rabble blogs are the personal pages of some of Canada's most insightful progressive activists and commentators. All opinions belong to the writer; however, writers are expected to adhere to our guidelines. We welcome new bloggers -- contact us for details.

Big Oil wins with the United States-Mexico-Canada Agreement

Please chip in to support more articles like this. Support rabble.ca in its summer fundraiser today for as little as $5 per month!

Big Oil appears to be a clear winner in the new United States-Mexico-Canada Agreement (USMCA) reached by U.S. President Donald Trump, Canadian Prime Minister Justin Trudeau, and outgoing Mexican President Enrique Peña Nieto.

In fact, the American Petroleum Institute, a Washington-based association representing oil and gas corporations,  is already calling on the U.S. Congress to approve the deal.

Their media release on the agreement highlights the five areas they are the happiest about:

"Key provisions of the agreement related to the U.S. natural gas and oil industry include: continued market access for U.S. natural gas and oil products, and investments in Canada and Mexico; continued zero tariffs on natural gas and oil products; investment protections to which all countries commit and the eligibility for Investor-State Dispute Settlement (ISDS) for U.S. natural gas and oil companies investing in Mexico; requirement that Mexico retain at least current level of openness to U.S. energy investment; additional flexibility allowing U.S. customs authorities to accept alternative documentation to certify that natural gas and oil have originated in Canada or Mexico upon entering the U.S."

While the American Petroleum Institute is celebrating, Friends of the Earth succinctly cautions, "This agreement is an attack on our ability to hold Big Oil and Gas accountable for the damage they cause to our communities."

Market access

As to "continued market access for U.S. natural gas and oil products", Alexander C. Kaufman notes in the Huffington Post, "The updated deal preserves a provision that requires the U.S. government to automatically approve all gas exports to Mexico, despite another rule mandating regulators consider the public interest."

Chapter 11

Here, Kaufman points out, "The new deal limits [investor-state dispute settlement] rights, with one major exception: U.S. oil and gas companies."

He notes, "Under the rules, firms that have, or may at some point obtain, government contracts to drill or build infrastructure like pipelines and refineries in Mexico --  such as ExxonMobil Corporation -- can challenge new environmental safeguards Mexican President-elect Andrés Manuel López Obrador has vowed to erect."

And Brock University political science professor Blayne Haggart has highlighted that Article 34.7 in the new agreement constrains all three governments with a "regulatory chill" effect similar to Chapter 11 thus further restraining future policies to defend the climate.

Alternative documentation

It would also appear that the USMCA will save Canadian-based oil and gas corporations tens of millions of dollars a year.

CBC reports "A border bottleneck that cost Canadian oil producers as much as $50-$60 million every year also appears to have been addressed. Under the old NAFTA rules, oil and gas producers had to prove the origin of their product right back to the wellhead if they were to be exempt from duty at the border."

That article adds, "[The Canadian Association of Petroleum Producers] says the new trade agreement allows a proportion of diluent -- up to about 30 per cent -- without Canadian producers paying that fee."

Energy proportionality

But surely it's a win that the energy proportionality clause was not included in the USMCA?

That was the odious and controversial provision that prohibited any restriction that would cut oil and gas exports to the U.S. from Canada below a three-year average.

JWN (which has as its motto "trusted energy intelligence") reports, "With the U.S. gushing oil at record levels, America apparently no longer needs to preserve Canada as its emergency crude supplier. "

While we can (and will) celebrate the end of the energy proportionality provision as a win, the American Petroleum Institute sours the mood when it casually (given its obvious hegemonic power) notes that preserving the provision was "not a priority."

Good for Big Oil, bad for the climate

Along with energy proportionality, the words "climate" and "warming" were also not mentioned in the agreement despite the United States, Canada, and Mexico respectively ranking as the second, ninth, and 12th biggest emitters of carbon dioxide in the world.

Further evidence that Big Oil won with this agreement is the market's response when the deal was announced. Reuters reports, "Oil futures jumped more than $2 a barrel Monday, rising to levels not seen since November 2014..."

That article further explains, "Phil Flynn, an analyst at Price Futures Group in Chicago, said the NAFTA deal would boost oil prices because it 'increases the growth prospects not only for Canada and the U.S., but for North America as a whole'."

"Growth prospects" means more oil and gas being extracted, more violations of Indigenous rights, more climate refugees, more climate fatalities, more chaos.

While big business is celebrating its win, others suggesting it was the best deal that could be reached, and some just feeling relieved, sober analysis increasingly tells us that three deeply neoliberal governments reached an agreement that hurts people and the planet.

Brent Patterson is a political activist and writer.

Image: nate2b/Flickr

Help make rabble sustainable. Please consider supporting our work with a monthly donation. Support rabble.ca today for as little as $1 per month!

Thank you for reading this story…

More people are reading rabble.ca than ever and unlike many news organizations, we have never put up a paywall – at rabble we’ve always believed in making our reporting and analysis free to all, while striving to make it sustainable as well. Media isn’t free to produce. rabble’s total budget is likely less than what big corporate media spend on photocopying (we kid you not!) and we do not have any major foundation, sponsor or angel investor. Our main supporters are people and organizations -- like you. This is why we need your help. You are what keep us sustainable.

rabble.ca has staked its existence on you. We live or die on community support -- your support! We get hundreds of thousands of visitors and we believe in them. We believe in you. We believe people will put in what they can for the greater good. We call that sustainable.

So what is the easy answer for us? Depend on a community of visitors who care passionately about media that amplifies the voices of people struggling for change and justice. It really is that simple. When the people who visit rabble care enough to contribute a bit then it works for everyone.

And so we’re asking you if you could make a donation, right now, to help us carry forward on our mission. Make a donation today.


We welcome your comments! rabble.ca embraces a pro-human rights, pro-feminist, anti-racist, queer-positive, anti-imperialist and pro-labour stance, and encourages discussions which develop progressive thought. Our full comment policy can be found here. Learn more about Disqus on rabble.ca and your privacy here. Please keep in mind:


  • Tell the truth and avoid rumours.
  • Add context and background.
  • Report typos and logical fallacies.
  • Be respectful.
  • Respect copyright - link to articles.
  • Stay focused. Bring in-depth commentary to our discussion forum, babble.


  • Use oppressive/offensive language.
  • Libel or defame.
  • Bully or troll.
  • Post spam.
  • Engage trolls. Flag suspect activity instead.