Oil industry encouraged by Trump’s trade deal with Mexico

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Washington Examiner/ John Siciliano / August 27

 

President Trump’s announcement with Mexico on Monday is being taken as an encouraging sign by the U.S. oil and natural gas industry.

“We are encouraged that negotiators have reached a preliminary agreement to modernize our trade relationships,” said Mike Sommers, the new president and CEO of the American Petroleum Institute, the oil industry’s top lobbyist in Washington.

“America’s natural gas and oil industry depends on trade to continue to grow U.S. jobs and our economy, and deliver for consumers,” he added.

Trump announced Monday morning that progress had been made toward a deal with Mexico on renegotiating the North American Free Trade Agreement. Negotiations with Canada, the final piece in the agreement, are still ongoing.

Trump called it a «big day for trade» and the nation in an Oval Office announcement in which he teleconferenced with outgoing Mexican President Enrique Pena Nieto.

Energy has been a key aspect of the negotiations on a revamped version of NAFTA. However, no announcement on energy trade was made on Monday. The agreement with Mexico centered on ensuring that a higher percentage of automobiles sold in North America are made with parts produced on the continent.

Negotiations on an update to the free trade agreement had stalled in recent months amid disagreements over, among other things, provisions related to the automotive and energy industries. U.S. and Mexican negotiators, however, had made breakthroughs on those issues ahead of Monday’s announcement.

Jesus Seade, the incoming Mexican government’s chief NAFTA negotiator, said Sunday the energy issues have been “ironed out,” without going into detail, Reuters reported.

Mexico has become a large importer of U.S. natural gas and oil in recent years. Energy Secretary Rick Perry had visited Mexico ahead of Monday’s announcement. He was there to discuss «how the U.S. and Mexico can continue to work together to make North America a world-wide leader in energy production and exports,» Perry said last week in a tweet.

 

Washington Examiner/ John Siciliano / August 27

 

Is Mexico Set To Boost Oil Output?

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Oil Price / By The Dialogue / August 16

 

On July 27, Mexican president-elect Andrés Manuel López Obrador said his government will earmark more than $9 billion for state-run energy companies next year and start working on a new oil refinery in southern Mexico. The moves seek to reduce reliance on fuel imports from the United States while boosting the country’s oil production, which has significantly fallen off in recent years. López Obrador did not say how he would fund his proposals, an omission that worries analysts concerned about Pemex’s already heavy debt burden. He also announced Octavio Romero Oropeza as the incoming head of Pemex. Will the promised investment help accelerate Pemex’s oil and gas production? What else is needed to boost output? How well prepared is Romero Oropeza to lead Pemex, and what should his priorities be? Four Mexican energy experts weighed in with their opinions on these developments.

George Baker, publisher of Mexico Energy Intelligence in Houston: The 116-page energy sector document that the Morena transition team issued on July 10 sports both good and bad ideas. First, among the good ideas, is advocating independent unions in the oil sector (the first time since 1935 that a political party has done this). Second is suspending until further review the so-called farm-outs of Pemex—the idea that civil servants (Pemex employees) and market-disciplined managers of oil companies can have a joint venture based on sharing risk and reward only makes sense on paper. Third is promoting the concept of intelligent cities, including low energy consumption, renewable energy and intelligent grids. A fourth good idea is expanding the grid of natural gas pipelines and the use of renewable energy sources and cogeneration. Among the bad ideas: first is reactivating the refinery project in Tula and analyzing the construction of another refinery in the Gulf of Mexico. Pemex refinery upgrades have gone badly for the past 20 years, notably in Cadereyta, Villahermosa and Tula. A new refinery could take three years just for design and another three for contracting and financing. López Obrador would likely leave office before the first shovelful of earth was turned for the new refinery. Second is the upgrade of the role of Pemex in the energy space. The Morena team proposes to eliminate the so-called ‘asymmetrical regulations’ that restrict Pemex to compete effectively—to aspire to ‘make Pemex great again’ as a state agency is to ignore global success stories of state oil companies with mixed-equity structures, market financing and professional management. Finally, a third bad idea is to overstate (and obfuscate) the potential for change via public policy: there is nothing that is actionable in statements such as ‘the necessary investments in Pemex should be made,’ or ‘efforts to increase exploration and production of natural gas should be made to favor the petrochemical industry,’ or ‘deepen and coordinate all efforts to eliminate the black market in petroleum products.’ Notably, one word that does not appear in the text is ‘corruption,’ an unexpected omission by a candidate that vowed to end corruption by example. Finally, former Pemex director general Adrián Lajous recently calculated the average tenure of a director general as two years and four months. Pemex, legally configured as an agency of the federal government, always has a dozen cooks in its kitchen of corporate governance. If a director general had the authority to order early retirement for 35,000 Pemex unionized workers, there would be opportunities for leadership.

