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U.S.-MEXICO HIGH LEVEL ECONOMIC DIALOGUE

PROGRESS REPORT

Background

In 2013, President Barack Obama and President Enrique Peña Nieto announced the U.S.-Mexico High Level Economic Dialogue (HLED) to establish a new strategic vision for our economic cooperation. The aim is to generate tangible economic benefits for citizens of both countries and promote economic growth to ensure that North America becomes one of the most competitive regions of the world.

The HLED, directed at the cabinet level, seeks to advance strategic economic and commercial priorities of both countries. On the Mexican side, the HLED is co-chaired by the Ministries of Foreign Relations, Finance and Economy and on the U.S. side, by the Department of State, Department of Commerce, and the Office of the U.S. Trade Representative. It also includes participation from other agencies of both countries.

The first HLED meeting took place in Mexico City on September 20, 2013, and was chaired by U.S. Vice President Biden and by Mexican Secretaries Videgaray, Meade and Guajardo. During this meeting, Mexico and the United States adopted a work plan that established the basis for the group’s work, and developed the milestones and initiatives to which both governments must dedicate themselves.

The second HLED meeting was held in Washington, D.C. on January 6, 2015, to coincide with President Peña Nieto’s visit. Progress was reported on the achievements made so far by the HLED and strategic priorities were defined to continue advancing our shared interests.

Priorities

The HLED’s six agreed upon priorities are energy, modern borders, workforce development, regulatory cooperation, stakeholder engagement, and regional and global leadership. Each of the priorities is framed within HLED’s three pillars: promoting competitiveness and connectivity; fostering economic growth, productivity, entrepreneurship and innovation; and partnering for regional and global leadership. Some of these priorities are addressed in a cross-cutting manner.

I. Energy

At the January 2015 meeting of the HLED, our governments agreed to add energy cooperation to the HLED workplan. The United States and Mexico will enhance communication and collaboration between our energy agencies, facilitate cross-border flow of energy-related equipment, improve information on U.S.-Mexico energy flows, create a binational business-to-business energy council, increase regulatory cooperation, support Mexico’s desire in becoming a candidate country in the Extractive Industries Transparency Initiative (EITI), and enhance education and capacity-building programs, including sharing best practices and lessons learned with Mexican energy regulators, to support Mexico’s energy reform. We also will continue efforts to promote renewable energy and share strategies for low-emission development.

As an initial step in the longer term energy agenda, the U.S. Department of Energy (DOE) and Mexico’s Ministry of Energy (SENER) will exchange views on the U.S. Quadrennial Energy Review (QER) and the Mexican publication of its 2014-2018 National Infrastructure Program and other power and hydrocarbons infrastructure development programs in order to assess and promote opportunities for better coordination between U.S. and Mexican energy systems.
A December 2014 Memorandum of Understanding (MOU) signed by the U.S. and Mexican Secretaries of Energy and the Canadian Minister for Natural Resources created the framework for trilateral consultation and sharing of energy information for the North American region. A robust collaboration effort was launched to: improve respective energy import and export data; share publicly available geospatial information related to energy infrastructure; exchange views and projections on cross-border energy flows; and develop a cross reference for terminology, concepts, and definitions with a view toward harmonization. Protocols for sharing information and an international data sharing portal have been established. A North American mapping system, hosted by Mexico, has already resulted in the creation of a number of infrastructure maps. On June 15, 2015, a progress report was delivered to the Secretaries and Minister.

In April 2015, the United States and Mexico held an energy education roundtable that brought together nearly 40 key stakeholders who determined possible areas for cooperation, including sharing best practices in energy education, developing vocational/polytechnic level energy skills training programs, examining joint industry certifications, and promoting greater communication among key players in both countries. Together, we are planning to follow up with August meetings in Mexico City and Merida to further advance these education goals.

The U.S.-Mexico Transboundary Hydrocarbons Agreement (TBA), which addresses the development of oil and gas reservoirs that cross the international maritime boundary between the two countries in the Gulf of Mexico, was signed in 2012 and entered into force in 2014. Led by the U.S. Department of the Interior and Mexico’s Ministry of Energy (SENER), implementation of the TBA is progressing well, and is an excellent example of regulatory cooperation between our governments.

Mexico and the United States are working together to support training and share best practices in support of new technology; to include safe and sustainable unconventional oil and gas development through visits and sharing U.S. experiences under the Unconventional Gas Technical Engagement Program (UGTEP); and to host a workshop on offshore and onshore oil and gas best practices and lessons learned.

