Mexico City, Mexico — On Wednesday, United States Trade Representative Katherine Tai said that the United States has requested dispute settlement consultations with Mexico under the United States-Mexico-Canada Agreement (USMCA).
The consultations relate to certain measures by Mexico that undermine American companies and U.S.-produced energy in favor of Mexico’s state-owned electrical utility, the Comisión Federal de Electricidad (CFE) and state-owned oil and gas company, Petróleos Mexicanos (PEMEX).
“We have repeatedly expressed serious concerns about a series of changes in Mexico’s energy policies and their consistency with Mexico’s commitments under the USMCA,” said Ambassador Katherine Tai.
“These policy changes impact U.S. economic interests in multiple sectors and disincentivize investment by clean-energy suppliers and by companies that seek to purchase clean, reliable energy. We have tried to work constructively with the Mexican government to address these concerns, but, unfortunately, U.S. companies continue to face unfair treatment in Mexico.
“We will seek to work with the Mexican government through these consultations to resolve these concerns to advance North American competitiveness.”
Mexico’s actions include, but are not limited to, amendments to Mexico’s electricity law that would prioritize the distribution of CFE-generated power over cleaner sources of energy provided by private sector suppliers, such as wind and solar.
They also include Mexico’s delays, denials, and revocations of U.S. companies’ abilities to operate in Mexico’s energy sector, including with regard to renewable energy projects.
Mexico’s policies have largely cut off U.S. and other investment in the country’s clean energy infrastructure, including significant steps to roll back reforms Mexico previously made to meet its climate goals under the Paris Agreement.
Mexico’s policy changes threaten to push private sector innovation out of the Mexican energy market. To reach our shared regional economic and development goals and climate goals, current and future supply chains need clean, reliable, and affordable energy.
After the Wednesday announcement by the U.S., Canada also said they will launch dispute talks with Mexico over its energy policies. On Wednesday, Canada’s International Trade Minister, Mary Ng, said the country will launch their own consultations with Mexico over energy policies, which are inconsistent with a new North American trade pact (USMCA).
Ng’s announcement is in support of a similar move announced earlier that same day by the United States.
“We agree with the United States that these policies are inconsistent with Mexico’s USMCA obligations,” Alice Hansen, spokeswoman for Canada’s International Trade Minister Mary Ng, said in a statement to Reuters.
“We are joining the United States in taking action by launching our own consultations under USMCA to address these concerns, while supporting the U.S. in their challenge,” Hansen said.
Since the announcements, Mexico’s President Andrés Manuel López Obrador said if necessary, he will send a letter to Biden to defend his energy policy to explain that Mexico’s energy policy defends the population from the interests of companies.
López Obrador said that the disagreements will be clarified.
“We are going to receive the proposal, it will be analyzed, this has to be done by the Secretary of Energy. There is no problem at all. Everything we are doing in energy matters is in accordance with our Constitution, with our laws,” he stated.
“We are going to answer them promptly. We are even going to make it public. We are acting in accordance with the public interest, defending the people of Mexico against voracious companies accustomed to stealing,” he said.