North American Corn and Energy Summit Mexico City, Jan. 9-10, 2023: Advice for American and Canadian negotiators

Outline of report PPP 10097 on the 10th North American Leaders Summit

Outline of report PPP 10097

Title page of PPP 10097 which describes the scope and contents of the report

Title page of PPP 10097 which describes the scope and contents of the report

This report analyzes the biotech and energy disputes that since 2018 have defied resolution.

In Spanish, there is no direct translation of the word 'compromise'”
— George Baker
HOUSTON, TEXAS, UNITED STATES, January 6, 2023 / -- The 2023 North American Leaders Summit (NALS), scheduled for Mexico City during Jan. 9-10, will test the resolve of both sides (U.S. and Canadian vs Mexico) to have the many disputes resolved to their liking: illegal immigration, illicit drugs, biotech, energy and the environment.

The American and Canadian delegations are at a disadvantage: Their goal is to convince their counterparts to roll back decrees and policies regarded as in violation of the U.S.-Mexico-Canada trade and investment (USMCA) of 2018. At first, open disagreements concerned the treatment of American and Canadian investors in renewables and fuels. At the end of 2020, a new dispute arose in biotech: The decree published on Dec. 31 set a date of Jan. 31, 2024, for the substitution of both genetically modified corn and the herbicide Glyphosate.

For American corn growers, a 17-million-ton market could disappear. For Talos Energy and partners, the economics of their 800-million oil discovery, named Zama, could crumble in the hands of Pemex as the operator.

For Mexico's president, Andrés Manuel López Obrador, there is a misunderstanding: In his view, Mexico's policies in matters of energy, agriculture, environment, and state procurement are expressions of the national interest and are consistent with Mexico's sovereignty.

For the Americans and Canadians to convert an investor dispute consultation into an international arbitration panel on any of these subjects would be out of line and disrespectful of Mexico's sovereignty as an independent country.

Mr. López knows that in Mexico's diplomatic hand, there are three wild cards: illegal drugs, cartels, and immigration, each one of which, especially immigration, is of special interest to President Biden. President López discerns that while the Americans and Canadians put on a good show of being offended by his economic policies and regulatory actions, their combined negotiating strength is inferior to his, as there are no effective sanctions. His goal is to avoid the convening of arbitration panels that could find fault with Mexico's policies and that could lead to sanctions.

But will either side compromise? Oil and power investors worry that Green Biden will accept a postponement of onerous biotech rules in exchange for accepting Mexico's controversial policies that have damaged their business interests in Mexico.

This report offers some advice to the American and Canadian negotiators. "They should know that, in Spanish, there is no direct translation of the word 'compromise'," observes George Baker, the lead author of the report issued recently by Mexico Energy Intelligence. "They should also know that the often-invoked terms 'energy sovereignty' and 'food sovereignty,' are ideological slogans and do not exist in Mexican law or regulation."

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