US demands talks on Mexican energy policies it calls unfair

·2 min read

WASHINGTON (AP) — The United States is putting pressure on Mexico over energy policies that Washington says unfairly favor Mexico's state-owned electricity and oil companies over American competitors and clean-energy suppliers.

The U.S. is demanding talks to resolve the dispute, starting a process Wednesday that could end in trade sanctions against Mexico.

“We have repeatedly expressed serious concerns about a series of changes in Mexico's energy policies and their consistency with Mexico's commitments,'' U.S. Trade Representative Katherine Tai said in a statement. She said “U.S. companies continue to face unfair treatment in Mexico.''

Among the specific issues in dispute is an amendment to Mexican law last year that the United States says gives an unfair edge to electricity produced by Mexico's state-owned utility Federal Electricity Commission over energy from private companies and over cleaner sources such as wind and solar.

The United States also protests a 2019 regulation that gives only state oil and gas company Petroleos Mexicanos extra time to comply with tougher environmental standards limiting the sulfur allowed in automotive diesel fuel.

The U.S. also accused Mexico of delaying, rejecting or failing to act on private companies' applications for permits to operate in the energy business and of revoking or suspending existing permits.

“Mexico's policies have largely cut off U.S. and other investment in the country's clean energy infrastructure, including significant steps to roll back reforms Mexico previously made to meet its climate goals under the Paris Agreement,'' Tai's office said in a statement.

If the two countries cannot reach an agreement after 75 days of talks, the U.S. can request intervention by a dispute resolution panel under the two-year-old US-Mexico-Canada Agreement or USMCA, that could result in sanctions against Mexico if the United States prevails. The pact, negotiated by President Donald Trump, replaced the 1994 North American Free Trade Agreement.

Paul Wiseman, The Associated Press

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