López Obrador Energy Policies Seen as Main Risk to New Era of Mexico-U.S. Bilateral Ties

Energy is set to be a sticky issue in the new Mexico-United States relationship under U.S. President-elect Joseph R. Biden Jr.

Moves by Mexican President Andrés Manuel López Obrador that favor public sector companies Comision Federal de Electricidad (CFE) and Petróleos Mexicanos (Pemex) over private sector entities have caused considerable concern to U.S. investors in Mexico over the past two years, resulting in threats of international arbitration and formal complaints.

According to the analyst team at political risk firm Eurasia Group, the most serious risk to bilateral ties is López Obrador’s energy policy, “which is generating growing criticism in the U.S. given efforts to favor state-owned companies Pemex and the CFE, while also targeting renewables.”

While...