David Shields, independent energy consultant based in Mexico City: In a previous comment for the Energy Advisor on June 15, I mentioned that President-elect López Obrador’s energy team has excellent, progressive plans in renewable energy. Sadly, the same does not apply to conventional energy. The naming of Octavio Romero and Manuel Bartlett to head state-run Pemex and the Federal Electricity Commission (CFE) has been severely criticized because of their hardline political, ideological, non-technical, non-business nature. They may be okay for rooting out corruption, but they add to fears that recent energy reforms may be rolled back, even if they and López Obrador himself deny legal amendments will be made. Congress will ultimately decide on this, and the outlook there is bad. Reforms can be reversed in practice, anyway, just through day-to-day opposition. López Obrador says he will push oil output up sharply to 2.5 million barrels per day, but reserves and reservoirs are largely depleted, there are no new discoveries, and there is not enough money for a vast exploration effort. Foreign operators will need several years to develop their projects. His best bet for ramping up output quickly would be fracking, but he promises to prohibit that, thinking that environmental risks will be greater than the benefits. His refining plans are unrealistic, too. López Obrador´s native Tabasco State offers the wrong site and the wrong logistics for a large-scale refinery to be built in just three years. Such a project normally requires two years to study, plan and tender, then another five or six years to build. Even then, it can hardly be profitable if Mexico produces and processes only very heavy crude. Intentions to rescue Pemex and reduce reliance on energy imports are good, but the prospects are not.

 

Oil Price / By The Dialogue / August 16

 

Mexican energy sector overhaul could reduce U.S. export demand

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Chron / Katherine Blunt / August 6

 

An ambitious plan to boost Mexico’s oil and gas production could potentially slow the country’s energy sector reforms and hinder trade opportunities for U.S. refiners and pipeline companies that have ramped up exports to meet growing demand there, according to research firm Morningstar.

Mexican president-elect Andrés Manuel López Obrador announced late last month a plan to invest billions of dollars in Pemex, the country’s state-owned energy company, in an effort to  reverse years of declining production. He also reaffirmed his intent to review more than 100 exploration and production contracts awarded to private oil and gas companies since the 2013 reforms, which opened the country’s energy sector to foreign investment for the first time in decades.

Mexico’s energy reforms are enshrined in its constitution, and López Obrador has said that he will he will honor existing contracts so long as they don’t reveal corruption. But Morningstar noted that any effort to scale back the reforms or increase Mexican energy production could jeopardize some $200 billion in outside investments planned for the country’s oil and gas, power, refining and distribution sectors.

Part of López Obrador’s plan involves investing $2.6 billion to upgrade the nation’s six existing refineries as well as building a new, $8.6 billion refinery at the oil port of Dos Bocas in Tabasco. The country’s existing refineries have been operating at less than 70 percent capacity since 2012, according to Mexico’s energy department, requiring the country to import more gasoline, diesel, jet fuel and other refined products.

 

Chron / Katherine Blunt / August 6

 

First Phillips 66 Sites Open in Mexico

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CSP Daily News / July 23 

 

EL PASO, Texas — Phillips 66 is opening its first retail sites in Mexico.

The Houston-based refiner, which owns the Phillips 66, 76 and Conoco brands, has a licensing agreement with fuel distributor Windstar LPG to open and operate branded sites in eight northern Mexican states, according to Arizona Public Media (AZPM). The first locations—three 76 branded sites—opened in Hermosillo, Sonora, on July 12. Another site was opening soon after in Chihuahua.

Reynold Gonzalez, CFO for El Paso, Texas-based Windstar, told AZPM that the company has «aggressive plans» for expanding in Mexico, with 25 to 30 branded locations slated for Sonora by the end of 2018.

Phillips 66 follows other U.S. and international refiners in entering the newly deregulated fuel market in Mexico, including ExxonMobil, Shell, Andeavor and BP.

Some industry observers have questioned whether Mexico’s new president-elect, Andres Manuel Lopez Obrador, might reverse the energy reforms launched in 2013 by his predecessor, Enrique Pena Nieto, which included opening up the fuel market to foreign companies. Lopez Obrador said he would review the reforms if he discovered corruption in how contracts were awarded, Reuters reported; however, he has not announced any plans for rollbacks since winning the election in July.

