The World Today for February 07, 2022

NEED TO KNOW

Keeping the Lights On

MEXICO

Proposed reforms to Mexico’s energy sector are causing ripples throughout North America.

Leftist President Andrés Manuel López Obrador wants to divert more of the country’s energy market to the public Federal Electricity Commission, canceling contracts with private providers, Agence France-Presse wrote.

The proposal aims to curb prices as inflation in Mexico skyrockets, while the country recently fell into a recession, reported the Associated Press. Mexican officials blamed the coronavirus pandemic, supply chain snarls and related issues for their economic woes.

If finalized, however, López Obrador’s energy plans would jeopardize billions in foreign investment, potentially run afoul of trade pacts with Canada and the United States that limit the role of state-owned enterprises in the economy and undermine efforts to develop clean energy that are necessary to fight climate change, according to a statement by US Secretary of Energy Jennifer Granholm. Others claim the reforms could increase Mexican dependence on energy imports.

Still, the electricity play is just one of López Obrador’s left-tilting moves in the energy sector.

The president recently blessed the election of a lawmaker from the former ruling party to lead Petroleos Mexicanos (Pemex), the state oil company. That lawmaker is also a leader in Pemex’s workers’ union and a close ally of the former Pemex boss, who left under a cloud of corruption. As Reuters explained, López Obrador’s critics said he should have exercised more control over who runs Pemex. Others noted how the president was expanding his power base in accommodating the union.

López Obrador has also recently signaled that private companies won’t gain access to Mexico’s lithium mines, added Bloomberg. An important mineral for rechargeable batteries in electric cars and other technologies, lithium is in high demand today. The president’s rhetoric was anti-capitalist when discussing the issue. “Lithium doesn’t belong to the government or the state,” said López Obrador. “Lithium belongs to the people and the nation of Mexico.”

These moves also come as Mexican unions – traditionally allied with politicians and employers rather than rank-and-file workers – have ramped up their organizing efforts in American and other foreign-owned companies’ factories, for example, a General Motors plant in central Mexico, the New York Times wrote.

Lastly, Mexico has also launched a lawsuit against American gunmakers whom Mexican officials blame for fomenting violence south of the border, added Democracy Now! It’s a novel test for the Protection of Lawful Commerce in Arms Act, and other countries as well as more than a dozen US states have joined the suit, the Intercept noted.

Voters appear to be embracing such moves. The popularity of López Obrador and his party, Morena, remain high, according to Jacobin, a leftwing magazine.

They might be the only ones who are happy. To politicians like López Obrador, however, they also might be the only ones who count.

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