The US-Mexico pact: A 60-day plan to protect critical mineral trade

On January 5, Wednesday, the United States' (US) Trump administration and its neighbouring Mexico government unveiled a 60-day roadmap to draw up well-coordinated trade policies in order to safeguard critical minerals supply chains from being endangered. The plan is to consist of minimum prices for some particular imported minerals as well. 

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Although China or its stronghold over the critical minerals market was not mentioned in the agreement, the US and Mexico have made the mineral protection initiative clear. It comes months ahead of a mandatory US-Mexico-Canada Agreement (USMCA) review, though there was no mention of Canada in the USTR announcement or the joint action plan.

The U.S. Trade Representative stated that the agreement with Mexico is the first of its kind, and added that Washington aspires for similar binding plurilateral trade frameworks with like-minded partners. 

Also read: US seeks to break China’s grip on critical minerals with new stockpile

US Trade Representative Jamieson Greer mentioned the shared intent of the collaborative move to address global market distortions that have left North American supply chains exposed to disruption.

According to the framework, “Correcting these vulnerabilities is imperative, as critical minerals are strategic assets integral to modern and innovative industrial economies, and diverse, resilient, and market-based supply chains are essential for our economic and national security.”

Meanwhile, with the US striving intensely to secure supply chains for advanced manufacturing, JD Vance, Vice President, announced plans to assemble allied nations into a preferential trade bloc for critical minerals.

Under the plan, US and Mexican officials agreed to identify mining, processing, and manufacturing projects in both nations and selected third nations, but did not disclose any specific project. It outlines consultations on introducing price floors in a binding plurilateral agreement on critical minerals trade, alongside potential measures such as regulatory standards, investment screening, trade tools, technical cooperation, and geological mapping coordination. 

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