits, and in any engagement with Mexico, obviously, the border crisis that is ongoing, but now we’re seeing the White House trying to shift gears in terms of rhetoric and seemingly strategy. But the policies remain the same and are likely to remain, in broad scale, the same, and we can talk about that.
Fentanyl, obviously, going through the border. So it’s not just an immigration crisis, but we’re seeing record numbers of fentanyl deaths, as we know well. And that is an issue that appears to be coming up in the plans for the conversation. But again, no plan has come out in terms of shifting gears on policy to crack down on fentanyl.
We can talk a little bit about the mechanics of the issues there, the looming elephant in the room on fentanyl that everyone appears to be overlooking, which is China, and the predominance of Chinese companies in the fentanyl trade going through Mexico, using Mexico as a transit route. And there’s other security issues there, like illegal fisheries.
Obviously, Mexican drug cartels are a threat to U.S. sovereignty and national security. It’s a multibillion-dollar industry that they have managed to carve out from Biden’s border crisis.
And trade, I would add, Virginia, is the last big point, where again, the United States unfortunately is not taking up its seat and its place with the Biden administration in regards to Mexico and Canada on trade. We can get more into the weeds of that, but we’re basically—they’re eating our lunch here on a number of sectors, and these are U.S. citizens and U.S. capital that’s on the line. And so we can get into the weeds of that.
1. Border and Fentanyl Are Key Conversations
Allen: Thank you so much for laying that out. I want to start with talking about the border. Obviously, as we have mentioned, President Biden was at the border on Sunday. That was his first trip. He goes right from the border down to Mexico, hopefully with a slightly, slightly better understanding of what exactly is happening at the border, what is the situation. And you mentioned fentanyl and that discussion taking place with the Mexican president, of how do we actually get this situation under control.
What are the kinds of conversations that are happening, do you think? These are happening behind closed doors, so obviously, we’re somewhat speculating here, but what are the kinds of conversations that the president is having with the president of Mexico to say, “OK, this is a massive issue, the amount of fentanyl that’s flooding from Mexico across the American border”? What are the strategies that they could be looking at to say, “We need to crack down on this and this is how we can work together to actually get this situation under control”?
Haydar: Right. So the problem, again, is that we’ve fallen into this cycle of security task forces and several engagements with the AMLO administration since the beginning of the Biden White House on this. But there has been no shifting of gears in terms of what the policy is to crack down on the numbers, different strategies to look at, particularly at transit through the border.
We know that fentanyl gets through the border in different ways and in a lot more sophisticated ways often than we see with other drugs that are carried in with bags, for example, when migrants or illegal aliens, in many cases, have to walk through the border. They basically, they pay a fee to the smugglers, and the fee is lowered or the benefits that they have increase in some way carrying a bag, or we see other ways of smuggling directly that the cartels operate themselves.
With fentanyl, we see a number of ways. We see it basically incorporated or hidden in other legal drugs. We see a rising number of American citizens, actually, driving through the border with fentanyl.
And so the issue here that Biden needs to be raising is, one, that this is a top-line priority for the administration, and that it is willing to put other things on the line to crack down, and to make sure that the Mexican government and its wide toolkit of law enforcement is being offered, and that they’re also putting resources on the line here because there’s a responsibility there that they carry. And so that needs to be the message that is sent.
Again, the other big message is China. You cannot crack down on fentanyl without having the Mexicans also take steps to crack down on the Chinese companies that provide the precursors on the transnational criminal component, also backed by the Chinese Communist Party specifically, that operates in Mexico, that also is widely predominant in the illegal fisheries camp as well. And there’s a potential triangulation there with fentanyl.
And so to not talk about China in these meetings, which we’ve seen in the past, totally ignores a large part of this problem. And again, we’ve fallen into providing these cosmetic solutions, or letting it be handled at a technical level between agencies, but there isn’t a plan that’s being rolled out of the White House, for example, that elevates this as a national security threat that it is.
Allen: I think that’s really fascinating, what you mentioned about China, and the fact that if China is not talked about during this summit, that’s going to raise a lot of red flags. And I do want to talk a little bit more about China in just a moment. But while we’re on the issue of drugs and cartels, I do think it’s really important to mention what happened shortly before Biden’s visit to Mexico, that the son of the drug lord El Chapo was arrested by authorities in Mexico.
Why exactly was this a significant move? And is this a sign, with Mexico saying, “OK, we’re going to arrest this individual who is highly involved in the cartels, who’s highly involved in the trafficking of fentanyl, we’re arresting him,” does that indicate an actual shift in the Mexican government starting to crack down on cartels, or was that more a gesture of goodwill just toward Biden and we might see this drug lord released just maybe even days after Biden leaves?
