USA invites Mexico for joint multibillion-dollar semiconductor manufacturing project

• $52 billion would be used to boost the manufacturing of microchips under the Chips and Science Act.
• US Secretary of State Antony Blinken was in Mexico for high-level economic talks.
• Officials ignored trade disputes over the energy policy of Mexican President Andres Manuel Lopez Obrador.

While US Secretary of State Antony Blinken was in Mexico for high-level economic talks, the US extended an invitation to Mexico to join a multibillion-dollar initiative to increase semiconductor manufacturing in order to compete with China.

Officials ignored trade disputes over the energy policy of Mexican President Andres Manuel Lopez Obrador and concentrated on the potential advantages of collaboration in microchips and other technology.

About $52 billion would be used to boost the manufacturing of microchips under the Chips and Science Act, which US President Joe Biden signed into law last month.

“Now in China and Taiwan the testing, packaging and assembly industry for semiconductors is a $60 billion industry. In North America it’s $3 billion,” said US Secretary of Commerce Gina Raimondo, who accompanied Blinken.

“So we’re really very excited about the opportunities for job creation in Mexico and in the United States,” she added.

“The opportunity for Mexico is not just in the manufacturing facilities but in testing, packaging and assembly,” Raimondo told reporters.

Foreign Minister of Mexico Marcelo Ebrard praised the US offer of semiconductor cooperation as “very generous.”

When questioned about Lopez Obrador’s energy reform initiatives, which are opposed by the United States and Canada, the two sides adopted a conciliatory stance.

In accordance with a North American free trade pact, Washington lodged a formal complaint against Mexico in July, alleging that its energy policies were unfair to US companies.

“Dispute settlement under international agreements is a normal part of trade relationships even among the closest of partners,” Blinken said.

“We’re moving full speed ahead in the further integration of our economies and in building the most competitive region in the world. And we’re doing that as you heard through the work on supply chains, on strengthening the work we’re doing together in building a clean energy economy, the work on semiconductors, etc,” he added.

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Signs of thaw

Prior to that, Lopez Obrador praised the “respectful attitude” of a recent letter from US President Joe Biden, contrasting it with the “not the most diplomatic” tone of the trade complaint. He said Mexico appreciated the letter’s “respectful attitude.”

Foreign investors and environmentalists are concerned that Lopez Obrador’s efforts to turn back the consequences of liberalisation, which they believe have favoured private corporations, are prioritising fossil fuels over renewable energy sources.

The US, Mexico, and Canada Agreement’s energy disagreement has prompted Washington to solicit consultations; this is the first stage in a process that could result in retribution for measures it claims harm US companies and limit the development of sustainable energy.

In July, Lopez Obrador travelled to Washington to meet with Biden, who emphasised the importance of mending fences between the two nations.

The Mexican president had turned down Biden’s invitation to the Summit of the Americas in Los Angeles a month earlier on the grounds that Cuba, Venezuela, and Nicaragua had not been included on the invitation list.

Prior to the economic negotiations, Blinken met with Lopez Obrador and they spoke about a variety of topics, according to the State Department, including working together to address irregular migration and the synthetic drug fentanyl.

“They also spoke about joint efforts to tackle the climate crisis through investments in clean energy and emerging technologies like electric vehicles, solar technologies, and semiconductors,” a statement said.

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