Electricity and cars, the collision

In the economic and commercial sphere, within an important range of issues, there are two hot potatoes that can collide in the relationship between Mexico and the United States.

Both issues are strategic for the governments of both nations.

One has to do with an internal policy in Mexico, which for now is in “stand by”, but which will be reactivated sooner rather than later, next year: the electricity reform proposed by President Andrés Manuel López Obrador.

And the other has to do with one of the most important engines of the Mexican economy.

The automotive industry, which, through its production and export, has become one of the most important sources of foreign exchange income to Mexico.

In this case, the blow comes from an internal policy in the United States: the application of tax incentives for consumers to buy electric cars made in the USA.

The automotive industry in the world is facing a paradigm shift. In particular it is in the United States, where its president Joe Biden is convinced that he has to support the automotive industry in his own territory and has to promote the manufacture of electric cars.

The two issues, that of the Electricity Reform in Mexico and that of the automotive industry, in the United States and in Mexico, are directly interrelated.

What does the Electricity Reform promoted by the Mexican Chief Executive have to do with the automotive industry in the US and in Mexico? It has to do with the paradigm shift in the US and in Mexico.

Both countries are changing their model. The bad thing is that the change of one and the other is in the opposite direction.

In the US and in many parts of the world, they are moving towards the greater development and use of clean energy.

It is a change that seems inexorable for the whole world. Leave behind the use of fossil fuels.

In Mexico, his government intends to carry out a reform that changes the model that was incipiently advancing precisely towards the development of clean energy.

It seeks to strengthen the two state energy companies: Petróleos Mexicanos and the Federal Electricity Commission. Restore its monopoly status, to the detriment of the participation of private initiative.

Although the government assures that the reform it proposes does include clean energy, most experts say exactly the opposite.

Beyond energy experts, more and more groups of companies, legislators and organizations in the US are speaking out against the Electricity Reform that President López Obrador put on the table.

Just a few days ago, the president and CEO of General Motors Mexico, José Francisco Garza Rodríguez, said that without clean energy, Mexico will cease to be a destination to invest.

Yesterday it was the president of The American Society of Mexico (AmSoc), Larry Rubin who made a similar warning.

He said that for US companies, the electricity counter-reform initiative and obstacles to access to clean energy are a source of concern that slows down investment in the country.

The representative of 18,000 North American investment companies in the country commented that the greatest concern of US firms and, in general, of all foreign ones, is the lack of clean energy in the country.

As for the policy of tax incentives of $ 12,500 for US citizens to consume electric cars made in the US, it seems that in the end Canada may seek to ally with the US government rather than with the Mexican.

Until now, it seemed that Mexico and Canada, which had been leading the opposition of a score of countries to what they describe as a discriminatory and protectionist policy, had a solid dumbbell.

However, Justin Trudeau proposed to Biden that Canadian electric cars receive tax benefits in the US.

It could happen that Mexico, without Canada, has to follow the path of disputes in the framework of the T-MEC. And Canada could join the North American trade bloc, based on clean energy and electric cars produced in the region.

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Marco A. Mares

Journalist

Rich and powerful

He has worked continuously in newspapers, magazines, radio, television and the Internet, in the last 31 years he has specialized in business, finance and economics. He is one of the three hosts of the Alebrijes, Águila o Sol program, a program specializing in economic issues that is broadcast on Foro TV.



Reference-www.eleconomista.com.mx

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