USTR Nominee Concerned Over Mexico’s Energy Policy

United States Trade Representative nominee Jamieson Greer expressed concerns about Mexico’s energy policies during his confirmation hearing before the US Senate Finance Committee. Greer specifically pointed to measures that favor Mexico’s state-owned energy companies, including PEMEX and CFE, at the expense of US energy firms.  

"I share your concerns about Mexico’s policies that unfairly favor Mexico’s state-owned energy companies to the detriment of US energy companies, undermine US-produced energy, and raise serious concerns about Mexico’s compliance with USMCA," Greer said in response to a question from Senator Michael Bennet. He committed to working with Congress and stakeholders to assess the impact of these policies and press Mexico to meet its obligations under the trade agreement.  

The Biden administration initiated a dispute under USMCA in July 2022, challenging Mexico’s energy policies. The dispute focused on a 2021 amendment to Mexico’s Electricity Industry Law, which gives priority to power generated by CFE over private sector electricity. Additionally, a June 2022 action favoring PEMEX and CFE in the use of Mexico’s natural gas transportation network was contested. Current Mexican President Claudia Sheinbaum made official CFE and PEMEX’s role at the center of Mexico’s energy policy. However, the Mexican government has stated that this does not contradict the USMCA free competition terms.

Although both countries engaged in discussions, no formal dispute settlement panel has been convened. As USMCA approaches its six-year joint review in 2026, the energy dispute remains a key issue in North American trade relations. Former US President Donald Trump’s return to the political stage adds uncertainty to negotiations, particularly regarding Mexico’s energy reforms and foreign investment in the sector.  

Industry analysts highlight potential consequences of these trade tensions. According to Miriam Grunstein, Senior Partner, Brilliant Energy, "With Donald Trump’s recent election victory, potential shifts in policies related to tariffs, homeshoring, domestic investment incentives, and a possible renegotiation of USMCA could impact Mexico’s energy demand. An economic slowdown driven by these policies could lead to decreased energy consumption, underscoring the importance of scenario planning."  

Yolanda Villegas, Legal Director, Envases, noted that a fossil fuel-focused approach to US-Mexico energy cooperation could stall progress in market integration under USMCA, affecting cross-border infrastructure projects. She also pointed out that increased US LNG exports could lower Mexico’s energy costs in the short term but would heighten environmental concerns.  

USMCA’s Future

Recently, former key negotiators of USMCA, launched the Coalition for North American Trade (CNAT) as a trinational private-sector group aimed at promoting the benefits of USMCA. The coalition seeks to ensure a successful review of the trade agreement in 2026, when the three countries will decide whether to extend it for another 16 years.