Haydar: I think it’s nail on the head with your comment there, Virginia, because if you look at the record of AMLO in Mexico on this in particular, first of all, there’s huge concerns that also are often ignored in these summits about the influence and power of Mexican drug cartels, the largest drug cartels in particular as operators in agencies of the Mexican state, in Mexican politics, as being seen as carrying a large influence over the AMLO administration, frankly, in many ways. And so there’s also no strategy there to at least to mitigate that and its effects on U.S. sovereignty.
Huge concerns, for example, with the Mexican Institute for Migration, that is responsible for handling the flow of illegal immigrants going through Mexico northbound to the United States. Huge concerns there and reports that have come out where Mexican drug cartels play a direct role in these agencies, where these agencies operate, in some cases, or units of these agencies, components of the larger force operate as cartels of their own for smuggling and trafficking. And so that’s an issue that often isn’t raised.
But to your point about the news of the week with the son of El Chapo, Ovidio Guzman, this is part of an ongoing saga where AMLO has shown … basically where he falls or at least the disastrous effects of his policy on security and on cracking down on these threats.
We saw this in 2019 when the son of El Chapo, the same individual that was captured this week, was actually captured by Mexican forces and then released because the Sinaloa Cartel basically launched war in Culiacan against Mexican law enforcement, and basically they caved and released him.
Now they’ve recaptured him. We saw a similar, though I would say perhaps less effective and less extensive, deployment of violence by the Sinaloa Cartel in Culiacan, but that’s not to basically to reduce the importance or to mitigate the importance of the events in the last few days, and to underestimate anything that occurred. But we saw, again, a similar show of force.
Despite the fact that the AMLO administration has actually deployed a media effort to try to explain that this isn’t a gesture to Biden, that this is more than that, there’s no coincidence here that in the same week where Biden is preparing his first visit to Mexico, that this is basically waged as a bargaining chip on the table that the Mexicans can use as the United States prepares a case for extradition, to request extradition of this individual.
The Biden administration needs to make clear here that this is not negotiable, that this is an individual that, like his father, follows a similar trajectory and has a similar record, and therefore the United States is not in a position to have to leverage or basically have to try to negotiate with the Mexicans on a request for extradition that is mutually beneficial for the United States and for Mexico.
There’s bigger issues here on the table. And you’re right, it is a lingering question as to what will happen if the extradition case does not go through. But I think the administration needs to be clear there … and also using media efforts to make this clear to the Mexican public. There’s a huge public diplomacy component that we often underestimate in these trips, especially for the local population.
To give you another example there, for example, Biden and Trudeau landed this week in a New Mexican airport in the outskirts of the capital that AMLO recently launched. It was a very controversial project, for a number of reasons, and controversial within the Mexican populace. But what you saw with that small detail of the itinerary is a subtle endorsement that AMLO tried to secure for a local project from the president of the United States.
And so you’re seeing a potentially similar situation on the security front with the son of El Chapo and Biden should leverage that to ensure, one, that again, that the extradition goes through, and two, that this doesn’t have some kind of effect on the United States’ ability to leverage other security issues on fentanyl, and again, the dynamic industries that the cartels are profiting from based on open border policies.
2. North America’s Economic Relationship Takes Center Stage
Allen: And with the summit of North American leaders kicking off today, we have Biden, and Obrador, and Canadian Prime Minister Justin Trudeau sitting down. We know, and as you have mentioned, one of the conversations that they’re going to be having is around economics, is around trade and those issues. What would you like to see them address and talk about? And what do you think are some of those likely economic issues that they’re going to say, “We have to talk about this”?
Haydar: So, this has also garnered a lot of attention, especially from those following Mexico, at least in the last year. And it’s another point, Virginia, where AMLO has leverage here, without need, because the United States is in a position to leverage tariffs and other points there on the diplomacy front and in the highly dynamic economic relationship with AMLO, as we saw, for example, with the Trump administration that leveraged tariffs on AMLO to see cooperation and results follow, on immigration and on trade, with the USMCA.
Now what we’re seeing, unfortunately, is AMLO, basically, in his pursuit of an ideological agenda, domestically waging war on U.S. investors, particularly in the energy sector, in a number of agricultural commodity sectors.
We’ve seen tariffs that have been raised and that are expected to follow also in the next few months in 2023. We’re seeing an outright protectionist policy, not even for Mexican industry, Virginia, but for the Mexican state, to take over large sectors of the energy industry, of electricity and oil in particular are the two big sectors at play here, at the expense of domestic and foreign investors, importantly here from the United States and Canada.
And so all of this in many ways to fund AMLO’s domestic social agenda, as he builds a political base for the long term here.
We’re seeing here another issue, for example, on the energy front, in particular is AMLO is expected to request that the Biden administration provide funds here or release funds through development banks, where the United States has leverage, for state-run clean energy projects, or so-called clean energy projects in Northern Mexico.
