Mexican official seeks 'open, frank,' dialogue with U.S. and Canada in energy dispute
Deputy Economy Minister Luz Maria De la Mora
Deputy Economy Minister Luz Maria De la Mora
Fri, July 22, 2022
By Anthony Esposito
MEXICO CITY (Reuters) - Mexico's government will hold frank and open discussions to resolve a dispute with the United States and Canada over Mexican energy policies that they argue breaches a regional trade pact, a senior trade official said.
The U.S. and Canadian demands come after years of concern among those nations' private firms that Mexican President Andres Manuel Lopez Obrador's drive to tighten the state's grip on oil and electricity output treated them unfairly and was in violation of the United States-Mexico-Canada Agreement (USMCA).
The U.S-led request for consultations with Mexico marks the most serious trade spat between Washington and Mexico City since the USMCA trade pact took effect two years ago. If unresolved, it could ultimately lead to costly U.S. tariffs.
Deputy Economy Minister Luz Maria De la Mora, who handles trade disputes for the Mexican government, said she hoped talks with U.S. officials would yield a breakthrough.
"We want to take advantage of this consultation phase ... to see how we can reach a mutually satisfactory solution through an open, frank and constructive dialogue, which will allow us to overcome these differences," she told Reuters in an interview.
Though De la Mora said Mexico would seek to argue that its energy policies are not in breach of the trade deal, her conciliatory tone contrasts with Lopez Obrador's defiant push back against the complaints.
A combative leftist, Lopez Obrador said on Friday "we will not yield" on the matter, promising to continue a robust defense of his nationalist energy vision.
Lopez Obrador has pledged to revive state oil producer Petroleos Mexicanos (Pemex) and power utility Comision Federal de Electricidad, which he argues his predecessors deliberately "destroyed" to cede Mexico's energy market to foreigners.
The U.S. Trade Representative says the moves to bolster the state-run firms have undermined American companies in Mexico.
De la Mora said Mexico would not use a separate dispute with Washington over the auto industry as a bargaining chip.
"We hope this issue will be resolved before the end of the year and we are very optimistic that we have a very solid case and that we will have a favorable resolution for Mexico," said De la Mora, referring to the auto spat.
Canada said in January it would join Mexico in requesting a dispute settlement panel to iron out their differences with the United States over how to apply automotive sector content requirements under the treaty.
Asked if Lopez Obrador's energy policies were spooking investors, De la Mora pointed to recent announcements of investments in Mexico by U.S. energy company Sempra Energy and Canada's TC Energy.
She argued that the USMCA's dispute settlement mechanism gave investors certainty because if differences arise, like they have now, its use would help clear things up.
"The dispute resolution mechanism is a very solid mechanism, it is a mechanism that allows the investor to have greater certainty and this is very positive for the business climate," she said.
The U.S. requested consultations under the USMCA over Mexico's energy policies on July 20.
Under USMCA rules, the United States and Mexico would enter into consultations within 30 days of the U.S. request, unless the parties decide otherwise. If they do not resolve the matter through consultations within 75 days of the U.S. request, the United States may request the establishment of a dispute panel.
(Reporting by Anthony Esposito; Additional reporting by Dave Graham; Editing by Kim Coghill and Alistair Bell)
By Anthony Esposito
MEXICO CITY (Reuters) - Mexico's government will hold frank and open discussions to resolve a dispute with the United States and Canada over Mexican energy policies that they argue breaches a regional trade pact, a senior trade official said.
The U.S. and Canadian demands come after years of concern among those nations' private firms that Mexican President Andres Manuel Lopez Obrador's drive to tighten the state's grip on oil and electricity output treated them unfairly and was in violation of the United States-Mexico-Canada Agreement (USMCA).
The U.S-led request for consultations with Mexico marks the most serious trade spat between Washington and Mexico City since the USMCA trade pact took effect two years ago. If unresolved, it could ultimately lead to costly U.S. tariffs.
Deputy Economy Minister Luz Maria De la Mora, who handles trade disputes for the Mexican government, said she hoped talks with U.S. officials would yield a breakthrough.
"We want to take advantage of this consultation phase ... to see how we can reach a mutually satisfactory solution through an open, frank and constructive dialogue, which will allow us to overcome these differences," she told Reuters in an interview.
Though De la Mora said Mexico would seek to argue that its energy policies are not in breach of the trade deal, her conciliatory tone contrasts with Lopez Obrador's defiant push back against the complaints.