Gonzalez of Windstar told AZPM that his company would not be opening locations in Mexico if it was concerned about a rollback, and that he believes U.S. competitors could help improve the quality of gasoline for fuel customers in Mexico.

«We are an example of a positive result of the energy reform act,» he said.

 

CSP Daily News / July 23 

 

 

California-based energy company building $150 million Mexico fuels terminal

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Chron / Rye Druzin, Staff Writer / July 12

 

 

A California energy company is moving ahead with a $150 million fuels terminal in the Mexican state of Sinaloa.

Sempra Energy of San Diego is building the fuels terminal in Topolobampo, Mexico through its Mexican subsidiary Infraestructura Energética Nova, S.A.B. de C.V. or IEnova after the company secured a 20 year contract with the Topolobampo Port Administration.

The first phase of the project will have a storage capacity of 1 million barrels for fuels including gasoline and diesel. Sempra Energy expects operations to start in the fourth quarter of 2020.

In April Sempra Energy announced that IEnova would build a $130 million, 1 million barrel fuels terminal at Ensenada, a city in the Mexican state of Baja California.

San Antonio refiner Valero Energy Corp., the largest independent refiner in the U.S., signed a deal in August with IEnova to export refined product into Mexico. The gasoline, diesel and jet fuel would ship to new $155 million storage terminals IEnova will build in the Gulf of Mexico port city of Veracruz. Other storage terminals will be constructed in Puebla, southeast of Mexico City, and in Mexico city itself, to the tune of $120 million.

 

Chron / Rye Druzin, Staff Writer / July 12

 

US launches five dispute actions in WTO challenging China, EU, Canada, Mexico and Turkey

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Merco Press / REUTERS / Yuri Gripas / 17 July

 

The United States launched five separate World Trade Organization dispute actions on Monday challenging retaliatory tariffs imposed by China, the European Union, Canada, Mexico and Turkey following U.S. duties on steel and aluminum. The retaliatory tariffs on up to a combined US$28.5 billion worth of U.S. exports are illegal under WTO rules, U.S. Trade Representative Robert Lighthizer said in a statement.

“These tariffs appear to breach each WTO member’s commitments under the WTO Agreement,” he said. “The United States will take all necessary actions to protect our interests, and we urge our trading partners to work constructively with us on the problems created by massive and persistent excess capacity in the steel and aluminum sectors.”

Lighthizer’s office has maintained that the tariffs the United States has imposed on imports of steel and aluminum are acceptable under WTO rules because they were imposed on the grounds of a national security exception.

Mexico said it would defend its retaliatory measures, saying the imposition of U.S. tariffs was “unjustified.”

“The purchases the United States makes of steel and aluminum from Mexico do not represent a threat to the national security,” Mexico’s Economy Ministry said in a statement.

“On the contrary, the solid trade relationship between Mexico and the U.S. has created an integrated regional market where steel and aluminum products contribute to the competitiveness of the region in various strategic sectors, such as automotive, aerospace, electrical and electronic,” the ministry added.

Lighthizer said last month that retaliation had no legal basis because the EU and other trading partners were making false assertions that the U.S. steel and aluminum tariffs are illegal “safeguard” actions intended to protect U.S. producers.

 

Merco Press / REUTERS / Yuri Gripas / 17 July

 

Amlo and the realities of Mexico’s oil reform

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Petroleum Economist / Craig Guthrie / July 9

 

The Mexican president-elect needs a strong oil and gas sector to fund a promised social transformation

The investor-friendly tone Mexican president-elect Andres Manuel Lopez Obrador, widely known as Amlo, struck in the run-up to his landslide victory on 1 July is fueling confidence he will tweak rather than dismantle the energy reforms that are enticing international oil companies to the country.

Prospects of an Amlo presidency had stirred concerns among investors for months ahead of the vote—he’s the first leftist Mexican president since the 1930s, and has forged an anti-elitist platform calling for a reordering of the political landscape. And yet the peso gained more than 2% against the US dollar in the hours after the result.

«This can be a presidency ruled by reason and legality,» Ixchel Castro, manager of Latin American oils and refining markets research with Wood Mackenzie, tells Petroleum Economist, while pointing to the currency market’s reaction and the links he’s built with Mexican business elites. «There may be change in the emphasis of the energy reforms, but we see a reversal as highly unlikely».

