President López Obrador To Request Aid From America in Upcoming Bilateral Meeting

A month after boycotting President Biden’s Summit of the Americas, the Mexican president, Andrés Manuel López Obrador, is set to visit the White House on July 12 with hat in hand. He is looking for help in tackling inflation and to discuss border issues after deciding to not take part in the Summit of the Americas because the leftist, anti-democratic leaders of Cuba, Nicaragua, and Venezuela were not invited. Earlier this year, Mr. López Obrador lurched even further leftward himself, beginning the process of re-nationalizing the country’s oil and gas sector. The government-owned company Petroleos Mexicanos, or Pemex, will be regaining full control over the fuel market. Mr. López Obrador also is pushing farmers to boost crop output, specifically corn and beans, and is instituting price controls for 24 basic products, including rice, eggs, onions, chicken, milk, and potatoes. Using extraordinary profits derived from high oil prices, Mexico is subsidizing the energy market, keeping gas prices at the pump about $2 a gallon lower than those in the U.S.“We are already carrying out the energy issue, even for the benefit of those who live in the border area,” Mr. López Obrador said during a press conference. “There are Americans who are already using gasoline from Mexico because it’s cheaper, and we made the decision to maintain prices.”In part because Americans are benefiting from the Mexican subsidies, Mr. Lopez Obrador said he has prepared a document to present to Mr. Biden requesting that America contribute to Mexico’s economy. In 2016, President Peña Nieto opened the oil market to private companies other than Pemex. They were encouraged to distribute and sell fuels for the first time since the industry was nationalized in 1938. Royal Dutch Shell Plc, Chevron Corporation, and Exxon Mobil Corporation obliged, opening thousands of gasoline stations that are now being forced to shut down. The president of the risk consulting firm Empra, Alejandro Schtulmann, told Bloomberg that the message sent by Mr. López Obrador to foreign and private investors was that “the Mexican government doesn’t want you here.”Mr. López Obrador’s “main motivation” in re-nationalizing the industry is that the private companies were overshadowing the state-owned company Pemex by importing large amounts of diesel, Mr. Schtulmann told Bloomberg.Currently, Mexico produces 1.7 million barrels of oil a day, but the country could have produced up to 2.9 million barrels if the reforms presented by Mr. Peña Nieto were in place, according to the American Energy Information Administration, an independent statistics and analysis organization.Mr. López Obrador this week opened a new refinery as the first part of a plan to supply gasoline for the entire country. The Olmeca refinery, whose construction began in 2019, is expected to start producing gas in 2023. It will have a processing capacity of 340,000 barrels per day. The project has been in the spotlight because its cost reached $18 billion, more than double the original estimate.The upcoming bilateral meeting is quite a leap for the leftist Mexican president. Less than a year after deciding that foreign investors were not allowed to explore for oil in the country and after boycotting the Summit of the Americas, Mr. López Obrador is now requesting America’s help in mitigating inflation in Mexico, the first such high-level request in two decades.

President López Obrador To Request Aid From America in Upcoming Bilateral Meeting

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