Congressman: US Should Increase FDI in Mexico Ahead of USMCA Review

House Foreign Affairs Committee member Rep. Greg Stanton, D-Ariz., during a hearing on competition with China in the Western Hemisphere, argued that the shortages experienced during the COVID-19 pandemic show that businesses should move supply chains to the Western Hemisphere.

"The U.S.- Mexico-Canada agreement will be up for review in 2026," he said June 13. "We should be gearing up for this by seizing the moment."

He said companies should expand chip testing and packaging operations in Northern Mexico -- he noted Intel already has such a facility in Costa Rica -- and the U.S. should encourage critical mineral mining and processing in Mexico and South America for the minerals needed to make semiconductors.

Stanton argued that Mexico needs to reduce drug trafficking-related violence and open up its energy policy to be more attractive for playing a part in the semiconductor ecosystem. Mexico has restricted private foreign direct investment in energy production in Mexico, a trade irritant that the Office of the U.S. Trade Representative has been discussing in formal consultations under the dispute resolution chapter of USMCA.

Brian Nichols, the State Department's assistant secretary for Western hemisphere affairs, said he wholeheartedly agrees with Stanton's suggestions. Mexico's "President-elect [Claudia] Sheinbaum is a scientist," he said. "Demonstrating to her with the hard facts ... and laying out the scientific case will be compelling for her."