Launched by outgoing President Enrique Peña Nieto in 2013, the reforms ended Pemex’s 75-year monopoly over the energy sector. So far, auctions in January and March jointly lured at least $100bn in oil exploration investment commitments from more than 70 different firms—useful revenue for a president who has promised sweeping social changes to tackle crime, corruption and poverty.

Amlo made opposition to the reforms a bedrock of his failed 2013 presidential bid, and told a rally just four months ago that he would never allow Mexican crude to return to the hands of foreigners. But a reversal in tack since has seen his top business adviser and nominee for chief of staff, Alfonso Romo, lead a pro-business public relations drive towards international investors.

Romo told Reuters on 25 June that there could be more auctions of oil drilling rights, as long as a review of contracts that have already been awarded to private companies showed no problems. «We will revise them and everything good will remain,» he said, noting that Amlo had said this directly to investors in New York.

But it’s not expected to be all smooth sailing for foreign oil investment under Amlo’s watch. Uncertainty over the long-term goals of his populist agenda will likely continue to unnerve companies looking to establish a steady pipeline of projects.

«Amlo will likely enjoy the benefits from the existing contracts that have been awarded, especially in terms of oil barrels produced, fiscal revenue received and jobs created. By the third year of his administration he can claim that Mexico is producing more oil under his presidency,» Duncan Wood, director of the Mexico Institute at the Woodrow Wilson International Centre wrote in an e-mail.

«But he will be reluctant to continue the bidding rounds. The one possible exception that I see would be in deep waters and in farm-outs from Pemex.»

Mexico plans to auction 37 onshore areas and nine in the shale gas-rich Burgos Basin on 27 September, as well as the farm-out of seven onshore areas with Pemex on 31 October.

Amlo’s approach to a planned re-shaping of Pemex is seen as the next critical indicator of his eventual intentions on the country’s energy direction.

While the president has pledged to resurrect Pemex into a strong national oil company through cost-cutting, this comes amid a significant decline in domestic energy production—from 3.4m barrels of oil a day in 2004 to 1.9m b/d in 2018.

«Pemex must be forced to compete in order to become stronger,» said Wood. «If the reform process is stopped, Pemex would gain from a strengthening of its position in the short-term. But in the long term its competitiveness and productivity could be severely damaged.»

 

Petroleum Economist / Craig Guthrie / July 9

 

 

Mexico Likely To Keep Making The World’s Biggest Oil Hedge

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Baystreet Staff / Tsvetana Paraskova / Oilprice / July 9

 

The Mexican oil hedge, or the Hacienda Hedge, is considered the biggest hedging bet on Wall Street as well as perhaps the most secretive. It has earned Mexico—and a few large investment banks—billions of U.S. dollars.

Mexico buys put options from investment banks and typically hedges a whopping 200-300 million barrels of oil a year. With the put options, it has the right, but not the obligation, to sell oil at a previously set price and timing. But will this tradition continue under the newly elected administration?

Throughout his campaign, Mexico’s now president-elect Andres Manuel Lopez Obrador kept the oil industry on edge with comments and promises that he would review the landmark 2013 energy reform of outgoing President Enrique Peña Nieto that ended seven decades of oil monopoly in the country.

But the first signals from Lopez Obrador’s staff and advisors after he won Mexico’s presidential election last weekend are that the new president would not seek to backtrack on the energy reform, which allowed foreign oil firms to win contracts to pump Mexican oil.

Leftist Lopez Obrador and the new government, set to take office on December 1, will also likely continue with Mexico’s annual oil hedging program—considered to be the biggest annual oil hedge deal on Wall Street—an economic advisor to the president-elect told Bloomberg this week.

For 2018, Mexico locked in last year an average export price of US$46 per barrel of crude oil with its oil hedge. According to data by Mexico’s Finance Ministry, the country spent the equivalent of around US$1.25 billion on the oil hedge program for 2018, which was 21 percent higher than the oil hedge in 2016 to lock in prices for 2017. Mexico’s spending on the world’s biggest oil hedge has been at around US$1 billion over the past few years. State-run Petroleos Mexicanos (Pemex) is also hedging part of its production.

According to a member of president-elect Lopez Obrador’s economic team, Mexico’s oil hedge and the Pemex hedge are “working fine” and are likely to be left unchanged.

