U.S. requests dispute talks over Mexican energy policies that 'undermine' U.S. firms

FILE PHOTO: Excess natural gas is burnt, or flared, from Mexican state-owned Pemex's Tula oil refinery, located adjacent to the Tula power plant belonging to national power company Comision Federal de Electricidad, or CFE, in Tula de Allende, north of Mexico City, Mexico June 22, 2020. REUTERS/Henry Romero/File Photo

WASHINGTON/MEXICO CITY (Reuters) - The United States on Wednesday requested dispute settlement consultations with Mexico under a regional trade deal over Mexican energy policies that it considers discriminatory and says "undermine" American firms and U.S.-produced energy.

The request, announced by the U.S. Trade Representative's office, marks the most serious dispute between Washington and Mexico City since the U.S.-Mexico-Canada Agreement on trade took effect two years ago. If unresolved, it could ultimately lead to punitive U.S. tariffs.