US IP holds consultations with Mexico on energy

José Díaz Briseño / Reforma Agency

Wednesday, July 20, 2022 | 17:59

Washington.- The decision of the United States to request consultations on the energy policy of the Government of President Andrés Manuel López Obrador is a welcome step given the impact it has had on investment, costs and integration in North America, the US private sector said. .

Only hours after the US government invoked the request for consultations under the dispute resolution mechanism between States of the regional trade agreement (T-MEC), several of the most relevant associations of the US private sector assured that the action was justified.

“This is an important step forward to address Mexico’s alarming energy sector policies, which not only violate the country’s commitments under the USMCA, but also undermine the integration of North American energy markets and jeopardize our climate goals.” shared,” said the American Petroleum Institute (API) and the American Clean Power Association (ACP).

Representing more than 500 companies, the API is the largest association of the oil and natural gas industry in the US while the ACP represents companies in the renewable energy industry and both decided to issue a joint statement against the policy energy of Mexico.

After strong pressure since the beginning of 2021 warning against the new Electricity Industry Law that favors the parastatal Federal Electricity Commission (CFE) over private energy producers, the US Chamber of Commerce also applauded the decision. from today.

“The Chamber applauds this important step to address the worrying measures that Mexico is advancing in its energy sector that we believe violate the country’s commitments under the T-MEC,” said Neil Herrington, the vice president for the Americas of the Chamber of Commerce of Mexico. EU.

“We have repeatedly expressed concern about the direction of these policies that have unfairly harmed America’s businesses and are at odds with our common goals of reliable energy generation, sustainable growth and lasting economic recovery.”

With important investments in Mexico, the main association of the manufacturing industry in the US -the National Association of Manufacturers (NAM)- advocated that the policies of President López Obrador that the US claims violate T-MEC clauses be quickly reversed so as not to affect more costs.

“We stand ready to work with the USTR to quickly reverse Mexico’s unfair energy policies and address the many other challenges facing the industry in Mexico,” said Ken Monahan, NAM vice president of international economic affairs.

“This has added costs for manufacturers that rely on existing contracts with energy providers and makes it difficult for them to meet long-term sustainability goals in Mexico, while also slowing the deployment of renewable energy in Mexico.”

On the other hand, other US private sector organizations hoped that the US decision to request consultations would be the first signal to ensure that the Government of President López Obrador fulfills its commitments in other areas where they believe Mexico is also lacking.

“We hope that this action today demonstrates to Mexico that the United States is serious about fulfilling Mexico’s commitments under the USMCA in these and other areas in which it is falling short,” said Brian Pomper, Executive Director of the Alliance for Trade Compliance (AFTE).

Representing 20 of the largest US private sector associations including the American Petroleum Institute (API) and the American Association of Fuel Refiners and Petrochemicals (AFPM), AFTE believes the US stands to gain from going before an eventual panel.

“AFTE has been an outspoken advocate encouraging the Biden-Harris Administration to take steps to get Mexico to meet its USMCA commitments in a variety of areas, including biopharmaceutical, manufacturing, biotech, electronic payment, and of course energetic,” he said.

Over the past two years, various US private sector organizations have sent letters to the White House and to US Trade Representative (USTR), Katherine Tai, warning of the deleterious effect they believe Mexico’s energy policy favoring industries is having. parastatals.

In its statement announcing the call for consultations today, Representative Tai’s office highlighted that the decision to request consultations under the USMCA’s inter-state dispute settlement mechanism had extremely broad support within the US not only from the private sector but as well as environmental groups.

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