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Big Oil backs NAFTA, Trudeau could push for “more predictability” on pipeline approvals

Jack Gerard, the president of the American Petroleum Institute.


Bloomberg reports that “oil industry leaders” are “desperate” to preserve the North American Free Trade Agreement (NAFTA).


The news service highlights, “Energy companies that sat on the sidelines during other recent trade negotiations are getting more involved on NAFTA — securing formal roles on committees advising the process, unleashing lobbyists to influence it and outlining their priorities for the administration.”


In terms of “securing formal roles on committees”, last month Foreign Affairs minister Chrystia Freeland named Sophie Brochu (the president and CEO of Gaz Métro) to her NAFTA advisory council, while Environment minister Catherine McKenna appointed Lorraine Mitchelmore (the former President & Canada Country Chairman of Shell Canada Limited) to her NAFTA Advisory Council on the Environment.


The Bloomberg article also notes, “Industry officials from all three countries are eyeing the deal as a way to seek more regulatory certainty and the harmonisation of industry standards, something factored in to other trade accords. Canada, for example, may use the negotiations to push for more predictability surrounding the approval of pipelines and power lines crossing into the US, following years of squabbling over TransCanada Corp’s proposed [830,000 barrel per day] Keystone XL [tar sands] project.”


To read the August 2 letter from the American Petroleum Institute (API), the Canadian Association of Petroleum Producers (CAPP), and the Mexican Association of Hydrocarbon Companies (AMEXHI) outlining their position on NAFTA, click here. The letter highlights, “API, AMEXHI  and CAPP support preservation of NAFTA’s provisions for strong investment protections and Investor-State Dispute Settlement (ISDS), including rules that restrict expropriation of investments and that provide for prompt, adequate and effective compensation if expropriation does occur.”


Canada has faced 38 NAFTA Chapter 11 investor-state suits, two-thirds of them over environmental protection laws.


Global Affairs (formerly the Department of Foreign Affairs and International Trade) has stated, “NAFTA Chapter 11 establishes a framework that provides investors with a predictable, rules-based investment climate. While disputes are a normal part of every trade relationship, they represent a very small portion of the billions of dollars in investment that Canada attracts and the billions that Canadian companies invest abroad.”


Now the Trudeau government appears to want to replace the ISDS provision with the Investment Court System (ICS) provision in the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). But that’s not real change given this report by the Canadian Centre for Policy Alternatives and allies found that ICS would still allow the most controversial ISDS challenges launched under NAFTA to proceed.


In February, Natural Resources minister Jim Carr said the renegotiation of NAFTA would benefit the energy sector. Reuters reported, “Asked whether the energy industry could get a more favorable role than other parts of the economy in NAFTA renegotiations, Carr said, ‘I think that’s a real possibility’. …Carr told reporters that Canada will continue to make the case that the integration of the energy sector is in the best interest of all three governments. ‘I think the energy sector is one of those where the integration argument and the mutual benefit can be well advanced by Canada’, said Carr.”


The Council of Canadians is calling for a 100 per cent clean energy economy by 2050 and for an end to provisions in so-called ‘free trade’ agreements that impede climate action (keeping in mind the investor-state dispute settlement challenges against the Obama administration rejecting the Keystone XL tar sands pipeline, the Quebec government’s moratorium on fracking under the St. Lawrence River, restrictions on water takings for tar sands operations, and the need to fully implement the United Nations Declaration on the Rights of Indigenous Peoples, notably their right to free, prior and informed consent).


The next round of NAFTA talks will take place in Canada from September 23-27.