Mexico has energy commitments in the USMCA and the EU

There is a deteriorating climate for investors in the sector and the US is committed to ensuring a fair deal, the White House trade office said.

The United States has also emphasized that, contrary to the statements of certain Mexican officials, the USMCA applies to the energy sector in Mexico.

Contrary to assertions by the Mexican government, the Treaty between Mexico, the United States, and Canada (USMCA) T-MEC in Mexico does apply to the energy sector and establishes commitments in this matter, affirmed the White House Trade Representative (USTR).

Within the framework of this position is the proposed electricity reform, which would impact the electricity market, by excluding private investment in electricity marketing, guaranteeing that the CFE generates at least 54% of the energy required by Mexico, and canceling energy supply contracts. long-term and preferential clean energy purchase programs.

“The United States has expressed concern to Mexico regarding the deteriorating climate for American energy investors in Mexico, emphasizing that the United States government is committed to ensuring that American investors are treated fairly and that Mexico adheres to its USMCA commitments, including those related to investment and state-owned companies,” the USTR said in a report on Mexico’s trade barriers.

“The United States has also emphasized that, contrary to the statements of certain Mexican officials, the USMCA applies to the energy sector in Mexico,” he continued.

The president of Mexico, Andrés Manuel López Obrador, has declared that the change to the rules on energy matters was made “because it was abused a lot”, in reference to certain private companies, and because with the electricity reform energy prices will be reduced. For Mexicans.

“In the energy chapter (in the USMCA) only the absolute, sovereign right of Mexico was established in two paragraphs, to decide on energy policy, in accordance with the letter and especially with the spirit of article 27 of our Constitution.

“I want to treat the matter with great respect towards them. I just want to clarify that in what has to do with the energy policy of our country, we have not signed any agreement with the government of the United States or Canada,” López Obrador said in October 2020, when visiting the José López Portillo Thermoelectric Power Plant, in Coahuila.

However, last Thursday, the head of the USTR, Katherine Tai, told the Finance Committee of the US Senate that she informed the government of President López Obrador that her office is already analyzing the legal response to the shift in energy policy. of Mexico in the last year (which also affects the hydrocarbon sector) and before the possible change to the Mexican Constitution.

“I have informed Mexico (…) that we at the USTR are analyzing all the options available under the USMCA to address these problems so that the USMCA can work for our participants (in the energy sector) and protect our environment in the three countries”, he stated.

In a July 2020 memo, López Obrador outlined a “new energy policy” that introduced several proposals that later became the core of the new legislation, and urged energy regulators to restore state control over the energy sector and prevent state energy companies from losing market share to private companies.

The memorandum instructs regulators to use existing authority to block permits for private sector energy projects in favor of Pemex and CFE, and protect their market share, according to concerns reported by US energy investors. Joined.


Mexico Daily Post