Mexico’s reforms opposed
Moves to limit U.S. investment draw fire from Texas lawmakers
WASHINGTON — A bipartisan group of Texas congressmen and senators are urging the Biden administration to pressure Mexican President Andrés Manuel López Obrador to back off efforts to roll back energy reforms that opened Mexico’s energy sector to U.S. companies for the first time in more than 70 years.
In a letter to President Joe Biden on Tuesday, Republican Sens. John Cornyn and Ted Cruz, along with Democratic House Reps. Lizzie Fletcher of Houston, Vicente Gonzalez of McAllen, and Henry Cuellar of Laredo, said Mexico was violating the United States Mexico Canada free trade agreement through legislation passed earlier this year that favors Mexican energy companies over foreign competitors.
“We ask that you address these violations when engaging in diplomatic discus
sions with President López Obrador,” the letter read. “This is necessary to not only establish a level playing field for U.S. companies operating in Mexico, but also to allow for competition in the energy market that will protect American jobs and ultimately drive down consumer cost and greenhouse gas emissions.”
Since Mexico passed constitutional reforms in 2013 to end the monopoly of state-owned energy companies such as Petroleos Mexicanos, or Pemex, U.S. companies have invested billions of dollars in Mexico’s energy sector.
But following the 2018 election of López Obrador, who campaigned against the market reforms as harmful to workers, those investments have begun to fall into doubt. The López Obrador administration has taken steps to reassert the dominance of Pemex and the state-owned power company, the Federal Electricity Commission, often to the detriment of private investors. Earlier this month, Mexico announced that Pemex would lead development of an oil and gas field in the Gulf of Mexico that was discovered by a consortium led by Houston-based Talos Energy.
The Mexican Legislature also has passed legislation ending an effort to open Mexico’s fuel market to retailers other than Pemex and ordering Mexico’s power grid to give preference to
plants operated by the Federal Electricity Commission. Tuesday’s letter followed a similar effort to get the Trump administration to pressure López Obrador. Former energy secretary Dan Brouillette wrote a letter to his counterpart in Mexico last year, cautioning that “business uncertainty leads investors to delay or change their plans, and without investment an economy cannot grow.”
Other congressional politicians signing off on the letter include Sen. James Inhofe, R-Okla., and Rep. Garret Graves, R-La., as well as Texas Reps. Randy Weber, R-Beaumont; Michael Burgess, R-Lake Dallas; Michael Cloud, R-Corpus Christi; Filemon Vela, D-Brownsville; and Marc Veasey, D-Dallas.