[Congressional Record Volume 169, Number 200 (Tuesday, December 5, 2023)]
[Senate]
[Pages S5726-S5727]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                                 Mexico

  Mr. HAGERTY. Mr. President, I am here today to discuss worrying 
developments in Mexico, one of the United States' most important 
international partners and our neighbor to the south.
  The nearly 2,000-mile border that our nations share both binds us 
together and presents a series of challenges, including illegal 
migration, drug trafficking, and human trafficking. As we work through 
those difficult issues, our robust economic relationship has provided a 
firm foundation to strengthen and stabilize our efforts with an eye 
toward the future. The innovative United States-Mexico-Canada 
Agreement, or USMCA, deepened the connections between our economies 
such that Mexico is now one of our largest and most strategic trading 
partners.
  However, actions over the past 2 years by the government of Mexican 
President Andres Manuel Lopez Obrador have weakened that bond and are 
threatening the economic and diplomatic ties between our nations. 
Through increasingly arbitrary and aggressive moves against companies 
based here in the United States and their lawfully owned assets in 
Mexico, the Mexican Government has abused its permitting and regulatory 
powers in ways that violate the letter and the spirit of our trade 
agreements, not to mention the special relationship historically 
enjoyed between our two countries. These decisions directly impact 
critical sectors of the U.S. economy from agriculture to energy and 
mining and from transportation to tourism.
  These capricious actions, which are falsely labeled as ``reforms,'' 
risk substantially undermining confidence in the commercial rule of law 
in Mexico. They also jeopardize the essential economic relations 
between North American partners. Further, these actions likely violate 
our trade agreements by abrogating contracts, stripping investors of 
value, and eliminating private competition and oversight, thereby 
sending a clear message to U.S. capital markets that Mexico is no 
longer safe or profitable for investing.
  I want to highlight the specific case of Vulcan Materials. For almost 
2 years now, President Lopez Obrador has personally harassed, 
interfered with, and obstructed Vulcan's lawful operations in Mexico.
  Vulcan is a U.S.-based construction aggregates company with a strong 
Tennessee and, I might add, a strong Virginia presence that has more 
than a 30-year track record of responsibly operating in Mexico and 
investing in the community that surrounds its Mexican facility.
  In May of 2022, President Lopez Obrador ordered the illegal shutdown 
of Vulcan's operations, which had an immediate and detrimental impact 
on the supply of construction aggregates to the United States.
  Then, in March of 2023, President Lopez Obrador ordered a military 
invasion of Vulcan's property and occupied the company's quarry and 
port for 2 weeks. As shocking as this sounds, video footage of this 
invasion is available online.

  President Lopez Obrador has initiated a process to illegally take the 
company's property by declaring it a supposed naturally protected area.
  The President of Mexico is abusing a process designed to protect 
regionwide ecosystems in order to illegally expropriate land that, 
coincidentally, exactly matches Vulcan's property lines. This is an 
egregious abuse of the law that undermines the very trust that should 
be foundational to the U.S.-Mexico relationship.
  By illegally closing Vulcan's business and now attempting to steal 
their property, the Mexican President is signaling to other American 
companies that Mexico cannot be trusted when it comes to foreign 
investment.
  If not quickly corrected, actions like these risk choking off the 
economic relationship between our two nations.
  Many important supply chains stretch across the U.S.-Mexico border, 
supplying millions of good jobs and making both countries more 
attractive for capital investment.
  This is certainly true for my home State of Tennessee. Because of the 
successes that I witnessed between my home State of Tennessee and 
Mexico, I have been a strong advocate for reshoring integrated supply 
chains from Communist China to North America.

[[Page S5727]]

