News Article

US Legislators Plead for Change in Mexican Energy Policy

By Cas Biekmann | Tue, 10/27/2020 - 09:21

More than 40 US lawmakers wrote a letter to US President Donald Trump to voice their concerns regarding Mexico’s energy policy, reported Reuters. Legislators argue that Mexican President López Obrador’s efforts to save its state production companies endanger US investments in Mexico and go directly against regional trade deals.

The letter cites reports of Mexican government bodies delaying or canceling permits for US energy companies. This information has been confirmed by various congressional sources and by Reuters. The letter furthermore refers to a recent memo circulating in the media, in which López Obrador asks regulators to do what is necessary to rescue PEMEX and CFE. “These efforts violate and contradict the spirit, if not the letter, of USMCA, an agreement among whose primary objectives are to promote growth among the participant countries,” the letter reads.

Legislators note “a pattern of obstruction” against the billions of dollars in investment coming from the US and urged Trump to take action to find a resolution and keep the market open like Mexico’s 2014 Energy Reform stipulated.

President López Obrador did not hesitate to outline his own views on the matter. “A document appeared signed by US legislators complaining about the energy policy that we are applying in our country. I want to treat the matter with great respect for them through clarity in this matter and in others. But fundamentally, regarding our country’s energy policy, we have not signed any agreement with the government of the US or Canada.” It appears that López Obrador does not consider energy matters to be part of the USMCA, whereas US lawmakers argue the opposite.

Aiming to use PEMEX and CFE as the cornerstones for national development, the president has stated earlier that a change in the constitution to undo the energy reform is still in the cards. Private interests should never go above the public interest, López Obrador said. “Repsol does not pay me, the Mexicans pay me to serve them. And that is why I have to defend the public interest, not the interest of individuals.”

According to a press release from COPARMEX, the government’s actions could obstruct investment worth US$6 billion. The confederation pleaded the government to follow the law and abide by international treaties to generate certainty for long-term investment.

Cancelling the granting of permits to private companies could generate administrative responsibilities for authorities and it would be against USMCA stipulations. These actions could create conflicts that would have to be resolved through the treaty’s dispute resolution mechanism, which could cost millions of dollars to the country, according to COPARMEX.

The data used in this article was sourced from:  
Reuters, Energía a Debate
Cas Biekmann Cas Biekmann Journalist and Industry Analyst