The United States Trade Representative (USTR) argued that Mexico is blocking the renewable energy operations of U.S. companies.
This point was included as part of its submissions to request consultations as part of the process to initiate a dispute settlement panel under the Mexico-U.S.-Canada Agreement (USMCA) in a case regarding regulations of the Mexican energy industry.
According to USTR, there is inaction, delays, denials and revocations of private companies’ ability to operate in Mexico’s energy sector.
“Mexico is taking, or has taken, actions or inaction that hinder the ability of private companies to operate in Mexico’s energy sector,” USTR said in its request for consultations.
In its view, these actions include: delaying, denying, or failing to act on applications for new permits or permit modifications; suspending or revoking existing permits; or otherwise blocking the ability of private companies to:
- Operate renewable energy facilities, such as wind and solar facilities.
- Import and export electricity and fuel.
- Store or transship fuel.
- Build or operate retail service stations.
Each of these measures appears to be inconsistent with several provisions of the T-MEC, according to USTR.
First, they appear to be inconsistent with Article 2.3 of the T-MEC because they provide less favorable treatment than that accorded to like products of national origin with respect to all laws, regulations and requirements affecting their internal sale, offer for sale, purchase, transportation, distribution or use.
Second, they appear to be inconsistent with Article 14.4 of the T-MEC because Mexico is not granting U.S. investors and their investments treatment no less favorable than that it grants, in like circumstances, to Mexican investors and their investments.
Moreover, third, they appear to be inconsistent with Article 2.11 of the T-MEC because, and to the extent that, they prohibit or restrict imports or exports of a good.
Fourth, they appear to be inconsistent with Article 22.5.2 of the T-MEC because the relevant administrative body is not exercising its regulatory discretion in an impartial manner with respect to the enterprises it regulates, including enterprises that are not state-owned.
Fifth, they appear to be inconsistent with Article 29.3 of the T-MEC because Mexico is not administering its laws in a consistent, impartial and reasonable manner.