By Owen Schalk, Canadian Dimension, April 13, 2023
One of the key tenets of Mexican President Andrés Manuel López Obrador’s “fourth transformation” government is state sovereignty over Mexico’s energy resources. This transformation has involved the nationalization of oil and gas, lithium, and electricity against the wishes of the US and Canada, Mexico’s former partners in NAFTA and current partners in the US-Mexico-Canada (USMCA) Trade Agreement.
Recently, AMLO’s government spurned warnings from Washington by purchasing 13 power plants from Spanish company Iberdrola for $6 billion. This deal means that the majority of electricity production in Mexico is controlled by the state-owned Commission Federal de Electricidad (CFE), not the private sector.
Before AMLO, 40 percent of the Mexican energy sector was state-controlled. Now, that number has risen to 56 percent.
AMLO’s commitment to securing Mexico’s energy sovereignty has been a source of tension between his administration and the US and Canadian governments. Ottawa and Washington want to maintain favourable access to Mexican energy resources for their own companies, an agenda that is diametrically opposed to AMLO’s “fourth transformation” policies.
On July 20, 2022, US Trade Representative Katherine Tai accused AMLO of violating the USMCA. While decrying “delays, denials, and revocations of US companies’ abilities to operate in Mexico’s energy sector,” Tai noted that the Biden administration has “repeatedly expressed serious concerns about… changes in Mexico’s energy policies.”
The Trudeau government followed suit, with Minister of International Trade, Export Promotion, Small Business and Economic Development Mary Ng travelling to Mexico City to meet with AMLO’s secretary of energy. At the meeting, Ng “emphasized Canada’s concerns regarding changes to Mexico’s energy sector regulations.” Ng released a statement asserting that AMLO’s nationalist policies are “inconsistent” with the USMCA, and that the Trudeau supports Biden’s “challenge” to Mexico’s popular government.
Canada and the US have cynically deployed the “clean energy transition” in their efforts to impair AMLO’s energy policy. Both governments have feigned concern over Mexico’s green transition and claimed that AMLO’s nationalizations harm the country’s ability to transition toward more sustainable energy, which Canadian and US companies were supposedly promoting.
This is a dishonest argument. Trudeau gifted $20 billion in subsidies to fossil fuel companies last year, while Biden just approved the Willow Project, a massive oil drilling venture in Alaska that will add 9.2 million metric tonnes of carbon to the atmosphere every year. As such, the “clean energy” argument is transparently an attempt by Canada and the US to discredit AMLO’s attempts at achieving energy sovereignty for Mexico.
Ottawa and Washington’s wish for the Mexican energy sector to remain open to unrestricted foreign investment is flagrantly anti-democratic. AMLO is well-liked in Mexico and his energy policies have only gained in popularity since the start of his administration.
By trying to hinder his policies, Canada and the US are not only attempting to weaken AMLO’s government—they are attempting to weaken Mexican democracy.
The rhetoric around this issue has intensified this year. In March, over 500,000 people poured into Mexico City to hear AMLO speak on the 85th anniversary of President Lázaro Cárdenas del Río’s nationalization of oil. In his address, the Mexican president emphasized his government’s commitment to energy sovereignty not only in the oil industry, but also the mineral sector, namely lithium. “Mexico is an independent and free country, not a colony or a protectorate of the United States,” he said. “Cooperation? Yes. Submission? No. Long live the oil expropriation.”
It should be noted that, in addition to energy, the Canadian and US agribusiness sector is also unhappy with AMLO. The Mexican government’s efforts to phase out glyphosate herbicides and genetically modified corn have been met with opprobrium by agriculture corporations in the rest of North America, which have made massive profits selling these products in Mexico. The Biden administration noted AMLO’s anti-GMO policies with “grave concerns,” while on March 6, the US requested trade consultations on Mexico’s agriculture policies.
A recent article in Western Producer notes that Canada is also “deeply concerned” about AMLO’s agriculture policies. Vice-President of CropLife Canada Ian Affleck stated that these policies are an example of “politics and ideology overriding science”—just like the Canadian trade commissioner in Mexico claimed that AMLO’s energy policies are motivated by “ideological assumptions” rather than a genuine desire for resource sovereignty.
In the Western Producer article, Shanti Cosentino, press secretary for Mary Ng, stated that the Canadian government is “working with Mexico towards an outcome that preserves trade predictability for biotechnology approvals and market access for genetically modified products.”
For its part, the Biden administration has continued to accuse AMLO of discriminating against US companies in Mexico. On March 27, Reuters reported that Biden is preparing an ultimatum for the AMLO government, an “act now or else” message demanding that Mexico reverse its plans to build resource sovereignty. Given the US’s long history of toppling Latin American governments that try to attain control over their own resources, the implications of such a threat are obvious: abide by our dictates or we’ll destroy you.
AMLO’s nationalist policies have earned him plenty of bad press in the US, including outlandish claims that he is “gutting fair elections” and “threaten[ing] democracy and stability.” In the midst of the heightened trade conflicts between Mexico and the US, some Republicans are even calling on the Biden administration to unilaterally attack Mexican territory on the pretext of targeting cartels. To this end, representatives Dan Crenshaw and Mike Waltz introduced legislation earlier this year to create an Authorization for Use of Military Force (AUMF), urging the Biden administration to attack Mexico.
In Mexico, presidents serve one six-year term. As such, AMLO will not be able to seek re-election in 2024. However, his Morena party will contest the elections, and given AMLO’s high approval ratings, it is likely that the “fourth transformation” will continue in some form after he has left the presidency.
If the US is plotting a coup of some kind to reverse Mexico’s path toward resource sovereignty, it will probably manifest next year, in the form of a plot to ensure that Morena is disempowered in the 2024 elections. If such a plot emerges, Canada will support the US position, as it has always done in Latin America.
Owen Schalk is a writer from Manitoba. His book on Canada’s role in the war in Afghanistan will be released by Lorimer in September. You can preorder it here. To see more of his work, visit www.owenschalk.com.
Posted April 23, 2023