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U.S. Prepares Ultimatum to Mexico Over Energy Dispute: Give Us Your Markets, Now

The United States has accused Mexico of violating the USMCA free trade agreement, arguing that western powers should be free to access the country’s electricity industry. As of now, Mexico is standing firm against the corporate raiding.

Arturo Méndez

April 15, 2023
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In the next few weeks, the U.S. government plans to send Mexico an ultimatum, with the intention of breaking the deadlock in talks around Mexican President López Obrador’s (AMLO) energy policy. The dispute centers on the 2021 proposed amendments to Mexico’s Electricity Industry Law, which give priority to their own Federal Electricity Commission (CFE) over electricity generated by private competitors outside the country. 

The U.S. and Canada requested the start of the talks in July of last year. According to the United States-Mexico-Canada Agreement (USMCA), the free trade agreement between the three countries that went into effect in 2020, the U.S. and Canada can request an international panel to resolve disputes which have not been resolved after 75 days. Before the panel is requested, the Office of the U.S. Trade Representative is expected to make a “final offer” — in other words, an ultimatum — to Mexico to open its energy market to foreign investment, such as industry giant Chevron.

In an attempt to keep the energy dispute from escalating, Raquel Buenrostro, Mexico’s Secretary of Economy, explained to members of the American Chambers of Mexico that they are working with the Ministry of Energy to authorize permits to private companies. However, imperialist powers’ appetite for cheap energy has no limits. And In their eyes, it is inadmissible for state-owned companies such as the CFE to maintain legal favor.

Like Birds of Prey

There is currently pressure on the Biden government, from Democrats and Republicans alike, to harden its positions towards Mexico. If there is no satisfactory response to the imperialist ultimatum, Mexico could lose before a dispute settlement panel, which would entitle the United States and Canada to impose multi-million dollar tariffs on its goods.The USMCA is showing itself more and more clearly to be an instrument of Mexico’s further subordination to U.S. and Canadian imperialism.

As is well known, the neoliberal opposition in Mexico’s Congress put the brakes on the electricity reform presented by AMLO, which favored the CFE over private electricity generation. However, this reform fell short of achieving energy sovereignty because, among other things, it never proposed to renationalize the electricity industry.

In order to truly achieve energy sovereignty, it is necessary to renationalize the entire industry under the control of democratically organized workers, without compensating the bosses. This would also allow the necessary transition towards renewable energies.

A policy is needed that breaks with subordination to imperialist powers and the AMLO government. This can only be achieved through the broadest mobilization in the streets of all the Mexican people, with energy sector workers at the forefront.

Originally published in Spanish on March 29 in La Izquierda Diario México.

Translation by Kimberly Ann 

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