Mexico eyes ‘mutually satisfactory’ solution to US energy trade dispute – deputy minister

MEXICO CITY, July 22 (Reuters) – Mexican Deputy Economy Minister Luz Maria de la Mora told Reuters she hoped for a “mutually satisfactory solution” to talks requested by the United States and Canada in about what they claim are Mexican energy violations. regional trade pact.

The U.S. and Canadian demands come after years of concern among private businesses in those countries that Mexican President Andres Manuel Lopez Obrador’s drive to tighten the state’s grip on the oil and power sectors treated unfairly and violated the United States-Mexico-Canada. Agreement (USMCA).

“We want to take advantage of this phase of consultation (…) to see how we can reach a mutually satisfactory solution through an open, frank and constructive dialogue, which will allow us to overcome these differences,” De la Mora told Reuters in an interview. .

The request for consultations marks the most serious trade dispute between Washington and Mexico since the USMCA trade pact took effect two years ago and, if left unresolved, could ultimately lead to punitive U.S. tariffs.

Although De la Mora said the Mexican government would seek to argue that its energy policies do not violate the trade deal, his conciliatory tone on finding a solution that benefits all parties stands in contrast to the defiant resistance of Lopez Obrador against the complaints. Read more

The left-wing energy nationalist has pledged to revive state-owned oil producer Petroleos Mexicanos (Pemex) and power company Comision Federal de Electricidad (CFE), which he says his predecessors have deliberately “destroyed” to cede the Mexican energy market to foreigners.

The U.S. Trade Representative said moves to bolster state-owned enterprises have undermined U.S. businesses in Mexico.

De la Mora said Mexico would not use a separate trade dispute with Washington over the auto industry as a bargaining chip.

“We hope this issue will be resolved before the end of the year and we are very optimistic that we have a very strong case and that we will have a favorable resolution for Mexico,” De la Mora said, referring to the auto wrangling, which includes disagreements over proposed U.S. tax breaks for manufacturing electric vehicles.

Canada said in January it would join Mexico in asking a dispute settlement panel to iron out their differences with the United States over how to enforce automotive content requirements under the treaty. . Read more

Asked if Lopez Obrador’s energy policies are scaring off investment, De la Mora pointed to recent announcements of investments in Mexico by US energy company Sempra Energy (SRE.N) and Canada’s TC Energy.

She argued that the USMCA’s dispute settlement mechanism gives investors certainty because if differences arise, as they do now, using it would help clear things up.

“The dispute settlement mechanism is a very strong mechanism, it is a mechanism that allows the investor to have greater certainty and it is very positive for the business climate,” she said. .

The United States requested USMCA consultations on Mexico’s energy policies on July 20.

Under USMCA rules, the United States and Mexico would enter into consultations within 30 days of the United States’ request, unless the parties agree otherwise. If it does not resolve the matter through consultations within 75 days of the United States’ request, the United States may request the establishment of a dispute settlement panel.

Reporting by Anthony Esposito; Editing by Kim Coghill


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