Canada accuses Mexico of ruining T-MEC investment

Canada has demanded that its enterprises be given equal treatment and has voiced its displeasure with the inaction of regulatory bodies over the release of licenses for the electrical industry.

Canada accuses Mexico of ruining T-MEC investment
Mexico is being blamed by Canada for the failure of the T-MEC venture. Photo by Milad Fakurian / Unsplash

Canada's Minister of Foreign Trade, Mary Ng, explained in the July 20 letter made public by the Canadian government that Mexico is not administering its laws in a consistent, impartial, or reasonable manner regarding the regulation of the electricity industry. She complained that there is preferential treatment for state-owned companies, specifically for CFE to dispatch electricity first, to the detriment of private producers.

Contrary to what the U.S. did by also putting the oil issue on the table, in the case of Canada, the biggest violation is in the regulation of the electricity industry. The letter warned that "Mexico's inactions and actions have distorted and created significant uncertainty in the market, denying Canadian investors access to the Mexican electricity market and leading to an erosion, or in some cases, destruction, of the value of Canadian investments in the sector, removing them from participation in the Mexican electricity market."

In the text, Canada complained that the regulation reduces the value of Clean Energy Certificates, in addition to the fact that regulations have been issued for the Energy Regulatory Commission (CRE) to revoke self-supply permits. The letter stated that the commitments to administer the laws without affecting trade in services in a reasonable, objective, and impartial manner are not complied with, in addition to the fact that the authorizations for the supply of services do not comply with the standards required in Chapter 15 of the T-MEC.

Mexico sold goods to Canada for a total value of 9 billion 90 million dollars between January and July of this year, almost 20% more than in the similar period of 2021, according to information from Banxico. On the other hand, Canada sold products to Mexico for a total of 7 billion 448 million dollars during the same period, 15% more than a year ago. In other words, the country accumulated a trade surplus of 1.642 billion dollars. According to data from the neighboring country's Department of Commerce, Mexico was the United States' largest trading partner from January to July, with Canada ranking second and China ranking third.