Canada Is Trying to Stop AMLO From Putting Mexico in Control of Its Own Resources

Mexican president AMLO has launched ambitious efforts to strengthen Mexico’s sovereignty over its energy, mining, and agriculture sectors. It’s provoked challenges to AMLO’s democratic mandate not only from the US, but also Canadian premier Justin Trudeau.

Justin Trudeau (L) shakes hands with Andres Manuel López Obrador (R) during the welcome ceremony for Canadian prime minister on January 11, 2023 in Mexico City, Mexico. (Manuel Velasquez / Getty Images)

The MORENA party of Mexican president Andrés Manuel López Obrador (AMLO) is in a strong position going into the 2024 general election. According to one polling aggregator, AMLO’s party has the support of 48 percent of respondents, while the two major opposition parties, the National Action Party (PAN) and the Institutional Revolutionary Party (PRI) — whose monopoly over Mexican politics AMLO broke when he won the 2018 election — sit at 18 percent and 14 percent, respectively. AMLO’s personal approval rating, meanwhile, is even better: almost 70 percent.

The contest to nominate AMLO’s successor in MORENA will occur on September 6, and there are currently two front-runners: Claudia Sheinbaum, the former head of government for Mexico City, and Marcelo Ebrard, the former secretary of foreign affairs. Both resigned from their positions earlier in June to contest the party’s leadership.

In the meantime, AMLO is pursuing several major policies that he hopes the next legislature will approve, including lowering the pension age from sixty-eight to sixty-five and reforming the Supreme Court so that justices are elected by popular vote. MORENA’s recent victory in the election for governor of Mexico’s most populous state, the State of Mexico, is another indication that, going forward, AMLO’s agenda can rely on a significant mandate from the Mexican people.

AMLO’s Fight for Mexican Resource Sovereignty

Whoever succeeds AMLO, however, will also inherit his foreign policy, an international approach promoting nonalignment and Mexican sovereignty. This approach allowed him to achieve largely cordial relations with everyone from Donald Trump to Venezuelan president Nicolás Maduro, and has meant remaining neutral in the Russia-Ukraine war and the new cold war between the United States and China. In recent years, however, AMLO’s effort to increase state sovereignty in Mexico’s energy, mining, and agriculture sectors has tested his relations with the other North American powers, leading to legal challenges and diplomatic pressures not only from Joe Biden’s administration, but from Canadian prime minister Justin Trudeau as well.

The foundation of AMLO’s “fourth transformation” project is the reclaiming of Mexican sovereignty over key elements of the country’s economy. AMLO has taken efforts to increase the state’s role in oil and gas production, electricity plants, mineral extraction (including much-sought critical minerals like lithium), and more.

These policies represent an about-face from the resource liberalization enacted under his predecessors, like Enrique Peña Nieto. Peña Nieto’s 2014 energy reforms weakened the role of state energy company Pemex in oil and gas production while opening the sector to international investment. Analysts deemed the reforms transformational for the Mexican economy, while energy investors praised them for prioritizing international investment over state sovereignty.

AMLO has enacted another transformation, this one aiming to reconstruct Mexican resource sovereignty. His administration has given Pemex a controlling interest in major energy projects like the Zama oil field, and he has nationalized Mexico’s lithium reserves. He has built and rehabilitated refineries for the purpose of processing the oil extracted in Mexico rather than shipping it to the United States to be refined. He has announced that Pemex will stop exporting oil altogether in 2023 so that Mexico’s domestic energy market can become self-sufficient.

There are of course contradictions in AMLO’s development model that the Left must honestly contend with. Mexico’s challenge is one faced by many historically underdeveloped nations today: How can a country raise social and economic indicators without contributing to the climate crisis? While AMLO’s government has pledged to reduce fossil fuel emissions by 35 percent by 2030, Mexico remains the world’s twelfth-largest crude oil exporter and the fourteenth-largest greenhouse gas emitter. It is true that Mexico’s greenhouse gas emissions are slowly decreasing, but the tension between development and sustainability has no doubt been a feature of his presidency and will be a challenge for his successor as well.

Still, AMLO has halted new mining permits, over sixty-five thousand of which had been granted between 1988 and 2018, mostly to Canadian and US companies. He has launched a series of major mining reforms aimed at strengthening environmental protections and increasing the participation of local communities in the extractive decision-making process. AMLO is also planning to phase out imports of genetically modified (GMO) corn products from the United States and Canada (which includes “yellow corn,” used for animal feed, and “white corn,” used for human consumption), which will strengthen Mexico’s domestic, non–genetically modified corn markets.

Despite AMLO’s democratic mandate far surpassing that of either Joe Biden’s or Justin Trudeau’s, the US and Canadian governments are trying to stop the Mexican president from implementing his popular reform agenda. Complaining that his efforts to secure Mexico’s resource sovereignty are marginalizing the interests of US and Canadian companies, Biden and Trudeau have legally challenged AMLO under the Canada-United States-Mexico Agreement (CUSMA) and sent officials to Mexico City to apply diplomatic pressure on his government.

Confronting Canadian Mining

Canadian interference in Mexico warrants special attention, especially given the increasing global scrutiny faced by Canada’s ecologically and socially destructive mining industry, which accounts for 75 percent of all the world’s mining companies. Canadian companies are disproportionately represented in the Mexican mining industry, representing two-thirds of all foreign mining investment. This number exploded in the 1990s following the passing of the North American Free Trade Agreement (NAFTA), and no previous Mexican president had ever fundamentally questioned the predominant role that Canadian companies play in the country’s mining sector.

