The United States and Mexico Collaborate to Enhance Foreign Investment Review Process
The Biden administration has announced a new agreement with Mexico to strengthen the foreign investment review process and prevent countries like China from investing in Mexican companies as a way to bypass U.S. sanctions and tariffs. This collaboration aims to enhance supply chains, protect national security, and promote economic interests.
Sharing Best Practices on Foreign Investment Screening
Treasury Secretary Janet Yellen revealed the signing of a “Memorandum of Intent” between the United States and Mexico to establish a bilateral working group. This group will focus on sharing technical information and best practices on foreign investment screening. By leveraging insights from the U.S. Committee on Foreign Investment in the United States (CFIUS), the Biden administration aims to assist Mexico in enhancing its foreign investment review process.
Protecting National Security and Economic Interests
The United States has recently intensified its regulations on foreign direct investment to safeguard national security and economic interests, particularly against potential acquisitions by foreign entities, including those from China. The agreement with Mexico reflects the Biden administration’s commitment to collaborating with other nations to address common challenges and ensure the protection of critical industries.
Treasury Secretary Yellen emphasized the importance of this engagement, stating, “Both countries benefit when they work together to guard against foreign investments that pose national security risks. This engagement is further evidence of the close partnership between our two countries, not only on matters of trade but also on critical issues of national security.”
Combating Chinese Efforts to Circumvent Tariffs
Stephen Ezell, vice president for global innovation policy at the Information Technology and Innovation Foundation, highlighted the significance of this agreement in cracking down on Chinese attempts to evade U.S. tariffs and sanctions. Chinese companies have been increasingly investing in Mexico since 2018, aiming to relocate their manufacturing and circumvent the tariffs imposed by the United States. President Joe Biden’s continuation of these tariffs, along with the Inflation Reduction Act, has further incentivized companies to consider “nearshoring” in North America.
The collaboration between the United States and Mexico aligns with the objective of maximizing North American companies’ utilization of the regional production environment. By sharing best practices and insights, both countries aim to create a level playing field and ensure fair competition.
Partnership for Global Infrastructure and Investment
The White House spokesperson, John Kirby, mentioned the president’s global program for investment in infrastructure, known as the Partnership for Global Infrastructure and Investment (PGI). This initiative aims to provide an alternative to China’s Belt and Road Initiative by offering transparent and reliable investment opportunities. The United States does not ask countries to choose between economic opportunities with the U.S. or China but emphasizes the importance of sovereign nations making their own decisions.
This collaboration between the United States and Mexico marks a significant step towards strengthening foreign investment screening processes and protecting national security. By sharing best practices and technical information, both countries aim to create a secure and transparent investment environment while promoting economic growth.
