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‘Three Amigos’ to spin trade, energy and climate

What issues will be discussed at the ‘Three Amigos’ summit this coming Wednesday and how will their decisions affect you and me?

The leaders – Justin Trudeau, Barack Obama and Enrique Pena Nieto – are expected to discuss North American trade, energy production, and climate change. They are likely to highlight the benefits of the North American Free Trade Agreement (NAFTA), with the US and Mexican presidents likely to say that the Trans-Pacific Partnership (TPP) is the next important step to take, and that they will be taking serious steps to address climate change, including harmonizing environmental regulations, promoting carbon markets, and reducing methane emissions.

They aren’t likely to highlight that just this past Friday Calgary-based TransCanada formally launched a US$15 billion NAFTA challenge against the United States for its rejection of the 830,000 barrel per day Keystone XL tar sands pipeline. Nor are they likely to note that the TPP contains the same “investment protection” provision that would allow transnational corporations to launch similar investor-state dispute settlement (ISDS) challenges that impede the ability of TPP-member countries to implement laws and regulations that constrain the fossil fuel industry.

They may also trumpet their pledges to reduce greenhouse gas emissions:

  • Trudeau has pledged to cut greenhouse gas (GHG) emissions by at least what the previous Harper government had (weakly) promised, 30 per cent below 2005 levels by 2030

  • Obama promised to cut emissions 26 percent to 28 percent below 2005 levels by 2025

  • Pena Nieto has said his country’s emissions would peak in 2026 and that its overall emissions would be cut by 25 per cent of its current trajectory to 2030

But pledges of this limited nature are not science-based, were not developed in relation to the 1.5 degrees Celsius target, and would likely to take us far beyond that limit.

And among their statements on tackling climate change, they aren’t likely to note that Canadian crude oil exports to the United States are increasing.

In January 2016, the Financial Post reported, “Canadian crude oil exports to the United States reached its highest level ever of 3.4 million barrels per day in the first week of January [up from an average of 2.9 million bpd in 2014]… In contrast, U.S. oil production is set to decline to around 8.7 million bpd this year [due to the drop in the price in oil]… With U.S. demand for cheap gasoline expected to hold up this year, Canadian producers may be able to increase their market share. …Canadian oil now accounts for 45 per cent of all U.S. import crude imports, from about 30 per cent three years ago.”

Nor in their spin on the benefits of NAFTA are they likely to note that Article 315, the proportionality clause, which means that Canada cannot reduce its oil exports below the level established over the preceding 36 months. In other words, if Canada were to cut its oil exports to the United States by a large percentage (in an effort to constrain the tar sands and our carbon emissions), then Canada would also have to cut back its domestic supply by the same percentage. This provision, which amounts to a mandatory exporting clause, presents a real obstacle to Canada limiting the extraction of fossil fuels and transitioning to a carbon-free economy.

In advance of this meeting, we know what big business is pushing the leaders to do. In a joint op-ed published in The Globe and Mail on June 23, John Manley of the Business Council of Canada (formerly the Canadian Council of Chief Executives) and his American and Mexican counterparts called on the leaders to:

  • “move expeditiously to approve and fully implement” the Trans-Pacific Partnership (TPP)

  • “streamline the approval process for cross-border energy infrastructure”

  • do more to “ensure regulatory differences among the three countries do not act as unnecessary barriers to trade”

  • undertake actions to “facilitate the movement of business travel and goods” across borders

  • enhance cyber-security

In contrast, the Council of Canadians calls on the three leaders to:

  • hold public consultations on their promised continental energy strategy

  • take bold action to limit global warming to 1.5 degrees Celsius (meaning science-based emission reduction targets)

  • commit to a 100 per cent clean energy economy by 2050

  • commit to a just transition strategy for workers and the millions of new jobs that can be created in the renewable energy sector

  • fully respect the right to free, prior and informed consent for Indigenous peoples to reject energy projects

  • reject the Trans-Pacific Partnership and the ISDS and proportionality provisions in NAFTA

  • redirect the billions of dollars current spent on subsidies to fossil fuel industries

The ‘Three Amigos’ summit takes place in Ottawa on June 29.