Officials in the Trudeau government have been highly active in advocating on behalf of the Canadian mining industry, which is critical of the Mexican president’s efforts to increase state sovereignty and implement greater social and environmental protections for local communities. In November 2022, Canada’s international trade minister, Mary Ng, visited Mexico City and spoke with representatives from large Canadian companies involved in energy, mining, and manufacturing. At the meeting, Ng “reaffirmed Canada’s commitment to engage with Mexico to resolve [Canadian companies’] concerns, particularly regarding the rule of law, permit issues, and changes to Mexico’s energy sector.”

Two months later, Ng returned to Mexico City, this time to meet with AMLO’s secretary of economy, Raquel Buenrostro. In their meeting, Ng “expressed concerns regarding the treatment of Canadian mining companies in Mexico and the need for transparent processes for mining sector permits.” She also claimed, without evidence, that “Canadian companies, including those in the mining sector, are leaders in establishing inclusive and sustainable workplace practices.”

Ng again sought to pressure Buenrostro in April 2023. On a call with the Mexican official, Ng “expressed concern” with AMLO’s mining reforms and accused Mexico of not “upholding the spirit” of the CUSMA. She also urged the Mexican government once again to take the interests of Canadian companies into account, calling for AMLO’s administration to consult with “all stakeholders regarding the proposed reforms, including with Canadian companies, which represent the largest group of foreign investors in Mexico’s mining sector.”

The US-Canadian Legal Challenge to AMLO’s Reforms

If Ottawa continues to be dissatisfied with AMLO’s mining policies, the Canadian government may launch an overt legal challenge against the reforms under the CUSMA, as Biden and Trudeau are currently doing in their efforts to halt AMLO’s reforms in the energy and agriculture sectors.

The Biden administration has been spearheading the challenge to AMLO’s oil and gas reforms, with Canada at its side. In July 2022, US trade representative Katherine Tai accused AMLO of violating the CUSMA and stated that Washington had “repeatedly expressed serious concerns about a series of changes in Mexico’s energy policies.” Ng joined Tai in expressing alarm, releasing a statement the next day that criticized “Mexico’s change in energy policy [that is] inconsistent with Mexico’s CUSMA obligations.” Meanwhile, the website of the Canadian trade commissioner claimed with extreme condescension that AMLO’s energy policies are “not necessarily based on economic or market principles, but on ideological assumptions, as well as a nationalistic approach that restrict[s] private participation in the Mexican energy market.”

While Canada’s investments in the energy sector are not as significant as in mining, Canadian companies are deeply embedded in Mexican energy, with investments totaling $13 billion (compared to $27 billion in mining). Export Development Canada labels Mexico a “priority market” and notes oil and gas as among the “key industries” for Canadian investment in the country.

Canada is also promoting agribusiness attempts to stop AMLO from establishing a more sovereign agricultural sector. In March 2023, the Biden administration expressed “grave concerns” with AMLO’s anti-GMO policies, as well as his plans to phase out glyphosate herbicides, and requested trade consultations on Mexico’s agriculture policies. Once again, Ottawa sided with Washington.

That April, Canada also claimed to be “deeply concerned” with AMLO’s efforts to phase out glyphosate and GMO corn imports. Shanti Cosentino, press secretary for Ng, revealed that the Canadian government was working in Mexico to secure the interests of Canadian agribusiness companies, particularly “trade predictability for biotechnology approvals” and “market access for genetically modified products.”

On June 2, the US government announced that it would be launching a trade-dispute panel to challenge Mexico’s policy on GMO corn imports, and Canada joined the panel as a third party. Canada’s Ministry of Agriculture and Agri-Food stated, “Canada shares the concerns of the U.S. that Mexico’s measures . . . have the potential to unnecessarily disrupt trade in the North American market.” Nevertheless, on June 19, AMLO signed an agreement ensuring that only non–genetically modified white corn will be used in the making of tortillas. He also imposed 50 percent tariffs on white corn imports as part of his efforts to make Mexico self-sufficient in the production of white corn for human consumption.

While Canada does not export much corn to Mexico, it does export a large amount of canola to the country ($1.6 billion in 2022), most of which is genetically modified. Chris Davison of the Canola Council of Canada explains: “Mexico is very important for Canadian canola. And so that’s definitely the point of entry for us into this discussion. . . . That’s really where the interest in this file comes from for Canada.” In other words, Canada wants to ensure that Mexico’s limits on genetically modified corn imports don’t eventually extend to genetically modified canola as well.

As AMLO has taken steps toward increasing Mexican resource sovereignty, the Canadian press (much like the US media) has become more vocal in demonizing him, painting him as a would-be autocrat who is undermining Mexican democracy — much like the North American characterization of Hugo Chávez and Evo Morales. Such is the fate of any left-of-center leader in Latin America who puts the interests of their own nation before those of Canadian and US capital.

Since MORENA is likely to triumph in 2024, consolidating AMLO’s sovereignty project, there probably won’t be an end any time soon to the demonization of the Mexican left, to the legal challenges and diplomatic pressures, or to Canada’s efforts to prevent Mexico from taking control of its own resources. The Left in the United States and Canada should vocally oppose these attempts to undermine Mexico’s democratic sovereignty.