The Canadian government said on Wednesday it will also initiate its own consultations with Mexico on its energy policy, which it believes is inconsistent with a new North American Trade Pact (USMCA), and supports a similar move announced by the United States.

“We agree with the United States that this policy violates Mexico’s obligations under the TMEC,” said Alice Hansen, a spokeswoman for the Canadian Secretary of International Trade Mary Ngin a statement to Reuters.

“We join the United States in taking action by launching our own consultations under the USMCA to address these concerns, while supporting the United States in its challenge,” said Hansen.

The United States earlier this Wednesday requested consultations over dispute settlement with Mexico under the Latin American nation’s North American trade agreement for energy policies that it considers discriminatory and “harms” its businesses.

The request, announced by the Office of the Trade Representative (USTR), represents the most serious dispute between the Washington government and Mexico since the T-MEC went into effect. Failure to resolve this could result in punitive tariffs from the United States.

The USTR explained that the consultations requested concern measures that, according to its arguments, harm American companies in favor of the Mexican state-owned companies, the Federal Electricity Commission (CFE) and Petróleos Mexicanos (Pemex).