Tuesday, December 06, 2022

Canada joined the US and T-Mec. Requests consultation on Mexico’s energy policies under

(Reuters) – The United States and Canada on Wednesday requested consultations on the Latin American nation’s energy policies on dispute settlement with Mexico under the North American trade agreement, which they consider discriminatory and that they say will allow international companies and cross-border supplies to be “supplied”. damages”.

The request, first announced by the United States Trade Representative’s Office (USTR, in English for its short form), represents the most serious dispute between Washington and Mexico City since the treaty between Mexico, the United States, and Mexico. Forces Canada (known as T-MEC or USMCA). If not resolved, it could lead to punitive charges from the United States.

Canada’s commerce ministry later told Reuters it would begin its energy consultation with Mexico and that it “stands with the United States in this challenge.”

“We agree with the United States that these policies are inconsistent with the obligations of Mexico (USMCA),” International Trade Ministry spokeswoman Alice Hansen said in an emailed statement.

Mexico’s economy ministry said in a statement late Wednesday that it had received Canada’s request, which has some similarities to the US request.

The ministry also said that it intends to coordinate with the two governments to discuss the scope of their requests, and that the Mexican government stands ready to reach a “mutually satisfactory solution” to the energy dispute.

USTR explained that the requested consultations refer to measures that, according to its arguments, harm US companies in favor of the Mexican state Federal Electricity Commission (CFE) and Petroleos Mexicanos (Pemex).

Mexican President Andres Manuel López Obrador has promised to reactivate Pemex and CFE.

The United States now argues that its efforts to consolidate state-owned companies violate Mexico’s commitments in T-MEC.

“We have repeatedly expressed serious concern about changes in Mexico’s energy policies and their continuity with Mexico’s commitments under the USMCA,” said US Trade Representative Catherine Tai.

The US measure is a blow to Mexico and comes just a week after López Obrador met in Washington with his neighbor Joe Biden’s counterpart, Joe Biden, and announced that US companies planned to invest billions of dollars in the region. Is. Mexican energy.

Will the US invest 40 billion US dollars in Mexico? 2:46

Later, López Obrador assured that there was no problem as his country was acting according to the law.

“We’re going to get the offer, it’s being analyzed (…) and we’re going to respond immediately,” the Mexican president said. “There is no violation of the treaty (T-MEC). No problem, everything we are doing in energy matters is according to our laws, according to the Constitution.”

“inappropriate behavior”

The US trade representative, Tai, argued that the policy changes by Mexico were affecting the economic interests of the United States in many areas and “discouraging investment” by renewable energy providers and companies seeking to buy clean energy and reliable. are.

In April, Mexico’s Supreme Court upheld the controversial electricity law passed in 2021, which establishes that CFEs should take precedence over private electricity providers in dispatch, or when plants come online.

López Obrador argues that his measures will benefit consumers and make Mexico more self-sufficient. The opposition claims they will raise electricity costs, undermine investor confidence and violate Mexico’s clean energy commitments.

USTR explained that it was challenging amendments to Mexican law that prioritize the distribution of electricity generated by CFE over clean energy sources such as wind and solar provided by private sector providers.

The USTR noted that Mexico has “delayed, denied or failed to act” on permit applications for renewable energy facilities and to store, transship or sell the fuel, making it difficult for private firms to participate in Mexican trade. Lobbyists’ complaints echoed.

“We have tried to work constructively with the Mexican government to address these concerns, but unfortunately, US companies continue to face unfair treatment in Mexico,” Tai said.

However, the Ministry of Economy, the agency in charge of coordinating the defense of the Mexican state, said in a statement that it expected the dispute to come to fruition.

“The Mexican government expresses its desire to reach a mutually satisfactory solution during the consultation phase,” he said in a statement.

In June, US Ambassador to Mexico Ken Salazar said the Latin American country’s energy policies put at risk about $30 billion in US investment projects.

Under USMCA rules, if the complaint is not resolved within 75 days, the USTR may request the Disputes Panel to review the claims.

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