Folks, we have all watched the North American economic moves with great interest ever since the first discussions about reforming NAFTA were triggered by Donald Trump. Well, things are about to get even more interesting, and we will have a front seat to see how this plays out.
Joe Biden and Canada’s Justin Trudeau are in ideological alignment, willing to destroy the entire North American economy as they construct the new climate change energy systems for the U.S and Canada. However, Mexican President Andres Manuel Lopez-Obrador (AMLO) has already indicated -including direct statements to Joe Biden at the White House– that he is not willing to put the Mexican economy into collapse and try to engineer an economic future on solar panels and windmills.
As a direct result of following an independent path, the Mexican currency has strengthened against the U.S. dollar providing AMLO with evidence his current strategy to stay away from the U.S. energy policy has benefit. Factually, AMLO is a soft-socialist (immigration); however, he is also a strong economic nationalist who has previously expressed a strong dislike for the influence of multinational corporations in Mexico. AMLO is not a World Economic Forum acolyte. AMLO ideologically aligned toward team BRICS.
The U.S. and Canada are going to push every possible political pressure point in order to force Mexico to change energy policy. The stakes are high. It is going to be remarkable to watch what happens as this battle takes place. The Wall Street Journal starts to notice:
(Wall Street Journal) – A shake-up of Mexican trade officials has clouded prospects for a quick resolution of a dispute with the U.S. and Canada over what are seen as Mexico’s nationalist energy policies.
The changes at the Economy Ministry are part of an effort by Mexican President Andrés Manuel López Obrador to put people who support his stance in charge of negotiations, according to people familiar with the situation.
U.S. Trade Representative Katherine Tai is scheduled to meet with Mexico’s new top trade official, Economy Minister Raquel Buenrostro, on Thursday. But there is a tacit agreement to extend dispute resolution talks until December, when the leaders of the U.S., Mexico and Canada are expected to meet in Mexico to review the implementation of the North American trade deal known as the U.S.-Mexico-Canada Agreement, the people familiar said.
The U.S. Trade Representative’s office in July requested dispute-settlement consultations with Mexico under the USMCA, alleging that Mexico’s energy policies undermine U.S. companies in favor of Mexico’s state-run electric utility CFE and oil company Petróleos Mexicanos.
Canada also joined the consultations, which represent a challenge to one of Mr. López Obrador’s top policy priorities: greater state intervention and control over Mexico’s oil and electricity markets.
[…] Mr. López Obrador opposed his predecessor’s opening of the energy sector to private and foreign investment. Since the consultations began he has stepped up his nationalist rhetoric on energy.
“Our sovereign energy policy…isn’t subject to negotiation, it’s a matter of principles,” he said last month.
Mr. López Obrador has also said that he hopes to avoid a costly trade dispute. “We’re looking for an agreement, an understanding, and to avoid confrontation,” he said. (read more)
The ideologues in the Biden administration will not accept Mexico continuing to exploit cheap natural energy products like oil, coal and gas. As the USA and Canada punish citizens with inflation and massive economic consequences from Green New Deal energy policy, they cannot allow Mexico to be a source of stable low-priced goods and services. Amid other economic outcomes, the next-door neighbor contrast would be too politically damaging.
We can expect the Biden administration to work with Wall Street corporations on a level of economic targeting of Mexico similar to the western alliance sanctions against Russia. It will be extremely interesting to see just how strong AMLO can be in the face of serious threats from the USA and Canada.
I’m not talking about little threats, or ordinary economic pressure points; watch closely how the U.S threats are established. The ideologues around Joe Biden will seek to destroy AMLO if he does not go along with the energy change effort.
Watch this closely. The leftist hypocrisies are going to be off the charts as they target the Mexicans for punishment.
♦ Flashback to July, 2022: AMLO tells Biden that Mexico will continue investing in expanded refining of gasoline, and he is willing to sell that gasoline to American companies because Joe Biden will not issue permits to expand gasoline refining capacity in the United States. Additionally, AMLO affirms his position on further oil development in Mexico and then, here comes the kicker,…. offers to expand electricity sales to the United States, including supplying Texas with electricity because both the Biden administration and Texas are not developing their own energy resources.
[Transcript] – PRESIDENT LÓPEZ OBRADOR: (As interpreted.) Yes, I fully coincide with what you have proposed, President Biden. And I could summarize everything we’ve been saying in five basic items of cooperation.
Number one, since the energy crisis started, Mexico has used 72 percent of its crude and fuel oil exports to United States refineries — 800,000 barrels a day.
Therefore, we decided that while we’re waiting for prices of gasoline to go down in the United States — and I hope that Congress approves or passes your proposal, Mr. President —
PRESIDENT BIDEN: It has gone down for 30 days in a row. (Laughs.)
PRESIDENT LÓPEZ OBRADOR: (As interpreted.) — of lowering — lowering prices, yes. That’s it.
In the meantime, while we’re waiting for prices to go down, we have decided that it was necessary for us to allow Americans who live close to the borderline so that they could go and get their gasoline on the Mexican side at lower prices.
And right now, a lot of the drivers — a lot of the Americans — are going to Mexico, to the Mexican border, to get their gasoline.
However, we could increase our inventories immediately. We are committed to guaranteeing twice as much supply of fuel. That would be considerable support.
Right now, a gallon of regular costs $4.78 average on this side of the border. And in our territory, $3.12.
Let me clarify something, and I also want to take advantage of this opportunity to thank you, Mr. President. Most of this gasoline, we are producing it in the Pemex refinery that you allowed us to buy in Deer Park, Texas.
Two, we are putting at the disposal — or sending at the disposal of your administration over 1,000 kilometers of gas pipelines throughout the southern border with Mexico to transport gas from Texas to New Mexico, Arizona, and California for a volume that can generate up to 750 megawatts of electric energy and supply about 3 million people.
Three, even though the USMCA has made progress for the elimination of tariffs, there are still some others that could be immediately suspended. And we could do the same with some regulations, regulatory measures, and tedious procedures or red tape in terms of trade related to foodstuffs and other products so that we can lower prices for consumers in both our countries, always being very careful in the protection of health and the environment.
Four, starting a private-public investment plan between our two countries to produce all those goods that will be strengthening our markets so that we can avoid having importations from other regions or continents.
In our country, we shall continue producing oil throughout the energy transition. With the U.S. investors, we are going to be establishing gas-liquefying plants, fertilizer plants, and we shall continue promoting the creation of solar energy parks in the state of Sonora and other border states as well.
And we’re going to accomplish this with the support of thermal electric plants and also through transmission lines to produce energy in the domestic market, as well as for exports, to neighboring states in the American union, as for instance, Texas, New Mexico, Arizona, and California.
It’s also important to mention that, two months ago, we took the sovereign decision of nationalizing lithium in Mexico. This is a fundamental mineral, a fundamental input to advance in our purpose not to depend on fossil fuels. And this will be available for the technological modernization of the automotive industry among our great countries — the countries of the USMCA.
Five, orderly migration flow and allowing arrival in the United States of workers, technicians, and professionals of different disciplines. I’m talking about Mexicans and Central Americans with temporary work visas to ensure not paralyzing the economy because of the lack of labor force.
The purpose of this plan would be to support and to have the right labor force that will be demanded by the plan you proposed and that was passed by Congress of using $1 trillion for the construction of infrastructure works. (read more)
Mexican President Lopez-Obrador was offering to bail out the United States energy crisis.
A crisis that Joe Biden has created.