Again, to subsidize the Mexican state in this case, as it wages a trade war essentially, or a one-sided trade war against U.S. investors and U.S. citizens, in this case would totally undermine broader U.S. interests and is totally one-sided. There would be no result that comes out of that, other than to keep pushing an ideological agenda.
But again, we can’t underestimate just the impact of this for major U.S. trade interest. This is a top-three trading partner for the United States, and especially with investors and American companies along U.S. border states that are highly affected by this in the oil sector and others, we need to see a reversal of policy by AMLO, basically providing guarantees to U.S. companies that the Mexican bureaucratic apparatus won’t be used against them by the way of circumventing Mexican law to overregulate, to basically not provide licenses and permits, and to stop them from operating in these sectors.
The looming question here in terms of President Biden and Prime Minister Trudeau is whether they will move forward with using USMCA-prescribed protocols to take action against AMLO’s clear violations of the USMCA and violations, quite frankly, of Mexican law in some cases against American investors. But again, that has been slow-rolled for over a year, in large part because of the immigration issue.
And so basically the perception there is that the Biden administration, to secure some kind of cooperation from AMLO on immigration, even though that clearly isn’t reflected in the overall numbers, he has basically been willing to delay any action on the Mexican state’s intervention here on trade.
We may see that change, again, going into a new year post-midterms. But again, there hasn’t been a clear message sent here that this is another top-line concern and that the United States, again, is willing to leverage tariffs as well or the tools at its disposal, basically, to show that we’re the bigger player that we are here.
3. A Crackdown on Trade With China?
Allen: Mateo, we’ve heard that there are expectations that these leaders are going to talk about how North America can start to cut back on its dependence on China, specifically in relation to this issue of trade. Do you have any expectation that there will be some sort of concrete solution that these three leaders come to some sort of strategy of how they are going to strategically cut back on trade with China?
Haydar: Yeah, there are a number of avenues, Virginia, that they might take here. AMLO is clearly capitalizing on this as a concern within the American public, and as part of the debate in the United States on the China front, basically to make requests of the Biden administration, particularly, as I mentioned, on the clean energy front.
And he’s framing that as a China competition angle, interestingly so. And also on support for semiconductor, supply chain, near-shoring, and reshoring, and for basically finding a way to plug Mexico into the shift of supply chain development for semiconductors stateside, which we’re seeing a push from the Biden administration and from Congress in particular on this issue.
They may find a way, again, to develop some kind of formal agreement within the USMCA framework, or they may be pushing for some kind of subsidy also, again, to plug Mexican industry into this trade and to expand overall investment on semiconductors within Mexico.
The concern here is, again, that AMLO doesn’t make a request that follows through, particularly if it’s costing the U.S. taxpayer dollar, and particularly, also, if there’s alternatives that are more cost-effective and still within the parameters of the top-line concern of U.S. national security, whether that’s reshoring here at home or finding other partners in the region that may be more cost-effective.
Mexico is well-positioned to benefit from the shifting of supply chains from China, again, as a top-line option there for cooperation on the China front. The issue here, again, has been AMLO’s policies on the domestic front.
So if there aren’t any guarantees for U.S. investors on this front, what we don’t want to see is the Biden administration release some kind of plan that subsidizes the Mexican state here in some way without instead, one, looking out for U.S. investors, as the partner of choice here, but also ensuring that the AMLO administration is providing guarantees of reforms and on the legislative side, but also on the regulatory front, to ensure that investors are in a market-friendly environment to compete and to know that the rules of the game won’t be changing every one or two years.
So that’s the biggest challenge there in terms of economic composition with China.
There’s other issues at play, again, that often get overlooked, and that shouldn’t. I mentioned illegal and unregulated fishing as a huge issue also for Mexico. Huawei and telecommunications as a sector and digital transformation efforts that China is pushing all over the region, Mexico is no exception, and there’s a bigger risk there with Mexico because of … the size of its market, but also its proximity, obviously, to the United States.
If you look at other instances of U.S. great power competition and of looming threats from the Soviet Union and others in the past, they have looked to Mexico as a hub for espionage and for intelligence gathering. And so that shouldn’t escape the conversation in terms of considering the advances on the telecommunications front with Huawei projects. And again, on our end, having some kind of an alternative that is considered in these projects and that is, again, at least discussed by the president of the United States as a sign of leadership.
Allen: Well, Mateo, it’s going to be really fascinating to see what are the actual end results that come out of this summit and what are the steps that the president of the United States, of course, and of Mexico, and the prime minister of Canada actually take as a result of this. But Mateo, we really appreciate your time today. Thanks so much for joining us.
Haydar: Thank you, Virginia.
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