A combative leftist, Lopez Obrador said on Friday "we will not yield" on the matter, promising to continue a robust defense of his nationalist energy vision.
Lopez Obrador has pledged to revive state oil producer Petroleos Mexicanos (Pemex) and power utility Comision Federal de Electricidad, which he argues his predecessors deliberately "destroyed" to cede Mexico's energy market to foreigners.
The U.S. Trade Representative says the moves to bolster the state-run firms have undermined American companies in Mexico.
De la Mora said Mexico would not use a separate dispute with Washington over the auto industry as a bargaining chip.
"We hope this issue will be resolved before the end of the year and we are very optimistic that we have a very solid case and that we will have a favorable resolution for Mexico," said De la Mora, referring to the auto spat.
Canada said in January it would join Mexico in requesting a dispute settlement panel to iron out their differences with the United States over how to apply automotive sector content requirements under the treaty.
Asked if Lopez Obrador's energy policies were spooking investors, De la Mora pointed to recent announcements of investments in Mexico by U.S. energy company Sempra Energy and Canada's TC Energy.
She argued that the USMCA's dispute settlement mechanism gave investors certainty because if differences arise, like they have now, its use would help clear things up.
"The dispute resolution mechanism is a very solid mechanism, it is a mechanism that allows the investor to have greater certainty and this is very positive for the business climate," she said.
The U.S. requested consultations under the USMCA over Mexico's energy policies on July 20.
Under USMCA rules, the United States and Mexico would enter into consultations within 30 days of the U.S. request, unless the parties decide otherwise. If they do not resolve the matter through consultations within 75 days of the U.S. request, the United States may request the establishment of a dispute panel.
(Reporting by Anthony Esposito; Additional reporting by Dave Graham; Editing by Kim Coghill and Alistair Bell)
Mexico denies energy policies unfair after Canada joins U.S. demand
Mexico's President Lopez Obrador attends daily news conference
Mexico's President Lopez Obrador attends daily news conference
at the National Palace
Thu, July 21, 2022 at 7:59 AM·2 min read
MEXICO CITY (Reuters) - Mexican President Andres Manuel Lopez Obrador on Thursday denied his energy policies breached a regional trade agreement after Canada challenged them, and said that he had reached agreement with a host of American investors in the sector.
Speaking at a regular news conference, Lopez Obrador said Mexico would defend control of its oil as well as its power market policies, responding to news that Canada had joined a U.S. demand for dispute settlement talks over his energy agenda.
The demand was the culmination of years of concern among U.S. and Canadian companies that Lopez Obrador's drive to tighten state control of energy treated them unfairly and was in breach of the United States-Mexico-Canada Agreement (USMCA).
Lopez Obrador said there had been "no violation" of the USMCA trade pact, and that his government had been successfully dealing with concerns among U.S. energy companies in Mexico.
"We have to make our sovereignty count," he said.
Canada's International Trade Minister Mary Ng on Thursday reiterated that Canada had "consistently raised its concerns regarding Mexico's change in energy policy".
"We agree with the United States that these policies are inconsistent with Mexico's USMCA obligations," Ng said in a statement.
Lopez Obrador said that about a month ago, he had spent two weeks meeting with 19 energy companies, and had reached agreement with 17 of them. He did not identify any of them.
Lopez Obrador also said the energy issue was "not discussed" when he met business executives in Washington last week.
However, the U.S. Chamber of Commerce, which helped to organize the talks, said executives had voiced "serious concern" over a worsening investment climate in Mexico and urged it to uphold its USMCA commitments, particularly on energy.
Among concerns raised at the meeting were policies that executives said unfairly favored Mexico's state-owned energy companies at the expense of private rivals, as well as delays in securing permits for companies, the Chamber said in a statement.
(Reporting by Dave Graham and Brendan O'Boyle; additional reporting by Steve Scherer in Ottawa; editing by Diane Craft and Marguerita Choy)
Thu, July 21, 2022 at 7:59 AM·2 min read
MEXICO CITY (Reuters) - Mexican President Andres Manuel Lopez Obrador on Thursday denied his energy policies breached a regional trade agreement after Canada challenged them, and said that he had reached agreement with a host of American investors in the sector.
Speaking at a regular news conference, Lopez Obrador said Mexico would defend control of its oil as well as its power market policies, responding to news that Canada had joined a U.S. demand for dispute settlement talks over his energy agenda.
The demand was the culmination of years of concern among U.S. and Canadian companies that Lopez Obrador's drive to tighten state control of energy treated them unfairly and was in breach of the United States-Mexico-Canada Agreement (USMCA).
