In the Headlines
August 21, 2018

Mexico’s President-Elect Balks at Including Energy Chapter in New NAFTA

Mexico, U.S. officials in talks to try reach a deal on trade pact in coming days
The Wall Street Journal

As negotiations over the North American Free Trade Agreement (NAFTA) continue, the incoming government of President-elect Andrés Manuel López Obrador seeks to prevent a new chapter on energy investment from being added to the pact—something the current Mexican team and its U.S. and Canadian counterparts had apparently already agreed upon.

At the time the original 1994 trade agreement was formed, energy wasn't included because Mexico had a state monopoly in oil and its constitution forbade any private investment in that sector. However, in 2013, President Enrique Peña Nieto made changes that Mr. López Obrador was outspoken about.

According to trade attorney Carlos Véjar, an energy chapter in NAFTA would—among other things mentioned in an article by The Wall Street Journal—prevent Mexico from backsliding on the opening of its energy sector at a time when U.S. companies are seizing a growing role in the local industry. "The energy sector was on the table, but it wasn't a matter of concern. It was rather a technical issue on how to reflect Mexico's overhaul in the treaty," Mr. Véjar said. "Excluding it could change the scope of the negotiation, given that this is the sector that currently has the highest investment volumes."

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