What to expect as Trudeau meets Biden, López Obrador this week

The North American Leaders’ Summit has become bigger and more formal since the original meeting of the “Three Amigos” when US president George W. Bush hosted it in Texas in 2005.

While President Andrés Manuel López Obrador hosted US President Joe Biden and Prime Minister Justin Trudeau on his home turf in Mexico City this week, the global threats facing these regional partners are also increasing.

NALS (rhymes with “gals”) – an acronym diplomats and stakeholders use for this sometimes irregular but now revived and recurring meeting of regional allies – now feels more business than chummy. That is partly driven by the politics of personalities at the table, but also because the current challenges require it.

“I will never use the Three Amigos again,” said Carlo Dade, director of the trade and investment center at the Canada West Foundation, who also specializes in Latin American policy and is a member of Mexico’s Council on Foreign Relations. “I think it’s a subtle indication of a change … a little more formal, a little more calm.

“You always have a close relationship with a relationship that you throw away when [Donald] Trump is in,” Dade said, referring to how former US presidents have avoided this summit and often blamed Mexico for America’s problems.

When Trump was replaced by Biden, protectionist policies remained in Washington. López Obrador was swept into office in 2018 on his own wave of nationalism, and now needs to cement his legacy as the latter half of his six-year term comes to an end.

“He’s a Trumpian populist,” Dade said.

Domestic politics vs global challenges

Even under the warm Mexican sky, this January gathering of neighbors and business partners doesn’t look as bright as it used to.

But if it’s colder and more calculated, what’s the problem – especially for Canada and its integrated economy?

“It’s not about that [warmth]about seriousness,” said Amy Porges, a trade attorney in Washington who has watched the trade file evolve over the decade since the North American Free Trade Agreement (NAFTA) took effect.

“Canada always takes the United States more seriously than the US takes Canada… [and] for López Obrador, domestic politics is everything.

Porges said the populist Mexican president wants to reverse the decisions made by his predecessors that integrated Mexico with the U.S. economy. Meanwhile, the US needs Mexico’s cooperation on its supply chain.

“Competition with China is the No. 1 issue for the Biden administration at this time,” he said.

In a briefing at the Wilson Center in Washington, DC, on Friday, Brian Nichols, US assistant secretary of state for Western Hemisphere affairs, suggested that America will announce more details as the Indo-Pacific Economic Framework for Prosperity develops.

The multilateral dialogue with its 13 trading partners does not — at least initially — include Canada or Mexico, leading some to wonder why North American trading partners are not in the conversation about regulatory harmonization and more integrated supply chains.

Dade thought America might reconsider.

“They have to win. They have to stay motivated. Canada is there, like a little kid in junior high school who wants to sit at the lunch table the cool kids are finally allowed in. And Mexico is also upset that they ‘ t included,” he said.

On the other hand, Canada and Mexico want to maintain the privileged US market access they enjoy. Neither Canada nor Mexico insisted on requests in the last month from Costa Rica to pursue membership in the North American trade agreement.

“The Three Amigos Club suddenly became three amigos again when you talk about allowing Ticos [Costa Ricans] or else to NAFTA,” he said.

Trudeau’s challenge: getting attention?

Louise Blais, a former Canadian diplomat who now works with the Business Council of Canada, noted in a separate media briefing on Friday that Biden’s summit appearance is set among his first visits to the Mexican border this weekend, to amplify the administration’s latest push to regulate. migration, and key talks in Washington on Wednesday with Japanese Prime Minister Fumio Kishida, as US-Indo-Pacific (read: China) priorities evolve.

“The goal for Canada is to carve out attention and a place at this summit,” Blais said. Among Canada’s priorities, Blais said he is “hopeful” about the resolution of the energy dispute with Mexico.

In the top priorities of the White House preview on Friday, Mexico was more often than Canada.

John Kirby, National Security Council coordinator for strategic communications, was asked whether Mexico’s new discrimination against foreign investors in the energy sector could be escalated or resolved in this week’s talks. He said he didn’t want to go ahead of Biden, but “obviously trade issues will be on the agenda.”

In an interview with Reuters on Friday, Trudeau said he “absolutely” hopes to make progress on this energy issue. While the nationalization of Mexico’s energy grid remains a priority for López Obrador, the country needs foreign capital, especially to switch to cleaner technologies and meet some of the Mexican government’s climate goals.

If Mexico’s president refuses, Canada could join the US in requesting a panel investigation under the revised NAFTA dispute resolution process, known in Canada as CUSMA.

This will add another file to the pile that already includes 17 other disputes that started in the last two years between the three partners, because the revised agreement includes ground that was not included in the original NAFTA, such as milk trade and labor rights.

In other respects, trilateral talks may not be a trade summit, although economic integration is a clear shared interest. The list of attendees does not include Biden’s trade representative, although the trade ministers of Canada and Mexico will be there, along with the foreign ministers of the three countries, who are holding their own discussions.

The list of top priorities released by Mexico’s foreign office talks about “diversity, equality and inclusion, the environment, competitiveness with the rest of the world, migration and development, health and shared security.”

Dade believes the “equity and inclusion” agenda will include creating opportunities for Indigenous people.

“It’s a fraught problem in every country, for various reasons: different history, different approaches. But each government has a new commitment to seriously address this problem,” he said.

Autos report is on hold again

One sign that the leaders do not want to talk too much about the trade dispute: the anticipated report by the panel on how the content of North America is calculated in the automotive sector was not released before the summit, although all three countries already have it. from December 28.

In some loose talk reported last month, Mexican officials announced that US arguments for a stricter definition had failed to persuade the panel. But the exact reason has not been made public, giving leaders an easy way to avoid questions about it this week.

“With a summit like this, what you want is harmony and good feelings… you want friendly photos of leaders shaking hands. You don’t have to be in conflict,” said trade lawyer Porges.

Automotive companies in the three countries will welcome this panel report, as they want greater flexibility for their supply chains as they compete globally, he said.

In other words: what appears to be a political loss for the Biden administration can help reduce costs in the sector, and this is a win for consumers.

Canada and Mexico have found common ground as they try to block American protectionism in the automotive industry. Both prefer to partner rather than compete with the US Treasury as they offer subsidies and rebates for cleaner technologies.

But Dade is not convinced that it is in Canada’s interest to align with Mexico – the two countries are also competing for new investments in electric vehicles and critical minerals, for example.

“Do we have solidarity?” Dade asked rhetorically. “And if you’re Trudeau, you can trust him [López Obrador]?”