American Oil and Gas Reporter - August 2018 - 33

States' most important energy market,
and reforms in our energy sector offer
even greater opportunities for U.S. firms
to invest in my country. To crack these
negotiations, we need signs of flexibility
from the United States. Mexico cannot
and will not make concessions on tough
issues if there is no balance."
As for tariffs and quotas such as those
for steel and aluminum, Gutierrez indicated
Mexico considered the latter a contradiction to international trade rules and
the former a regrettable move. "In principle, we reject quotas," he said. "In
terms of tariffs, we deeply lament the action undertaken by United States to impose
tariffs on steel and aluminum on countries
such as Canada, Mexico and those in the
European Union."
He urged IPAA and its allies to make
their strong support for NAFTA known
to policymakers. "It is important that the
message comes from you, their constituents," Gutierrez advised. "There is a
deal to be made and your representatives
and senators can communicate to the
president the opportunity to improve
North American energy independence
and security under a new NAFTA."
Getting To 218 And 60
Congressman Gonzalez also urged
IPAA members to make their positions
known to their federal representatives,
and suggested that NAFTA 2.0 must
retain a mechanism that would protect
companies against having their assets
seized by a foreign government.
"I don't think it would be a very bright
idea to get rid of a reliable system," he
considered. "You guys have the president's
ear, probably more than anyone else, and
I hope you can continue to communicate
how important it is to have some certainty
and reliability for foreign investment in
other countries."
As for how he expected the anticipated
election-which took place a couple weeks
later-of Andrés Manuel López Obrador
to Mexico's presidency, Gonzalez predicted
Mexico's energy structure would not change
much. "It would take two-thirds of both
houses and a majority in every state legislature to change Mexico's constitution to
stop the newly crafted method of trade in
their energy sector," he observed.
Similarly, Representative Hurd advised, ISDS actually benefits U.S. companies. "In all the disputes that have
gone through the system in NAFTA's
24 years, I think the U.S. side won every

Pausing after the Teacher of the Year award presentation are Galen Cobb of Halliburton,
Anne Ford with the IPAA Education Center, honoree Laurie Schlaudt of Westside High
School in Houston, and IPAA President Barry Russell. IPAA teams with the Petroleum
Equipment and Services Association to recognize outstanding educators who demonstrate
excellence and a commitment to the groups' Petroleum Academy program.

dispute," he related.
Moreover, he continued, it is not only
Mexico that questions the wisdom of removing ISDS and instituting a five-year
sunset provision. "Even if all the countries
were able to negotiate an agreement, it
would be hard to pass that type of legislation in the House," Hurd advised. "The
administration needs to realize this is
about getting 218 votes in the House and
60 in the Senate."
Nonetheless, he continued, even if the
countries negotiate a business-acceptable
NAFTA 2.0 that passes Congress and is
signed into law, advocacy must not stop
there. "NAFTA is the acute problem; the
chronic problem is that people have to
understand the importance of free trade
and the unique relationship our country
has with Mexico," Hurd related. "We
have taken some things for granted that
we thought everyone always understood.
NAFTA is a good deal that has increased
the U.S., Mexican and Canadian
economies more than 300 percent. We
all know if we don't get this right, a
couple others are knocking on the doors
of our friends in Mexico and their names
rhyme with China and Russia."
Fast Moving
During his association update, Russell
described events surrounding international
trade as a prime example of the challenges
IPAA faced in Washington. "These decisions are being made pretty quickly,"
he reported.

As an example of the speedy swings
and rapid developments, he cited the
Trump administration's announcement to
impose tariffs on imported steel and aluminum. Despite that disappointment,
IPAA was pleased that those duties initially
included exemptions for countries including Mexico and Canada, except those
countrywide exemptions expired after
one month. Nevertheless, the administration noted that companies could seek
exemptions, he recounted, but then the
associated application process turned out
to be byzantine.
"That should give you a sense of the
ups and downs in Washington," Russell
considered. "While it may seem that not
much is happening as these decisions are
being made, we actually have input during
each part of the process."
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