Lopez Obrador said there had been "no violation" of the USMCA trade pact, and that his government had been successfully dealing with concerns among U.S. energy companies in Mexico.
"We have to make our sovereignty count," he said.
Canada's International Trade Minister Mary Ng on Thursday reiterated that Canada had "consistently raised its concerns regarding Mexico's change in energy policy".
"We agree with the United States that these policies are inconsistent with Mexico's USMCA obligations," Ng said in a statement.
Lopez Obrador said that about a month ago, he had spent two weeks meeting with 19 energy companies, and had reached agreement with 17 of them. He did not identify any of them.
Lopez Obrador also said the energy issue was "not discussed" when he met business executives in Washington last week.
However, the U.S. Chamber of Commerce, which helped to organize the talks, said executives had voiced "serious concern" over a worsening investment climate in Mexico and urged it to uphold its USMCA commitments, particularly on energy.
Among concerns raised at the meeting were policies that executives said unfairly favored Mexico's state-owned energy companies at the expense of private rivals, as well as delays in securing permits for companies, the Chamber said in a statement.
(Reporting by Dave Graham and Brendan O'Boyle; additional reporting by Steve Scherer in Ottawa; editing by Diane Craft and Marguerita Choy)
Mexico Is Seen Risking $30 Billion Hit in US-Canada Trade Spat
Nacha Cattan and Max de Haldevang
Thu, July 21, 2022
(Bloomberg) -- Mexico could be hit with between $10 billion and $30 billion in tariffs if it loses a trade spat with the US and Canada, according to two former officials who negotiated the pact under which the dispute was brought.
The US and Canada have requested dispute settlement talks under the US-Mexico-Canada Agreement, known as USMCA, arguing that Mexico is violating the North American free trade deal with its moves to prioritize energy from its state utility over private renewables companies. They argue the policies of President Andres Manuel Lopez Obrador, known as AMLO, have led to denials and revocations of US firms’ abilities to operate in Mexico’s energy sector.
If there is no resolution and Mexico loses the dispute, then in the summer of 2023, the US and Canada can slap tariffs equal to the losses their companies have faced, Kenneth Smith Ramos, who was Mexico’s chief USMCA negotiator through 2019, said in an interview. Former Economy Minister Ildefonso Guajardo, now an opposition lawmaker, said the same in an interview with Mexican journalist Carmen Aristegui.
US officials have already quoted losses of anywhere between $10 billion and $30 billion, which Canada would only add to, and BloombergNEF has calculated at least $22 billion in all private investment is at risk.
“This looks very difficult to be resolved during the consultation period because the violations are so precise, specific,” said Ramos, who saw this as one of the most potentially expensive trade spats since USMCA’s predecessor took effect in 1994.
Thu, July 21, 2022
(Bloomberg) -- Mexico could be hit with between $10 billion and $30 billion in tariffs if it loses a trade spat with the US and Canada, according to two former officials who negotiated the pact under which the dispute was brought.
The US and Canada have requested dispute settlement talks under the US-Mexico-Canada Agreement, known as USMCA, arguing that Mexico is violating the North American free trade deal with its moves to prioritize energy from its state utility over private renewables companies. They argue the policies of President Andres Manuel Lopez Obrador, known as AMLO, have led to denials and revocations of US firms’ abilities to operate in Mexico’s energy sector.
If there is no resolution and Mexico loses the dispute, then in the summer of 2023, the US and Canada can slap tariffs equal to the losses their companies have faced, Kenneth Smith Ramos, who was Mexico’s chief USMCA negotiator through 2019, said in an interview. Former Economy Minister Ildefonso Guajardo, now an opposition lawmaker, said the same in an interview with Mexican journalist Carmen Aristegui.
US officials have already quoted losses of anywhere between $10 billion and $30 billion, which Canada would only add to, and BloombergNEF has calculated at least $22 billion in all private investment is at risk.
“This looks very difficult to be resolved during the consultation period because the violations are so precise, specific,” said Ramos, who saw this as one of the most potentially expensive trade spats since USMCA’s predecessor took effect in 1994.
“Mexico would need to completely overhaul two pieces of legislation that are essential to AMLO.”
The fight could have a wide-ranging impact beyond Mexico’s energy sector, hitting automakers and farmers, Guajardo added.
Ultimately, the battle could hurt Mexico and North America’s attractiveness to investors just as the region is expected to see a boom in trade.
