Thank you, Mr. Chairman.
It is really a privilege to participate in these hearings organized by the foreign affairs committee on the possible issues faced by the next North American leaders' summit. Events and ideas have certainly shifted since I last had the pleasure to be in Parliament, in the Senate last year, but I think the changes have been mostly for the good.
Although of course we face old and new challenges, some of which can be solved in the short term, others will require a long-term agenda. I think three in particular are good news. Canada and Mexico, acting together, are making progress to reverse the U.S. protectionist measures on COOL. That's really good news. We're working together with Canada on the TPP negotiations. There has also been significant progress made on the very difficult issue of ISIS.
I will attempt to highlight 10 very quick points, the main topics that I believe are essential for the North American agenda.
First, obviously, is energy cooperation. I think that's the real and the most important driver for trilateral cooperation. Of course, there are new factors, one of which is the falling price of oil. In the short term, that has reduced the appetite for investment, particularly in deepwater drilling and shale-oil fracking. But Mexico's energy performance is in the process of full implementation. It will require some adjustments in that the investment will take place not in deepwater or shale gas but in the easier areas.
The three energy ministers met for the first time in Washington at the end of last year to put in place, for the first time, a working agenda. An important part is a shared medium-term energy outlook on the potential. Mexico sees energy as a driver to push forward the industrialization process. Particularly, we see that cheap gas will give the area a vast competitive edge in manufacturing, in automobiles, and in aerospace. This has triggered lots of investment.
Last week there was a second ministerial meeting of the three energy ministers working together on climate change, clean energy technologies, energy efficiency, and carbon capture. Electricity generation is often forgotten. One speaks about oil, in the case of Mexico, but electricity generation and converting from fuel oil to gas will require significant investment in the order of $90 billion. Another area in which we're working closely with Canada is on best regulatory practices in shale gas and avoiding water pollution and waste. Here we are working very closely with the energy regulator in Alberta.
Large investments are already taking place in oil and gas pipelines within our country and linking them to the borders. Mexico will be building a total of 10,000 kilometres' worth of pipelines with about $20 billion in investment. Canadian companies like TransCanada and ATCO are already working on something like 2,000 kilometres of pipelines, which is the the size of Keystone. That's already in place.
The area of trade negotiations is a very significant area. I mentioned that we're working together to reverse the U.S. measures on COOL, but we're also working very closely with Canada to advance on TPP negotiations. Although we have cautious optimism on the part of Mexico, we think we could be able to conclude an agreement by the end of the year. We view TPP as an area to expand trade with Asia, as you do, but also as the easiest way to update and upgrade NAFTA to make it a second-generation, state-of-the-art treaty.
We have two main concerns, I think, that are probably the main obstacles. If there is no fast-track authority by the U.S. Congress, then this won't move forward. The second concern is that the U.S. Congress does not overburden the negotiations with issues that of course are important in their own right but are related to the domestic agenda and have nothing to do with trade. Take religious liberty and whether we agree with religious liberty. That has nothing to do with trade, and it will create a cost on other countries—not for us, obviously.
Intellectual protectionism is creeping. We obviously believe in intellectual property, but intellectual property protected for a century is perhaps a bit excessive. This might affect areas like pharmaceuticals, which need a more limited period of protection. We have, of course, the usual suspects in such products as dairy and apparel, but as I mentioned, we are confident that we can come to an agreement by the end of the year.
Border competition I won't mention. I think stupendous work has been done by my colleagues at the Canadian Council of Chief Executives. I think there we were working a bit at cross purposes.
There are two border commissions. One is a border commission and one is a regulatory commission. One is between the U.S. and Canada, and the other one is between the U.S. and Mexico. To some extent some of the border issues are specific, but some were common. I think now we're working to have some amount of convergence.
In terms of infrastructure investment, the three countries lack infrastructure investment along our borders, and within our borders. We have a vast program totalling $600 billion. There again we will be working on roads, railroads, and ports. There is a large megaproject for Mexico City with a fantastic Norman Foster design. Canadian companies like Bombardier are active in these fields.
There's a great deal of Mexican interest in working on the logistic corridors. A clear logistic corridor is one that goes from Winnipeg right down the centre of the United States and into Mexico, and there's interest in investing in CentrePort in Winnipeg. As I think some of the other speakers have said, I think NADB is North American in name only. It's an institution that can really work to invest for the three countries in the infrastructure and in environment.
