Page 6 - NorthAmOil Week 29 2022

NorthAmOil COMMENTARY NorthAmOil

US, Canada raise concerns

over Mexican energy policy

Washington and Ottawa have requested that Mexico City review key

provisions of its energy policy under USMCA

NORTH AMERICA WASHINGTON and Ottawa have both asked rule instituted by the Mexican government
Mexico City to settle disputes over energy policy in 2019 under which Pemex, the national oil
WHAT: within the framework of the US-Mexico-Canada company (NOC), became the only firm in the
The US and Canadian Agreement (USMCA), the trilateral trade deal country eligible to receive extra time to ensure
governments are signed in 2020 to replace the North American compliance with new laws lowering the cap
disputing Mexican energy Free Trade Agreement (NAFTA). on sulphur content in road diesel. Addition-
policy under the USMCA. The US and Canadian governments submit- ally, USTR noted that Mexican authorities had
ted separate dispute resolution requests sepa- effectively blocked private companies from
WHY: rately on July 21. However, officials in Ottawa participating in certain types of energy projects
This is not the first time made clear later in the day that they backed by “delaying, denying or failing to act” when it
the issue has arisen, Washington’s position. received permit applications for the construc-
but it could lead to the tion of renewable energy facilities or for the
imposition of punitive US request storage, transshipment or sale of refined fuels.
tariffs. The first request was made by the office of the
US Trade Representative (USTR). In a document Canadian request
WHAT NEXT: sent to Mexico’s Economy Ministry, USTR com- The second request came from Canada’s Min-
Mexico’s president may plained that Mexican authorities were unfairly istry of International Trade. Alice Hansen, a
seek to avoid domestic burdening US companies and restricting mar- spokeswoman for the ministry, informed Reu-
political fallout by ket access in order to ensure advantages for two ters later on July 21 that while Ottawa would hold
painting the US as an state-owned companies, Pemex and the Federal its own consultations with Mexico City, it would
enabler of corruption. Electricity Commission (CFE). also be “supporting the US in their challenge.”
“We have repeatedly expressed serious con- In a statement emailed to the news agency, she
cerns about a series of changes in Mexico’s said: “We agree with the United States that these
energy policies and their consistency with Mex- policies [favouring state-owned energy compa-
ico’s commitments under the USMCA,” Kather- nies] are inconsistent with Mexico’s [USMCA]
ine Tai, the head of the office of the USTR, wrote obligations.”
in the document. Mexico’s Economy Ministry, for its part, con-
One of the examples Tai’s office cited was a firmed that it had received both requests for

P6 www. NEWSBASE .com Week 29 21•July•2022