May 4, 2023
Canada says Mexico making progress to resolve electricity concerns
Call for increased cooperation among Three Amigos
Mexico is making progress resolving Canadian companies’ concerns about the Latin American country’s nationalist energy policy, and Ottawa sees no current need to escalate the dispute, its top trade official said.
On a trip to Washington, Canadian Trade Minister Mary Ng credited her Mexican counterpart, Economy Minister Raquel Buenrostro, for meeting with companies to explain the nation’s legal changes, a dialogue that she said was previously lacking.
Canada last July requested talks with Mexico over its power policy that favors state-owned utility Comision Federal de Electricidad over private renewable-energy firms.
Mexican President Andres Manuel Lopez Obrador in January met with four Canadian companies following a visit to Mexico City by Prime Minister Justin Trudeau. While Ng declined to comment on specific firms, a Canadian official said that three of them had their concerns resolved. Only the matter of Caisse de Dépôt et Placement du Québec, Canada’s second-largest pension fund, is still being negotiated, with mediation by Mexico’s economy ministry.
Ng said that while she wouldn’t completely rule out future need for a panel of arbiters under the U.S.-Mexico-Canada agreement on trade, known as the USMCA, there’s no requirement now as long as work is taking place, and that Ottawa’s preference is to resolve concerns via mutual solutions.
“We’re going to be keeping a close eye on this to make sure that the provisions of our trade agreement are being met,” Ng said in an interview on Tuesday. “Ultimately, it’s making sure that the investments down there are met with the predictability of the rules that they’ve got.”
Canada’s ask followed a U.S. request for separate talks with Mexico on a broader set of energy concerns. Those discussions are still ongoing, with U.S. Trade Representative Katherine Tai saying in March that her office and Mexico were working on the issues.
If consultations with either the U.S. or Canada were unable to resolve their differences, the complaints could go to dispute panels that could allow the nations to impose tariffs on billions of dollars of Mexican exports.
Mexico is Canada’s third-largest trade partner, trailing only the U.S. and China. Together, the three North American economies trade more than US$1.4 trillion annually between them.
On a separate dispute on genetically modified agricultural imports, where Canada requested consultations in March, Ng said she’s raised the issue with Buenrostro, who will visit Canada next month, but those talks are in the early stages.