Kerry outlines U.S. proposals to Mexican president on disputed energy bill

MEXICO CITY (Reuters) -U.S. climate envoy John Kerry said on Thursday he put forward proposals for reaching consensus on a contentious Mexican electricity bill in a meeting with Mexican President Andres Manuel Lopez Obrador.

The two also discussed working towards a North American approach to climate change and broader economic issues, he said.

The meeting, also attended by the U.S. ambassador to Mexico Ken Salazar and U.S. energy-sector executives, comes amid a dispute over the country’s efforts to change its energy laws. Lopez Obrador has championed the bill, which would give more market power to state-run energy companies, and said the meeting was “friendly, necessary and beneficial.”

The United States is concerned that strengthening the state energy companies could breach the United States-Mexico-Canada Agreement trade pact by hindering competition.

Kerry noted the energy proposal is still “on the table,” and that he presented “ideas for how that reform can best reflect the possibilities of moving forward effectively.”

A team in Mexico led by U.S. Ambassador Ken Salazar will work with the White House and his office to help with that effort, he said.

Speaking to reporters outside Mexico’s national palace, Kerry added that Lopez Obrador discussed his hope for Mexico, the United States and Canada to coincide on “our efforts on climate and also larger economic issues.”

“President Lopez Obrador agreed that we need to work on this,” he said, adding that the approach aligned with U.S. President Joe Biden’s vision.

Lopez Obrador told a regular news conference earlier in the day that he hoped to come to an agreement with Kerry.

“We’re not taking an intransigent position; we want to have good relations with the United States government and with entrepreneurs from the United States,” the president added.

Lopez Obrador said he would explain why his government was pushing legislation to strengthen the country’s state-run energy companies and noted the conflict in Ukraine showed the benefit of a country having control over its national energy resources.

“The state cannot fail to comply with its social responsibility,” the president said.

Still, the steps to bolster national power company the Comision Federal de Electricidad (CFE) and state oil firm Petroleos Mexicanos (Pemex) at the expense of private companies have alarmed many of Mexico’s longstanding diplomatic allies.

Kerry is visiting for the second time in two months.

Lopez Obrador said that, provided companies in Mexico had permission to operate, their contracts would be respected. He momentarily appeared to suggest that they might have to operate under new terms if his reforms passed, but was not explicit.

(Reporting by Dave Graham and Daina Beth Solomon; Writing by Valentine Hilaire and Kylie Madry; Editing by Marguerita Choy, Kenneth Maxwell and Bradley Perrett)