Contradictions and tensions in the way the USMCA regulates energy

Abstract

Abstract The international regulation of energy is complex, involving various legal frameworks such as economic agreements, environmental conventions, and dispute resolution mechanisms. These instruments often overlap and may not align, creating challenges for addressing energy-related issues. The United States–Mexico–Canada Agreement (USMCA) exemplifies these complexities. It addresses entitlements to natural resources, protection of energy-related transactions, cross-border energy policies, and environmental externalities. However, the USMCA does not fully resolve conflicts among differing policy goals within the energy sector. This article examines how the USMCA navigates issues related to resource entitlements, energy transactions, policy clashes, and environmental concerns. It argues that the absence of a unified energy policy leaves disputes to be balanced by resolution bodies, such as arbitration panels. The article scrutinizes each aspect of the USMCA’s approach and discusses potential mechanisms for resolving policy conflicts. The USMCA’s treatment of energy-related matters underscores the intricate interplay between international economic law and the energy sector, with implications for regional competitiveness and sustainability.