Letter: Mexico’s preferential treatment threatens US investment in energy sector

The Rio Grande Valley’s congressional delegation joined state senators from Texas, Oklahoma and Louisiana in sending a letter to President Donald Trump Friday warning him Mexico might not be playing fair when it comes to the energy sector.

The bipartisan and bicameral letter was sent following news of a recently leaked memo that purportedly shows Mexican President Andres Manuel Lopez Obrador is directing Mexican authorities to give preferential regulatory treatment to PEMEX, Mexico’s state-owned energy giant, and the Federal Commission on Electricity, referred to as the CFE.

Additionally, the Mexican government is delaying or canceling outright permits for U.S. energy companies, the legislators wrote.

“ These efforts violate and contradict the spirit, if not the letter, of the USMCA, an agreement among whose primary objectives are to promote growth among the participant countries,” the congressmen wrote in reference to the U.S.-Mexico-Canada Agreement. “Therefore, we are deeply concerned that these actions demonstrate a pattern of obstruction and urge you to find a resolution with the Government of Mexico to keep the current market conditions that the Energy Reform regulatory framework provides, along with certainty and fairness for U.S. companies operating and competing in Mexico.”

In 2014, Mexico passed constitutional reforms that allowed foreign companies to participate in the Mexican energy sector. Since then, U.S. companies have invested billions of dollars to develop infrastructure on both sides of the border to import fuel from U.S. refineries to satisfy Mexican demand, the letter indicated.

“ As you know, Mexico is the largest export market for U.S. petroleum products and is a growing market for natural gas exports,” the letter continued. “In fact, U.S. exports of refined products to Mexico have tripled over the past decade.”

But despite the benefit of additional infrastructure and job creation on both sides of the border, Mexico’s ruling party is trying to dismantle those reforms, the lawmakers wrote.

“ Members of the governing party, Morena, have presented constitutional initiatives that would roll back the historic 2014 Energy Reform and seek to relinquish all contracts currently in force,” the 43 lawmakers wrote.

The correspondence — signed by U.S. Reps. Vicente Gonzalez, D-McAllen, Filemon Vela, D-Brownsville and Henry Cuellar, D-Laredo — urged Trump to intervene in actions they said “threaten” the investment and market access of U.S. energy companies and “undermine the spirit” of USMCA.

“ An integrated North American energy market benefits U.S. fuel manufacturers, workers, and ultimately Mexican consumers,” the congressmen wrote.

nlopez@themonitor.com