New Act Mandates USTR to Enforce USMCA Energy Rules Against Mexico Within 90 Days

The Mexican Energy Trade Enforcement Act is short, punchy, and zeroes in on a specific trade problem: what the U.S. government sees as Mexico playing favorites in its energy sector. Simply put, this bill forces the United States Trade Representative (USTR) to take immediate, concrete action against Mexico for allegedly violating its commitments under the United States-Mexico-Canada Agreement (USMCA).

This isn't about setting new policy; it’s about enforcing existing rules. The bill mandates the USTR to address “covered actions”—Mexico’s policies that favor its state-owned companies, Comision Federal de Electricidad (CFE) and Petroleos Mexicanos (Pemex), over U.S. energy companies and exports. The USTR has 90 days from the bill’s enactment to report to Congress exactly what action they chose to take.

The Enforcement Mandate: Pick Your Weapon

The bill gives the USTR two specific options for enforcement, essentially telling the U.S. trade chief, “You have to do one of these, and you have to do it now.”

Option 1: The Formal Showdown. The USTR can request the establishment of a formal dispute resolution panel under Article 31.6 of the USMCA. This is the trade equivalent of taking the case to court. For U.S. energy companies, this means a structured process to fight for non-discriminatory treatment, potentially leading to sanctions if Mexico is found to be non-compliant. This route is typically slower but carries the weight of the international agreement.

Option 2: The Review Mandate. The USTR can require, during the first joint review of the USMCA, that Mexico provide non-discriminatory access to U.S. energy companies. This access must align with Mexico’s obligations under key chapters of the USMCA, including those covering Investments (Chapter 14). This option ties the enforcement action to the scheduled review of the entire trade deal, potentially leveraging the broader agreement to achieve energy market access.

Why This Matters for the Everyday Economy

While this sounds like high-level trade jargon, the outcome affects market stability and, ultimately, the cost of doing business. When U.S. energy companies—whether they are natural gas exporters or renewable energy developers—face unfair barriers in Mexico, it limits their ability to compete and invest. For the energy sector, this bill aims to level the playing field, ensuring that competition is based on price and performance, not government favoritism.

For U.S. energy exporters, clearer rules and better access mean more stable markets for their products, which can support jobs and investment here at home. For the Mexican state-owned entities (CFE and Pemex), this bill is a direct threat to their protected status, forcing them to compete more directly with international players as originally intended under the USMCA. The mandatory 90-day reporting requirement ensures Congress keeps the pressure on, preventing the USTR from letting the issue drift into bureaucratic limbo.