Electricity reform: this would cause tensions between AMLO and Biden during their virtual meeting on Monday

The controversial reform of the law on the electricity industry and the vision against green energies risk becoming President Andrés Manuel López Obrador’s main political difference during his first meeting on Monday with his American counterpart Joe Biden.

The virtual meeting will take place one week after the CThe Chamber of Deputies approved the reform which favors the Federal Electricity Commission (CFE) to the detriment of private companies, especially foreign and renewable, and this is a bet against the Mexican current in favor of oil against solar and wind power.

“The United States can claim the government to Mexico because the electricity reform has many implications for US investors and will unfortunately be a point of tensionBrenda Estefan, who worked at the Mexican Embassy in Washington, told EFE analyst.

Defense of sovereignty

López Obrador’s initiative, Now in the Senate, he will eliminate the economic criterion consisting in always channeling electricity from CFE hydroelectric and fossil power plants in priority over private renewable and combined cycle plants.

In addition, retroactively, it orders a review of previous government contracts with individuals and changes the rules for clean energy certificates (CELs) to give them to the old CFE factories.

The Mexican president argued that it was his duty to defend the “sovereignty ”, but it is a question of calling into question the investments of North American and European companies in the energy sector, which constitutes a disguised expropriation and which will lead to the presentation of multiple lawsuits before international courts.

“They have made a lot of progress in the privatization of the oil and power industry, but fortunately the change has happened, people said ‘enough with the theft, with the looting’, especially of foreign companies,” he said. López Obrador declared this Sunday to justify his bet on a return to the monopoly of the energy sector.

But the government cannot hide behind “sovereignty” because it signed the Treaty between Mexico, the United States and Canada (T-MEC) and the Paris Agreement, says Emerson Segura, researcher at the Gilberto Center Bosques d’études internationales (CEI).

“The Mexican government cannot use sovereignty cTo justify imposing its agenda on issues that it does not want to negotiate, it cannot appeal to sovereignty every time it is on an issue in which it does not intend to give up anything ”, explains Segura, also adviser to the Senate. .

New relationship

López Obrador’s defensive tone towards Biden contrasts with that of Donald Trump, who led Mexico to deploy the National Guard to its southern border to stop Central American migrants. For this reason, Segura considers the Mexican government’s sovereignty argument “not very credible”., which also adopted arguments against clean energy similar to those of the Republican Party of the United States.

“It seems Mexico was reacting with the carrot and the stick, the Mexican government was responding to Trump’s logic, and it felt pretty comfortable even though it was operating from the threat,” suggests.

President López Obrador has grown accustomed to the fact that the bilateral relationship revolved around the Trump figure, his tweets and threats on migration. From now on, Segura believes that the Mexican government “must rethink” its strategy in front of a more institutional White House.

“The energy transition is going to be a matter of tension, but also of great distancing, that is to say that the incentives are weak for them to accept, so that the Mexican Government can sit down and speak frankly”, foresees.

Higher pressure

The pressure from Washington is already materializing with the demand for certainty of the investments made by the State Department last week, underlines Brenda Estefan.

Meanwhile, the next U.S. trade representative, Katherine Tai, has warned that meeting the T-MEC will be a priority. The energy sector is one of the six issues being considered by the T-MEC dispute resolution committees, the analyst recalls. “The United States does not express its opinion on internal matters of the CFE, but on matters which violate the provisions of the T-MEC”, spoint it out. In addition, the new Democratic president is under pressure from progressive groups hoping for results on climate change and workers’ rights.

Even like that, The expert predicts that the meeting will be “cordial” as there are coincidences in the migration and management of the covid-19 pandemic with more equitable access to vaccines. “Biden will not fight against Andrés Manuel. It is neither in the interest of the other. And this idea of ​​saying he’s meddling isn’t really like that, Biden has every right to defend US investments already made in Mexico, ”concludes Estefan.

With information from EFE

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