Exclusive-Biden administration moving to escalate energy trade dispute with Mexico
By Jarrett Renshaw and David Lawder
(Reuters) — President Joe Biden's administration has asked U.S. energy companies to prepare affidavits documenting how Mexico’s protectionist policies disrupted their investments as Washington prepares to escalate a trade dispute with its neighbor, according to three people familiar with the discussions.
The request for affidavits from major U.S. oil and renewable energy companies represents the latest and clearest signal that the Office of the United States Trade Representative (USTR) plans to seek an independent dispute settlement panel under the United States Mexico Canada Agreement trade pact, or USMCA.
Mexico President Andres Manuel Lopez Obrador's steps to roll back reforms aimed at opening Mexico's power and oil markets to foreign competitors ultimately sparked the trade dispute.
U.S. energy and power companies, such as Chevron (NYSE:CVX) and Marathon Petroleum (NYSE:MPC), which sought to expand in Mexico, have complained that they have been denied simple permits and applications in decisions that favored state oil company Petroleos Mexicanos (Pemex) and national power utility Comision Federal de Electricidad (CFE).
The United States is likely to seek a dispute panel before the end of the year if talks on the issue continue to stall, and the affidavits represent evidence that would be included in the panel request, the sources said. If that panel rules against Mexico and it fails to take corrective action, Washington could ultimately impose billions of dollars in retaliatory tariffs on Mexican goods.
The people asked not to be named because they are not authorized to speak publicly on the matter.
The steps add to a significant worsening of trade relations between Washington
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