Image credits: Andrés Manuel López Obrador on Twitter
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News Article

US Climate Envoy Visits Mexico Once Again

By María José Goytia | Wed, 04/06/2022 - 11:08

In an effort to negotiate better terms for Mexico’s new energy reform, US Special Climate Envoy John Kerry met with President López Obrador on March 31. This is the second time Kerry visits Mexico in 2022 regarding concerns surrounding the Mexican energy market and US investment.

The meeting took place on Thursday, March 31 and was also attended by US Ambassador to Mexico Ken Salazar and a group of 20 US company executives with an interest in investing in the Mexican energy sector.

Before the meeting with Kerry, López Obrador commented that his government “is not taking an obstinate position. We want to have good relations with the US government and entrepreneurs." The president also said he would explain the rationale behind his change of legislation, which would strengthen the country’s state-run energy companies, as he noted that the conflict in Ukraine highlighted the benefits of having control over one’s national energy resources.

Kerry arrived at the National Palace around 14:00 p.m. The encounter occurred amid a public-private dispute over Mexico’s efforts to change its energy laws. López Obrador has championed the proposal, which would give more market power to state-run energy companies CFE and PEMEX. However, multiple high-level US officials, like Ambassador Ken Salazar and US Trade Representative Katherine Tai, voiced the US’ concerns regarding Mexico’s compliance with USMCA guidelines on free trade in the energy sector.

President López Obrador and Kerry’s meeting lasted several hours. According to the president, the meeting was "friendly, necessary and beneficial." Throughout the meeting, López Obrador presented opportunities for the private sector, as he highlighted that companies will be able to participate in the 46 percent of the generation market and that opportunities will remain in natural gas and power production via fossil fuels. "We have surplus natural gas … We are interested in developing industrial parks in the Isthmus of Tehuantepec. The possibility for investment remains. We want to maintain good relations with the US government and seek further economic integration but always with respect for our sovereignty,” the president said.

As he left for Mexico City International Airport, Kerry commented on his discussion with the president and the US vision for North America to coincide with "our efforts on climate and larger economic issues." Kerry took to the media to thank President López Obrador for the meeting and reported the formation of a working group led by Ambassador Ken Salazar to follow up on the energy reform with the White House. "We will work on developing ideas with the Ambassador to see how that reform can best reflect the possibilities of working effectively. We have a team headed by Salazar in conjunction with the White House and the Climate office to try to assure that whatever decision is made, the reform reflects to the best extent the regional vision we are trying to achieve," said Kerry.

Kerry is visiting for the second time in two months. In February, Kerry urged President López Obrador to ensure that his plan to boost state control of the energy market would not breach the USMCA trade agreement. He also requested Chancellor Marcelo Ebrard to "strengthen an open and competitive energy market".

Nevertheless, the day after the meeting, mixed messages materialized. During his morning conference, President López Obrador changed the tone previously shared with Kerry, as he insisted that the reform "remains as it is as it already includes US concerns.” The president pointed out that the full text of the energy reform was shared with the US delegation during the meeting.

President Andrés Manuel López Obrador rejected the agreement regarding the follow-up group focused on the energy reform. He remarked that his government, unlike others, is not “submissive.” “There was a proposal to maintain communication on the issue and to have a group participate but I kept quiet and did not accept. We are not going to accept that an external group would be watching over our actions," the president said on Friday.

The data used in this article was sourced from:  
Latinus, Reuters, Financial Post, El País, Expansión, Mexico Business News
María José Goytia María José Goytia Journalist and Industry Analyst