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1 NAFTA NEGOTIATIONS AND NORTH AMERICA ENERGY TRADE, JUNE 2018 Carlos González Gutiérrez Consul General of Mexico to Austin CONSULATE GENERAL OF MEXICO
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Page 1: NAFTANEGOTIATIONS AND NORTH AMERICA ENERGY TRADE, … · Crudeoil Gasoline. Naturalgas. Liquefiedgases. 6. ... investment, are captured in Annexes of "reserves" (Annexes I and II).

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NAFTA NEGOTIATIONS AND NORTH AMERICA ENERGY TRADE, JUNE2018

Carlos González GutiérrezConsul General of Mexico to Austin

CONSULATE GENERAL OF MEXICO

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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

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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.

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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

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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

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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

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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

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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

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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

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• 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

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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

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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

@[email protected]

MX-US Trade www.naftamexico.net More

information:[email protected]

[email protected]

Thank you


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