MEXICO CITY, Oct 3 (Reuters) – Talks between the United States and Mexico to resolve a dispute over energy policy will extend beyond an initial consultation period as the two sides narrow their differences, officials said on Monday.
The United States Trade Representative (USTR) demanded dispute resolution talks in July, arguing that the energy policies of Mexican President Andrés Manuel López Obrador discriminated against US companies and violated a pact North American trade.
At the center of the US lawsuit, joined by Canada, are permitting delays, a Mexican electricity law that prioritizes state-owned companies and other rules that investors feel hurt them, say industry sources.
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Under the United States-Mexico-Canada Trade Agreement (USMCA), if such disagreement is not resolved within 75 days of consultation, a dispute panel may be called to review the claims. Read also : United States vs. Mexico: What to expect ahead of CONCACAF W group stage clash. A panel could expose Mexico to the risk of punitive trade tariffs.
But on Monday afternoon, Mexico’s Ministry of the Economy tweeted that the dialogue had been “productive” with its counterparts in the United States and Canada, and that they wanted to continue talking to reach a “mutually satisfactory” solution.
Earlier, three government officials from both sides of the dispute told Reuters that progress in the talks meant they would be extended beyond October 3, when the 75 days expire. They spoke on condition of anonymity due to the sensitivity of the matter.
The USTR office did not respond to a request for comment.
In recent weeks, tensions have eased as Mexican courts suspended some contentious rules and signs Mexican regulators have begun to address permitting delays, sources and industry officials say.
“From my point of view, the Mexican government has sought to respond to the requests of the governments of the United States and Canada with a view to a solution that avoids international arbitration,” said Francisco de Rosenzweig, a former top Mexican trade official.
With the US midterm elections in November, heightened concerns about inflation and the likelihood of Mexico losing the arbitration, neither side wants to escalate the trade dispute now, the sources added.
Still, a Mexican source said US officials had warned that without substantial progress, pressure on Mexico will mount again.
Rosanety Barrios, a former Mexican energy official, said that while Mexican regulators were trying to appear more flexible, many problems remained to be resolved.
Instead of reaching a definitive resolution, the two sides seemed able to “kick the can until the next (Mexican) government,” he said.
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Information from Dave Graham To see also : Biden’s march covers the United States and is still at war in the Middle East.
Additional reporting by David Lawder in Washington D.C.; Edited by David Gregorio and Richard Chang
