The United States also wants to avoid an energy panel: AMLO

Like Mexico, the United States wants to avoid an energy panel within the framework of the Treaty between Mexico, the United States and Canada (T-MEC), said this Friday the president Andres Manuel Lopez Obrador.

The dispute settlement process was initiated at the request of the United States and Canada against Mexico’s energy policies that have, among other purposes, to strengthen Pemex and the Federal electricity commission (CFE).

“When it was thought that there were going to be conflicts over the consultation on energy matters, we reported, we clarified, we made our point of view known and they have decided not to take the step towards a panel and an agreement is being sought, that there be no confrontation,” He stated in a morning conference.

“There is no point in me referring to those who bet on confrontation, experts always come out, internationalists who rub their hands looking for confrontation, I hope they calm down, like those here, the opponents, conservatives, who we respect them a lot, let them tell up to 10, take a deep breath before launching yourself again,” López Obrador said in a conference at the National Palace.

His statements take place in a context in which Alejandro Encinas Nájera replaced Luz Maria de la Mora in the ownership of the Undersecretary of Foreign Trade of the Ministry of Economy just in the stage of consultations between Mexico and the United States to determine whether or not to lift the dispute settlement panel on energy policies.

There was also another related and important event: after her resignation as Secretary of the Economy last week, Tatiana Clouthier revealed in an interview with Enrique Galván Ochoa, from La Jornada, that the Secretary of Energy, Rocío Nahle, “does not want to give up anything ” in the dispute settlement process with the United States and Canada in the energy industry.

On July 20, 2022, the United States requested consultations with Mexico under the chapter of Dispute Resolution of the T-MEC, arguing that various energy policies in Mexico violate this agreement, favor Pemex and the CFE, and negatively affect US companies operating in Mexico and energy produced in the United States.

The parties failed to resolve the dispute through consultation within 75 days, so the complaining parties (United States and Canada) requested an extension of the period before determining whether to request the establishment of a dispute settlement panel to examine the measures in question and potentially authorize retaliatory actions.

The measures challenged by the United States affect a wide range of energy resources and technologies, including natural gas, electricity, renewable sources such as wind and solar, and diesel fuel.

Mexico’s actions include, but are not limited to, amendments to Mexico’s electricity law that would prioritize the distribution of power generated by the CFE over cleaner power sources provided by private sector providers, such as the wind and solar.

They also include Mexico’s delays, denials, and revocations of the ability of US companies to operate in Mexico’s energy sector, including with respect to renewable energy projects.

While López Obrador has insisted that the reform will reduce energy prices for Mexicans, skeptics argue that less private sector involvement in an industry that requires significant capital investment will increase rates.

roberto.morales@eleconomista.mx