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Economy, gangs, migrants on Mexico agenda

United States President Joe Biden and his Mexican counterpart have discussed stronger economic ties, fighting the illegal drug trade and approaches to curbing illegal migration at a meeting in Mexico City.

Biden and Mexican President Andres Manuel Lopez Obrador also discussed incentives to promote investment in semiconductor manufacturing along the border in the bilateral meeting on Monday, the White House said in a statement.

"There are unmatched conditions to start a new policy of economic and social integration in our continent," Lopez Obrador said at the start of the meeting, urging Biden to invest in the region.

Lopez Obrador is hosting Biden and Canadian Prime Minister Justin Trudeau from Monday to Wednesday for the first summit between the three since late 2021.

The talk of a closer partnership comes even as disagreements persist over Lopez Obrador's nationalist energy policies, which led to the launch of a formal trade complaint in July by Washington and Ottawa.

Lopez Obrador said a trade agreement has proven to be a valuable instrument but that there was continuous growth in its Pacific ports with goods from Asia, signaling the countries remain dependent on Asian industrial production.

"Couldn't we produce in America what we consume? Of course, it is a matter of definition and joint planning of our future development," he said during a meeting with Biden.

Since the COVID-19 pandemic battered supply chains, policymakers have stepped up calls for firms to relocate business from Asia to beef up the economies covered by the US-Mexico-Canada regional trade agreement.

The two leaders also reaffirmed their commitment to using "innovative approaches" to reduce irregular migration after the Biden Administration recently introduced a policy to expel back to Mexico migrants from Cuba, Haiti and Nicaragua who cross the border illegally.

Mexico has urged the US to commit funds to Central America and southern Mexico to boost development and stem migration from one of the poorest regions in the hemisphere, and to make it easier for migrants to get US jobs.

The leaders discussed more co-operation to prosecute drug traffickers and disrupt supplies of chemicals used to make fentanyl, the White House said, with the synthetic opioid blamed for thousands of US deaths.

Two Mexican officials, speaking on condition of anonymity, told Reuters earlier on Monday the plan would in essence involve Mexico reducing the fentanyl smuggled across the border in exchange for the US bringing down the number of guns being trafficked into Mexico.

Mexico last week arrested a prominent cartel leader, Ovidio Guzman, who is wanted in the US.

Weaponry used by Guzman's gang had come into the country from US border states, one of the Mexican officials said.

Despite the talk of strengthening ties, tensions remain.

"Trade tensions over automobiles, customs rules, genetically-modified corn and Mexico's energy policies are already high and could sharpen," said Jake Colvin, president of the Washington-based National Foreign Trade Council.

"To create a North American corridor to outcompete China, the United States, Canada and Mexico need to be on the same economic page."