American and Canadian companies are “deeply concerned” about Mexico’s efforts to reduce the private sector’s ability to compete in the state-dominated energy industry and asked the nations’ leaders to address the issue at a summit Thursday.
Mexican President Andres Manuel Lopez Obrador has been working to undo changes implemented by his predecessor that started to expose state-owned oil producer Petroleos Mexicanos, known as Pemex, and electric utility CFE to more competition.
The letter comes on the eve of a summit that President Joe Biden will host on Thursday with Lopez Obrador—known as AMLO—and Canadian Prime Minister Justin Trudeau. The countries plan to “reaffirm their strong ties and integration,” while also mapping out collaboration on ending the Covid-19 pandemic and advancing health security; competitiveness and equitable growth, to include climate change; and a regional vision for migration, the White House said last week.
AMLO is proposing to change the constitution to give CFE a bigger share of the power market. But Mexico’s carbon-emissions risk and electricity costs could jump if the country passes the reforms, according to a report by the U.S. Energy Department’s National Renewable Energy Laboratory.
The business chambers urged the three leaders to hold each other accountable for the full implementation of the U.S.-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement in July 2020 and has some rules that are phased in over time. The groups called for increased dialogue between the governments, “and, when required, enforcement actions.”
The Canadian and Mexican chambers also expressed apprehension over the U.S. interpretation of regional content rules for cars that trade duty-free, which they said could pose risks to integrated supply chains.
The groups called on the governments to engage businesses in “meaningful dialogue” on the topics.