“The formula by which the government is calculating the price of oil is a very stable formula,” Abel Hibert told Bloomberg. “Using the hedges reduces uncertainty in financial markets,” the economic advisor said, adding, however, that the hedging program was not mentioned when energy policies were discussed at a meeting of the transition team this week.

Reducing uncertainty seems to be the key message from Lopez Obrador’s team after the election, even beyond the hedging program for oil.

Alfonso Romo, who is tipped to be the next president’s chief of staff, says that the new administration doesn’t want to create uncertainty and that there won’t be rescinding of the energy reform.

“What do we want to do? We want to take advantage of all of the enthusiasm we’ve generated to fix everything we can,” Romo told Bloomberg in an interview. “What don’t we want? To create uncertainty. Zero. I’m terrified of that.”

The incoming president’s chief of staff also said that he didn’t see changes to the 2013 reform.

“If anything happens, it would be done without hurting private investment,” Romo told Bloomberg.

With the energy reform of the outgoing president Peña Nieto, Mexico has attracted oil majors of the likes of ExxonMobil, Chevron, Shell, and Eni to its offshore areas, as it seeks to reverse a decline in its oil production.

Mexico needs a lot of money for offshore drilling, and “no one will fight success” if it manages to boost oil production, according to Romo.

The president-elect Lopez Obrador has said that he would have the already awarded contracts scrutinized for irregularities. But neither Romo nor the likely incoming finance minister Carlos Urzua expects the review of the contracts to reveal acts of corruption.

“If it looks good, on we go. It’s a contract we have to respect,” Urzua told Mexican television on Wednesday.

We are still five months away from the new president and government taking office, but the first messages after the election point that Mexico wants to reassure foreign oil investors and seek reconciliation rather than confrontation.

 

Baystreet Staff / Tsvetana Paraskova / Oilprice / July 9

 

 

Trump and Mexico’s New Leader, Both Headstrong, Begin With a ‘Good Conversation’

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The New York Times / Michael D. Shear and Ana Swanson / July 2

 

WASHINGTON — President Trump reached out to Mexico’s new populist president-elect on Monday in an early, but potentially short-lived, show of détente, saying the two leaders engaged in a “good conversation” about border security and the North American Free Trade Agreement.

The two countries remain locked in a heated dispute over the fraught issues of immigration and trade, areas that may face difficult complications from the election of Andrés Manuel López Obrador, a leader known for being as strong-headed and nationalist-minded as Mr. Trump — and just as willing to engage in a public clash of ideas.

Mr. López Obrador, who has said Mexico will not be a “piñata” for foreign governments, has said he will stand up to Mr. Trump to protect his country’s interests. And he may find himself under pressure by an electorate that, weary of Mr. Trump’s hectoring and disparaging comments about Mexico, will demand that he cede no ground, leaving little room to manage the relationship.

“There are going to be so many opportunities for this to go wrong,” said Duncan Wood, the director of the Wilson Center’s Mexico Institute. “If there are too many provocations, if there are too many insults against Mexico, López Obrador will not be able to just sit back and take it. His character shows that he will respond, and that could lead us down a dark path.”

Relations between Mexico and the United States are already tense, particularly over trade and the future of Nafta, which has enabled companies to create critical supply chains across North America. Talks to revise the trade pact among Mexico, the United States and Canada have stalled over dramatic changes proposed by the Trump administration, including altering protections for investors and rules for manufacturing automobiles in North America.

Mr. López Obrador has been a longtime critic of the 1994 trade pact and has given no indiction he will be more willing to accommodate Mr. Trump’s demands than the current Mexican government. Among other things, Mr. López Obrador has blamed Nafta for triggering an influx of grain from the United States that ultimately forced Mexican farmers off their land.

But Mr. López Obrador has pledged to continue to renegotiate Nafta — a promise that could ultimately put him in the position of defending the trade agreement against the frequent criticisms of Mr. Trump, who has called it the “worst” trade deal in history and blamed Mexico for siphoning off American jobs. Mr. López Obrador’s advisers have said they will start working with the current Nafta negotiators soon to ensure a smooth transition when the new administration takes office on Dec. 1.

The president-elect has also taken a far more critical view than his predecessor of corporations — which have among the most to win or lose with a revised Nafta. He has long criticized the role of multinational corporations in Mexico and once promised to turn the presidential palace into a public park. He has promised to review dozens of outstanding oil and gas exploration contracts for corruption, potentially delaying hundreds of billions of dollars in foreign investment. His election has put the value of the peso and Mexican government bonds on a more volatile path.