The Mexico – U.S. Entrepreneurship and Innovation Council (MUSEIC) is seeking programs and policies to increase investment in small and medium size enterprises in Mexico’s burgeoning energy sector.

Mexico and the United States also work together on energy cooperation in the Caribbean and Central America. State, SENER and SHCP continue to work with Central American stakeholders to assist in regional power sector reform, promote increased power trade as well as a natural gas pipeline between Mexico and Guatemala, with potential to benefit Central America.

II. Modern Borders

To ensure a modern border that can foster economic competitiveness and prosperity in North America through the secure, swift and efficient crossing of people and goods, Mexico and the United States have invested in border infrastructure. However, the border is only part of the competitiveness equation for the region. Industry clusters, such as those in the automotive and aerospace industries, must be properly connected through world class-infrastructure and seamless border operation. Since the majority of our trade crosses the border by truck, we intend to develop programs, identified through studies, to strengthen the main corridors that facilitate trade between our two countries.
During this year, three projects will be inaugurated: the West Rail crossing at Brownsville-Matamoros between Texas and Tamaulipas; Tornillo-Guadalupe port of entry at the Texas-Chihuahua border, and the San Diego-Tijuana Airport Pedestrian Bridge.

Additional efforts are underway to enhance border flows between our countries, such as wait time metrics for cross-border passenger vehicles through 10 pilot programs; expansion of Trusted Traveler Programs and the Mutual Recognition Arrangement between the U.S. Customs-Trade Partnership Against Terrorism (CTPAT) and Mexico’s corollary program, the Nuevo Esquema de Empresas Certificadas (NEEC); lane segmentation; and the implementation of joint cargo pre-inspections pilot programs.

Once it has entered into force, the new U.S.-Mexico bilateral air services agreement will benefit the travelling public, businesses and economies of both countries. It will increase opportunities for passenger and cargo airlines to meet existing demand, in addition to future market growth, between both countries. The agreement will promote trade and greater connectivity between the United States and Mexico and promote the global competitiveness of both countries.
U.S Customs and Border Protection (CBP) and Mexico’s Tax Administration Service (SAT) continue to work in the development of a single, shared customs manifest for use in both countries for all transportation modes. The Single Rail Manifest (northbound) is operating at four of seven railway border crossings (Mexicali, Nogales, Juarez and Matamoros). It is expected that the remaining crossing points, as well as the air and sea manifests will be operational by the end of this year.

In the coming months, CBP and SAT will inaugurate two cargo pre-inspection pilots (the Laredo Texas International Airport; and the Mexican customs export facilities at Mesa de Otay-Baja California). A third pilot site at the Mexican customs port at San Jeronimo, Chihuahua, is planned for 2016. Together these pilot programs will reduce wait times and costs in foreign trade transactions. Most of the shipments will be inspected only once by both customs authorities in the exporting country.

At the Laredo International Airport in Laredo, TX, CBP and SAT will inspect air cargo shipments from the auto, electronics and aerospace industry sectors bound for eight Mexican airports (Aguascalientes, Guadalajara, Toluca, Hermosillo, Ramos Arizpe, San Luis Potosi, Silao and Queretaro). On the Mexican side of the border, at the customs port of Mesa de Otay - Baja California, CBP and SAT personnel will inspect U.S.-bound shipments of Mexican agricultural products. Finally, adjacent to the Mexican customs port in San Jeronimo, Chihuahua, CBP and SAT will inspect U.S.-bound shipments of computers and other electronic goods

Workforce Development

Mexico and the U.S. maintain a firm shared commitment to create a knowledge economy by developing a regional workforce that responds to our economic priorities as the key to achieving 21st century competitiveness. To this end, and through the Bilateral Forum on Higher Education, Innovation and Research (FOBESII), in 2014, 30,901 Mexican professors and Mexican students participated in exchange programs with U.S. innovation centers and institutions of higher education. Also, 50 cooperative agreements have been signed between universities and institutions of both countries, including the governments of the U.S. states of California, Arizona and New Jersey. Collaboration between the Mexican National Council of Science and Technology (CONACyT) and the U.S. National Science Foundation (NSF) has also increased significantly.

In March 2015, Mexico and the United States signed a Memorandum of Understanding for the creation of the professional internship program between both countries. Our governments continue to work with the private sector and universities to increase the numbers of cross-border internships.

The Mexican Secretariat of Labor and Social Welfare (STPS) and the U.S. Department of Labor agreed to implement a program aimed at eliminating gender and sexual orientation-based employment discrimination through a grant to the NGO Heartland Alliance International. Furthermore, the STPS and the California Governor’s Office continued to collaborate under the STPS-California Letter of Intent regarding a pilot program to protect migrant workers in the United States. Currently, both countries are finalizing the scope of the program which will prevent abuses of temporary workers in the recruitment process.

