By Brendan O'Boyle and Aida Pelaez-Fernandez
MEXICO CITY, Jan 29 (Reuters) - U.S. President Donald Trump and Mexican President Claudia Sheinbaum spoke on Thursday about trade and security, as both governments
gear up for high-stakes and potentially fraught negotiations about their trilateral trade deal with Canada later this year.
Both leaders said the call was productive and touched on trade and security issues.
The call follows a Wednesday meeting in Washington between Sheinbaum's economy chief and the U.S. trade representative, who agreed to begin formal discussions on possible reforms to the United States-Mexico-Canada trade agreement.
"There is nothing concrete, but it is coming along very well," Sheinbaum said about the trade deal in her morning press conference, noting in particular that progress has been made on what the Trump administration has called Mexico's "non-tariff barriers" to trade, which it says Mexico must address.
TRUMP PRAISES SHEINBAUM
Trump, who in a Truth Social post after the call praised Sheinbaum as Mexico's "wonderful and highly intelligent leader," said the conversation went well for both countries.
Under the trilateral trade deal, which was negotiated during Trump's first term, the U.S., Mexico and Canada must launch a joint review of the trade pact by July 1, its sixth anniversary, to confirm their intention to renew it for 16 years or make modifications.
The USMCA deal replaced the North American Free Trade Agreement in 2020 and is a backbone of Mexico's economy. It has shielded Mexico from the bulk of Trump's tariffs, as goods that comply with its rules of origin can enter the U.S. duty-free.
U.S. Trade Representative Jamieson Greer, however, has said the deal has "shortcomings," and it is not equipped to deal with surges of exports and investment from non-market economies such as China into the region. Trump this month said the USMCA was "irrelevant" for the U.S. despite a highly integrated North American economy.
Sheinbaum said two topics - Cuba and critical minerals - were not brought up on the call, but stressed the two governments are discussing the issues.
Mexico's oil shipments to Cuba have come under scrutiny in Washington after Trump vowed to stop the flow of oil and money to Cuba from Venezuela, until recently Cuba's other main supplier of crude oil. Sheinbaum this week appeared to acknowledge that Mexico had halted a planned shipment to Cuba, but said decisions about shipments are a sovereign matter and that Mexico would continue to provide humanitarian aid to Cuba in the form of oil.
(Reporting by Brendan O'Boyle and Aida Pelaez-Fernandez; Additional reporting by David Lawder; Writing by Brendan O'Boyle; Editing by Sarah Morland, Rod Nickel)
