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NAFTA NEGOTIATIONS AND NORTH AMERICA ENERGY TRADE, JUNE2018
Carlos González GutiérrezConsul General of Mexico to Austin
CONSULATE GENERAL OF MEXICO
2
North America’s economic success depends on a strong regional trade partnership
POPULATION GDP
480 $20Million Trillion
ANNUALGOODS TRADE
$1Trillion
Source: WorldBank Source: Bureau of Economic Analysis
3
NAFTA increases trade, supports jobs, and strengthens ties with Mexico
5 million jobs in the U.S. relyon tradewithMexico1
World class supply chain
Efficientproduction
U.S.-Mexico trade hasgrown six-fold since 1993.
1993201
7
$557billion
U.S.FDI in Mexico has goneup over 400%
800% from1995 to2016.4
from1995 to2016.3
4 Source: Bureau of Economic Analysis
Mexican companies have invested over $52 billion2 in more than 6,500businesses in the U.S.,employing more than 120,000 workers.3
Mexico’s FDI in theU.S.has gone up over2, 3 Source: SE-Washington from iMapData 2015. FDI figures
1 Source: Woodrow Wilson Center from IMF CDIS using outward positions (stock) data 2015.
4
Trusted partners invest in each other
We are more than trade partners – we are allies.
1 Source:Ethos.org
There are 55 border crossings along the U.S.–Mexico border where:
More than 80% of bilateral trade is conducted
Over 1 million people and 447,000 vehicles crossbothways every day
MEXICO
U.S. companies have invested nearly
$93 billion inMexico
Mexican companies have invested about
$52 billion in theU.S.
UNITED STATES
Source: IMF, CDIS, 2015 outward FDI positions
Mexi Expos
Exports toU.S.:
40%U.S.made
Exports to World:37% U.S.made
Mexican exports to the world include 37% U.S.-made content. 1
North America: An Emerging Energy PowerhouseMexico is the US’ largest energy market, consuming over $26 billion in energy goods
Canada is the US’ biggest energy supplier, providing over $73 billion in commodities
$50.1B
$6.1B
$11.9B
$5.5B
$4.8B
$8.7B
$2.5B
$5.1B
$1B$9.8B
$2.0B
$2.5B
$7.3B
$2.5B
$2.0B$2.4B
$184M
Electricity Diesel & fuels
Crudeoil Gasoline
Natural gasLiquefiedgases
6
Importance of NAFTA for the energy industry
1 Source: Mexican Secretary of Energy2 Source: US Energy InformationAdministration 3 Source: WhartonSchool, March 17, 2017; MIT database
• Over 50% of US gas exports and over 50% of US gasoline exports go to Mexico2
Natural Gas
Gasoline
0 10 20 30 40 50 60 70 80 90 100
• 90% of Mexico’s natural gas imports and 80% of gasoline imports were from the US3
Natural
gas
Gasoline
Mexico imports nearly all of its natural gas and petroleum products from the U.S.
Mexico is the 2nd largest energytradingpartnerof theU.S., totaling $39 billion in trade in 20161
Mexican Energy Reform: Four Years of ImplementationThe Mexican energy industry has transformed completely with the creation
of new markets operating in a competitive system.
After four years, the estimated investment broughtby new energyprojects adds up to nearly $190billion.
These investments are supported by internationally binding contracts and are backed in the Mexican Constitution.
Natural Gas
Oil Products
Wholesale Electricity
MarketUpstream
$12.8billion
$2.7billion
$8.6billion
$162.9billion
Upstream Competitive Bidding System
$2.7 $8.6
13ConcludedBiddings
107NewContracts
67%Success
Rate
$160BillionUSD
Investment
73 Private CompaniesOperating
AUSTRALIA1%
63%NORTHAMERICA
Canada, USA,Mexico
7%SOUTHAMERICA
Argentina, Colombia
18%EUROPEGermany, Spain,
France,Netherlands, Italy, Norway,United
Kingdom,Russia
1%AFRICA
Egypt
10%ASIA
China,Japan,Malaysia,Thailand,
Qatar
NAFTA 2.0
Cooperation Regulation
Section A: Protections, disciplines &obligationsSection B: ISDSMechanism
Enhancing competitiveness in the North American energy sector
Energy Chapter
Investment Chapter
Temporary Entry of BusinessPeople
State Owned Enterprises (SOEs)
10
• Objective: Liberalizationof trade in goods, services and investment.
CP TPP NAFTA 2.0
• Exceptions: Trade in services and investment, are captured in Annexes of "reserves" (Annexes I and II).
AnnexI:Non-
Conforming Measures
•Freezes the current regime (standstill principle), plus the future opening that a country makes unilaterally (ratchet principle).
AnnexII: Future
Measures
•Exclusions of sensitive activities or sectors or with incipient regulation, to save policy space(activities reserved to the State), among others.
Reflecting energy reform in international commitments
11
12
NAFTA transformed the U.S.-Mexico bilateral relationship
A modernized NAFTA
agreement will give North
America the tools to
compete in the 21st century economy
A robusteconomic
agenda and trade
diversification continues to be a high priority
for Mexico
Trade is part of the solution to
the challenges posed by
globalization
The global economy waits for no one
13
Carlos González GutiérrezConsul General of Mexico to Austin
Contact:Guillermo Malpica SotoTrade and NAFTA OfficeSECRETARÍA DE ECONOMÍA MÉXICO
Jorge Salcido ZugastiConsul for Political AffairsCONSULATE GENERAL OF MEXICO IN AUSTIN
MX-US Trade www.naftamexico.net More
information:[email protected]
Thank you