Fentanyl, arms trafficking and money laundering: the keys to Janet Yellen’s visit to Mexico

On her second and last day of work in Mexico, the Secretary of the Treasury Department in the United States, Janet Yellen, has pointed out the surveillance of foreign investments. The official signed a memorandum of intent to guarantee the review of national security in foreign direct investment. The signing of this agreement occurred hours after the private meeting that Yellen held with President Andrés Manuel López Obrador at the National Palace. Although the secretary did not delve into the points discussed behind closed doors, the president celebrated her meeting with Yellen in the afternoon through her social networks. “The good neighbor policy between the people and governments of Mexico and the United States is a reality. Our relationships cover all aspects: from friendship to cooperation in economic and financial matters. That is why the meeting with the Secretary of the Treasury of that country, Janet Yellen, was very productive and pleasant,” he wrote on his social networks.

Joe Biden’s Government has put a magnifying glass on the capital flows that come from Mexico to detect the profits from drug trafficking and which, according to Treasury figures, exceed $100 billion each year in the US financial system. Questioned about whether this new agreement will be a mechanism to stop the triangulation of Chinese investments through Mexican territory, Yellen assured that it is not the intention of the US Government to stop the Asian giant. “Our interest is in ensuring that our supply chain is not concentrated in one place, we want to see geographic diversification so that this supply chain becomes more resilient,” she declared.

The Secretary of the Treasury, Rogelio Ramírez de la O, emphasized that organized crime groups now have an entire network of illegal businesses that are not limited exclusively to fentanyl or weapons trafficking. “We are faced with the fact that there are very well-armed criminal groups, better armed than the local police. It is not easy to confront these groups when they have access to weapons that come from the United States and on our side of the border we are making every effort to detect and prevent,” he commented. In an attempt to undermine the power of drug trafficking, the US Treasury this week issued sanctions against 15 members of the Beltrán Leyva Cartel and two companies for alleged fentanyl trafficking.

In these bilateral meetings, they also addressed cooperation in cross-border payments and opportunities to further leverage through relocation or nearshoring, a term that Yallen modified as friendshoring when talking about exchange between friendly nations such as Mexico, Vietnam or India. The official stated that Mexico has a geographic competitive advantage that makes it a crucial ally for the United States and that is why it was important to also address cost reduction in sending and receiving remittances.

The participants of the working groups from the United States and Mexico will have quarterly meetings in 2024 in which they will review foreign investment projects in order to prioritize national security and combat financial crimes, including drug trafficking, arms trafficking, the entry of illicit resources and armed violence.

In her brief but substantial visit to the country’s metropolis, Yellen ate tacos, met with the authorities of the Bank of Mexico, visited a crime laboratory and shared the table with diplomats, businessmen and bankers. Yellen’s cordial tone towards her counterparts in Mexico contrasts with the bloodletting caused by arms and drug trafficking on both sides of the border and specifically by the emergence of fentanyl, the drug whose chemical precursors are Chinese, synthesized in Mexico and culminates in the US market, causing more than 100,000 deaths a year.

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