  Building upon the successes of USMCA as a foundational component of 
North American competitiveness supports both American and Mexican 
economic prosperity and both nations' national security.
  But without a basic respect for private property and the rule of law, 
the prospects for expanding our shared economic and national security 
via commerce and investment are greatly diminished.
  In fact, failing to protect private property and the rule of law will 
inevitably lead to the disintegration of our economic ties. Therefore, 
I again urge President Lopez Obrador to reverse course before more 
damage is done.
  Instead, we should be looking for opportunities to work together to 
attract investment and unlock the economic opportunity that is being 
presented to both of our nations as supply chains are rebalanced away 
from communist China.
  Let's seize this opportunity together rather than damage our shared 
interests for short-term political gains.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. KAINE. Mr. President, I join my friend and colleague from 
Tennessee who, in addition to being on the Foreign Relations Committee, 
has background in the private sector as an economic development 
official for the State of Tennessee and also as a diplomat in his 
service as Ambassador to Japan.
  The issue that we are talking about is one about the economy and the 
economic relations between the United States and Mexico; but also, it 
is about diplomacy.
  We are here to speak about the Mexican Government's unfair targeting 
of this one business, Vulcan Materials Company, but they can stand as 
an example for many others.
  Vulcan is headquartered in Alabama, but they employ more than 1,000 
people in the Commonwealth of Virginia at more than 70 facilities, and 
they have been legally operating this construction material facility 
and port in the Yucatan Peninsula of Mexico for more than 30 years.
  The Mexican Government in recent years, under the direction of the 
President of Mexico, has taken a set of actions, to include the recent 
filing of a regulatory notice that they intend to take over Vulcan's 
property in the Yucatan. This is a matter about trade; but to be sure, 
it is also a matter about the rule of law.
  Last December, we celebrated the bicentennial of diplomatic relations 
between the United States and Mexico. Our two countries share a 2,000-
mile border, extensive trade, security, and economic relations. The 
relationship, as my colleague shared, is a consequential one. But that 
relationship will suffer unless Mexico chooses a different direction 
with respect to foreign investment.
  Mexico is a member of the Organization for Economic Cooperation and 
Development, OECD. That is the international forum designed to promote 
sustainable economic growth.
  The OECD membership is made up of 38 democratic countries with 
market-based economies, countries as small as Iceland and as large as 
the United States but who share a commitment to democracy, rule of law, 
trade, and economic growth.
  If you are a member of the OECD, you rest pretty comfortable in the 
fact that 80 percent of global trade, by many estimates, come through 
these 38 countries, and nearly 60 percent of the world's GDP are 
through OECD nations.
  The OECD's last economic survey of Mexico pointed out some trouble 
signs. They indicated that investment in Mexico has been weak for the 
last 9 years since 2015. And they made a key recommendation that if 
Mexico wants to be stronger in the OECD pillar values, they should 
provide investors with certainty and regulatory stability.
  The report notes that ``with appropriate policy settings,'' Mexico 
could ``reap further benefits from the strong recovery in the United 
States and the ongoing reorganization of global supply chains closer to 
consumer markets.'' In other words, Mexico has a huge upside in an 
economy that is globally coming out of COVID.
  But this type of behavior by the Mexican Government against companies 
like Vulcan is exactly what is limiting Mexico's ability to reap the 
benefits of OECD membership.
  Senator Hagerty and I are supporters of nearshoring and closer 
economic engagement not just with Mexico but with other nations in the 
Western Hemisphere. We are original cosponsors of S. Res. 273, which we 
introduced earlier this year, calling on the need to promote stronger 
economic relations between the United States, Canada, and countries in 
Latin America and Caribbean.
  I am not going to repeat my endlessly repeated concern that American 
diplomacy too often moves on an east-west axis and not a north-south 
axis. I have spoken about that often. We both want to have a more 
robust north-south axis, whether it is about trade, diplomacy, or 
security assistance. And Mexico is key to this.
  If we want to look at nearshoring, the Mexican example already 
through the USMCA of supply chain integration with the United States is 
a great example. But this is all jeopardized if foreign investors 
believe that their land can be taken; that they can be invaded by the 
Mexican military; that decades of providing jobs and investment can be 
taken away at the whim of the individual who is President.
  We are seeing a historic shift in global supply chains right now. 
That could be to Mexico's advantage. But if Mexico continues on the 
kind of behavior that Senator Hagerty and I are discussing today, 
Mexico will fall short of this opportunity that is right at its 
doorstep.
  I support the State Department's efforts to assist and advocate for 
U.S. businesses in Mexico, including making clear to the Mexican 
Government that their treatment of Vulcan and other companies will 
undermine U.S. and international confidence in that country.
  I urge the government to refrain from moving in this 
counterproductive direction. And I thank my colleague from Tennessee, 
Senator Hagerty, and others in this body who are focused on this issue. 
I thank them for maintaining a focus. I am doing everything I can to 
make sure this works out the right way.
  With that, I would like to yield back to my colleague from Tennessee.
  Mr. HAGERTY. Mr. President, I thank Senator Kaine for lending his 
expertise as a senior member of the Senate Foreign Relations Committee 
and, most importantly, as chair of the Western Hemisphere Subcommittee. 
I thank the Senator from Virginia for bringing his respected voice to 
this matter of serious diplomatic concern. As former Governor of his 
home State of Virginia, he has an acute appreciation of the economic 
opportunity that exists that is in danger of being destroyed by the 
illegal actions of the Mexican President. So thank you very much for 
joining me in this.