Page 7 - NorthAmOil Week 29 2022

NorthAmOil COMMENTARY NorthAmOil

Mexican President
Andres Manuel
Lopez Obrador, US
President Joe Biden
and Canadian Prime
Minister Justin Trudeau.

dispute resolution. It said in a statement that the Mexico would be able to retain full control over
Canadian petition bore some similarities to the domestic energy policy, despite the free trade
one submitted by the US but did not elaborate. deal’s commitment to removing barriers to
The Economy Ministry added that Mexico competition. That promise led to the inclusion
City was willing to collaborate with both Wash- of provisions in USMCA stipulating that both
ington and Ottawa to discuss the scope of the the US and Canada recognise Mexico’s right
requests for relief and ready to work toward a to establish its own energy policy via constitu-
“mutually satisfactory solution” to disagree- tional reforms and new legislation.
ments over energy. The agreement does also state that Washing-
As of press time, neither the US nor the Cana- ton and Ottawa have extended this recognition
dian side had said exactly what kind of relief “without prejudice to their rights and remedies”
they expected Mexico’s government to offer. under the trilateral agreement, but it is specifi-
Likewise, Mexican authorities have not yet cally designed to preserve the Mexican govern-
described what they might view as a satisfactory ment’s ability to set its own policy agenda. Lopez
resolution to the matter. Meanwhile, Reuters Obrador and his administration may very well
described the incident as an embarrassment for stress this point when responding to the US and
Mexico’s President Andres Manuel Lopez Obra- Canadian requests.
dor, who recently said after a meeting with his The matter is
US counterpart Joe Biden that US companies Blame game and punitive tariffs
were eager to invest in Mexican energy projects. On the domestic political front, meanwhile, the complex, and
Mexican president is likely to depict the US and there may be a
Complex dispute Canadian governments as supporters of cor-
Lopez Obrador, for his part, has tried to down- porate greed. “It seems like the United States limit to how much
play the matter, saying that his government government is revealing itself to us and we are
intends to review the US complaints and that answering: They are supporting corruption,” he certain parties
“there is no problem” with Washington in the said at his daily press conference on July 20.
realm of energy policy. This campaign of blame may come in handy if are ready to
That might not seem like an unreasonable US and Canadian authorities end up taking the overlook.
thing to say, in light of the fact that all of the dispute to the next level. USMCA rules state that
complaints listed in the dispute resolution if parties to the agreement are unable to resolve
requests submitted to Mexican authorities have disagreements within 75 days, they may request
been aired before without having any lasting that a dispute panel review their claims. This
effect on North American trade relations. How- could, if the matter remains unresolved, lead
ever, the matter is complex, and there may be a to harsher administrative measures – including
limit to how much certain parties are ready to the introduction of punitive tariffs by the party
overlook. that sought resolution in the first place.
One of the factors that convinced Lopez This outcome is “a possibility,” a USTR
Obrador to sign USMCA in 2020 was a promise representative told reporters on July 20, Reu-
from Biden’s predecessor Donald Trump that ters reported.™

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