Trade groups urge US to act over ‘discriminatory’ Mexican energy policy

In a letter to US trade representative Katherine Tai on 13 March, the American Clean Power Association (ACP), the National Association of Manufacturers and the American Petroleum Institute said Mexico had failed address issues raised by the US President Joe Biden over policies favouring state-owned companies in breach of the US-Mexico-Canada free trade agreement (USMCA).

“As such, our organisations respectfully urge that the Biden administration continue to hold Mexico accountable by using every tool available to enforce the USMCA,” the letter said.

Since taking office in 2018, the administration led by Andres Manuel Lopez Obrador has halted approvals of new largely foreign-owned renewable energy projects and passed legislation giving more power to domestic oil giant Pemex and power utility CFE.

“The government of Mexico’s escalating pursuit of discriminatory policies dramatically favours Mexico’s state-run electrical utility and state-run oil and gas companies, hindering private-sector investment, threatening companies in the United States and their workers, and undermining North American energy integration and our regional competitiveness vis-à-vis China and other rivals,” the letter stated.

After meeting with US and Canadian counterparts in Los Angeles in January, Mexico’s president, known as Amlo, announced the construction of four wind farms and a new solar energy plant in southern Mexico that would be funded by the US. However, details of the projects have not been revealed.

“In our view, the government of Mexico has not engaged constructively in the consultation process with the United States, nor has Mexico taken meaningful steps to address the issues raised by the US,” the associations said.