Mexican Secretary of the Economy Tatiana Clouthier will begin discussions with U.S. and Canada today around a controversial new Mexican energy policy.
Mexico’s two northern neighbors claim that the new law—which prioritizes gas-powered energy from the Mexican state utility CFE over private renewables companies, among other measures—violates the three countries’ free trade deal, USMCA. Mexican President Andres Manuel Lopez Obrador has repeatedly defended the policy, claiming it will support Mexico’s energy independence and defend the country from opportunistic foreign firms.
Washington has already requested formal deliberations, and in late July Ottawa announced plans to do the same. The dispute reflects part of the recent decline in U.S.-Mexican relations. Lopez Obrador declined Biden’s invitation to attend the recent Summit of the Americas.
Expect Clouthier to fail to appease her American and Canadian counterparts due to Lopez Obrador’s unwillingness to back down—likely emboldened as the economic penalties common during the Trump era fade. The US and Canada will then likely take the case to arbitration via the WTO, an organization whose importance is increasingly uncertain. The ensuing saga will likely further strain U.S.-Mexican relations, which are unlikely to improve before each country’s upcoming 2024 presidential elections.
Jon is a Content Editor and Analyst within the Analysis division of Foreign Brief.