CASPER, WY – U.S. Senator John Barrasso (R-WY) and U.S. Representative Jodey Arrington (R-TX), along with a bipartisan, bicameral group of legislators recently sent a letter to U.S. Trade Representative Katherine Tai regarding the Government of Mexico’s pursuit of discriminatory policies that favor Mexican state-run energy companies and directly undermine United States-Mexico-Canada Agreement (USMCA) commitments. The letter demands Representative Tai swiftly establish a USMCA dispute settlement panel to address Mexico’s discriminatory policies across the energy sector.
“The United States has given Mexico more than enough time to rein in its discriminatory actions toward American energy producers,” said Sen. Barrasso. “Seventy-five days of consultations under the United States-Mexico-Canada Agreement have stretched on for nearly a year with little meaningful progress. It’s time to convene a dispute resolution panel and put an end to these unfair practices once and for all.”
“The USMCA agreement was negotiated in good faith to ensure freer markets, fairer trade, and robust economic growth in North America. Mexico’s actions in undermining American energy companies betray the historical bipartisan trade agreement,” said Rep. Arrington. “The energy producers in the food, fuel, fiber capital of the world are relying on the administration to settle this dispute, continue the commitment to fair trade made in USMCA, and ensure all parties are upholding their part of the deal.”
The American Petroleum Institute said, “Mexico’s escalating pursuit of discriminatory policies that favor state-run energy companies violate the country’s commitments under USCMA and directly threaten the prosperity of U.S. companies and their workers. The US has given Mexico several opportunities to fix its problematic policies, including last year’s consultations request, but Mexico has made little effort to fix them. We welcome the efforts of trade leaders in both the House and Senate to address these alarming polices and support their request for the establishment of a dispute resolution panel.”
In addition to Barrasso, Senators John Cornyn (R-TX), Tim Scott (R-SC), James Lankford (R-OK), Bill Cassidy (R-LA), Todd Young (R-IN), and Ron Johnson (R-WI) signed the letter.
Full letter text below:
July 20, 2023
The Honorable Katherine Tai
U.S. Trade Representative
Office of the U.S. Trade Representative
600 17th St. NW
Washington D.C. 20006
Dear Ambassador Tai:
We write in regard to the Government of Mexico’s pursuit of discriminatory policies that favor state-run energy companies and directly undermine United States-Mexico-Canada Agreement (USMCA) commitments. We strongly support your July 20, 2022 request for consultations—an important initial step to enforce USMCA for U.S. energy workers and families. However, consultations under USMCA are designed to last only 75 days before a Party may request a dispute settlement panel to review the matter. The Biden Administration has afforded Mexico nearly a year—and yet there remains a lack of any meaningful progress. Consequently, we urge you to pursue full enforcement action against the Government of Mexico to address its energy policies that hinder U.S. investment in Mexico’s energy sector.
These discriminatory policies exist throughout Mexico’s energy sector, including natural gas and oil exploration and production, electricity generation including solar and wind power, and retail sales. Mexico’s unfair actions threaten over $10 billion in U.S. investment that have already been made and clearly run afoul of Mexico’s USMCA obligations. Ensuring there is a reliable market for U.S. energy production and infrastructure will help strengthen energy supply chains in North America and lower energy costs for consumers as Americans continue to feel the impacts of volatile energy markets.
Extending the period of consultations has not yielded results. Robust enforcement action is necessary—not just in the renewable energy sector, but across the entire energy sector. Establishing a dispute settlement panel for these troubling energy issues will demonstrate that the United States is serious about enforcing USMCA to provide Americans the benefits that the we bargained so hard to achieve in USMCA negotiations.
We therefore respectfully urge the U.S. Trade Representative to request the swift establishment of a USMCA dispute settlement panel to address Mexico’s discriminatory policies across the energy sector.
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