Sunday, March 2, 2008

Request: Would someone who knows realities please write about the effect on Energy Trade with Mexico and Canada should we change/end NAFTA?

An Energy Eye on Russia is taking the week off - because it's always the same thing. So now we move from Europe to North America:

I was watching Meet the Press this morning and ending NAFTA and its effect on our energy trade in North America came up - and using that against the Democratic nominee.

This article, "The Pipes that Bend", is about all I know.

"Canadian Trade Minister David Emerson mused this week that Ottawa might wield oil exports as a bargaining chip if NAFTA is reopened - as U.S. Democratic presidential hopefuls Barack Obama and Hillary Clinton apparently want. Veiled threats about Canada's energy riches have been used sporadically over the years in the face of U.S. protectionist threats."

The bargaining implications are kind of what I'm interested in. Personally, I don't think energy will be a problem - I would say, as I guess the article says, that business would just continue what they are doing outside of politics.

Renegotiating energy trade and strengthening Mexico's production policies under NAFTA seem to be an aim for the future. I read part of NAFTA Revisited: Achievements and Challenges Chapter 7 from the Institute for International Economics, which says:

"Although the United States and Canada have largely integrated their energy markets, the ultimate goal of a unified North American energy market is still a long way off. The United States and Canada should continue to deepend cooperation in the areas of infrastructure planning and regulation. They should encourage Mexico to pursue tax and energy policies that will generate domestic revenues that can fund expansion of oil and gas production and electricity generation. Such reforms are needed first and foremost to provide a strong foundation for Mexican economic growth. In so doing, Mexico would also contribute to North American energy security and thus to the long-term health of the North American economy -on which Mexico is so dependent."
I suppose that with the North American trade agreements and current energy abilities of all three countries, they kind of avoid the powerful position that Russia controls (with the gas pipelines) in the European Union. It's an interesting situation to contrast.

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