Mexico readies defense in trade disputes: a look at the timetable

Mexican President Andrés Manuel López Obrador (AMLO) called on lead USMCA trade agreement negotiator Jesús Seade to assist on trade dispute consultations launched by the US and Canada.

“We are going to defend ourselves,” said AMLO at a Thursday press conference. “We have to assert our sovereignty,” he said, while making it clear that ownership of hydrocarbons was not up for discussion.

The USMCA replaced the Nafta framework for free trade between Mexico, the US and Canada, and came into effect July 1, 2020.

“This is all going to get cleared up,” AMLO said, adding he asked Seade (pictured) “to help respond” to the US and Canadian requests.

POLITICAL MOTIVE?

The leftist leader said that the possibility of dispute consultations was not discussed on his recent trip to Washington DC.

“On the contrary, US businessmen have promised to invest US$40bn in the energy sector, we have already signed agreements, agreements. Then suddenly this.”

Having announced that investment amount on July 13, AMLO gave few details other than agreements had been made with companies, including Sempra Energy on the US side and Grupo Carso on the Mexican side, between now and 2024.

His presidential term ends on October 1, 2024, unable by law to run for re-election in the elections scheduled for June of that same year.

On Thursday, AMLO said he worked to close 19 investment deals while in the US, closing “I think” 17.

“However, this has nothing to do with the companies … the companies don’t have the disagreement … that’s why I feel like this is a political issue,” he added.

DISPUTE PROCESS

Mexico received separate requests for consultations from US and Canadian trade officials on Wednesday.

Under USMCA dispute settlement consultation guidelines for two-party disputes concerning all matters other than perishable goods, Mexico will have 30 days from the date of the initial request to begin consultations.

According to the guidelines (available here), consultations may be held by technological means or in person. However, if held in persons, “they shall be held in the capital of the party to which the request for consultations was made, unless the consulting parties decide otherwise.”

If the parties fail to arrive at an agreement resolving the dispute within 75 days after the initial request was submitted, the consulting party may establish a formal dispute review panel, unless both parties agree on a different time frame.

If a panel is required, this will push the process well into 2023, according to Mexican deputy foreign trade minister Luz María de la Mora.

De la Mora, in a radio interview, said the “establishment of a panel could take between six and seven months ... but I would like to focus on the consultations as they are an excellent opportunity to resolve these differences that we have.”