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Delivering Community Power CUPW 2022-2023

Canada is trying to stop Mexico from becoming energy sovereign

“What AMLO ultimately wants to ensure is that control over Mexico’s energy resources lies in the hands of the Mexican nation”

Canadian PoliticsCanadian BusinessLatin America and the Caribbean

Mexican President Andrés Manuel López Obrador. Photo by Eneas De Troya/Flickr.

President of Mexico Andrés Manuel López Obrador (AMLO) is currently embroiled in an international dispute that has pitted his government against two of its largest trading partners, the United States and Canada. At the centre of this dispute is energy—always a fraught geopolitical domain, but even moreso in today’s worldwide energy crisis.

AMLO’s administration—a progressive, nationalist, and broadly anti-imperialist one—has made strengthening Mexico’s state-owned energy companies a priority as he attempts to move his country closer to full energy sovereignty. The US and Canada, both of whom favour a steady neoliberal arrangement in Mexico in which the state does little or nothing to impede foreign capital, are attempting to prevent AMLO from making the prospect of Mexican energy sovereignty a reality, as such a development would obstruct the free operation of US and Canadian energy companies in the country.

The Mexican state’s commitment to pursuing energy sovereignty is not only a central pillar in AMLO’s wider project to reassert Mexican sovereignty domestically and abroad; it is also a simple pragmatic move in the midst of the global energy crisis that intensified earlier this year with the war in Ukraine and Western sanctions against Russia. As a result, energy sovereignty is even more popular in Mexico today than it was on the year of AMLO’s election. As Nick Corbishley explains in Naked Capitalism, this growth in popularity is “partly due to the recent masterclass the European Union has given the world on the dangers of depending excessively on foreign states [i.e. Russia] to meet your own energy needs.”

While AMLO’s spokesperson Jesús Ramírez has insisted that Mexico continues to be “interested in investments from US and Canadian companies,” the dispute has widened the rift between the US-Canadian bloc of capital and the more left-leaning policies of AMLO’s “fourth transformation” government. On July 20, US Trade Representative Katherine Tai accused AMLO’s government of violating the terms of the US-Mexico-Canada (USMCA) Trade Agreement through his attempts to strengthen state energy company Pemex at the expense of US companies. “We have repeatedly expressed serious concerns about a series of changes in Mexico’s energy policies and their consistency with Mexico’s commitments under the USMCA,” she said.

Tai’s statement chides the AMLO administration for prioritizing the growth of Mexico’s state-owned companies over private investors and for restraining US investment through, among other things, “delays, denials, and revocations of US companies’ abilities to operate in Mexico’s energy sector.” Tai claims that AMLO’s attempts to rely less on foreign energy investment and move toward a sovereign energy sector “largely cut off US and other investment in the country’s clean energy infrastructure,” policy changes which “threaten to push private sector innovation out of the Mexican energy market.”

On July 8, Global Affairs Canada revealed that the Minister of International Trade, Export Promotion, Small Business and Economic Development Mary Ng met with Mexico’s Secretary of Energy in Mexico City and “emphasized Canada’s concerns regarding changes to Mexico’s energy sector regulations.” On July 21, Ng followed Tai with a statement criticizing “Mexico’s change in energy policy [which is] inconsistent with Mexico’s CUSMA obligations.” She added that Canada had begun “consultations under CUSMA to address these concerns,” and that the Government of Canada supports the US in their “challenge” to Mexican energy policy.

Currently, Canadian companies have $13 billion invested in the Mexican energy sector. Export Development Canada labels Mexico a “priority market” and notes oil and gas as among the “key industries” for Canadian investment in the country.

Both the US and Canada are ornamenting their aversion to Mexican energy sovereignty with concern for the clean energy transition that Mexico, by strengthening its state-owned energy companies like Pemex, is allegedly hindering—an argument that is totally undermined by the fact that this year the Trudeau government pumped billions of dollars into oil pipelines within Canada. It should be remembered, however, that US-Canadian interference against left-wing governments in Latin America over the past several years has often been dressed in the guise of environmental protection by the pliant Western press (see the cases of Evo Morales, “murderer of nature,” and Nicolás Maduro, “ecocidal” destroyer of the environment). One should keep this in mind if the trade dispute continues to deteriorate.

The Canadian trade commissioner in Mexico is less couth in its appraisal of AMLO’s energy policies. “With the flag of recovering Mexico’s energy sovereignty,” the trade commissioner website reads, “AMLO has implemented a series of modifications in terms of policies, structure, and operation of the sector. The new paradigm is not necessarily based on economic or market principles, but on ideological assumptions, as well as a nationalistic approach that restrict[s] private participation in the Mexican energy market.” The commissioner’s view of AMLO’s energy policies is extremely condescending, dismissing any wishes for energy sovereignty by the people of Mexico as mere phantasms conjured by a Mexican president whose vision is blurred by “ideological assumptions”—unlike, we are to assume, the rational and clear-eyed neoliberal policies pushed southward by Canada and the US.

Nick Corbishley asserts that “[w]hat AMLO ultimately wants to ensure is that control over Mexico’s energy resources lies in the hands of the Mexican nation,” an aspiration that “flies in the face of what Washington wants, which is ultimately an energy-rich neighbor to the south that is open to unrestricted foreign investment.” Canada wants the same. It remains to be seen whether AMLO, inarguably a transformative figure in Mexican politics, will be able to transform his country even more by fortifying its energy industry against the claws of its frantic norther trading partners.

Owen Schalk is a writer based in Winnipeg. He is primarily interested in applying theories of imperialism, neocolonialism, and underdevelopment to global capitalism and Canada’s role therein. Visit his website at www.owenschalk.com.

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