Mexico energy moves could cause lasting damage

Significance

The moves are intended to strengthen the state-owned Federal Electricity Commission (CFE) -- a goal the government seems keen to achieve even if it means greatly restricting the activities of private firms.

Impacts

• Aggressive resource nationalism risks spooking investors potentially interested in sectors other than energy.
• Higher electricity prices may eventually prove problematic for some economic activities, such as manufacturing and commerce.
• The government will probably face lengthy arbitration and legal procedures under trade and other international agreements.