RE: £6+ price target10 Sep 2021 15:38
ENERGY AND POWER GENERATION
The U.S. energy and power sector is facing an increasing array of market access obstacles that are contrary
to Mexico’s USMCA commitments (Article 2.3) as they relate to the national treatment investment protection
in Mexico and exports of related U.S. energy equipment and resources. These actions also appear to violate
Mexico’s commitments to non-discriminatory treatment in the USMCA’s chapter on state-owned enterprises
and designated monopolies (Articles 22.4.1 and 22.4.2). We urge that USTR begin consultations with the
Mexican government to roll back these regulatory and legislative actions and honor the commitments made
under the USMCA.
For the past year, President López Obrador has issued a series of regulatory and administrative measures that
restrict competition from private, foreign, and national investment with Mexican state companies (such as
Petróleos Mexicanos (Pemex)) and government agencies such as the Federal Electricity Commission (CFE),
entrenching their dominant role in Mexico and reversing energy market reforms that had been memorialized
in the USMCA. This push began with a June 22, 2020 memorandum from President López Obrador that
directs Mexican energy regulatory agencies to expressly favor Pemex and CFE over private investment in all
energy production and generation and apply a new rescue policy to the struggling state-owned enterprises,
but has elevated sharply in recent months with a highly concerning legislative effort to rush reforms to
the Power Industry Law (Ley de la Industria Eléctrica) that will directly disadvantage U.S. energy and power
companies in the Mexican market.
U.S. energy and power investors now face increasing difficulties getting permits for a range of activities
including new or re-branded stations, third-party storage facilities, imported fuels, liquid terminals, and LNG
terminals. Additionally, the change in export and import permitting for hydrocarbons and petroleum products
from 20 years to 1 year directly discriminates against hydrocarbon investment in Mexico to the benefit of Pemex.
These reforms discriminate against U.S. and other private investors in Mexico’s power market and curtail existing opportunities for U.S. exporters of energy resources and equipment. Read the page 4 of the pdf file letter https://enforcementalliance.org/wp-content/uploads/2021/03/AFTE-letter-to-USTR-on-Mexicos-Adherence-to-USMCA.pdf
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