Wednesday, May 22, 2024

US says Mexico must address ‘serious’ energy policy concerns

The United States has once again pressured Mexico to address concerns over the energy policies implemented by the current Mexican government.

In a meeting in Mexico City with Deputy Economy Minister for Foreign Trade Alejandro Encinas Nájera on Wednesday, the Deputy United States Trade Representative Jayme White “underscored the pressing need for Mexico to address the serious concerns that the United States has raised during the ongoing consultations under the USMCA regarding Mexico’s energy measures,” according to a statement issued by the Office of the United States Trade Representative (USTR).

Jayme White and Alejandro Encinas Nájera
Deputy U.S. Trade Representative Jayme White with Deputy Economy Minister for Foreign Trade Alejandro Encinas Nájera. (Secretaría de Economía/X)

In July 2022, U.S. Trade Representative Katherine Tai requested dispute settlement consultations with Mexico under the United States-Mexico-Canada Agreement, or USMCA, regarding policies that favor the Federal Electricity Commission and state oil company Pemex over U.S. energy companies that operate in Mexico.

“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,” Tai said at the time.

“These policy changes impact U.S. economic interests in multiple sectors and disincentivize investment by clean-energy suppliers and by companies that seek to purchase clean, reliable energy.”

The dispute settlement consultations are ongoing 14 months later even though the United States has been pushing for prompt resolution almost since the beginning. The U.S. so far has decided against requesting the establishment of dispute settlement panel to deal with the matter, even though it could have done so 75 days after it first asked for consultations.

Katherine Tai and Raquel Buenrostro
U.S. Trade Representative Katherine Tai with Mexico’s Economy Minister Raquel Buenrostro earlier this year. Tai has repeatedly emphasized U.S. concerns about Mexican energy policy in relation to the USMCA trade pact. (Katherine Tai/X)

President López Obrador, a fierce critic of the 2014 reform that opened up Mexico’s energy sector to foreign and private companies, remains reluctant to change the government’s nationalistic policies.

Ambassador White raised other concerns during his meeting with Encinas, whose father is Deputy Interior Minister for Human Rights Alejandro Encinas Rodríguez.

White “reiterated concerns about the recent surge in U.S. imports of certain steel and aluminum products from Mexico and the lack of transparency regarding Mexico’s steel and aluminum imports from third countries,” the USTR statement said.

He “encouraged Mexico to enhance its monitoring of Mexican steel and aluminum exports to the United States in accordance with the 2019 Joint Statement by the United States and Mexico on Section 232 Duties on Steel and Aluminum,” the statement added.

Mexico has requested a USMCA review of antidumping quotas on steel, while the U.S. has expressed concern about a “surge” in Mexican steel imports to the United States. (Shutterstock)

The USTR also said that White and Encinas “discussed the importance of making progress in the ongoing USMCA consultations regarding Mexico’s enforcement of its fisheries-related environmental laws.”

Those consultations are related to Mexico’s obligation to protect the critically endangered vaquita marina porpoise.

Among other matters discussed by White and Encinas were “the regulatory environment for medical device manufacturing” – a growing sector in Mexico – the “importance of competition in the telecommunications sector” and “conducting procurements in accordance with USMCA obligations in an open and transparent manner.”

The USTR readout of the meeting didn’t mention the dispute between Mexico and the United States over the former’s genetically modified corn policies. The U.S. government last month requested the establishment of a dispute settlement panel to resolve that issue.

The meeting between White and Encinas came ahead of the second USMCA Small and Medium Enterprise Dialogue, which was held in Mexico City on Thursday.

Mexico News Daily 

Have something to say? Paid Subscribers get all access to make & read comments.
A Citibanamex bank in Mexico City

4 economic forecasts for Mexico from Citibanamex’s 30-bank survey

0
GDP growth, inflation and interest rate predictions were similar among those surveyed, but USD:MXN exchange rate forecasts had a wider range.
A completely dried out section of Lake Patzcuaro in Mexico, with cracks in the lake bed

Drought affects just over 70% of Mexico’s territory

2
The latest national drought monitor reports that 85% of municipalities in Mexico are currently experiencing some level of drought.
Aerial view of the angel of independence in Mexico City

Study ranks Mexico’s most and least competitive states for business

1
Mexico City again ranked the highest in 2024, with states in the southern region including Guerrero, Oaxaca and Chiapas among the least competitive.