Ahead of the North American Leaders’ Summit between President Joe Biden, Canadian Prime Minister Justin Trudeau, and Mexican President Andrés Manuel López Obrador later in the day, the White House released a statement Tuesday morning that said the three countries will take steps to bolster the continent’s semiconductor industry.
The United States, Canada, and Mexico will deepen “economic cooperation, promote investment, and reinforce competitiveness, innovation, and resilience by organizing the first-ever trilateral semiconductor forum with industry to adapt government policies and increase investment in semiconductor supply chains across North America,” the White House said.
The nations will also work together to coordinate semiconductor supply chain mapping efforts and identify “complementary investment opportunities,” the statement said.
Semiconductor chips are used for multiple purposes, including automotive manufacturing, telecommunication, and defense. The industry has been dominated by Asia for years, and disruptions during the coronavirus pandemic created problems in North American supply chains.
Semiconductor companies constructing new manufacturing facilities in the United States would like to have parts suppliers in Mexico, according to U.S. officials.
Scott Jones, managing director at the consulting firm Alvarez & Marshal, has served as an adviser to semiconductor firms interested in launching operations in Latin America.
Jones told the Wall Street Journal that “Nearshoring is a specific consideration because of the trade agreements that are in place. That and the added bonus of lower labor rates … makes Mexico a very attractive option for putting certain parts of the semiconductor supply chain there.”
Immigration, clean energy, and security are among the other topics that the leaders are expected to discuss at the summit.
A dispute about Mexico’s energy policy has negatively impacted the country’s semiconductor output.
López Obrador’s focus on strengthening Mexico’s state oil company and public power utility has prevented private and foreign investment. Mexico’s energy policy places billions of dollars in U.S. investments at risk, according to the U.S. Trade Representative’s office. Canada has joined the complaint.
Mexican Foreign Minister Marcelo Ebrard said the energy policy dispute will not be prominently discussed at the summit. He noted that a resolution process has started and the countries did not want to transform the meeting into focus on the dispute.
Ebrard told a Mexican radio station, “I wouldn’t imagine it’s a major issue in today’s summit” and that Trudeau would likely address the topic in one-on-one talks with López Obrador on Jan. 11.
Biden, Trudeau, and López Obrador had dinner on Jan. 9.
On Tuesday morning, Biden met with Trudeau before the summit. They discussed clean energy, ongoing support for Ukraine, and ways to help stabilize Haiti, the White House reported.
“There’s a lot we’re going to be talking about, including clean energy. We should be the clean energy powerhouse of the world. And that’s not hyperbole; I genuinely mean that,” Biden said.
“And we’re also in a situation where we’re in the process at home—and you are as well, and we’ve talked about it—of strengthening our supply chains so that no one can arbitrarily hold us up, or a pandemic in Asia cause us to not have access to critical elements that we need to do everything from build automobiles to so many other things,” Biden added.
Biden praised Trudeau, saying “You’ve always been there. Whenever I’ve called, you’ve picked up the phone. Obviously, it’s the same here.”
The U.S. President continued by referencing a conversation he had with another foreign leader.
“I said to him—I said, ‘Well, I’m lucky. I got Canada to the north and Mexico to the south and two oceans on either side,” he said. “You’ve got … and then I described his circumstance. And he just looked at me like ‘Ooh.’”
Canada has expressed concerns about an electric vehicle provision in the Inflation Reduction Act that Biden signed last year. Trudeau avoided that subject during his comments about the meeting with Biden. “North America is the largest free-trading bloc in the world, larger even than the European Union,” Trudeau said. “We have a tremendous amount to contribute to the world in goods and services but also in technologies and solutions that the world really needs.
“Our capacity to work together has brought us to places of extraordinary success. But at a time of disruption around the world, a time of very real challenges, we can and must be doing even more,” he added.
On Jan. 9, Biden had a private meeting with López Obrador and urged his Mexican counterpart to create new policies to capitalize on U.S. initiatives to increase domestic semiconductor production.
According to officials who are familiar with what took place during the meeting, Biden and López Obrador agreed to establish high-level teams to generate economic cooperation on chips and other areas.
Last September, U.S. Secretary of Commerce Gina Raimondo visited Mexico City and said that Mexico would benefit both from manufacturing facilities for semiconductors and from the testing, packaging, and assembly of chips.
She added that the CHIPS Act passed by Congress and signed by Biden last year will create jobs and opportunities for the United States and Mexico.
The meeting was tense in the early stages.
The leaders shook hands and smiled for the cameras before entering a room at the Palacio National to begin the discussion.
López Obrador implored Biden to help improve life in his country and criticized the United States for not doing more.
“I hold that this is the moment for us to determine to do away with this abandonment, this disdain, and this forgetfulness for Latin America and the Caribbean, which is opposed to the policy of the ‘good neighborhood’ of the titan of freedom and liberty, FDR—Franklin Delano Roosevelt,” López Obrador said.
“President Biden, you hold the key in your hand to open and to substantially improve the relationship among all the countries of the American continent,” he added.
The Mexican leader also complained that too many products are manufactured in Asia, compared with North America.
“We ask ourselves, couldn’t we produce in America what we consume?“ López Obrador said. ”Of course.”
Biden defended America’s response by saying that “just in the last 15 years, we’ve spent billions of dollars in the hemisphere—tens of billions of dollars in the hemisphere. We have to continue to support and build democratic institutions in the hemisphere.”
Biden added that “the United States provides more foreign aid than every other country, just about combined, in the world ... to not just the hemisphere but around the world.”
“Unfortunately, our responsibility just doesn’t end in the Western Hemisphere. It’s in Central Europe. It’s in Asia. It’s in the Middle East. It’s in Africa. It’s in Southwest Asia,” Biden continued.
“I wish we could just have one focus—only one focus,” Biden added. “We have multiple foci. And so that’s what we have to work on. And I’m confident we can do a great deal more in tandem with one another.”
Biden, Trudeau, and López Obrador are scheduled to address the media after their joint meeting Tuesday afternoon.
