White House 3-Way Summit With AMLO, Trudeau Is First Since 2016
(Bloomberg) -- The leaders of the U.S., Canada and Mexico will hold their first in-person meeting since President Joe Biden’s election on Thursday, with skirmishes looming over energy and trade as the nations emerge from the pandemic.
Biden will host Canadian Prime Minister Justin Trudeau and Mexican President Andres Manuel Lopez Obrador at the White House for what’s called the North American Leaders’ Summit. Pandemic-related border restrictions have recently begun to ease among the nations, but some hurdles remain, such as the risk of overheating economies, supply chain logjams and vaccine and testing rules for cross-border movement.
The three countries’ leaders haven’t held a formal summit since 2016, when Trudeau hosted then U.S. and Mexican Presidents Barack Obama and Enrique Pena Nieto.
Fights over tariffs and a rewrite of the North American Free Trade Agreement loomed large during former President Donald Trump’s term in office. The mood at Thursday’s meeting will be more conciliatory, but domestic pressure on Biden as well as Trump-era policies he’s continued are straining ties. The leaders won’t hold a joint press conference.
Here are some of the topics they’re sure to discuss during the trilateral meeting and a series of one-on-one sessions.
Auto manufacturing has long been both a pillar of the continental economy and a thorn in cross-border relations. That hasn’t changed.
Biden teed up the summit with a trip to Michigan on Wednesday, where he visited a General Motors facility making electric vehicles. North America’s auto sector is a closely integrated supply chain spanning the three nations, and EV subsidies are poised to be a fresh battle front.
Biden has proposed offering a tax credit for the purchase of electric vehicles made in the U.S., which Canada and Mexico have both warned risks a dispute under the trade accord Trump signed.
“The United States wants to incentivize electric cars, through a subsidy of nearly $14,000 dollars,” Mexican Economy Minister Tatiana Clouthier said in an interview.
“We consider that to go against not only the USMCA but also the World Trade Organization,” she said, using an acronym for the U.S.-Mexico-Canada Agreement that replaced the North American Free Trade Agreement.
Trudeau said Wednesday in Washington that Canada was “concerned” that Biden’s plans would hurt the continental auto sector. Deputy Prime Minister Chrystia Freeland of Canada said the incentive would violate the USMCA and “has the potential to become the dominant issue in our bilateral relationship.”
The White House shrugged off the complaint. Spokesman Chris Meagher said: “There’s a history, a long history of using tax credits to incentivize choices, and that’s true here.”
Meanwhile, Mexico is disputing how vehicle manufacturing shares are calculated across the three countries. The U.S. is said to be insisting on a stricter interpretation of new minimums that need to be met for a car to be traded duty-free. Mexico has sought consultations and is now free to seek a formal dispute panel on the matter. It will decide by December whether to do so.
Facing political pressure to ease rising energy prices, Biden has potential disputes with each U.S. neighbor.
AMLO, as the Mexican president is known, is a nationalist who has vowed to return Mexico’s state-owned oil company, Petroleos Mexicanos or Pemex, and electricity utility CFE to their former glory by scaling back private sector participation in the industry. U.S. lawmakers have complained that his latest proposal for a constitutional reform would hurt private energy giants.
The electricity reforms will be discussed, U.S. officials said during a briefing, speaking on condition of anonymity ahead of the meeting. But Mexican Foreign Minister Marcelo Ebrard said Wednesday it won’t be a central topic of the trilateral talks. American and Canadian companies are “deeply concerned” about the changes, according to a joint letter to the leaders from chambers of commerce in the three countries.
One of Biden’s early acts as president was to kill the Keystone XL pipeline from Canada -- a project Trudeau backed. The countries are now at odds over the Enbridge Inc. Line 5 pipeline to Michigan, and the fate of a proposed expansion is unclear.
Biden has called on OPEC and its allies to produce more oil to cut prices, but his administration has taken steps to restrict continental production, either through domestic curbs or by slowing or axing major conduits for Canadian oil.
But Trudeau’s center-left government is walking a delicate political balance in supporting the energy sector while also advancing climate initiatives like capping domestic oil and gas emissions and pushing for a global carbon tax.
Biden reopened U.S. land borders this month to tourism, a key step to restore the flow of travel between the three countries. But restrictions apply, and Biden remains under pressure to stop undocumented migrants from crossing into the U.S. at the border with Mexico.
Migration will be discussed, but leaders will focus on a coordinated approach to regional root causes rather than measures at the U.S.-Mexico border, the U.S. officials said.
Trump pressured AMLO to help ward off crossers and to hold some asylum applicants in Mexico while U.S. claims were adjudicated. Biden is under pressure from Democrats to loosen Trump-era immigration policies, while Republicans criticize him for his more lenient attitude toward migrants.
Mexico appears poised to ask for more U.S. visas that would allow its nationals to work abroad temporarily, arguing that they would help fill labor shortages amid the economic recovery. Mexico also wants the U.S. to relax its Covid-19 vaccination and testing requirements for border crossings.
Trudeau appears poised to ease testing rules for Canadians who return from a visit the U.S., a key logistical hurdle for cross-border shopping and tourism. Trudeau said he discussed the issue with lawmakers in Washington on Wednesday and is “looking at taking steps to loosen up requirements,” with an announcement due in the coming days.
The world continues to face a shortage of vaccines while the U.S. enjoys a glut of supply. AMLO’s country trails the U.S. and Canada in vaccinations and he has previously appealed to Biden to share more doses.
The U.S. lent vaccines to its neighbors early in the pandemic, and Canada and Mexico will announce a deal to repay that by forwarding vaccines onto other needy countries, U.S. officials said. The pledge will be for millions of doses but exact totals and timelines haven’t been finalized, they said.
Mexico and the U.S. will discuss ways to strengthen continental vaccine production, Ebrard said. Biden has meanwhile pressured other nations to contribute more shots to the effort to vaccinate the world.
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