Increasing U.S.-Mexico Cross-Border Trade in Electricity by NAFTA's Renegotiation

Synopsis: Trade in electricity encounters several problems, such as the lack of interconnections, infrastructure and legal issues. The Mexican regulatory framework was one of the main hurdles to integrate the North America electric market. Nevertheless, Mexico has passed an energy reform entirely sweeping the previous regulation.

Even though the new Mexican framework promotes an increase of trade in electricity with the United States, the current renegotiations of the North America Free Trade Agreement (NAFTA) can assure further stability and less political risk that could compromise the electric markets' integration.

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