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Guest Editorial: This is why Trump shouldn't shred NAFTA
For the first time in eight decades, retail gas stations in Mexico are getting competition from foreign firms — and a lot of it.
It makes for a great illustration of the benefits of capitalism and, with NAFTA renegotiations languishing, for an especially timely lesson in how connected our economy is to that of our southern neighbors.
Irving-based Exxon Mobil turned heads this month by announcing plans to spend $300 million over the next decade opening gas stations in Mexico, the fifth-largest retail gasoline market in the world.
Eight opened already, and 50 should be open by the spring. California-based Chevron and a consortium of partners have announced plans to open stores in Mexico, too.
BP and Royal Dutch Shell are also on the ground in Mexico. Shell, which opened its first gasoline station in Mexico in September, plans to open 1,000 more within the decade.
These investments reinforce the ties linking Mexico and America and our economies.
Exxon, for instance, plans to supply its new stations, which it will operate jointly with a Mexican firm, with gasoline and diesel fuel produced at its refineries in Texas, and then ship that fuel by rail to Mexico.
The foreign capital is flowing to Mexico because Big Oil sees there's money to be made, now that the country has finally finalized rules in the wake of its 2013 shift to privatization.
That change includes lifting the ban on foreign ownership of retail gasoline stations and, most dramatically, ending the monopoly on oil production by state-owned firm Petróleos Mexicanos.
Mexico sells some 800,000 barrels a day of gasoline. But since 1938, all that gasoline was sold at locally owned stations that carried the Pemex brand. That's beginning to change.
It's true, Mexicans are now paying more for gas than during the years of the monopoly. But in return for paying more, they are likely to see better service, more options at the stations and cleaner, more reliable gas, too.
Pemex leaders have already conceded that the company will have to invest heavily in its 11,000 gas stations in order to keep customers from abandoning old habits and filling up in the stations that are already carrying Mobil, Shell and other foreign brands.
It's a good time to think about the way money and jobs and energy resources cross the border with Mexico.
Negotiators from Canada, Mexico and the U.S. are in Washington this month for informal meetings ahead of next month's sixth round of talks in Montreal about the future of the North American Free Trade Agreement.
Sen. John Cornyn of Texas has been one of the most consistent and vocal GOP supporters of keeping NAFTA's guts intact, including through conversations with President Donald Trump.
This latest talk of cross-border investments ought to keep him well-supplied for that vital advocacy.
Dallas Morning News, Dec. 19