Energy and Economic Integration in North America: Tracing Mexico’s Path to Sustainability

Abstract

This article examines the relationship between energy trade and economic integration in North America, with an emphasis on Mexico’s energy transition under the USMCA. It analyzes flows of energy, materials, and CO₂ emissions between Mexico and the United States between 2005 and 2023. The central finding is the structural transformation of Mexico’s energy system, which shifted from a net exporter of crude oil to a net importer of natural gas, driving the expansion of combined-cycle power generation—lowering costs and displacing fuel oil—while also deep-ening energy dependence and locking in long-term fossil infrastructure that complicates climate goals. The growth of bilateral trade shows a strong coupling between economic activity, energy consumption, and environmental pressure, with only an incipient decoupling from emissions. Although the USMCA offers a more robust environmental framework than NAFTA, its implementation faces tensions between domestic policy and international commitments. Dependence on U.S. natural gas entails risks of national security, vulnerability to price volatility, and geopolitical leverage in bilateral negotiations. The article concludes that diversifying Mexico’s energy matrix is necessary to advance toward sustainable development.