Amid disrupted global shipping networks, the re-routing of supply chains from Asia could boost exports by billions of dollars for Latin America’s No. 2 economy, but the trade dispute puts some of that at risk, Luis de la Calle, Guajardo’s former deputy, said in an interview. A report by the Inter-American Development Bank estimates the annual value to Mexico of over $35.3 billion.
China and Europe’s economic problems have made North America the “most competitive region in the world” at the moment, De la Calle said. If the three countries fail to come to an agreement, “the main cost is the opportunity cost for Mexico and North America to not take advantage of the international context that tremendously favors North America.”
Under the trade accord’s rules, such a request would give Mexico up to 30 days to agree to schedule consultations. If after 75 days no agreement is reached, the US could request that a formal panel hear arguments from the two nations. While that process focuses on getting Mexico to agree to corrective actions, dragged-out conflicts can ultimately lead to the US imposing punitive tariffs on imports from Mexico under the two-year-old trade pact.
Lopez Obrador, known as AMLO, defended his policies Thursday, saying the oil sector was excluded from the trade pact, an argument Smith and other trade experts dispute. At a daily press conference Wednesday after the US announced its complaint, he played a song titled “Oh, so scary,” seeming to downplay his concerns. He also said he was protecting the country against “voracious companies” and added that by starting the dispute, the Biden administration risked looking like it was supporting “corrupt” firms.
Lopez Obrador has worked to return Mexico to energy independence by supporting state-owned oil and gas producer Petroleos Mexicanos, known as Pemex, and state power company CFE. The government has refused to hand out permits to several all-but-finished foreign energy projects.
“We are watching a potential train crash between the US, Mexico and Canada,” Smith Ramos said.
The fight could have a wide-ranging impact beyond Mexico’s energy sector, hitting automakers and farmers, Guajardo added.
Ultimately, the battle could hurt Mexico and North America’s attractiveness to investors just as the region is expected to see a boom in trade.
Amid disrupted global shipping networks, the re-routing of supply chains from Asia could boost exports by billions of dollars for Latin America’s No. 2 economy, but the trade dispute puts some of that at risk, Luis de la Calle, Guajardo’s former deputy, said in an interview. A report by the Inter-American Development Bank estimates the annual value to Mexico of over $35.3 billion.
China and Europe’s economic problems have made North America the “most competitive region in the world” at the moment, De la Calle said. If the three countries fail to come to an agreement, “the main cost is the opportunity cost for Mexico and North America to not take advantage of the international context that tremendously favors North America.”
Under the trade accord’s rules, such a request would give Mexico up to 30 days to agree to schedule consultations. If after 75 days no agreement is reached, the US could request that a formal panel hear arguments from the two nations. While that process focuses on getting Mexico to agree to corrective actions, dragged-out conflicts can ultimately lead to the US imposing punitive tariffs on imports from Mexico under the two-year-old trade pact.
Lopez Obrador, known as AMLO, defended his policies Thursday, saying the oil sector was excluded from the trade pact, an argument Smith and other trade experts dispute. At a daily press conference Wednesday after the US announced its complaint, he played a song titled “Oh, so scary,” seeming to downplay his concerns. He also said he was protecting the country against “voracious companies” and added that by starting the dispute, the Biden administration risked looking like it was supporting “corrupt” firms.
Lopez Obrador has worked to return Mexico to energy independence by supporting state-owned oil and gas producer Petroleos Mexicanos, known as Pemex, and state power company CFE. The government has refused to hand out permits to several all-but-finished foreign energy projects.
“We are watching a potential train crash between the US, Mexico and Canada,” Smith Ramos said.
Mexico’s president taunts Biden over energy policy trade fight: ‘Ooooh, I’m so scared’
Will Daniel
EXPLAINER: US energy sector dispute with MexicoWill Daniel
Thu, July 21, 2022
There's a brewing trade dispute between the U.S. and Mexico on energy policy, and it’s getting ugly fast.
“Ooooh, I’m so scared,” Mexican President Andrés Manuel López Obrador (AMLO) said at a Wednesday press conference, referencing a popular Mexican song and taunting the Biden administration by ordering his staff to play it.
When reporters asked him how he proposes to solve the policy spat, AMLO was defiant: “Nothing will happen.”
What is going on here?
It started early on Wednesday, when U.S. officials argued that AMLO’s energy policies favor Mexico's state-run electrical utility and oil companies and undermine American business.
