Page 5 - LatAmOil Week 29 2022

LatAmOil COMMENTARY LatAmOil

Canadian request aired before without having any lasting effect on
The second request came from Canada’s Min- North American trade relations. However, the
istry of International Trade. Alice Hansen, a matter is complex, and there may be a limit to
spokeswoman for the ministry, informed Reu- how much certain parties are ready to overlook.
ters later on July 21 that while Ottawa would One of the factors that convinced Lopez
hold its own consultations with Mexico City, Obrador to sign USMCA in 2020 was a promise
it would also be “supporting the US in their from Biden’s predecessor Donald Trump that
challenge.” In a statement emailed to the news Mexico would be able to retain full control over
agency, she said: “We agree with the United domestic energy policy, despite the free trade
States that these policies [favouring state-owned deal’s commitment to removing barriers to
energy companies] are inconsistent with Mexi- competition. That promise led to the inclusion
co’s [USMCA] obligations.” of provisions in USMCA stipulating that both
Mexico’s Economy Ministry, for its part, the US and Canada recognise Mexico’s right to
confirmed that it had received both requests for establish its own energy policy via constitutional All of the
dispute resolution. It said in a statement that the reforms and new legislation.
Canadian petition bore some similarities to the The agreement does also state that Washing- complaints listed
one submitted by the US but did not elaborate. ton and Ottawa have extended this recognition
The Economy Ministry added that Mexico “without prejudice to their rights and remedies” in the dispute
City was willing to collaborate with both Wash- under the trilateral agreement, but it is specifi-
ington and Ottawa to discuss the scope of the cally designed to preserve the Mexican govern- resolution
requests for relief and was ready to work toward ment’s ability to set its own policy agenda. Lopez requests have
a “mutually satisfactory solution” to disagree- Obrador and his administration may very well
ments over energy. stress this point when responding to the US and been submitted
As of press time, neither the US nor the Canadian requests.
Canadian side had said exactly what kind of to Mexico City
relief they expected Mexico’s government to Blame game and punitive tariffs on previous
offer. Likewise, Mexican authorities have not yet On the domestic political front, meanwhile, the
described what they might view as a satisfactory Mexican president is likely to depict the US and occasions
resolution to the matter. Canadian governments as supporters of cor-
Meanwhile, Reuters described the incident porate greed. “It seems like the United States
as an embarrassment for Mexico’s President government is revealing itself to us and we are
Andres Manuel Lopez Obrador, who recently answering: They are supporting corruption,” he
said after a meeting with his US counterpart Joe said at his daily press conference on July 19.
Biden that US companies were eager to invest in This campaign of blame may come in handy
Mexican energy projects. if US and Canadian authorities end up taking the
dispute to the next level. USMCA rules state that
Complex dispute if parties to the agreement are unable to resolve
Lopez Obrador, for his part, has tried to down- disagreements within 75 days, they may request
play the matter, saying that his government that a dispute panel review their claims. This
intends to review the US complaints and that could, if the matter remains unresolved, lead to
“there is no problem” with Washington in the harsher administrative measures – including the
realm of energy policy. introduction of punitive tariffs by the party that
That might not seem like an unreasonable sought resolution in the first place.
thing to say, in light of the fact that all of the com- This outcome is “a possibility,” a USTR rep-
plaints listed in the dispute resolution requests resentative told reporters on July 20, Reuters
submitted to Mexican authorities have been reported. ™

The Mexican president accused the US of supporting corruption on July 19 (Photo: LopezObrador.org.mx)

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