The United States Trade Representation (USTR, for its acronym in English) reviews the electrical reform initiative presented by the Mexican government to the Congress of the Union to determine if it incurs in violations of the Treaty between Mexico, the United States and Canada (T- MEC).
The above was reported by three high-ranking government officials from US President Joe Biden to Republican Congressman Count L. “Buddy” Carter in a letter. The letter was signed on January 20 by the head of the USTR, Katherine Tai; the Secretary of Commerce, Gina M Raimondo, and the Secretary of Energy, Jennifer Granholm, prior to a working visit that the latter made to Mexico City.
At the beginning of their response, the three officials acknowledge a letter that Carter addressed to them on November 3, 2021, expressing his concern about the proposals of the Government of Mexico to limit the participation of private companies in its energy sector.
They then argue that trade and investment in energy between the United States and Mexico are crucial to ensuring energy security and economic prosperity for the United States and North America.
“We understand and share your concerns regarding Mexico’s proposed constitutional reforms and recent actions affecting US companies and investors in the energy sector,” the officials say.
Carter is then informed that the American government remains committed to ensuring fair treatment for American exporters and investors.
In addition, the Office of the United States Trade Representative continues to carefully review these measures and their implications for Mexico’s commitment under the United States-Mexico-Canada Agreement.
Granholm traveled to Mexico City from January 19-21, 2022 to meet with Mexican officials and “directly raise concerns” of the United States about the proposed constitutional reforms.
In counterpoint, the Mexican president, Andrés Manuel López Obrador, has defended the electrical reform arguing that it would allow for a certain downward control of electricity prices in the country.
In this same month of January, Kevin Brady, Republican leader of the Ways and Means Committee of the United States House of Representatives. He warned that, if the electrical reform initiative in Mexico is approved, it would arbitrarily block investors.
On September 30, 2021, López Obrador sent a Bill to the Mexican Chamber of Deputies to amend various provisions of the Mexican Constitution.
“If enacted, these amendments will prohibit CFE from contracting with private investors to supply electricity in Mexico and revoke existing and pending electricity generation permits,” Brady said, in a letter to Tai. This letter was sent prior to the meeting to be held by the Undersecretaries of Commerce of Mexico, the United States and Canada. “They will also empower investors to discriminate by arbitrarily limiting or blocking their participation in the Mexican electricity market,” Brady added.
roberto.morales@eleconomista.mx