The U.S. said it was seeking “dispute settlement consultations” under the U.S.-Mexico-Canada Agreement (USCMA), a trade agreement meant to ensure balanced, reciprocal trading between North American nations. It was a first step in a process that could lead to tariffs on some Mexican products.
The news comes just over a week after Biden and AMLO put out a joint statement reaffirming their commitment to the USMCA.
Mexico’s president laughed off the White House’s rhetoric, saying that Biden has always respected Mexican sovereignty and the trade fight was merely a result of corrupt right-wing lobbying, the Wall Street Journal first reported.
Mexico has been attempting to prop up its state-run electrical utility, the Comisión Federal de Electricidad (CFE), and its national oil and gas company, Petróleos Mexicanos (PEMEX), with policies that U.S. trade ambassador Katerine Tai argues “prioritize the distribution” of energy from these firms, disincentivizing market competition and clean-energy production in the country.
“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,” Tai said in a statement on Wednesday.
Canada's trade ministry is also launching energy consultations with Mexico, with officials telling Reuters they are "supporting the U.S. in their challenge."
The Alliance for Trade Enforcement, a trade group made up of various U.S. industry associations, also stood by the Biden administration’s trade fight.
“The Alliance for Trade Enforcement applauds USTR’s request for consultations with Mexico. President López Obrador’s efforts to nationalize the country’s energy sector directly violate the USMCA, obstruct clean energy initiatives in the region, and threaten America’s economic prosperity,” they wrote in a Wednesday statement.
Republican senators applauded the move by the Biden administration as well, but argued it should have been done sooner.
“Under the USMCA, Mexico agreed to level the playing field and [to] allow American companies to compete with Mexican companies to meet Mexico’s energy needs. But the government of Mexico has been violating this agreement. It was well past time for the United States to respond, and it was right for the U.S. Trade Representative to finally act,” U.S. Senator Ted Cruz (R.-Texas) said in a Wednesday statement.
Mexico's economy ministry responded to U.S. and Canadian requests for consultation late on Wednesday night, with officials saying that they are hoping to reach a "mutually satisfactory solution" to the energy dispute. President López Obrador remained defiant on Thursday, however, arguing that Mexico has not violated the USMCA trade agreement.
This story was originally featured on Fortune.com
There's a brewing trade dispute between the U.S. and Mexico on energy policy, and it’s getting ugly fast.
“Ooooh, I’m so scared,” Mexican President Andrés Manuel López Obrador (AMLO) said at a Wednesday press conference, referencing a popular Mexican song and taunting the Biden administration by ordering his staff to play it.
When reporters asked him how he proposes to solve the policy spat, AMLO was defiant: “Nothing will happen.”
What is going on here?
It started early on Wednesday, when U.S. officials argued that AMLO’s energy policies favor Mexico's state-run electrical utility and oil companies and undermine American business.
The U.S. said it was seeking “dispute settlement consultations” under the U.S.-Mexico-Canada Agreement (USCMA), a trade agreement meant to ensure balanced, reciprocal trading between North American nations. It was a first step in a process that could lead to tariffs on some Mexican products.
The news comes just over a week after Biden and AMLO put out a joint statement reaffirming their commitment to the USMCA.
Mexico’s president laughed off the White House’s rhetoric, saying that Biden has always respected Mexican sovereignty and the trade fight was merely a result of corrupt right-wing lobbying, the Wall Street Journal first reported.
Mexico has been attempting to prop up its state-run electrical utility, the Comisión Federal de Electricidad (CFE), and its national oil and gas company, Petróleos Mexicanos (PEMEX), with policies that U.S. trade ambassador Katerine Tai argues “prioritize the distribution” of energy from these firms, disincentivizing market competition and clean-energy production in the country.
“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,” Tai said in a statement on Wednesday.
Canada's trade ministry is also launching energy consultations with Mexico, with officials telling Reuters they are "supporting the U.S. in their challenge."
The Alliance for Trade Enforcement, a trade group made up of various U.S. industry associations, also stood by the Biden administration’s trade fight.
“The Alliance for Trade Enforcement applauds USTR’s request for consultations with Mexico. President López Obrador’s efforts to nationalize the country’s energy sector directly violate the USMCA, obstruct clean energy initiatives in the region, and threaten America’s economic prosperity,” they wrote in a Wednesday statement.
Republican senators applauded the move by the Biden administration as well, but argued it should have been done sooner.
