Reopen NAFTA, reclaim our oil
Linda McQuaig
Canada will need tough negotiators to gain parity in trade agreement.
Yes, let's punish the official who leaked the Canadian memo that created
heat for Barack Obama, future president of the United States.
But let's not waste much time examining the mouth of this particular gift
horse.
Let's just consider ourselves lucky that the heated US Democratic
presidential race may result in NAFTA (the North American Free Trade
Agreement) being put back on the table.
NAFTA is deeply flawed from Canada's point of view. We failed to get the
promised "guaranteed access" to the US market (as the softwood lumber case
amply showed), while giving up important levers over our economy — most
crucially, control over our energy.
Ottawa's failure to protect Canadian energy sovereignty has always been
curious. But, with oil prices leaping wildly, it takes on a whole new
level of curiosity.
Here's the problem: NAFTA contains a clause that effectively prevents us
from cutting back exports of our energy to the United States — even if it
means there will be energy shortages in Canada.
This "proportionality clause" is highly unusual. Indeed, according to a
new report by the Alberta-based Parkland Institute, it is "unique in all
the world's treaties."
The oddity of this clause and Canada's willingness to accept it — Mexico
refused to and was granted an exception in the treaty — has never been
much of an issue in Canada. That's because anything smacking of energy
nationalism has been virtually banished from this country since Pierre
Trudeau put forward his National Energy Program in 1980, creating deep
suspicions in Alberta of federal intrusion.
But the escalating world energy crunch should finally shake Canada out of
its near 30-year slumber.
High world oil prices are at least partly a reflection of the fact that
global oil supplies are dwindling; that is, we're using up oil faster than
we're finding new sources of it.
This is the flip side of the global warming dilemma. While our over
consumption of oil risks frying the planet, we also risk running out of
the fuel that runs the modern world — the only world we know how to live
in.
Canadians are vulnerable. We have roughly a 13-year supply of conventional
oil, and a 9.3-year supply of natural gas. Yes, the oil sands are massive
but, with the extremely high levels of greenhouse gas emissions released
in processing, they're far more problematic than we've acknowledged.
Canada already imports about 49 percent of its oil needs (particularly in
Eastern Canada), with about half coming from unreliable OPEC sources.
Unlike the United States, Canada has no stockpile of oil for an emergency.
It's also very cold here; energy shortages would impact us in a
particularly cruel way.
NAFTA supporters insist Canadians are well served by the proportionality
clause, since we get to sell our energy to the US and make lots of money.
But without the clause, we could still sell our energy to the US and make
lots of money. The only difference would be that we'd also have the option
to sell it elsewhere — including to Canadians who might badly want it. The
price, which is set by world oil markets, would be the same.
So reopening NAFTA might not be such a bad thing. Of course, the Americans
would be tough negotiators, and control over Canadian energy is not
something they'd give up easily.
But we could hope that, a second time around, Canadian negotiators might
at least be as tough as their Mexican counterparts.
