MEXICO CITY (Reuters) – U.S., Canadian and Mexican negotiators are zeroing in on ways to enshrine Mexican President Enrique Pena Nieto’s sweeping energy reforms into a modernized North American Free Trade Agreement, Mexico’s chief negotiator said on Saturday.
The 2014 reforms wrung control of the country’s oil and gas sector from state hands, opening it up to private investment, and incorporating them into the 23-year-old NAFTA is seen as a way to help preserve them for the long term.
“We’re working in this sense, analyzing all of the elements that need to be included in the energy discussion to reflect the reform Mexico established,” Mexico’s chief trade negotiator, Kenneth Smith, said on Saturday after a bargaining session in the second round of NAFTA modernization talks.
Smith, speaking to reporters as he walked side-by-side with his counterparts John Melle of the United States and Steve Verheul of Canada, added that negotiators would “look for mechanisms that allow us to integrate ourselves in a positive way in the energy sector.”
Trade negotiators from the three nations are working through the weekend in Mexico City to present more proposals to revamp NAFTA, an accord that underpins more than $1.2 trillion in annual cross-border trade.
When NAFTA was enacted in 1994, Mexico’s energy sector was closed and Pena Nieto’s reforms ended a decades-long monopoly for national oil company Pemex [PEMX.UL] and ensured competitive oil auctions. Incorporating them into NAFTA would help shield them from any future governments that may want to reverse them.
Trade experts both in the United States and Mexico have said that increasing energy trade and investments through NAFTA would help reduce the $64 billion U.S. trade deficit with Mexico that irritates U.S. President Donald Trump, partly through increased U.S. gas and oilfield equipment sales to Mexico.