The US and Mexico are trying to boost trade while curbing the flow of fentanyl

The United States and Mexico sought to present a united front on Thursday in their efforts to deepen economic ties and tackle illegal drug trafficking, as the Biden administration looks to strengthen its 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 U.S. and Mexico would work more closely to screen foreign investments coming into both countries with a new working group to identify potential threats to national security exterminate.

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

“Greater engagement with Mexico will help maintain an open investment environment while monitoring and addressing security risks, making both our countries more secure,” Ms. Yellen said at a news conference on Thursday.

In Mexico, Ms. Yellen has had to strike a delicate balance, pushing her colleagues there to work harder to crack down on fentanyl smuggling into the U.S. while trying to deepen economic ties at a time when China is also investing heavily to build factories.

Ms. Yellen has embraced Mexico, America’s largest trading partner, as a friendly ally on her journey: she visits drug-sniffing dogs and interviews top Mexican leaders. But there is growing frustration within the Biden administration over what officials see as President Andrés Manuel López Obrador’s unwillingness to invest in efforts to combat fentanyl trafficking in the region. An increasing number of U.S. officials have become more outspoken in recent months about the need to pressure Mexico to do more to crack down on fentanyl.

“The illicit trade in fentanyl is devastating families and communities and threatening our national security, while also undermining public safety in Mexico,” Ms. Yellen said.

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

Mr. López Obrador has generally rejected the idea that fentanyl is being produced in his country, describing the U.S. drug crisis as a “problem of social decay.” He has 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 for military action against Mexico.

In February, Anne Milgram, the director of the Drug Enforcement Administration, said her agency was still not receiving enough information from Mexican authorities about fentanyl seizures or the entry of precursor chemicals into that country, and that the United States was increasingly concerned raised the number of laboratories used to produce fentanyl in Mexico.

And in October, on the eve of Secretary Antony J. Blinken’s visit to President López Obrador in Mexico, Todd Robinson, the State Department’s assistant secretary for the Bureau of International Narcotic Drugs and Law Enforcement Affairs, told The New York Times that the Mexican president failed to acknowledge the severity of the region’s drug crisis.

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

Mr. Robinson, as well as Treasury Department officials, also believe Mexico must do more to expand its ports to intercept fentanyl precursors from China. Both Republicans and Democrats are specifically concerned about a port in Manzanillo, Mexico, which they say is a major hub for fentanyl precursors.

The United States, meanwhile, is increasingly relying on the Treasury Department’s tools to target drug organizations in Mexico that smuggle the dangerous drug into the United States.

Brian Nelson, undersecretary for terrorism and financial intelligence at the Treasury Department, said in an interview in October that the department would continue to use sanctions to pressure antitrust organizations and suppliers of fentanyl chemicals.

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

The Treasury Department accelerated those efforts this week with the creation of a new “counter-fentanyl strike force” that will aim to more aggressively scrutinize the finances of suspected drug dealers. On Wednesday, Ms. Yellen announced that the Treasury Department is imposing new sanctions on 15 Mexican individuals and two companies linked to the Beltrán Leyva Organization, a major distributor of fentanyl in the US.

As the Biden administration tries to curb the flow of drugs from Mexico, Ms. Yellen emphasized the desire for more trade between the two countries and noted that the U.S. benefits from imports of Mexican steel, iron, glass and cars. components.

The US Inflation Reduction Act of 2022 law allows US consumers to take advantage of tax breaks for electric vehicles assembled in Mexico, and Ms Yellen said she wants the auto sector supply chain to be 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 wide range of trusted allies and partners,” Ms. Yellen said. “Mexico has a natural advantage given its proximity and frequent interaction between U.S. and Mexican companies that create jobs on both sides of our shared border.”