Sunday, June 4, 2023

Consultations, alert in the relationship between Mexico, the US and Canada

The business relationship between Mexico, United States and Canada faces a new challenge around one of its most important agreements, the Trade Agreement between Mexico, the United States and Canada (T-MEC).

The T-MEC is in its first two years of implementation and, with this, coordination between countries becomes very important to comply with each of its postulates.

In this process, one of the issues that generates the most controversy is energy, mainly focused on the fact that the US and Canada consider that Mexico affects free competition, the productivity of the energy sector and violates the conditions for companies that invest in the country, which which is detrimental to various articles of the Treaty.

Some questioned processes have to do with the intention of the federal government to privilege the CFE by giving it priority in energy dispatch from the questioned Electric Industry Lawas well as not contemplating the transition towards clean energies, in addition to the extension to Pemex on compliance with the sulfur content in diesel, establishing it as mandatory to transport gas natural by CFE and Pemex pipelines, as well as the blocking of permits for private sector energy projects by the Energy regulatory commission (CRE).

These issues have been addressed in recent months by the countries without reaching agreements, so now the governments of the US and Canada have asked Mexico to initiate the Consultations, a procedure for the resolution of disputes.

The request implies an alert for the commercial and diplomatic relationship between these countries, so we hope that Mexico will open up to dialogue and show willingness to fulfill the commitments assumed, because otherwise it could go to a next instance in which derive tougher measures from these trade allies, such as tariffs or multi-million dollar sanctions.

At Coparmex we believe that the Consultations can be a great opportunity to start a dialogue that allows the strengthening of communication channels and links between countries, and a space for Mexico to reconsider the measures it is taking in energy matters.

The T-MEC is a fundamental instrument to continue consolidating North America as the most competitive region in the world.

Mexico must comply with international agreements, guarantee legal certainty, confidence in foreign investment and generate an environment conducive to free competition and the arrival of new capital.

Faced with this new challenge in the commercial and diplomatic relationship between Mexico, the United States, and Canada, respect, dialogue, and fulfillment of commitments must be the basis for achieving positive results for our country and the entire region. #OpinionCoparmex

World Nation News Desk
World Nation News Desk
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