In terms of innovation and education, I think it's essential to invest in those. Education links are substantially lacking despite the great progress that has been made in trade and investment. The three countries are now working on relevant programs that are specifically to increase the number of scholarships and to increase the number of agreements between universities and businesses to promote joint products for investment and technology. We will be working with Canada and with Canada's international education division on the science and technology agreement between Canada and Mexico.
People mobility is a more ample concept and less politically sensitive one than is labour mobility. We're very pleased with the recent decision by the Canadian government, as the letter from the Prime Minister to our President says, to eliminate visa requirements for a very large number of Mexicans. As you know, this means requirements for visas will be reduced or they will be replaced with the new trend, which is an electronic travel authority. We very much welcome this. There are some outstanding issues. Perhaps I can comment on those later. We already have a political decision by the three leaders to have a North American trusted traveller program linking NEXUS, Global Entry, and SENTRI.
The Mexico-Canada seasonal agriculture workers program has been a success for 40 years. We have been working particularly with some of the western provinces that have severe shortages of semi-skilled workers, and we would hope some progress will be made so that eventually agreements would be made to facilitate the movement of semi-skilled workers for which there is need in the western provinces.
We are convinced that we cannot make progress if diplomacy does not extend to governors and premiers. Fortunately, for the first time, in Colorado in November, there will be a meeting of the governors and premiers of the three countries, which will be great in preparing for the summit. I think we have to work in cooperation towards our continent, and I think there Mexico and Canada should work to collaborate with Cuba in its transition process, and we have to work with Central America and Haiti. Otherwise I think we will have problems requiring a wide vision.
I want to emphasize that our starting point, our best economic platform, is North America itself. Trade within North America is more than $1 trillion, more than trade with TPP countries which, excluding US and Canada obviously, is $800 million.
Trade with Europe is less than trade within North America. Our key priority is to make our region more dynamic and competitive. The North American countries are obviously among the largest and most dynamic countries in the world. In 2013 Mexico was the eighth-largest economy. I think we can no longer see it as a question of trade. It is a matter of value chains, and there the intraregional trade is very important.
I would point out that there's a basic trend emerging in which Mexico in some quarters is not seen as a complement but rather as a competitor, particularly in the automobile sector. I think we have to work there on a good narrative to convince people that it's not labour costs. It's overall productivity and a host of other factors, but the North American automobile and aerospace industries are integrated. A car produced in Mexico has Canadian and U.S. parts.
I will make a number of last remarks, a conclusion.
After two full winters as Mexico's ambassador to Canada, I want to conclude on a positive, personal note with optimism, obviously encouraged by the summer weather and having survived two particularly hard winters. After that, it's nothing: I can be positive; I can be optimistic.
On the future of North American corporations, I have discussed all of this during this period with bilateral skeptics who return to the past, with trilateral enthusiasts who look to the future, with those who measure results by the half-full glass, and with others by a half-empty one.
Twenty years of NAFTA, in my view, yielded huge results, but that grand old lady has aged and has become wrinkled. I feel now that over the past two years we are in the spirit of a revival. People like former Secretary George Shultz have spoken of it, in recent fora, as a North American economic powerhouse. This is compared with secular stagnation in Europe and Japan and with emerging countries, which are losing momentum.
I think we have new drivers of growth. It's energy. It's trade negotiations. It's infrastructure investment. Mexico is becoming a new growth driver, approaching growth rates of 4% to 5%, and there is a manufacturing revival in the region, new ideas and new studies. In my view, the relationship between Canada, Mexico, and the United States has now increased and covers a wide spectrum of topics, with increasing depth, with an increasing number of actors from the business community, thinkers, provincial and city governments, fora, institutional mechanisms like the Canada-Mexico Partnership. There are new flights coming every day and large investments both ways. Now Bimbo is investing in Canada. I think it almost doesn't matter if top governments are involved in electoral matters. We're getting to know each other better. There are of course obstacles and issues, but we are advancing at different speeds according to the issues. It's nothing dramatic, but I think there's an inner momentum and steady progress.
I will conclude by particularly congratulating your committee because you're acting with great vision and a great sense of timeliness in getting together these ideas well ahead of the summit. I really congratulate you because I think it's really far-sighted.
Thank you very much for inviting me.