By Dave Graham

MEXICO CITY (Reuters) -Mexico’s President Andres Manuel Lopez Obrador on Monday struck a conciliatory note on a major dispute with the United States over Mexican energy policy, saying Washington had adopted a “different tone” and respectful attitude toward his position.

He spoke on the same day senior U.S. officials led by Secretary of State Antony Blinken were holding the so-called High-Level Economic Dialogue (HLED) with Mexican officials in Mexico City.

In July, the U.S. trade representative demanded dispute settlement talks with Mexico, arguing Lopez Obrador’s drive to tighten state control of the energy market was unfair to U.S. companies and likely in breach of a regional trade deal.

Lopez Obrador, who has said his energy policy is a matter of national sovereignty, at the time responded defiantly, saying he would defend Mexico’s position at an independence day military parade taking place this coming Friday.

However, on Monday he said he would no longer refer to the energy dispute during his Friday speech because U.S. President Joe Biden had responded to his concerns positively.

“There’s a different tone. There’s a respectful attitude. Rather, it’s a reaffirmation of respect for our national sovereignty,” Lopez Obrador told a regular news conference, referring to a letter he said had received from Biden.

The U.S. energy complaint, which Canada immediately joined, is arguably the biggest dispute to surface under the United States-Mexico-Canada Agreement (USMCA) since the North American trade deal came into effect in 2020.

If unresolved, it could lead to the imposition of hefty trade tariffs against Mexico, analysts say.

Lopez Obrador said on Twitter (NYSE:) he had a “productive and friendly” meeting with Blinken and U.S. Commerce Secretary Gina Raimondo.

Blinken and the Mexican President “spoke about joint efforts to tackle the climate crisis through investments in clean energy and emerging technologies like electric vehicles, solar technologies, and semiconductors,” among other topics, said U.S. State Department spokesperson Ned Price.

At a joint press conference, Raimondo said the United States and Mexico have identified areas of collaboration on supply chains.

Mexican Foreign Minister Marcelo Ebrard told reporters Mexico had been invited to participate in a U.S. push to strengthen semiconductor output and electromobility in North America.

Ebrard added that the energy dispute was not the focal point of Monday’s agenda and that it had taken up “no more than 5 percent” of the conversation in the presidential palace.

He gave no further details of the energy discussion.

Last week, Ebrard said the energy dispute was not on the agenda for Monday’s HLED talks.

However, talks over the dispute have been underway for weeks, and it could feature on the sidelines.

Blinken and Raimondo were welcomed at Mexico City airport by Ebrard late morning for the talks, which were focused on semiconductors, telecommunications, medical equipment among other economic issues.

“By relaunching HLED, Presidents Biden and Lopez Obrador reaffirmed their commitment to our economic ties, USMCA, growth, jobs, development, regional competitiveness and shared prosperity for our nations,” said U.S. Ambassador to Mexico Ken Salazar on Twitter.