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 geared up for high-stakes negotiations later this year about their trilateral trade deal with Canada.
Both leaders said the call was productive.
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. She noted progress on the Trump administration's demand that Mexico address what Washington calls "non-tariff barriers" to trade.
TRUMP PRAISES SHEINBAUM
Trump, in a Truth Social post, praised Sheinbaum as Mexico's "wonderful and highly intelligent leader." He said the conversation went well.
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 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.
While the presidents did not go into detail about what they discussed regarding security, Sheinbaum said both agreed things are going "very well."
Washington's desires for a more active role combating drug cartels in Mexican territory - resisted by Sheinbaum who cites Mexico's opposition to foreign interference in law enforcement - have at times been a sticking point in trade talks.
The FBI's reported involvement in arresting Canadian former snowboarder Ryan Wedding on drug charges in Mexico last week has further heightened tension between the U.S. and Mexico on the issue of security.
Two topics - Cuba and critical minerals - were not brought up on the call, said Sheinbaum. She stressed, however, that 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 and David Gregorio)
