The Day at a Glance | Jul 20 2022

The Top

*The Biden administration requests dispute-settlement regarding USMCA; argues Mexico`s favoring of state utility breaks pact.

*Ukraine calls for extension for debt payment due to economic consequences of the war.

*Putin affirms that Europe`s supply of gas will resume, but could be partial if West doesn’t deliver essential components retained by sanctions.

*Inflation in the United Kingdom increased to an annual 9.4% in June, its highest level since 1982.

*The US Senate approved $52 billion dollars to be invested in the production of semiconductors in the country.

*The EU calls for member countries to decrease gas consumption in 15% until spring.

*Russia is China`s largest provider of oil for a second consecutive month, exceeding volumes originating from Saudi Arabia.

*Drought affects 70% of Mexico`s territory.

Economic environment

USMCA dispute. The United States requested the start of a dispute-settlement  regarding the United States-Mexico-Canada Agreement (USMCA) arguing that Mexico`s nationalist energy policy violates the free trade agreement. According to a statement made by the US government, Mexico`s energy policy has had a shifted towards prioritizing state businesses over private enterprises – especially energy coming from renewable energy sources. Additionally, it has denied or revoked permits from US companies to operate in the sector, something that violates Mexico`s international pledges. Katherine Tai, United States Trade Representative who signed the statement, assured that the issue has been tried being resolved through direct dialogue with the Mexican government, but unfortunately, US companies are still being discriminated against in the energy sector. According to the process, Mexico now has 30 days to set an agenda for consultations. If an agreement is not reached after 75 days within the consultations to resolve the dispute, the United States could request the formation of a panel to hear arguments from both sides. The panel could ask Mexico to carry out actions to correct its violations of the trade agreement; and if Mexico doesn’t abide, it could allow the US to impose tariffs on Mexican imports as a measure of retaliation.

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