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Free Trade Fact of the Day

Posted By Conn Carroll On June 24, 2008 @ 10:57 am In International | Comments Disabled

Among those least amused by Barack Obama’s threats to unilaterally pull out of NAFTA are the Canadians. And being our next-door neighbors, they know exactly where to hit us [1] should the U.S. turn protectionist under a President Obama:

If Mr. Obama wins in November and brings his issues — labour and environment standards — to the table, Canada should prepare its own list. At the top should be getting out of the “energy proportionality” straitjacket that mandates that Canada must offer a majority of its oil and gas to the United States, even if Canadians freeze in the dark. Proportionality is “unique in all of the world’s treaties,” writes Richard Heinberg, a noted California author on energy. In no other developed country are citizens denied first access to their own resources. “Canada has every reason to repudiate the proportionality clause,” Mr. Heinberg continues, “unilaterally and immediately.”

The tar sands have much oil. But they cannot be produced with as low a carbon footprint as conventional oil. A seemingly unstoppable momentum is gathering in the United States to not buy dirty tar-sands oil. If Mr. Obama becomes president, he would likely shut the borders to it.

So, although Canada has lots of oil, we will increasingly be unable to use most of it. That means stretching out the lifespan of conventional oil by ending exports and seriously cutting domestic consumption. The alternative of increasing imports from unstable OPEC countries is irresponsible. Thus, Canada can no longer afford to export its remaining supplies of deliverable oil.

We should take the opportunity offered by the prospect of an Obama presidency and exit from NAFTA’s proportional, mandatory-exporting clause. It may have made sense when we signed it. It doesn’t now.


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[1] they know exactly where to hit us: http://www.theglobeandmail.com/servlet/story/RTGAM.20080623.wconafta23/BNStory/specialComment/home

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