This column by @jackmintz raises some concerns as a potential policy response to the expected cancellation of the KXL permit.

1/

First, Dr Mintz cites numbers for direct and indirect jobs created by KXL for both Canada and USA. It isn’t clear where these numbers came from or if they are permanent jobs. Methods for calculating induced jobs are notorious for their unreliable and non-robust methodology.

2/
Second, Dr Mintz proposes that Canada retaliate with duties and other trade restrictions, as what happened with aluminum. However, KXL is very different, and this changes the scope of available responses, especially under our trade agreements.

3/
Canada viewed the US duties on aluminum and steel as violating trade agreements. The retaliatory duties were permitted under those agreements as a response to those violations. They are not permitted in response to cancelling KXL.

4/
It is also somewhat odd to see an economist arguing for a trade war in any event, especially one tat would be initiated by a small, trade-exposed economy against a much larger economy. No one wins in a trade war.

5/
Some actions, such as a Netflix tax/royalty (and similar for international online services) aren’t offside trade agreements. Dr Mintz notes that Canada is already considering these policies, along with other nations.

6/
Prior to doing so, it makes sense for Canada to properly understand the effect such a tax regime would have, including whether or not there are benefits to proceeding in tandem with other countries.

7/
As a retaliatory measure, therefore, it isn’t very useful. It would be foolish to promise to rescind the tax in exchange for KXL if it is a good policy and other countries go ahead with it in due course.

8/
Jumping the gun by implementing the tax now, before the analysis is complete, risks creating a tax measure that is bad for Canada. As a general rule, bad policy decisions should be avoided, even if they are just to spite someone else.

9/
This DOES NOT MEAN Canada should just accept the cancellation of KXL. There may be many valid reasons for Canada to push the President to reconsider, and there may also be valid options for how Canada can make its case stronger.

10/
But in defending KXL, Canada should be mindful of its obligations under trade agreements as well as what policy options are in the best interests of Canadians generally. We should never let a wedge issue push us into a policy response that only hurts us.

/fin

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Typically excellent piece from @dsquareddigest The exponential insight is especially neat. Think of it a little like fishing...today you can’t export oysters to the EU (because you simply aren’t allowed to), tomorrow you don’t have a fish exporting business (to the EU).


The extremely small minority of people who known anything about this who think that Brexit will be good for the City make a number of arguments which I shall address in turn...

1. They need us more than we need them. This is a variant of the German carmakers argument. And we know how that went...Business will follow the profit opportunity and if that has moved then so will the business...

And what do we mean by us / we. We’re not talking about massed ranks of Euro investing / trading etc blue blooded British institutions.

Au contraire. We’re talking about the London based subs of US, Asian and indeed European capital markets players...As soon as they think the profit opportunity has moved then so will they...it’s a market innit...
Abbott is pushing a lie to protect incompetence. There is no Federal oversight of the Texas Grid, ergo fewer regulations (sound familiar) - so point one: state legislature needs reform. 2/


2. Point 2: there were clear signs the grid would get overloaded under extreme cold conditions. Why? Due to a vacuum of regulations mandating winterization of turbines and power generators. This from sources, in Texas!

3. Point 3: Of the power shortfall that hit Texas, over 80% was due to problems at coal and gas fired plants. Power generators were just not winterized. Decisions to do so have been ignored since the 1990s.

4. Point 4: these are winterized wind turbines in Denmark. The ocean is frozen. The turbines are generating.


5. #Texas| the main issue is: catastrophic governance at the State level (no Federal oversight of the Texas grid) failing to allocate funding to winterise the Natural Gas, Coal and Wind Turbine elements that contribute to the grid. (~ 80/20

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