-9999

Floor Speech

BREAK IN TRANSCRIPT

Mr. KAINE. Mr. President, I am glad to be here with my colleagues from Tennessee and Alabama to speak about this Mexican government's unfair, discriminatory treatment of Vulcan Materials and to encourage colleagues to support the Defending American Property Abroad Act.

Before I get into the details--and I see I am engendering an amazing response from the Gallery--I do want to say, I was a strong supporter of the USMCA. NAFTA was 20 years old. And any deal after 20 years, you would have learned what worked, what didn't, how to make it better. And I viewed USMCA as a significant achievement of the Trump administration, which I was glad to support. It got the overwhelming and bipartisan support of this body as well as the House.

I am very worried about incursions into this deal. We will have plenty of time to talk next year about one worry I have, which is the incoming administration's proposal to levy tariffs against Canada and Mexico. My thought is: Once you have a trade agreement that is a state- of-the-art trade agreement that has been voted for by an overwhelming bipartisan majority, that gives you an avenue of communication that you should be able to use with Canada and Mexico, and you shouldn't need to use tariffs against these trade partners. You should use the framework of the agreement to resolve disputes that you have.

But that is a matter for another day. Today, I want to talk about, in some detail, the matter that my friend and colleague Senator Hagerty raised, which is the treatment of Vulcan Materials. And it is not just the treatment of Vulcan, but what it might say either about the Mexican government's treatment of American companies generally or, frankly, the American government's posture of either battling to protect American companies or standing by while they are mistreated.

Vulcan is headquartered in Alabama--I see colleagues from Alabama on the floor--but employs over a thousand people in Virginia, nearly 70 facilities in the Commonwealth of Virginia. Vulcan has been operating in the Yucatan Peninsula for more than 30 years.

Senator Hagerty and I came to the floor to talk about this matter a number of months ago in the hopes that we might be able to avert what the AMLO administration has done. But, nevertheless, even in a transition of government, Mexico has continued to ratchet up efforts to seize Vulcan's property in the Yucatan.

These actions against Vulcan were initiated, to be sure, by the Lopez Obrador administration. But with the inauguration of the new President Sheinbaum earlier in 2024, these efforts that would continue to degrade the rule of law in Mexico continue. They are chilling investor confidence. They are making Mexico a more challenging place for American firms to do business.

In August, I joined Senators Cardin, Risch, and Rubio in expressing our deep concern over proposed constitutional reforms in Mexico. Separate and apart from the matter of Vulcan, there is a larger context of actions in Mexico that should cause us some significant concerns. There is a judicial reform underway in Mexico promoted by the AMLO administration that was widely viewed by civil actors within Mexico, human rights and other organizations, as an effort to undermine the independence of the judiciary and make it harder for the Mexican judiciary to stand up against actions, illegal actions, by the Mexican government.

We strongly urged the AMLO administration in this bipartisan letter, as well as the incoming administration, to pursue only reforms that enhanced the professionalism and the independence of the judiciary; but, unfortunately, neither administration has heeded our call and, instead, moved forward on implementing reforms that weaken the independence of the Mexican judiciary.

Taken together, the direct bad-faith actions against Vulcan and the two administrations' insistence on degrading the independence of the Mexican judiciary are jeopardizing critical economic security interests of both of our nations.

Mexico is one of the top three trade partners of the United States, whether you measure by outgoing or incoming top three; and, certainly, it is the same in Virginia. Our two countries have a long history of friendship, and our cultural ties run deep.

The NAFTA, followed by USMCA, have integrated supply chains in the United States, Canada, and Mexico in a degree that I view as generally positive. We do share essential traditions of democracy, and they require consistent work to ensure strong and independent institutions.

Looking more closely at the USMCA in particular, my colleague talked about worries that rules are being renegotiated around the resolution of disputes that would make it harder for Vulcan and companies like Vulcan to seek assistance.

We have been in this Free Trade Agreement for three decades now. In exchange for preferential access to American markets, which has resulted in the intertwined supply chain that I described, Mexico has committed to uphold certain standards that American workers, consumers, companies, and investors expect. The standards were reinforced and strengthened in the USMCA in 2019. They include robust protection for workers, for the environment, and for companies operating abroad. And the standards not only protect Americans but promote economic growth in Mexico, helping address the root causes of migration and other challenges.

The protections for American investments, for instance, give certainty to other companies and investors looking to participate in helping grow and expand the Mexican economy.

Particularly as companies are looking to near-shore in the aftermath of COVID and looking to bring supply chains back to the United States and nations closer to the United States with which we have free-trade agreements, Mexico has been seen as a very attractive destination, but actions like those that are being taken against Vulcan now undermine that momentum. So in response to these actions, Senators Hagerty, Britt, Tuberville, Barrasso, Budd, and I introduced the Defending American Property Abroad Act earlier this year. The bill would make it clear that the United States does not condone discriminatory treatment against American companies, particularly with our free-trade agreement partners.

We understand, even if we don't accept the notion, that some American companies are put at great disadvantage in nations where there are not trade agreements, but where there are trade agreements--particularly like USMCA, which is going to be scheduled for a renegotiation and consideration in 2026--we should not condone mistreatment of American companies by our trade agreement partners.

The bill that we have introduced would reiterate that it is a bipartisan priority in Congress for the U.S. Government to work to uphold the USMCA's investment standards in the upcoming 6-year review of the trade agreement. It would work to deter Mexico and any country in our hemisphere from illegally seizing additional U.S. assets. We must make it clear that this behavior will not be tolerated.

I note for my colleague with some sense of dismay that I think I have some colleagues on my side of the aisle who don't like the notion that a disappointed company can seek relief against a regulation put in place by another country. They are concerned about whether that is a violation of sovereignty in some sense.

Yes, it is the case that the USMCA leaves wide latitude for the participating nations to adopt their own regulatory framework, but there should be no disagreement in this body that an effort to completely seize the property of an American company can never be justified as an appropriate regulatory action, and that is what is happening with Vulcan.

I would hope colleagues on both sides of the aisle, in thinking about companies in their own States, would realize that if this is allowed to happen with the United States turning a blind eye or shrugging their shoulders to it, you will see a lot more of it, and we need to stop this now.

I look forward to continuing to work to pass our bill next Congress. We must ensure that the future of the U.S.-Mexico relationship continues to be grounded in the rule of law.

I am the chairman of the Western Hemisphere Subcommittee of the Foreign Relations Committee. I care about this relationship. I want it to get stronger and stronger. I celebrate its successes. I celebrate Mexico's successes. But I don't hesitate to stand and challenge actions either by the Mexican Government or the inaction of the U.S. Government that pose risk to Americans and American companies.

BREAK IN TRANSCRIPT

Source