Tomorrow, Messrs. López Obrador, Biden and Trudeau will meet in Washington for the ninth edition of the North American Leaders’ Summit (NALS). The NALS was created on March 2005 as part of the Security and Prosperity Partnership or SPP, a dialogue and cooperation framework intended to promote regional competitiveness –building upon NAFTA– and to address shared security concerns –especially after the terrorist attacks of 2001 on the United States. A lot has changed since the last NALS in 2016, and even more so since 2005, but an ambitious North American Agenda remains as important today as it was 16 years ago. Here are five take-ways on the context and outlook for the meeting.
The idea of North America has been notably resilient. Over the last 25 years, the idea of North America has prompted both great hopes and fears –as suggested by the late professor Robert Pastor– and endured tough challenges. There are plenty of examples. The concerns raised by Ross Perrot’s “giant sucking sound of jobs going south” were surpassed and NAFTA, a free trade agreement conceived by Republican President Bush 41 and technocrat Mexican President Salinas de Gortari, became a reality under Democrat President Clinton. The impetus of former presidents Vicente Fox and Bush 43 to build a NAFTA 2.0 was indeed moderated by the effects of 9/11 but resulted in the Security and Prosperity Partnership. NAFTA was renegotiated into USMCA rather suddenly, after President Trump described the former as the “worst trade deal ever” during his campaign in 2015. Interestingly, even President López Obrador, whose ideas of self-sufficiency often run contrary to the principles free trade, is a staunch supporter of North American supply chains –at least on speech. Canadian concerns about “contaminating” their special relation with the U.S. have always been present to some extent, but nevertheless tempered. In short, the idea of North America remains because of two reasons. First, at least some degree of inter-dependence is now broadly recognized. Second, when one takes a look around the world and the problems faced by other regions, it seems that the North American partners have something fairly good going.
Supply chain reconfiguration implies that working on regional competitiveness is even more important. The 1994 NAFTA, it is often said, made North America the most competitive region in the world. This was largely the result of lowering trade tariffs and allowing capital to move more freely and with certainty. By and large, those conditions were already present when USMCA entered into force in 2020 and thus is safe to say they can no longer be the main driver of economic growth. However, as I have mentioned in these pages before, USCMA is really about strengthening our regional supply chains and making them as efficient and resilient as possible. Is not only about trade, it is about producing together. Therefore, getting supply chains right can be the new driver, especially if the effects of Covid-19 and U.S. concerns about China are considered. The narrative by all the parties seems to be in the right place. However, the real question is whether the three governments are able and willing undertake the domestic policies needed to achieve this objective. Mexico and Canada rightly worry about the Biden’s administration “Buy American” policies. Canada and the United States do the same with the López Obrador administration´s energy policy and the overall investment climate.
Dual bilateral is unavoidable and will also be quite relevant. Notwithstanding the importance of the trilateral meeting, previous NALS have normally included bilateral reunions of the leaders and their teams. This fact sometimes draws attention away of the trilateral meeting and its results, especially if there are urgent items on the respective bilateral agendas. For example, President López Obrador, is expected to meet individually with President Biden and Vice President Harris to discuss immigration, an issue that weighs much more heavily in the U.S.-Mexico agenda that in the trilateral relationship. As it has been recently reported, the number of encounters of migrants in the U.S-Mexico border surpassed 1.6 million during fiscal year 2021. For the first time in years, Mexican nationals comprised the largest group: 608,000. Mexico’s President will undoubtedly raise once more the proposal to address the root causes of migration with development strategies. Yet, it less clear how this will play in the trilateral sphere and also how López Obrador might frame the discussion when the numbers for Mexican nationals attempting to cross the border is increasing and when the Mexican economy is not quite picking up. Expectations on how the two sides will handle immigration remain high on both countries. The same can be said about security cooperation where Canada and Mexico have very different security contexts and relations with the United States. For example, last year over 90,000 Americans died of drug overdose, with synthetic opioids (mainly fentanyl coming through Mexico) being the main cause, and an increasingly concerning topic in the U.S. Congress.
Covid-19 and climate change introduce a new dynamic into the trilateral framework. Dealing with the Covid-19 pandemic as well as sustainable growth and development are listed as two of the main pillars of the trilateral meeting. In the first case, it is not only natural but also welcomed that the three neighbors engage in serious dialogue on how to better deal with health security. They all have a vested interest in doing so, and Canada and Mexico experienced firsthand the consequences of non-essential travel restrictions established by the United States at its land borders. At the same time, the U.S. and Canadian governments would seem to be better aligned with respect to climate change and energy transition, topics that rank high in the host’s domestic and international policy agenda. Last month, President Biden’s climate envoy, John Kerry, met with the Mexican President and his team. The optics and general statements appeared remarkably smooth. This time around the U.S. side might want more concrete commitments from Mexico.
Success of the NALS depends on having a truly shared vision, follow-up, and execution. I consider positive the mere fact that the leaders of North America will meet again after five trying and complex years. Retaking an institutional framework such as NALS can certainly help the three partners take on some of the challenges they face among them and vis a vis the rest of the world. For example, it has recently been rumored that the U.S. side –and maybe Canada- will raise concerns about the situation in Cuba. This is an issue where President López Obrador view is radically different from that of his peers. Moreover, presidential summits often serve as action-creating events, meaning that they help push bureaucracies forward. However, success ultimately depends on the leaders having a truly shared vision about what they want to accomplish together, transmitting a clear blueprint for their teams to follow and assuring that actions are executed. In a bilateral closing note I would say that, so far, Presidents López Obrador and Biden have shown willingness to engage constructively albeit carefully. The extent to which they actually have a shared vision remains to be seen. This NALS meeting might shed more light on the matter.
* Gerónimo Gutiérrez Fernández is senior advisor at Covington and Burling, LLP and partner at BEEL Infrastructure. Twitter: @GERONIMO_GF