During the campaign, Mr. López Obrador and his advisers worked to reassure voters and industry that he would provide continuity for the private sector.

Known as an anti-establishment candidate, Mr. López Obrador is a divisive figure with Mr. Trump’s flare for capturing attention. After a failed bid for the presidency in 2006 against Felipe Calderón, Mr. López Obrador held a faux inauguration ceremony for himself, appointed a shadow cabinet and protested in the middle of the capital for weeks.

Mr. Trump and Mr. López Obrador spoke for 30 minutes Monday morning after the latter ’s landslide victory Sunday night. The call came just hours after Mr. Trump congratulated Mr. López Obrador in a rare, friendly tweet that said: “I look very much forward to working with him.”

The incoming Mexican president in turn pledged never to “disrespect” the United States government. In a tweet of his own, Mr. López Obrador said there was “respectful treatment” on the call.

Any period of gracious talk may be short lived, however, with Mr. Trump almost certain to continue his tirade about the 2,000-mile border with Mexico, and Mr. López Obrador virtually guaranteed to fire back in ways that his predecessors did not.

Mr. López Obrador “has committed to a louder, more combative posture with the U.S.,” said Carlos M. Gutiérrez, the former secretary of commerce under President George W. Bush. “He’s getting ready to take it up a notch.”

Mr. Trump campaigned for the presidency by demanding a wall across the southern border and suggesting that people being “sent” from Mexico into the United States are “bringing drugs. They’re bringing crime. They’re rapists.”

More recently, Mr. Trump has escalated his language against Mexico, accusing Democrats in a tweet of wanting “illegal immigrants, no matter how bad they may be, to pour into and infest our Country, like MS-13.”

 

The New York Times / Michael D. Shear and Ana Swanson / July 2

 

Mexico’s incoming leftist President could open US-Mexico energy relations

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The Daily Caller /Jason Hopkins / July 2

 

The election of Andrés Manuel López Obrador as Mexico’s next president has investors around the world on edge, waiting to see how the leftist leader will approach the oil and gas industry.

López Obrador handily won Mexico’s presidential election Sunday, capturing over 53 percent of the vote — more than double the percentage of the second-place finisher. His victory brings a new era of progressive populism to the U.S.’ southern neighbor. A member of the National Regeneration Movement Party, López Obrador touts a far-left pedigree: universal access to public colleges, an expansion of welfare programs, increased investment in industries and other big government proposals.

The president-elect’s calls for energy reform, however, has been the most striking to international observers. López Obrador pledged during the campaign to hold a referendum on reforms the country made several years ago that embraced measured degrees of privatization of the country’s oil sector.

Outgoing President Peña Nieto opened the country’s petroleum industry in 2013 to foreign investment, ending a decades-old monopoly held by Pemex, the country’s state-run petroleum company. The move was intended to revive Mexico’s oil and gas production, which is plagued with rampant inefficiency, debt and outdated equipment.

During the 2018 campaign, López Obrador derided these pro-market reforms. While promising to honor existing oil contracts, he believes the country should prioritize nationalization of the industry once again.

“As a long-time ally of national labor unions and a supporter of a strong [Pemex], [López Obrador] may seek to maximize national investment and employment in the sector, hedging Mexico’s political risk, even at the cost of economic efficiency,” David Goldwyn, chairman of the Atlantic’s Global Energy Center Advisory Group, noted Sunday.

Such reforms could have major implications for Mexico-U.S. energy relations, which hold very deep ties.

The U.S. currently exports a large amount of gas across the border and the Mexican government, in turn, sends heavy crude to American consumers. As crude oil imports to the U.S. has declined over the years, the trade imbalance between the two countries has shifted. U.S. energy exports to Mexico now exceeds its imports, according to the Energy Information Administration. These issues may come up as the Trump administration is set to renegotiate key agreements within the North American Trade Agreement with Mexico and Canada.

López Obrador, for his part, is no fan of Trump. The longtime Mexican politician wrote a book entitled “Oye, Trump” (“Listen, Trump”) that blasts the American leader for his calls to build a border wall and his “attempts to persecute migrant workers.” The book includes a number of speeches López Obrador has given. In one such speech, he compared Trump to Hiter, saying “Trump and his advisers speak of the Mexicans the way Hitler and the Nazis referred to the Jews, just before undertaking the infamous persecution and the abominable extermination.”

 

The Daily Caller /Jason Hopkins / July 2