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Floor Speech

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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.

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