Lately, the old NAFTA trade deal, or North American Free Trade Agreement, has been getting some new press as of late. Recently, Donald Trump has proposed that Canada and Mexico engage in talks to renegotiate the NAFTA deal. Donald Trump has discussed many different plans that he had in mind for trade between neighboring countries, including imposing 10% and 25% tariffs on aluminum and steel, in addition to a whole host of other proposals that he had made in regards to restructuring America’s trade economy.Even though other minerals and metals have been discussed as having levies and tariffs imposed upon them, one industry that has been left out of the discussion, perhaps deliberately, is energy.
In fact, energy companies do not see any reason for the NAFTA trade deal to be renegotiated. Presently, the United States receives oil from Canada, while selling its natural gas to Mexico, and many experts feel that this is a delicate balance that should not be altered with a new trade deal. Canada is the US’s number one oil importer. and those in charge do not want to see this be disrupted for any reason in the foreseeable future. However, despite the entrenched order, Mexico itself is making inroads into the energy sector. Mexico has been pursuing private investment into its energy industry, and they have received funding from companies such as Talos Energy.
Talos Energy, a Houston Texas based energy company, has been putting massive amounts of capital into Mexico’s oil industry, foreseeing a time when Mexico will have to depend on itself mostly for oil production. In the midst of all this, there will still be talks of renegotiating NAFTA, and many experts say that there is a high chance that there will be changes made to the original deal at some point in the future. In fact, all this new investment in oil and energy could prove to make geopolitics in this region more difficult. And yet, production in the oil and energy industry is what is keeping friendly relations between these three countries together. Learn More.