Reuters is reporting that according to sources, The United States is preparing, under a regional trade agreement, to request dispute settlement negotiations with Mexico over what it alleges are discriminatory Mexican energy policies.

The dispute relates to Mexican actions which the U.S. Trade Representative asserts undermine American companies as well as US-produced energy, and which confer unfair advantage on Mexican state-owned power utility Comision Federal de Electricidad (CFE) and oil firm Petroleos Mexicanos (Pemex).

The news of the demand was released by sources in Mexico, and USTR would not immediately reply to a request for comment, though reports indicate the announcement will be made public on Wednesday.

Mexican President Andres Manuel Lopez Obrador, an energy nationalist, pledge to Mexico he would revive their domestic energy companies Pemex and CFE, which he accused predecessors of purposely destroying, to give the market to foreigners.

The United States is now arguing his efforts to give domestic energy producers advantage have run afoul of Mexico’s commitments under the United States-Mexico-Canada Agreement (USMCA) trade pact.

U.S. Trade Representative Katherine Tai said in a draft statement, “We have repeatedly expressed serious concerns about a series of changes in Mexico’s energy policies and their consistency with Mexico’s commitments under the USMCA.” Tai went on to argue that policy changes implemented by the Obrador government affect U.S. economic interests in numerous sectors and “disincentivize investment” by clean-energy suppliers.

Tai continued, “We have tried to work constructively with the Mexican government to address these concerns, but, unfortunately, U.S. companies continue to face unfair treatment in Mexico.”

The draft announcement pointed out that under USMCA rules, now the United States and Mexico will begin consultations within 30 days of the U.S. request, unless the parties come to an agreement.