Mexico’s policies have largely cut off US investment in the country’s clean energy infrastructure, a US trade official said.
The US is putting pressure on Mexico on energy policies that Washington considers unfairly favors Mexico’s state-owned oil and power companies relative to American competitors and clean energy suppliers.
The US is demanding talks to resolve the dispute, beginning a process on Wednesday that could end with trade sanctions against Mexico.
“We have repeatedly expressed serious concern about a range of changes in Mexico’s energy policy and its consistency with Mexico’s commitments,” U.S. Trade Representative Katherine Tai said in a statement. declare. “American companies continue to face unfair treatment in Mexico,” she said.
Among the specific issues in dispute is an amendment to Mexican law last year that the United States has said gives it an unfair advantage over electricity produced by the Mexican state-owned company. Federal Electric Commission energy from private companies and cleaner sources such as wind and solar energy.
The US also opposes the 2019 regulation to only give state oil companies Petroleos Mexicanos more time to comply with harsher environmental standards, limiting allowable sulfur in automotive diesel fuel.
The United States also alleges that Mexico has delayed, refused or failed to comply with the procedures for obtaining permits to operate energy businesses by private companies and revoked or suspended existing licenses.
“Mexico’s policies have largely cut off investment by the United States and other countries in the country’s clean energy infrastructure, including important steps to roll back reforms Mexico has made in the past. to meet the climate targets under the Paris Agreement,” Tai’s office said in a statement.
The Mexican government has tried to downplay the controversy, seeing it as a normal process between countries.
Chairperson Andres Manuel Lopez Obrador said on Wednesday that relations with the US government were good and that the dispute was caused by Mexican companies opposing his administration and lobbyists on the issue.
If the two countries cannot reach an agreement after 75 days of negotiations, the United States may request the intervention of a dispute settlement panel under US-Mexico-Canada Agreement or USMCA, which could lead to sanctions against Mexico if the US prevails. The pact negotiated by President Donald Trump replaced the 1994 North American Free Trade Agreement.
“The Mexican government expressed its readiness to reach a mutually satisfactory solution during the consultation period,” the Economy Ministry said in a statement.
The ministry, which will lead the negotiations, pointed out that this is the fourth time the mechanism has been used since the free trade agreement took effect two years ago. It was first used by the US against Canada over its dairy quota, then by Canada against the US over tariffs on Canadian solar panels. Mexico and Canada have used it to challenge the US interpretation of the auto part’s origin clause to qualify for duty-free status under the agreement.
Lopez Obrador said there were “no complaints” on the subject during a meeting with American and Mexican businessmen in Washington earlier this month and he told Biden that Mexico was investing in updating hydroelectric power plants. and will create new solar plants on the northern border. .