NAFTA renegotiation brings uncertainty to oilpatch
Experts fear prolonged renegotiation could hurt energy industry
Energy industry experts fear a renegotiation of the North American Free Trade Agreement (NAFTA) will add another level of uncertainty to a slowly recovering market.
The Trump administration has sent a letter to Congress Thursday, officially triggering the 90 day consultation period before talks with Canada and Mexico can begin.
The news broke as energy leaders met in Calgary for the Energy Visions Business Forum. The discussion focused on the market's current state and how Canadian companies can find opportunities in the uncertainties.
Harder to attract investment
Panelist Reynold Tetzlaff, national energy leader with PwC, said the quicker the NAFTA process moves ahead, the better.
"The more uncertainty there is in the market, the harder it is to attract investment," he said.
Tetzlaff said most experts don't believe Trump is after the energy industry. Beyond the uncertainty the renegotiation will create, he doubts it will have a big impact on the oilpatch.
"If he's going to make a couple changes, let's get it done. Let's make the changes so that we can move forward, we can plan and we can actually start attracting capital."
Prolonged renegotiation feared
Panelist Robert Johnston, CEO of Eurasia Group, said a renegotiation of NAFTA is going to take time.
"I think the real risk for Canada here is that this drags on. I think that risk would be most acute if the U.S. is still negotiating at a time when Mexico has an election next year," he said.
"The risk of a prolonged renegotiation here and the intended uncertainty for business and markets is pretty high."
Unpredictability from White House
ATB Financial's latest Alberta Economic Outlook, released Thursday, also highlighted the unpredictability in the White House and the uncertainty it's creating for much of the province's economy.
The outlook said some Alberta sectors, including forestry and energy, could feel the pain because of actions taken by Donald Trump.
Such precariousness comes as the energy patch has stabilized, said ATB's chief economist Todd Hirsch in a news release, adding "that alone, has gone a long way to boost sentiment and optimism in the province."
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With files from Jennifer Lee