This week, a bipartisan group of Texas lawmakers in Washington wrote a letter to President Joe Biden urging him to intervene in what they argue are Mexico’s violations of the recent trade agreement between the United States, Mexico and Canada.
They argue that Mexican President Andrés Manuel López Obrador, or AMLO, is giving the state-owned oil company, Pemex, advantages in what is supposed to be a competitive energy market.
George Baker, publisher of the newsletter Mexico Energy Intelligence, told Texas Standard that AMLO wants Pemex to be “the principal economic actor in oil production, oil distribution and oil transportation.” But doing so, he says, violates the terms of the trade agreement.
“The USMCA asked for equal treatment, it asked for nondiscriminatory treatment and asked for a level playing field between the state companies and private investors,” Baker said.
Highlights from this segment:
– AMLO’s decision to put Pemex “center stage” in Mexico’s energy market is part of AMLO’s belief, Baker says, that Mexico should have “energy sovereignty.” Baker says AMLO’s commitment to energy sovereignty supersedes his commitment to the trade agreement.
– The American lawmakers argue AMLO is creating a “technical barrier to trade,” which is prohibited in the USMCA. The agreement is designed to allow for an open market where private and public energy companies and investors compete for business on a level playing field, Baker says.
– If Mexico is found to be violating the terms of the USMCA, the United States could stop oil exports to Mexico. That could be devastating since Mexico imports about 900,000 barrels per day of petroleum products from the United States. The United States, on the other hand, would stand to lose billions of dollars worth of work that goes to American oil suppliers, contractors and services companies.