Mexico power watch: USMCA dispute developments, Tamaulipas state creates energy ministry

Mexico's economy ministry is aiming to resolve a dispute under the UMSCA free trade agreement in the near future. 

The dispute, which was started by the US in July with Canada joining shortly after, pertains to regulatory and legislative changes undertaken by the Mexican administration over the past four years in an attempt to bolster federal power utility CFE and national oil company Pemex. The two countries argue that these policies have hurt US and Canadian firms that operate in Mexico.

On Wednesday, Mexico’s economy minister Raquel Buenrostro said her team had presented the US government with a roadmap aimed at reaching a deal before the North American Leaders' Summit, which is expected to begin on January 9 in Mexico City.

"We have presented a plan to try to solve everything in January, we’re waiting for their feedback about the proposal we presented," said Buenrostro.

"We want to solve the energy issue as soon as possible because it generates a lot of uncertainty for investment," she said.

The US and Canada could have asked for the creation of a panel since October 3, but they have decided to extend preliminary negotiations in a bid to reach a settlement. The authorities in Mexico have also signaled they have made strides in direct negotiations with affected private players.

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The state of Tamaulipas is seeking to grow its attractiveness for energy investments through the creation of a new ministry.

The existing energy commission will be upgraded to an energy ministry, a state representative told local news outlet Energía a Debate. The ministry will focus on public-private investments to promote sustainability and the energy transition.

Tamaulipas is investing in increasing its transmission capacity to transfer the excess energy it produces to neighboring states, like San Luis Potosí and Nuevo León. Transmission-related obstacles are currently stifling the development of new renewable projects, according to the state government.