Dispute That Led to Mexico Seizing US-Owned Port ‘Not Unprecedented’: Expert

Trade agreements are written for issues like this, according to Villanova professor

Police stand guard at the port of Playa del Carmen, Quintana Roo State, Mexico, before the arrival or Tropical Storm Rina, on October 27, 2011. Hurricane Rina weakened Thursday to a tropical storm hours before it was expected to crash into tourist resorts dotting Mexico's Caribbean coast like Cancun and Playa del Carmen, US experts said. AFP PHOTO/RONALDO SCHEMIDT Photo credit should read Ronaldo Schemidt/AFP via Getty Images

The Mexican military has vacated a port in Mexico owned by Vulcan Materials Company of Birmingham, Alabama, according to a U.S. senator.

“I am happy to hear that Mexican governmental forces have now heeded our request to withdraw from Vulcan’s port facility, following a nearly two-week unlawful takeover,” Sen. Katie Britt (R-Ala.) said in a statement.

“There was never a legitimate reason for Mexican military and law enforcement personnel to forcibly occupy this Alabama company’s private property.”

Britt is the ranking member of the Homeland Security Subcommittee of the Senate Committee on Appropriations.

Mexican police and naval personnel reportedly seized the property at Punta Venado in Quintana Roo, Mexico, at 5:30 a.m. on March 14 to allow a ship belonging to Cemex, a Mexican building materials company, to offload cargo.

Vulcan Materials and the Mexican government have been in arbitration over alleged violations of the North American Free Trade Agreement since late 2018.

Mexican President Andrés Manuel López Obrador gestures during a press conference in Mexico City on Jan. 20, 2023. Alfredo Estrella/AFP via Getty Images

According to the statement, Britt and other members of Alabama’s congressional delegation met with Ambassador of Mexico to the United States Esteban Moctezuma at the Mexican Embassy in Washington on March 27.

The meeting came after the delegation sent Moctezuma a letter asking why the military remained in the port after a March 16 deadline to leave that had been set by a Mexican federal court.

The letter, dated March 22, reads, “Despite the events, as of the date of this letter, Mexican military and law enforcement forces remain on the property and show no sign of leaving.”

The letter stated that the takeover of the port was “the latest in a pattern of the Mexican government ignoring the rule of law.”

Jonathan Doh is an associate dean of research and a professor of management at Villanova University, Pennsylvania. He said that disagreements are common in international business, though this one has gone on longer than usual in his experience.

Disputes Not Unprecedented

“These kinds of disputes are not unprecedented,” Doh told The Epoch Times. “This is the very reason we have these provisions in international trade agreements.”

He said the deal between Vulcan and the Mexican government is covered by the North American Free Trade Agreement, first negotiated in 1994, then renegotiated as the U.S.–Mexico–Canada Agreement.

Such agreements aim to ensure that all parties are treated fairly and have some recourse in the event of a disagreement. The ultimate aim is to ensure that foreign-owned businesses are treated the same as domestic businesses, Doh said.

According to Doh, this is important because cultural, legal, and commercial differences must be addressed to ensure free trade.

Vulcan Lists Tax Complaints

Doh pointed out that U.S. legal precepts are likely foreign to many Mexican citizens.

“We have our own policies and restrictions. That’s exactly why we have [trade agreements],” he said.

In its complaint, Vulcan claims that various Mexican agencies have levied unfair taxes on the property and ignored their own courts’ warnings to stop the taxes and return the company’s money. Mexican officials allege that Vulcan has engaged in illegal mining.

Since taking office in 2018, Mexican President Andrés Manuel López Obrador has garnered a reputation as a nationalist, Doh said. For example, Obrador has walked back policies brought in to comply with the U.N.-brokered Paris Agreement, which opened the country’s energy markets to foreign suppliers. Obrador instead favors Pemex, Mexico’s state-owned energy company.

US Companies Have Concerns

“In other cases, some U.S. companies have expressed concerns about the Mexican government. They have accused Mexico of dragging its feet [in trade agreements],” Doh said.

Vulcan has operated in Mexico for more than 30 years. It built the port in Quintana Roo to load deep draft vessels with limestone for export to the United States. Mexican officials have accused Vulcan of illegally mining other materials.

In documents filed with the U.S. State Department as part of the arbitration process, Vulcan claims that the Mexican government has “deployed the full powers of the State to interfere with Legacy Vulcan’s integrated project to quarry limestone and produce aggregates for export to the United States.”