(Reuters) – The United States and Canada on Wednesday requested dispute settlement consultations with Mexico under the North American trade agreement over the Latin American nation’s energy policies which they consider discriminatory and say “harm ” to international businesses and cross-border supplies.
The request, announced in the first instance by the Office of the United States Trade Representative (USTR), represents the most serious dispute between Washington and Mexico since the entry into force of the treaty between Mexico, the United States and Mexico. T-MEC or USMCA). If left unresolved, it could lead to punitive tariffs by the United States.
Canada’s Commerce Department later told Reuters it would launch its own energy consultations with Mexico and “stands with the United States in their challenge.”
“We agree with the United States that these policies are inconsistent with Mexico’s (USMCA) obligations,” Department of International Trade spokeswoman Alice Hansen said in a mailed statement. electronic.
Mexico’s economy ministry said in a statement Wednesday that it had received Canada’s request, which bore some similarities to the US request.
The ministry also said it would seek to coordinate with the two governments to discuss the scope of their demands, and that the Mexican government was willing to reach a “mutually satisfactory solution” to the energy dispute.
The USTR explained that the requested consultations referred to measures it said hurt U.S. businesses in favor of Mexico’s state-owned Comisión Federal de Electricidad (CFE) and Petróleos Mexicanos (Pemex).
Mexican President Andrés Manuel López Obrador promised to reactivate Pemex and CFE.
The United States is now arguing that its efforts to strengthen state-owned enterprises appear to contravene Mexico’s commitments in the USMCA.
“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 US Trade Representative Katherine Tai.
The US measure is a blow to Mexico and comes just a week after López Obrador met his counterpart from the neighboring country, Joe Biden, in Washington and announced that US companies planned to invest billions of dollars in the Mexican energy sector.
Later, López Obrador assured that there were no problems since his country was acting according to the law.
“We will receive the proposal, it will be analyzed (…) and we will respond to it quickly,” said the Mexican president. “There is no violation of the treaty (T-MEC). There is no problem, everything we do in energy is in accordance with the constitution, with our laws.”
“Unfair Deal”
Tai, the U.S. Trade Representative, argued that policy changes undertaken by Mexico affect U.S. economic interests across multiple sectors and “discourage investment” from renewable energy providers and companies looking to buy energy. clean and reliable energy.
In April, Mexico’s Supreme Court upheld controversial electricity legislation passed in 2021, which states that CFE should have priority over private power providers when shipping or when plants come online. .
López Obrador argues that his measures will benefit consumers and make Mexico more self-sufficient. The opposition says they will raise electricity costs, undermine investor confidence and violate Mexico’s clean energy commitments.
The USTR explained that it is challenging amendments to Mexican law that prioritize the distribution of electricity produced by the CFE over cleaner energy sources supplied by private sector suppliers, such as the wind and solar.
The USTR noted that Mexico has also “delayed, refused or failed to act” on permit applications for renewable energy facilities and for the storage, transshipment or sale of fuels, making it difficult to involvement of private companies, echoing the complaints of Mexican business lobby groups. .
“We have tried to work constructively with the Mexican government to address these concerns, but unfortunately American companies continue to experience unfair treatment in Mexico,” Tai said.
However, the Ministry of Economy, the agency responsible for coordinating the defense of the Mexican state, said in a statement that it hopes the dispute will be resolved.
“The Government of Mexico expresses its willingness to reach a mutually satisfactory solution during the consultation phase,” he said in a statement.
In June, Ken Salazar, the American ambassador to Mexico, assured that the energy policies of the Latin American country had jeopardized some 30 billion dollars of American investment projects.
Under USMCA rules, if the complaint is not resolved within 75 days, the USTR may request a dispute resolution panel to review the claims.
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