The Mexican president, Andrés Manuel López Obrador, has no intention of giving his arm to twist when it comes to the electricity reform. The United States, the main trading partner, has already expressed concern about the initiative that limits private power generation and that threatens to halt the growth of renewables. Given the possibility that the issue may arise during the bilateral summit on November 18 with President Joe Biden, the Mexican president said on Wednesday that he would insist that it is an internal issue. “This is a matter that corresponds to us, the Mexicans,” he declared at a press conference.
The summit, to be held in Washington, will address migration, access to covid-19 vaccines and problems in supply chains, the Mexican government has explained. Officially, the electricity reform will not be one of the priority issues. However, this initiative has aroused misgivings in the Biden Administration and is closely followed by its diplomatic representatives. The ambassador to Mexico, Ken Salazar, said Tuesday that US companies are “concerned” and that the Latin American country requires this investment.
Despite pressure, for now subtle from US officials, López Obrador already knows how he would respond to Biden about what is his top legislative priority at the moment. “It is not on the agenda, but if it arises we would explain what the reform consists of,” he said. “In the event that he told me something, I would say to him: Well, President, they don’t want to stop stealing and tell me what to do in these cases, do I become an accomplice or do I represent my people with dignity?”
The president has accused multinationals such as Spain’s Iberdrola of being corrupt. There is no known complaint to the Attorney General’s Office against the company, but the president does not forgive him for his apparent closeness to previous Mexican governments. “Those of Iberdrola, of the electricity industry, who had the audacity to even hire a former president of Mexico as an employee, they also hired the Secretary of Energy of the federal Government,” he said this Wednesday. This association has fueled the hostility of the president against companies in the sector.
Legally, the Mexican position is that the energy sector is outside the T-MEC, the free trade agreement that unites the three North American economies, and that the Government has a free hand to legislate on this matter. “If you ask me, I don’t think I will do it because it is very respectful and that is a matter that corresponds to us, the Mexicans, we are not going to give advice to other countries, to other governments, to make recommendations and he is very respectful of our sovereignty, ”said López Obrador.
The electricity reform includes the cancellation of all current contracts signed by private power plants and the renegotiation of the terms by the Federal Electricity Commission (CFE), in addition to the elimination of the agencies that regulate the market autonomously. The private initiative has reacted with alarm. They are more than 40,000 million dollars invested in the sector, of which around 1,000 correspond to US investments in renewable energy, according to Ken Salazar. After meeting last week, separately, with the Secretary of Energy Rocío Nahle and with businessmen in the sector, the diplomat said he did not know “if it is possible to reach a resolution.”
Regardless of pressure from the US, the government has to get enough votes to pass the constitutional reform, which requires a two-thirds majority. The PRI and the Green Party have not yet clearly defined their position and will be key to determining the success or failure of the initiative.
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