Monday, May 20

The United States and Mexico seek to promote trade by stemming the flow of fentanyl

The United States and Mexico sought to project a united front Thursday in their efforts to deepen economic ties and crack down on illicit drug trafficking as the Biden administration seeks to consolidate the North American supply chain and reduce dependence on China.

At the end of three days of meetings in Mexico City, Treasury Secretary Janet L. Yellen announced that the United States and Mexico will begin working more closely to screen foreign investment coming into both countries with a new group of work to eliminate potential threats to national security.

The collaboration comes as the administration seeks to ensure that allies like Mexico are able to participate in the billions of dollars in domestic energy and climate investments that the United States is implementing. However, as the administration seeks closer cross-border economic integration, it wants to ensure that Mexico is not the recipient of potentially problematic investments from countries like China.

“Greater engagement with Mexico will help maintain an open investment climate by monitoring and addressing security risks, making both of our countries safer,” Yellen said at a news conference Thursday.

In Mexico, Yellen has had to strike a delicate balance, pushing her counterparts to work harder to counter fentanyl trafficking into the United States, while seeking to deepen economic ties at a time when China is also investing heavily to build factories there.

Yellen embraced Mexico, America’s largest trading partner, as a friendly ally during her trip, visiting drug sniffer dogs and holding talks with top Mexican leaders. But there is growing frustration within the Biden administration over what officials perceive as President Andrés Manuel López Obrador’s reluctance to invest in efforts to combat fentanyl trafficking in the region. In recent months, a growing number of U.S. officials have become more vocal about the need to pressure Mexico to do more to crack down on fentanyl.

“The illicit trafficking of fentanyl devastates families and communities and poses a threat to our national security, including undermining public safety in Mexico,” Yellen said.

Nearly 110,000 people died last year from drug overdoses in the United States, a crisis that U.S. officials say is largely caused by chemical fentanyl ingredients shipped from China to Mexico and turned into the powerful synthetic drug that is then trafficked across the southern border . in the United States.

López Obrador has generally rejected the idea that fentanyl is produced in his country and has described the drug crisis in the United States as a “problem of social decay.” He argued that American politicians should not use his country as a scapegoat for the record number of overdoses in the United States. The growing number of fentanyl-related deaths has fueled calls from Republican presidential candidates to take military action against Mexico.

In February, Drug Enforcement Administration administrator Anne Milgram said her agency was still not receiving enough information from Mexican authorities about fentanyl seizures or precursor chemicals entering the country, and that the U.S. was increasingly concerned for the number of laboratories used to produce fentanyl in Mexico.

And in October, on the eve of Secretary Antony J. Blinken’s visit with President López Obrador to Mexico, Todd Robinson, the State Department’s assistant secretary at the Bureau of International Narcotics and Law Enforcement, told the New York Times that The Mexican president was not recognizing the severity of the drug crisis in the region.

The Mexican president would prefer to fall into the category of “someone who has a problem but doesn’t know it,” he said.

Robinson, as well as Treasury Department officials, also believe that Mexico needs to do more to upgrade its ports and intercept fentanyl precursors coming from China. Both Republicans and Democrats are particularly concerned about a port in Manzanillo, Mexico, that they say is a major hub for fentanyl precursors.

Meanwhile, the United States is increasingly relying on the tools of the Treasury Department to target Mexican drug trafficking organizations that traffic the dangerous drug into the United States.

Brian Nelson, under secretary for terrorism and financial intelligence at the Treasury Department, said in an October interview that the department will continue to use sanctions to put pressure on cartel organizations and suppliers of fentanyl-based chemicals .

“We will continue to use our tools to map and track network suppliers of precursor drugs flowing into Mexico from foreign countries, including China; the money laundering organizations that support the financial flows that enable this criminal enterprise,” Nelson said.

The Treasury Department accelerated those efforts this week with the creation of a new “fentanyl strike force” that will aim to more aggressively examine the finances of suspected narcotics dealers. On Wednesday, Yellen announced that the Treasury Department was imposing new sanctions against 15 Mexican individuals and two companies linked to the Beltrán Leyva Organization, a major distributor of fentanyl in the United States.

As the Biden administration seeks to curb the flow of drugs from Mexico, Yellen emphasized a desire for more trade between the two countries and noted that the United States benefits from Mexican imports of steel, iron, glass and automobiles. set off.

The 2022 Inflation Reduction Act in the United States allows American consumers to benefit from tax credits for electric vehicles assembled in Mexico, and Yellen said she wants to see the automotive supply chain more closely integrated between the two countries .

“The United States continues to pursue what I have called “friendshoring”: seeking to strengthen our economic resilience by diversifying our supply chains across a broad range of trusted allies and partners,” Yellen said.

At the news conference, Yellen rejected the idea that the United States was encouraging Mexico to adopt stronger safeguards on foreign investment because it wanted to discourage Chinese investment in the country.

“As long as there are adequate national security controls and such investments do not create national security concerns for Mexico or the United States, we have absolutely no problem with China investing in Mexico to produce goods and services that will be imported into the United States. ,” Ms. Yellen said.