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President López Obrador and Foreign Minister Marcelo Ebrard at a presidential press conference. Ebrard has stated that the proposed electricity reform is not up for discussion at the meeting.

As leaders meet in Washington, pressure mounts against AMLO

Politicians, businesses express concern over energy reform and migration

United States lawmakers, the governor of Texas and business organizations in the U.S., Canada and Mexico have raised concerns about the Mexican government’s stance on energy and migration as President López Obrador attends Thursday’s North American Leaders Summit in Washington D.C.

A group of seven Democratic Party lawmakers led by Texas Representative Veronica Escobar wrote to United States President Joe Biden on Wednesday to urge him to address energy policy concerns in the “strongest possible terms” when he meets with López Obrador.

“As your administration hosts our United States-Mexico-Canada Agreement (USMCA) partners … this week, we write to share our increasingly growing concerns by Mexico’s disregard for the international commitments it has made to the companies in the energy sector under the USMCA and the climate consequences of such actions,” said the letter addressed to Biden and five other high-ranking U.S. officials.

“North American energy integration is key to our continued global competitiveness in relation to China, Russia and the European Union. Our energy markets, infrastructure and trade are already integrated and independent across the U.S., Canada and Mexico. In fact, North America is on the verge of energy self-sufficiency. Because of this, energy was enshrined as a central component of this historic agreement between our three nations. Mexico and … López Obrador, however, continue to willfully undermine this agreement to protect state-owned energy companies, Petróleos Mexicanos (Pemex) and the Federal Electricity Commission (CFE), while disadvantaging private investment in energy – including from the United States and Canada,” said Escobar and other Democrat lawmakers from Texas, California and Pennsylvania

The legislators said that “in addition to a slew of administrative and regulatory actions against private investors, President López Obrador has spearheaded major amendments to two laws – the Power Industry Law and the Hydrocarbons Law – to change market rules in favor of Pemex and CFE and against private companies.”

Senator John Neely Kennedy of Louisiana, a Republican, wrote to Energy Secretary Jennifer Granholm on Wednesday to express his concern about López Obrador’s treatment of U.S. energy companies operating in Mexico.

“… While AMLO’s strategy to deal with Mexican drug cartels is using ‘hugs, not bullets’ his strategy to deal with American energy companies is quite different,” he wrote.

Kennedy noted that United States-owned fuel storage terminals have been shut down, adding that “multiple facilities” remain closed and under the the supervision of the National Guard “despite the companies’ continued efforts to work with AMLO’s regulators.”

“… AMLO’s strategy includes undermining other privately-owned, American renewable energy facilities. These companies could be the next to be seized, and it is unacceptable. It is obvious what is going on here – AMLO’s shutting down all foreign competition for his state-owned company, Pemex, and so far he’s getting zero resistance from U.S. officials in the Biden administration,” the senator wrote.

“… To protect energy investments in the region from AMLO’s nationalistic actions, I implore you to begin aggressive engagement with the AMLO administration and urge the White House to immediately initiate a dialogue on this specific issue between our countries.”

Texas Governor Greg Abbott wrote to Biden to raise concerns about border security and energy and to ask the U.S. president to address them in his meetings with López Obrador.

Texas Governor Greg Abbott was one of several politicians and business leaders who have raised concerns about the Mexican government's stance on immigration and energy reform.
Texas Governor Greg Abbott was one of several politicians and business leaders who have raised concerns about the Mexican government’s stance on immigration and energy reform.

“Despite numerous calls to action, your administration refuses to enforce our immigration laws and to secure our southern border. Unfortunately, Mexico has also been unwilling to stem the flow of illegal immigration and thus contributed to the open border situation,” he wrote.

“… I urge you to engage the Mexican government about ways to prevent the smuggling of individuals, drugs, and the continued flow of illegal immigrants into Texas,” Abbott said.

He also urged Biden to “take action to protect American assets from seizure by the Mexican government, potentially in violation of international trade laws.”

“… It has also come to my attention that the Mexican government is using militarized police forces to prevent the operation of U.S. businesses. … In order to protect energy investments in the region, I implore your administration to begin aggressive engagement with Mexico and immediately initiate a dialogue between our countries,” the governor wrote.

He said the closure of U.S.-owned facilities in Mexico came “on the heels of continued regulatory assault on American companies by the Mexican government at a time when energy prices are rising across our nation.”

The United States Chamber of Commerce, the Canadian Chamber of Commerce and the Business Coordinating Council, a Mexican umbrella organization that represents 12 business groups, also raised concerns about Mexico’s energy sector plans and policies in a letter addressed to Biden, López Obrador and Trudeau.

“The Canadian and U.S. private sectors are deeply concerned about efforts by the Mexican government to reduce private competition in the energy sector,” they said.

“Attempts to favor state-owned enterprises at the expense of renewable and other private energy providers only undermine investment certainty, put at risk ambitious shared goals to address climate change, and promise both added cost and diminished opportunity for our countries’ workers.”

Writing on behalf of the North American business community, the three organizations said that “it is imperative that the three governments hold each other accountable to full implementation of USMCA in order to reap the benefits the agreement provides as an economic framework for advancing our shared prosperity and job creation.”

They also said that the U.S., Mexican and Canadian governments must “guarantee open and transparent investment environments to enhance our continental competitiveness.”

In addition to energy and migration, Cuba could be a potentially contentious issue at Thursday’s trilateral summit given that López Obrador supports the Cuban government and the United States is a harsh critic of the regime.

Migration issues are certain to be on the agenda but Foreign Minister Marcelo Ebrard said Wednesday that Cuba and Mexico’s proposed electricity reform were not up for discussion, despite indications from U.S. officials to the contrary.

“Our view is that we’re going to have positive results, we have an optimistic view of this meeting but that doesn’t mean that an issue on which there are different positions can’t arise,” he told reporters outside the Mexican Embassy in Washington.

According to analysts who spoke with the newspaper El País, the fact that a vote on the proposed electricity reform has been pushed back to April takes the heat off the issue.

“If the reform is approved next year there will be noise about it but at the moment the only thing that Biden can do is express concern,” said Adrián Duhalt, a postdoctoral fellow in Mexico energy studies at Rice University’s Baker Institute for Public Policy.

“I can’t imaging Trudeau or Biden telling AMLO ‘you have to get rid of the reform,’” said Juan Carlos Baker, managing director of Ansley Consultores and a trade negotiator for the previous federal government.

“… We can’t expect much from the meeting,” he said, adding that the main focus will be on the region’s economic recovery from the coronavirus pandemic.

Referring to Mexico’s willingness or otherwise to uphold USMCA provisions, Baker said: “In Mexico, sometimes it seems that we want access to the United States market and our compatriots’ remittances but when it comes to taking on a deeper commitment we don’t like it and we return to the dialectic of sovereignty, full respect [for foreign countries] and non-intervention [in their internal affairs].”

The North American Leaders Summit is scheduled to take place at the White House late Thursday afternoon. López Obrador will also meet with Biden and Trudeau separately in the United States capital.

With reports from Reforma and El País 

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