U.S. Trade Representative Katherine Tai and Mexico‘s Secretary of Economy Raquel Buenrostro agreed to continue consultations in the energy trade dispute initiated by both countries.
“Tai stressed the importance of moving quickly to address the issues in Mexico’s energy sector that the United States identified in its July 20, 2022 request for consultations under the T-MEC,” the U.S. Trade Representation (USTR) said in a statement.
Tai also commented on the importance of avoiding a disruption in U.S. corn exports and returning to a science- and risk-based regulatory approval process for all agricultural biotech products in Mexico.
The two officials concluded their first meeting, in a virtual format, on Thursday.
“(Tai and Buenrostro) committed to continue consultations and enable working groups between both countries, privileging continuous dialogue,” the Ministry of Economy said through its Twitter account.
Recently, the Mexican government has adopted several measures to favor the state-owned electric power company (CFE) and the state-owned oil and gas company (Pemex) at the expense of foreign investors, according to the USTR.
That is why the United States and Canada have activated the state-to-state dispute settlement mechanism under Chapter 31 of the U.S.-Mexico-Canada Agreement (T-MEC) by engaging in consultations with Mexico.
In the NAFTA renegotiations, the United States sought to preserve and strengthen investment, market access and state-owned enterprise disciplines that benefit energy production and transmission.
In addition, the negotiating objectives stated that the United States supported North American energy security and independence and promoted the continuation of energy market opening reforms.
Mexico specifically called for a modernization of NAFTA’s energy provisions.
The T-MEC maintains recognition of Mexico’s national ownership of all hydrocarbons.
The treaty also maintains dispute settlement between the United States and Mexico regarding government contracts in the energy and other sectors.
The T-MEC will end ISDS for disputes between the United States and Canada, as well as those between Mexico and Canada.
Some observers say that the stakes were high for the North American oil and gas industry during the T-MEC negotiations, especially with respect to Mexico as an energy market for the United States.
Although Mexico was traditionally a net exporter of hydrocarbons to the United States, the United States has a trade surplus in energy trade with Mexico as a result of declining Mexican oil production, declining oil prices, and increasing U.S. exports of natural gas and refined oil to Mexico.
The growth in U.S. exports is largely due to Mexico’s reforms, which have boosted U.S. investment in natural gas-fired electricity generation and in the retail gasoline market.