Mexican power reforms opposed by US face crunch vote


By AFP
Published April 17, 2022

Mexican electricity reforms at the center of diplomatic tensions with the United States faced a major test as opposing lawmakers prepared Sunday to vote on the proposed constitutional amendment.

President Andres Manuel Lopez Obrador wants to strengthen the state-owned electricity provider and roll back the effects of liberalization under previous governments that he says favored private companies.

But his plans have alarmed the United States and Canada, prompting warnings that Mexico is in danger of violating its trade commitments by favoring state-run entities heavily dependent on fossil fuels.

Members of the lower house of Congress began a marathon debate on the contentious reform bill on Sunday morning, with a vote expected by the early hours of Monday.

Lopez Obrador lacks the two-thirds majority in the Chamber of Deputies needed to amend the constitution, putting him in danger of a high-profile political setback.

The president of the lower house, Sergio Gutierrez Luna, accused the opposition of wanting to remain “imperialist lackeys” at the service of foreign companies.

But Jorge Romero of the conservative National Action Party argued that the bill would put the country “back 50 years” in efforts to protect the environment.

Lopez Obrador’s Morena party and its allies only have 277 seats out of a total of 500 in the Chamber of Deputies, and the opposition bloc has said it will vote against the bill.

“It would represent a big defeat for Morena and Lopez Obrador because it is one of the central axes of their project to nationalize energy,” Jose Antonio Crespo, a political analyst at the Center for Research and Teaching in Economics, told AFP.

The United States has warned that Mexico’s reforms risk bringing “endless litigation” that would impede investment and undermine joint efforts to fight climate change.

Canada and Spain are also concerned about the consequences for their energy companies that have invested in Mexico.

The changes would ensure that the state-owned Federal Electricity Commission (CFE) has at least 54 percent of the electricity market — a move the government says is needed to prevent soaring power prices.

A defeat for the constitutional reform bill does not, however, necessarily mean the end of Lopez Obrador’s electricity industry changes.

Mexico’s Supreme Court this month endorsed a reform aimed at strengthening the CFE that was approved by Congress in 2021 but has become bogged down in legal challenges.