The United States has raised concerns with Mexico about a worsening climate for U.S. energy investors in the Latin American nation, the Office of the U.S. Trade Representative (USTR) said.

Mexican President Andres Manuel Lopez Obrador, bidding to reverse previous reforms that enticed foreign investors, has sought to strengthen the state's role in the energy sector, including bolstering state oil firm Petroleos Mexicanos (Pemex).

His interventions have upset some of Mexico’s main allies, including the U.S., Canada and major European countries, and angered investors who believe the government is violating their rights under trade agreements Mexico signed.

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U.S. energy companies have expressed concerns about extended delays on permit approvals for retail fuel stations, as well as efforts by Pemex to wrest away operational control of a big shared crude deposit discovered by a U.S.-led consortium three years ago, among other criticisms of the state-centric energy policy pursued by Lopez Obrador.

USTR, in its annual report about trade barriers, said that throughout last year U.S. energy companies in Mexico have complained of permitting delays, discriminatory enforcement of regulations, and lack of notice regarding regulatory and policy changes.

“The United States has raised concerns with Mexico regarding the deteriorating climate for U.S. energy investors in Mexico,” said the USTR report published on March 31.

The report adds that Washington emphasized “that the U.S. Government is committed to ensuring that U.S. investors are treated fairly and that Mexico adheres to its USMCA commitments.”

The U.S. government is also at odds with Mexico over weed-killer glyphosate, which Mexico is trying to phase out amid concerns the pesticide causes cancer.

“The United States continues to press Mexico to grant import permits for glyphosate-containing products,” the report said.

U.S. companies also complained about changes in the Mexican procurement process, which included exemptions for Pemex, Mexican armed forces, and power utility the Comision Federal de Electricidad (CFE). U.S. businesses thought the process was less transparent than before, USTR said.

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