WASHINGTON (AP) — The United States is pressuring Mexico over energy policies that Washington says unfairly favor Mexican state-owned electric and oil companies over U.S. competitors and clean energy providers.
The United States is demanding talks to resolve the dispute, beginning a process on Wednesday that could lead to trade sanctions against Mexico.
“We have repeatedly expressed serious concerns about a series of changes in Mexico’s energy policies and their consistency with Mexico’s commitments,” U.S. Trade Representative Katherine Tai said in a statement. She said “American businesses continue to face unfair treatment in Mexico.”
Among the specific issues in dispute is an amendment to Mexican law from last year that the United States says gives an unfair advantage to electricity generated by the Federal Electricity Commission, a Mexican state-owned company, over energy from companies private and cleaner sources such as wind and solar.
The United States is also protesting a 2019 rule that gives state-only oil and gas company Petroleos Mexicanos more time to comply with tougher environmental standards limiting the sulfur allowed in automotive diesel fuel.
The United States has also accused Mexico of delaying, rejecting or not responding to applications for permits from private companies to operate in the energy sector and of revoking or suspending existing permits.
“Mexico’s policies have largely halted U.S. and other investments in the country’s clean energy infrastructure, including significant steps to reverse reforms Mexico had previously taken to meet its climate goals under the Accord. of Paris,” Tai’s office said in a statement.
If the two countries fail to reach an agreement after 75 days of talks, the United States may seek the intervention of a dispute settlement panel under the United States-Mexico-Canada Agreement or USMCA, which could result in sanctions against Mexico if the United States prevails. The pact, brokered by President Donald Trump, replaced the 1994 North American Free Trade Agreement.