WASHINGTON– The United States is pressuring Mexico over energy policies that Washington says unfairly favor Mexican state-owned electric and oil companies over U.S. competitors and clean energy providers.
The United States is demanding talks to resolve the dispute, beginning a process on Wednesday that could lead to trade sanctions against Mexico.
“We have repeatedly expressed serious concerns about a series of changes in Mexico’s energy policies and their consistency with Mexico’s commitments,” U.S. Trade Representative Katherine Tai said in a statement. She said “American businesses continue to face unfair treatment in Mexico.”
Among the specific issues in dispute is an amendment to Mexican law last year that the United States says gives an unfair advantage to electricity produced by the Federal Electricity Commission, a Mexican state-owned company, over the energy from private companies and cleaner sources such as wind and solar.
The United States is also protesting a 2019 rule that gives state-only oil and gas company Petroleos Mexicanos more time to comply with tougher environmental standards limiting the sulfur allowed in automotive diesel fuel.
The United States has also accused Mexico of delaying, rejecting or not responding to applications for permits from private companies to operate in the energy sector and of revoking or suspending existing permits.
“Mexico’s policies have largely halted U.S. and other investments in the country’s clean energy infrastructure, including significant steps to reverse reforms Mexico had previously taken to meet its climate goals under the Accord. of Paris,” Tai’s office said in a statement.
The Mexican government has tried to downplay the controversy, portraying it as an ordinary process between countries.
President Andrés Manuel López Obrador said on Wednesday that relations with the US government were good and that the dispute was fueled by Mexican companies opposed to his administration and lobbying the issue.
If the two countries fail to reach an agreement after 75 days of talks, the United States may seek the intervention of a dispute settlement panel under the United States-Mexico-Canada Agreement or USMCA, which could lead to sanctions against Mexico if the United States prevails. The pact, brokered by President Donald Trump, replaced the 1994 North American Free Trade Agreement.
“The government of Mexico expresses its willingness to reach a mutually satisfactory solution during the consultation phase,” the economy ministry said in a statement.
This ministry, which will lead the negotiations, stressed that this is the fourth time that this mechanism has been used since the entry into force of the free trade agreement two years ago. It was first used by the United States against Canada over milk quotas, then by Canada against the United States over tariffs on Canadian solar panels. Mexico and Canada have used it to challenge the US interpretation of a provision on the origin of auto parts to qualify for duty-free status under the deal.
López Obrador said there were “no complaints” about it when he met with American and Mexican businessmen in Washington earlier this month and told Biden that Mexico is investing in updating hydroelectric power plants and will create new solar power plants on the northern border. .
Verza reported from Mexico City.