The United States and Mexico plan to form a working group on foreign investment screening to guard against national security threats, officials said Thursday, as Washington pushes to shift supply chains toward trusted partners.
US Treasury Secretary Janet Yellen and Mexican Finance Minister Rogelio Ramirez de la O reached the agreement as she ends a three-day visit to Mexico City, where she also sought to further the fight against fentanyl trafficking and deepen economic ties.
The working group will exchange technical knowledge and best practices, Yellen said.
She drew parallels with the US investment screening regime — involving the Committee on Foreign Investment in the United States (CFIUS), a government agency that assesses foreign investments’ risks to US national security.
“Increased engagement with Mexico will help maintain an open investment climate while monitoring and addressing security risks,” Yellen told reporters.
‘No problem with China’
The pact does not mention specific countries, but comes amid concerns that China or others could find ways to get around US trade restrictions.
Asked about Chinese investment in Mexico, Yellen said at a press briefing that there needs to be “appropriate national security screens,” adding that investments should also not create national security concerns for Mexico or the United States.
If so, “we have absolutely no problem with China investing in Mexico to produce goods and services that will import into the United States,” she said. “That’s not a concern for us.”
CFIUS has recently been scrutinizing TikTok, owned by Chinese group ByteDance, but Yellen stressed that the vast majority of Chinese investments in the United States are approved.
She noted the need to be more coordinated in investment screening, adding that the United States is having similar conversations with others such as partners in Europe.
“Some of whom have much less advanced or no really systematic screening of foreign investments,” she said.
Secure supply chains
As Mexico attracts investments to supply the United States, Yellen said the country would “continue supporting the creation of reliable, secure supply chains” spanning the neighbors.
Asked about potential strains to business ties between China and Mexico, Ramirez de la O stressed the “dominant” nature of Mexico’s commercial and financial ties with the United States.
Mexico, the United States and Canada participate in the USMCA free-trade agreement, an updated version of NAFTA negotiated under then-president Donald Trump.
This month, Washington proposed new rules surrounding its electric vehicle subsidies, limiting material that producers can source from Chinese firms and others, as officials spelled out how companies could be considered a foreign entity of concern.
“This working group recognizes the fact that US national security is linked to the security of our allies and partners, including our neighbors in North America,” said Paul Rosen, Assistant Secretary of the Treasury for investment security.
On Thursday, US and Mexican teams also met to discuss cross-border payments, Yellen said, including the possibility of more deeply integrating both sides’ payments systems.
“We see that this level of financial cooperation gives us the opportunity to take on subjects that are of interest to Mexico,” Ramirez de la O said. This includes in digital payments and lowering remittance costs.
US-Mexico trade reached over $850 billion in 2022 and this year, Mexico became America’s largest goods trading partner.
