North America to boost semiconductor industry, doubts persist on Mexico energy policy

© Reuters. FILE PHOTO: U.S. President Joe Biden and Mexican President Andres Manuel Lopez Obrador meet at the National Palace during the North American leaders summit in Mexico City, Mexico January 9, 2023. REUTERS/Kevin Lamarque

By Jarrett Renshaw and Dave Graham

MEXICO CITY (Reuters) -The United States, Mexico and Canada will take steps to beef up the North American semiconductor industry, the White House said on Tuesday, as the three countries try to fix a dispute over Mexico's energy policies that worries investors .

In a statement ahead of a North American leaders' summit in Mexico City, the White House said the three countries would in early 2023 organize a semiconductor forum to increase investment in the strategic hi-tech industry.

This, according to the statement, would mean coordinating semiconductor supply chain mapping to identify needs and investment opportunities in making chips that are used in everything from telecoms, to carmaking and defense.

The three governments would also step up cooperation to root out lethal drug smuggling and improve legal pathways for migrants, the White House said.

The semiconductor industry has long been dominated by Asia, and disruptions during the COVID-19 pandemic wreaked havoc among North American supply chains.

Mexico's hopes of benefiting from the push to boost semiconductor output have been undermined by the energy dispute, with Washington and Ottawa complaining that Mexican policies are putting their investors at a disadvantage.

The spat is a focal point of the summit, and Canada on Monday again raised the matter.

Canadian International Trade Minister Mary Ng put across concerns about Mexico's energy policies and their potential effects on Canadian investments in a meeting with Mexican Economy Minister Raquel Buenrostro.

The United States and Canada in July launched formal dispute settlement proceedings against Mexico under a regional trade deal, taking issue with measures Mexico has passed to give priority to its cash-strapped state energy companies.

Ng said it was important to find a "mutually acceptable resolution" to the dispute, and also flagged concerns about the treatment of Canadian mining companies in Mexico.

U.S. President Joe Biden, his Mexican counterpart Andres Manuel Lopez Obrador and Canadian Prime Minister Justin Trudeau have vowed to deepen regional economic integration as they gear up for a trilateral meeting on Tuesday.

The three leaders will issue public statements after their talks at the National Palace in Mexico City. Biden and Trudeau will hold a bilateral meeting earlier in the day.

Biden and Lopez Obrador met on Monday and discussed strengthening economic ties, fighting the drug trade, and approaches to curbing illegal migration, the White House said.

Under the North American Drug Dialogue (NADD), the three countries would adopt an "updated strategic framework" to address threats posed by banned narcotics, the White House said.

This would include greater information-sharing on chemicals used to make drugs including fentanyl, a synthetic opioid that has been blamed for thousands of U.S. overdose deaths.

The White House said the three were also committed to curbing methane emissions from solid waste and wastewater by at least 15% by 2030 from 2020 levels.

They would also create a virtual platform to give migrants streamlined access to legal pathways.

"This will give potential migrants the information they need to come to Mexico, the United States, and Canada lawfully – making them less likely to rely on smugglers," it said.