III. Regulatory Cooperation

In order to minimize costs and reduce burdens for bilateral trade, the focus on regulatory cooperation has intensified. The Mexican Secretariat of Economy and the U.S. Office of Information and Regulatory Affairs and the United States Embassy in Mexico recently concluded the first two-year U.S.-Mexico High Level Regulatory Cooperation Council (HLRCC) work plan, which led to important advances in areas such as electronic certificates for import and export of plants and vegetable products; harmonization of safety standards for cargo trucking; nanotechnology-related guidelines and safety standards for exploration and exploitation of hydrocarbons in the Gulf of Mexico, among others. The lessons learned from this first work plan, will help to shape an enhanced and more dynamic cooperation. We look to build on the work of the first plan and include new potential areas based on public consultations and feedback from the private sector.

Mexico has carried out a public consultation process to identify our national productive sector’s interests, where the Second Work Plan will be a product of their interests and not the result of a desk job. In addition, it enhances transparency to the process.

On June 30th, the Mexican Secretariat of Agriculture (SAGARPA), through the National Health Service, Food Safety and Quality (SENASICA) and the United States Department of Agriculture (USDA) signed a letter of intent to formalize cooperation for developing mutually compatible electronic certification systems for the exchange of plant and animal electronic certificates between both governments. This arrangement aims to provide for increased compliance for import and export of agricultural products and enhance food safety and bilateral trade.

Regarding energy regulatory cooperation, the U.S. Department of the Interior is currently negotiating a new agreement with Mexico’s Ministry of Energy (SENER) as well as updating an existing agreement with Mexico’s Ministry of Environment and Natural Resources (SEMARNAT) to facilitate collaboration on regulations for hydrocarbon exploration and extraction in shared reservoirs. This will help develop more specific agreements between the regulatory entities in both countries such as the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE) in the United States and the National Hydrocarbons Commission (CNH) and the National Agency for Safety, Energy and Environment (ASEA) in Mexico.

Regional and Global Leadership

The Mexican Government is promoting the principles of open government as a horizontal and cross-cutting tool to implement the Post 2015 Development Agenda. That is why President Enrique Peña Nieto will host a High Level Event with the Heads of State (HoS) of the countries that are part of the Steering Committee at the United Nations High Level week. At the event, the participating HoS will launch a declaration that invites OGP countries to commit in making use of open government as a mean to implement the Millennium Sustainable Development Goals.

We will continue our association to exercise regional and global leadership to improve government transparency and accountability, by exchanging experiences and presenting results during the Open Government Partnership Global Summit, which will take place in Mexico City in October 2015.

In addition, both countries are committed to promoting sustainable and inclusive growth. Mexico and the United States are working together to promote development in Central America and the Caribbean, in strategic areas such as specialized training for Central American customs personnel. Regarding transparency in the hydrocarbon and mineral resources sectors and as a part of the 2013-2015 Mexican Work plan in the Open Government Partnership, the Mexican Government has gathered an interagency working group to prepare Mexico’s candidacy to enter the Extractive Industries Transparency Initiative (EITI). This international initiative is a tripartite mechanism, in which civil society, industry and government share and validate information and transparency standards of a country’s hydrocarbon and mineral resources development. The U.S. Department of State and the U.S. Agency for International Development are collaborating with Mexico on technical questions in preparation for Mexico’s candidacy to implement the EITI.

It is important to note that the U.S. Agency for International Development has continued its support for different elements of the Mexican energy sector by helping to analyze potential sources of renewable energy and foster integration of renewable energy sources into Mexico’s energy matrix.

Stakeholder Engagement

Stakeholder’s engagement remains a strategic element of our joint efforts. Officials from both governments maintain dynamic interactions with members of the private sector, business associations and educational institutions, among others, to gather feedback and opinions about the initiatives carried out under the mechanism.

In this context, the Mexican Ministries of Foreign Relations, Finance and of Economy have been in a constant dialogue with representatives of the U.S. - Mexico CEO Dialogue in order to be cognizant of the recommendations made by the group to strengthen competitiveness and identify possible actions for both governments to undertake in this regard. The objective is to have constant feedback between both governments and the private sector, on those initiatives that will benefit the economic development of both countries.

Next Steps

The HLED will continue to move forward on key priorities as we prepare for the next Cabinet-level meeting in Mexico in the first quarter of 2016.

 

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