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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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U.S. Set To Escalate Energy Trade Dispute With Mexico

  • The Biden Administration has asked U.S. energy firms to document how Mexico’s recent energy policies have affected their business.
  • Mexico’s protectionist energy policies have led to state-owned majors being awarded contracts and permits ahead of U.S. companies.
  • The U.S. has expressed concerns that the energy policies aren’t consistent with Mexico’s commitments under the USMCA.

The U.S. Administration has asked oil and gas firms and renewable energy companies to document how Mexico’s recent energy policies have hampered their business and investments in the U.S.’s neighbor to the south, sources with knowledge of the plans have told Reuters.

The Biden Administration and U.S. energy companies have been frustrated by Mexico’s protectionist policies in the energy sector, which have denied permits to American companies to operate in Mexico while the country has awarded contracts and permits to the local state-owned majors.

The U.S. Administration has now asked for affidavits from the American companies in the clearest sign yet that the U.S. would seek an independent dispute settlement panel under the United States-Mexico-Canada Agreement (USMCA), according to Reuters’ sources.

Since Mexican President Andrés Manuel López Obrador took office at the end of 2018, he has passed many laws favoring state oil giant Pemex and the national power company, Comisión Federal de Electricidad (CFE), as the leftist president has sought a greater role for its state-held energy firms and has tried to overturn some of the energy reforms of his predecessor, Enrique Peña Nieto. 

The U.S. has expressed concerns over the priority status of Mexico’s state energy firms under López Obrador, which gives those companies an unfair advantage over U.S. producers and U.S.-produced energy under the United States-Mexico-Canada Agreement. Big Oil companies, such as Chevron and Marathon Petroleum, alongside a host of solar and wind energy companies, have struggled to obtain permits to operate in Mexico.

The United States requested last year formal consultations with Mexico under the USMCA over Mexico’s recent energy policies, which the U.S. argues prioritize Mexican state energy firms at the expense of American companies.

“We have repeatedly expressed serious concerns about a series of changes in Mexico’s energy policies and their consistency with Mexico’s commitments under the USMCA,” United States Trade Representative Katherine Tai said at the time.  

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on September 06 2023 said:
    Since its founding, the United States has never stopped for even one second escalating disputes and even starting wars with its allies and enemies alike in order to serve its national interests rightly or wrongly. Its plan to escalate trade dispute with Mexico over its energy policies is no exception.

    The Biden administration is now claiming that Mexico’s protectionist energy policies have led state-owned majors being awarded contracts and permits ahead of US companies in violation of the United States-Mexico-Canada Agreement (USMCA), according to Reuters’ sources.

    Nevertheless, the United States hasn’t thought twice about breaking World Trade rules and damaging the interests of its closest allies, the EU, by implementing its Inflation Reduction Act (IRA).

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




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