“Under the USMCA, Mexico agreed to level the playing field and [to] allow American companies to compete with Mexican companies to meet Mexico’s energy needs. But the government of Mexico has been violating this agreement. It was well past time for the United States to respond, and it was right for the U.S. Trade Representative to finally act,” U.S. Senator Ted Cruz (R.-Texas) said in a Wednesday statement.
Mexico's economy ministry responded to U.S. and Canadian requests for consultation late on Wednesday night, with officials saying that they are hoping to reach a "mutually satisfactory solution" to the energy dispute. President López Obrador remained defiant on Thursday, however, arguing that Mexico has not violated the USMCA trade agreement.
This story was originally featured on Fortune.com
Thu, July 21, 2022
MEXICO CITY (AP) — The U.S. government has forced Mexico into negotiations over what Washington considers unfair practices that are effectively excluding U.S. and other foreign companies from the Mexican energy sector in violation of the free trade agreement they signed with Canada. Mexico says it has received a similar notice from Canada related to its electricity law.
WHAT IS THE U.S. GOVERNMENT COMPLAINING ABOUT?
The U.S. government says a change to Mexican law last year gives an unfair advantage to Mexico’s state-owned Federal Electricity Commission and puts energy sold by private companies, including cleaner energy from solar or wind, at a disadvantage.
The U.S. also says a 2019 regulation gives only state oil and gas company Petroleos Mexicanos extra time to comply with tougher environmental standards limiting the sulfur allowed in automotive diesel fuel.
Mexico has also delayed, rejected or failed to act on private companies’ applications for permits to operate in the energy business and has revoked or suspended existing permits, according to the U.S. government.
HOW DID WE GET HERE?
Private companies, mainly from Spain and the United States, invested billions of dollars in Mexico to build wind, solar and gas-fired electricity plants under the terms of a 2013 reform opening the energy sector during the administration that preceded the current one under President Andrés Manuel López Obrador.
Before that overhaul, Mexico faced several problems: high electricity rates, scarce generating capacity and dirty power plants that often burned fuel oil to produce electricity. So the government built pipelines to import cleaner U.S. natural gas, allowed companies to buy electricity from independent generators and gave foreign and private firms incentives to install cleaner wind-power turbines or gas-fired plants.
Mexico may have given private and foreign firms too many incentives. They received preferential treatment in pricing and purchasing, and didn’t have to pay the Federal Electricity Commission fees for distributing power through government-owned transmission lines. The state-owned utility lost market share and income, but still had to maintain transmission lines.
WHAT IS MEXICO'S POSITION?
The energy sector is a point of national pride for Mexico's president, who frequently speaks fondly of large state-owned entities.
López Obrador has made propping up Mexico’s deeply indebted state oil company a top priority, and he has railed against foreign companies that flooded the electricity sector when it was opened to competition.
López Obrador doesn’t want the Federal Electricity Commission to go bankrupt or lose more market share. Last year, his allies in Mexico’s congress made legal changes that give preference to the state power utility, requiring it to buy power from its own plants first, while often cleaner energy from private generators would be last in line.
The president tried to enshrine some of those changes in the constitution, but those failed to get the required two-thirds majority in congress earlier this year.
Mexican law had required free competition in the power industry. And the U.S.-Mexico-Canada free trade agreement prohibits member nations from favoring domestic producers or state-owned firms.
WHAT DO THE SIDES SAY ABOUT THEIR DISPUTE?
In announcing the formal U.S. complaint Wednesday, the office of the U.S. Trade Representative said in a statement: “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.”
López Obrador downplayed the dispute Wednesday, framing it as fairly routine in relations between the two countries. He noted that no complaint was mentioned to him when he visited President Joe Biden in Washington earlier this month.
On Thursday, López Obrador said the issue is “about the interests dedicated to plundering Mexico.” He said he doesn’t believe it is the companies that are complaining, but rather that this is a “political issue.”
“We have many elements to respond (with),” López Obrador said. “We are going to defend ourselves.”
Mexico’s Economy Ministry said Wednesday, “The government of Mexico expresses its willingness to reach a mutually satisfactory solution during the consultation phase.”
Mexico announced later Wednesday that it had received a similar notice from Canada related to its electricity law.
WHAT HAPPENS NOW?
The consultation phase between the sides is supposed to start within 30 days.
If the two countries cannot reach an agreement after 75 days of talks, the U.S. can request intervention by a dispute resolution panel under the U.S.-Mexico-Canada Agreement that could result in sanctions against Mexico if the United States prevails.
The pact, negotiated by President Donald Trump, replaced the 1994 North American Free Trade Agreement.
No comments:
Post a Comment