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After Canadian milk, Mexico’s energy sector is in the crosshairs of the United States. Washington announces that it has launched this Wednesday, July 20, a dispute procedure against its neighbor and trading partner.
At the heart of the quarrel, the will of the Mexican president to favor national public groups to the detriment of foreign private companies, in particular American.
It has been ten years since the energy sector was liberalized in Mexico. But under the leadership of President Obrador, elected in 2018, the government wants to reserve at least 56% of energy production for public companies in order to guarantee its sovereignty in the matter.
What harm private companies, which happen to be mostly American. Washington, after having tried to dissuade the Mexican president, took action. As he did with the Canada twice for the dairy sectorit officially launches a dispute procedure under the new United States-Mexico-Canada free trade agreement.
A 75 day ultimatum
The parties must hold consultations: if beyond 75 days, nothing comes out of it, Washington can demand measures that can go as far as punitive customs duties.
Washington ensures that it wants to avoid getting there and insists on the economic argument: with its policy, Mexico is depriving itself of 10 billion dollars of investments.
An argument taken up by opponents of the reform in Mexico: with the free trade agreement, they say, the country has made commitments in terms of the liberalization of the sector and the development of renewables. However, the development of wind and solar power still largely depends on American investments.
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