A week after her arrival at the office of the Ministry of Economy, Raquel Buenrostro threatens to blow up one of the most important teams in the agency: the Undersecretary of Foreign Trade, in charge of consulting on the energy policy requested by the United States and Canada under the new North American Free Trade Agreement (TMEC). Last week, Tatiana Clouthier left the Economy office, leaving her place to the then head of the Tax Administration Service (SAT). With the arrival of Buenrostro to the dependency, Luz María de la Mora was asked to resign as Undersecretary of Commerce and the lawyers who carried out the trials abroad, according to sources close to the dependency.
This series of resignations, pending confirmation by the Secretariat, occur in the midst of a trade dispute between Mexico, Canada and the United States over the terms of the TMEC for the automotive and energy sectors. In addition to the departure of De la Mora, the Undersecretary of Industry and Commerce is expected to leave; the head of the Regulations, Competitiveness and Competition Unit and the head of the International Business Practices Unit (UPCI).
The López Obrador government has decided to switch to its headquarters of international trade strategists just when they must face two of their biggest battles in the TMEC arena: the dispute initiated by the US against its energy policies. Last July, both the United States and Canada announced that they would resort to the agreement’s mechanisms to resolve the dispute over “a series of changes in Mexico’s energy policies and their consistency with Mexico’s commitments under the TMEC,” the US Trade Representative Katherine Tai in a statement.
The center of the controversy in this case falls on the electrical reform proposed by López Obrador that prioritizes the dispatch of electricity from the parastatal, the Federal Electricity Commission (CFE), to the detriment of the private plants that are already operating in Mexico and they have invested large capitals to generate a megawatt in the country. Although the constitutional reform failed due to lack of support and the changes to the law are stalled in the courts, de facto the Energy Regulatory Commission (CRE) has continued to put obstacles to the operation of private plants. Separately, the president has defended his position and has emphasized that he was not going to continue with the “surrogate policy” and that there has been “no violation of the treaty (TMEC)”.
But this is not the only trilateral dispute that is on the table of the new Ministry of Economy. The rules of origin agreed for the automotive industry in the TMEC have become another breaking point between the signatory countries. Since August 2021, Canada has joined Mexico’s request to review the interpretation of rules of origin for US car producers. In this case, the controversy rests on the methodology for measuring regional content so that cars are traded duty-free: the United States insists on a more stringent method than Mexico and Canada believe they agreed to for counting the origin of certain core parts, including engines, transmissions and steering systems in the overall calculation. According to the official calendar, the final ruling on this controversy is expected on November 10. De la Mora, who has been in charge since December 2018, was one of those who led this commercial dispute.
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