US and Canada launch commerce dispute with Mexico over clear vitality


The US and Canada are looking for commerce dispute talks with Mexico over the nation’s nationalist vitality insurance policies, which they argue have undermined worldwide corporations investing in clear vitality.

Washington accused Mexico of failing to fulfill its obligations underneath the US-Mexico-Canada Agreement (USMCA) by favouring state-run utility Federal Electricity Commission (CFE) and oil firm Petróleos Mexicanos (Pemex). This got here on the expense of US and different non-public corporations which have poured billions of {dollars} over the previous decade into the clear vitality sector in Mexico, it mentioned.

“Mexico’s policies have largely cut off US and other investment in the country’s clean energy infrastructure,” US commerce consultant Katherine Tai mentioned in a press release on Wednesday.

Canada adopted the US’s lead and requested its personal consultations underneath the USMCA commerce pact. “Canada has consistently raised its concerns regarding Mexico’s change in energy policy. We agree with the United States that these policies are inconsistent with Mexico’s USMCA obligations,” a spokeswoman for Mary Ng, Canada’s worldwide commerce minister, mentioned in a press release.

Mexico president Andrés Manuel López Obrador made mild of the US’s grievance at his morning press convention by saying “nothing is going to happen”. He then performed a music from Mexican artist Chico Che with the title: “Oh, how scary!”

“It seems like the United States government is revealing itself to us and we are answering: they are supporting corruption,” López Obrador mentioned.

Mexico’s financial system ministry mentioned the nation needed to succeed in a “mutually satisfactory solution” through the session stage.

If no settlement is reached inside that 75-day interval, USMCA guidelines permit the US to request the formation of a dispute settlement panel.

The grievance introduced by the US accuses Mexico of limiting market entry, failing to guard funding and pushing coverage modifications that curb the usage of clear vitality from non-public producers.

The US assertion takes goal at, amongst different issues, a 2021 change in Mexico’s electrical energy regulation that offers precedence to energy generated by the CFE — together with from its coal-fired crops — over renewables corresponding to wind and photo voltaic, that are produced by non-public corporations.

The letter provides to tensions between the nations following US complaints that Mexico is failing to dwell as much as its USMCA obligations on vitality points and placing little significance on local weather change.

López Obrador has pledged to advertise “energy sovereignty” in Mexico in a reversal of a reform accredited in 2013 that opened the electrical energy and petroleum sectors to non-public funding. A leftwing populist and nationalist, the president has been hostile in the direction of buyers within the sector and questioned the worth of unpolluted vitality.

Arturo Sarukhán, a former Mexican ambassador to Washington, mentioned “There is real concern that Mexico is the odd man out in efforts to truly build a paradigm of North American energy efficiency, security, resilience and independence — on renewables, on hydrocarbons, on the green economy and on climate change.”

Mexico may face retaliatory tariffs underneath the USMCA if the grievance stays unresolved, however Sarukhan mentioned “we still have a long process ahead of us”.

The request for the dispute settlement session additionally follows a White House assembly between López Obrador and US president Joe Biden on June 12. A joint declaration after that assembly acknowledged the 2 nations’ acknowledgment of “the importance of investing in and promoting renewable sources of energy.”

López Obrador subsequently mentioned non-public funding can be permitted in photo voltaic initiatives as long as it was partnered with the CFE.