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MEPs reject the reform of the electricity market contested by the United States

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Mexico (AFP) – Mexican deputies on Sunday rejected a draft constitutional reform aimed at strengthening the role of the state in the production of electrical energy, a flagship measure by nationalist leftist President Andres Manuel Lopez Obrador publicly criticized by the United States.

The presidential party Morena and its allies did not obtain the qualified majority of two-thirds of the 497 voting deputies (out of 500 in total) necessary to modify three articles of the Constitution. A total of 275 voted for and 223 against this reform of the Constitution aimed at strengthening the role of the public sector in the production and distribution of electricity.

The result of the vote fell after more than twelve hours of a debate during which Morena and his allies described as “traitors” the deputies of the three main opposition parties who united against the reform (the former party-state of the PRI, the right PAN and the left PRD).

This draft constitutional amendment planned to reverse the liberalization of the electricity sector in 2013, and to strengthen the role of the public company Federal Electricity Commission (CFE) vis-à-vis the private sector and foreign companies.

The United States denounces a risk for the environment and for the billions of private investments of American companies in Mexico.

US Ambassador to Mexico Ken Salazar said approval of the reform could cause “endless litigation” under the Mexico-US-Canada free trade agreement.

Spain also fears the consequences for its private companies in the Mexican market, such as Iberdrola.

The President of the Republic had minimized in advance his foreseeable defeat before the Chamber of Deputies. “Whatever happens, we are armored against betrayal. I will explain it again tomorrow,” he tweeted on Sunday evening, hours before the vote.

During a rally in favor of the reform of the electricity market in front of the Chamber of Deputies in Mexico City, April 17, 2022 Alfredo STAR AFP

The president appears to be referring to a Supreme Court ruling ten days ago. The Court ruled that the project to strengthen the role of the public company CFE on the electricity market was constitutional.

The president also announced last week that in the event of failure and “betrayal of the deputies” on his constitutional reform by qualified majority, he would transmit on Monday a “mining law” “so that lithium remains the property of the Nation. “. This law against new lithium mining concessions (a strategic mineral used in the manufacture of batteries) only requires a simple majority.

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