(Washington) Canada joined the United States on Wednesday in a bilateral effort to challenge what it says is Mexico’s protectionist energy policies, which would violate both the spirit and the letter of the new free trade agreement. North American.
Posted at 6:13 p.m.
U.S. Trade Representative Katherine Tai announced Wednesday that her office would seek dispute settlement talks. Washington argues that Mexico unfairly prioritizes its state-owned companies in the energy sector, excluding US companies, including solar and wind power producers.
A few hours later, in Ottawa, the office of Trade Minister Mary Ng gave much the same speech. Mexico’s policies have been described as inconsistent with its obligations under the Canada-United States-Mexico Agreement (CUSMA).
“Canada has consistently raised concerns about Mexico’s shift in energy policy,” wrote the minister’s spokesperson, Alice Hansen. We will join the United States in taking action by initiating our own consultations, under CUSMA, to address these concerns, while supporting the United States in its challenge. »
U.S. energy producers have been complaining for months that Mexico offers preferential prices and sets favorable emissions standards to its two main energy companies: oil and gas producer Pemex and the Commission. Federal Electricity.
The 2021 changes to Mexico’s electricity laws not only keep U.S. companies out of the Mexican market, they discourage investment in clean energy providers and potential customers who want to buy from this energy, argued Mme Tai.
“We have tried to work constructively with the Mexican government to address these concerns, but unfortunately American companies continue to experience unfair treatment in Mexico,” she said Wednesday. We will seek to work with the Mexican government through these consultations to resolve these concerns to advance North American competitiveness. »
Delay tactics
The US Trade Representative also accuses Mexico of using delaying tactics to block US access to the Mexican energy sector, including renewable energy such as wind and solar.
“To achieve our shared economic and development goals and our climate goals, current and future supply chains need clean, reliable and affordable energy. »
The show of solidarity between Canada and the United States may come as a surprise, given their trade relationship which has been largely marked by disputes since the trilateral free trade agreement became law two years ago.
The two countries are regularly at odds over how Canada uses CUSMA rules to allow US dairy farmers access to the supply-managed Canadian market. And Joe Biden’s administration only agreed earlier this month to lift tariffs on Canadian-made solar products, tariffs imposed in 2018 by Donald Trump’s administration.
Softwood lumber also remains an old bone of contention between Canada and the United States. In November 2021, the U.S. Department of Commerce doubled tariffs on softwood lumber, to set them at 17.9%, but it finally decided earlier this year to lower them to 11.64%.
Envoys from the three CUSMA signatory countries met virtually on Wednesday to mark the second anniversary of the entry into force of the trade agreement. They underscored that this trilateral agreement had provided a consistent framework and rules of conduct for what turned out to be a rather tumultuous era in world trade.
“This agreement completely refutes the mistaken view held by some that free trade agreements are 20th century tools that should no longer be at the center of American trade policy,” said Republican Representative from Texas Kevin Brady, who helped push the deal through in 2019 as chairman of the powerful House Ways and Means Committee.
Mr. Brady also welcomed the decision of Mr.me Tai to challenge Mexico’s energy practices – though it’s a little late, he says.
Louise Blais, former Canadian ambassador to the United Nations, pointed out that the CUSMA framework had made it possible to resolve a number of disputes over the past two years, “some more discreetly than others”.
“He provided that intangible thing, which is not always possible to quantify: predictability,” she said. This has facilitated the entry of investment flows from Europe and Asia into our three countries. »