EXCLUSIVE — Rep. Jodey Arrington (R-TX) plans to introduce legislation aimed at ensuring that Mexico stops giving preferential treatment to its state-owned energy companies, arguing it is violating the U.S.-Mexico-Canada Agreement and hurting American companies.
Arrington, who chairs the House Budget Committee, will introduce the Mexican Energy Trade Enforcement Act on Friday. The bill directs the U.S. trade representative to address Mexico’s energy policies that prioritize its state-owned energy companies over those of American businesses.
Mexico has been accused of favoring its state-owned electricity company, the Comisión Federal de Electricidad, and its state-owned oil and gas firm, Petróleos Mexicanos. Under the USMCA, Mexico is prohibited from discriminating against U.S. companies in energy sectors such as oil, gas, and power generation.
Specifically, the legislation instructs the USTR to either request a USMCA dispute settlement panel or resolve the issue during the upcoming six-year review. In 2022, the Biden administration initiated consultations with Mexico regarding alleged violations, but the case did not progress.
“In his landmark USMCA trade agreement, President [Donald] Trump secured historic commitments to open Mexico’s energy markets to American investment and guarantee fair treatment for U.S. producers,” Arrington said. “Unfortunately, [former President Joe] Biden failed to enforce those commitments, allowing Mexico to break its promises and give preferential treatment to its state-run oil and power companies while shutting out American competition.”
“My Mexican Energy Trade Enforcement Act gives President Trump the full backing of Congress to hold Mexico accountable, defend American energy producers, and ensure our trade agreements are enforced with the strength and resolve the American people deserve,” he added.
USTR said in 2022 that since 2018, Mexico has pursued energy policies focused on reinstating the primacy of CFE and PEMEX.
In March 2021, Mexico amended its Electric Power Industry Law, requiring grid operators to prioritize CFE-generated electricity over that of all private competitors, regardless of cost or environmental effect.
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The bill comes as the relationship between Mexico and the United States has been strained due to sweeping tariffs imposed by Trump.
The legislation has been endorsed by the U.S. Chamber of Commerce, Energy Workforce & Technology Council, U.S. Oil & Gas Association, and the Permian Basin Petroleum Association.
