Mexico to extend talks with U.S. over energy, hails 'productive' dialogue
By Dave Graham
MEXICO CITY, Oct 3 (Reuters) -
Talks between the United States and Mexico to resolve a dispute over energy policy will extend beyond an initial consultation period as the two sides narrow differences, officials said on Monday.
The U.S. Trade Representative (USTR) in July demanded dispute settlement talks on the grounds that Mexican President Andres Manuel Lopez Obrador's energy policies discriminated against U.S. companies and violated a North American trade pact.
At the heart of the U.S. complaint, which Canada joined, are hold-ups in granting permits, a Mexican electricity law that prioritizes state firms, and other rules that investors feel disadvantage them, industry sources say.
Under the U.S.-Mexico-Canada (USMCA) trade deal, if such a disagreement is not resolved in 75 days of consultations, a dispute panel can be requested to review claims. A panel could expose Mexico to the risk of punitive trade tariffs.
But on Monday afternoon, Mexico's economy ministry tweeted that dialogue had been "productive" with U.S. and Canadian counterparts, and that they wanted to keep talking to reach a "mutually satisfactory" solution.
Earlier, three officials from governments on both sides of the dispute told Reuters that progress in talks meant they would run beyond Oct. 3, when the 75 days expire. They spoke on condition of anonymity due to the sensitivity of the matter.
The USTR's office did not respond to a request for comment.
In the past few weeks, tensions have eased as Mexican courts suspended some contentious rules, and on signs that Mexican regulators have begun to address backlogs on permits, industry sources and officials say.
"In my view, the Mexican government has sought to deal with the requests from the U.S. and Canadian governments with a view to a solution that avoids international arbitration," said Francisco de Rosenzweig, a former top Mexican trade official.
With mid-term U.S. elections in November, acute concerns about inflation, and the likelihood that Mexico would lose arbitration, neither side wants to escalate the trade dispute now, the sources added.
Still, one Mexican source said U.S. officials had warned that without substantial progress, pressure on Mexico will increase again.
Rosanety Barrios, a former Mexican energy official, said while Mexican regulators were trying to give the impression of being more flexible, many issues remained unresolved.
Instead of reaching a definitive resolution, the two sides looked as if they could "kick the can down the road until the next (Mexican) government," she said.
Reporting by Dave Graham Additional reporting by David Lawder in Washington D.C.; Editing by David Gregorio and Richard Chang
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.