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Fall 2011 - 61100 - PA682GA - Policy Research Project on Global Policy Issues

After NAFTA: Emerging Energy & Business Issues

Instructor(s): Ibarra-Yunez, Alejandro
Unique Number: 61100
Day & Time: T 2:00 - 5:00 pm
Room: SRH 3.214
Waitlist Information:For LBJ Students: UT Waitlist Information
Course Overview

Each student will be required to take this two-semester course in his or her second year. Topics will vary. In each course, a research team of ten to twenty students led by one or two professors will study a contemporary policy problem of interest to a specific client. Policy research projects are both client- and product-oriented and serve as instruments for both learning and public service.

Section Description

INTRODUCTION AND JUSTIFICATION

After sixteen years since the North American Free Trade Agreement (NAFTA) was launched between Canada, the USA, and Mexico, a silent integration process has been evident for many sectors and industries, as well as institution building, trans-border investment and trade in goods and services. However, for both political and institutional asymmetries, a truly deep and cooperative regional integration beyond a trade agreement has been waiting better times. Moreover, infrastructure convergence and trans-border networks have not been accomplished and even seem to be a low priority among the three NAFTA partners and their governments.

Some can be considered emerging issues after NAFTA is now totally operational since 2009. Some have to do with pending liberalization or “stand still” sectors, while others have to do with procedures such as customs administration and trade facilitation within a new security framework among the three partners. Finally, some policy mix differences exist mainly among what are called “networked industries” that call for a deep understanding and research both at the national or sub-regional levels, and also at the international dimension. Networks of interest for the proponent researcher during my sabbatical year 2011 are: transmission of electricity and electricity international integration; the sustainability character of renewable electricity generation; international pricing through financial rights and bonds/credits; and the security properties of networked industries with externalities such as electricity. Moreover, after a period of recession during 2008-2009, the general agreed predictions are that demand for electricity (and gas) will resume its upward trend along the US- Mexico border regions.

Many if not most of network industries, operate as oligopolies where an essential asset is controlled by leading incumbents (for Mexico there is a state-owned vertically integrated enterprise with an incipient shadow market), and where monopoly rents can be extracted by interconnection conditioning, for which there are sectoral (ex ante) regulators, and competition (conduct or ex post) regulators. One needs to also analyze the institutional convergence, conflict, or subsidiarity of regulators among trading partners, an aspect that has been little researched. For this reason, a Policy Research Project under the proponent’s coordination will address these emerging issues and sectors, electricity infrastructure both domestically and trans-border, and regulatory convergence and capacities.

Dr. Ibarra-Yunez will be at the LBJ School as visiting professor during the 2011-12 academic year. He is currently a professor of economics and public policy at EGADE Business School and Department of Economics, Technológico de Monterry in Monterrey, Mexico.