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• Case | HBS Case Collection | June 2018 (Revised December 2018)

  Renegotiating NAFTA

  Laura Alfaro and Haviland Sheldahl-Thomason

  January 1, 2019 marked the 25th anniversary of the North American Free Trade Agreement (NAFTA). Twenty-five years after the landmark trade pact was signed by the United States, Canada, and Mexico, considerable debate surrounded it. Trade and trade agreements were a focal point of the 2016 U.S. presidential election. NAFTA came into effect on January 1, 1994, after being backed by the Republican administration of U.S. President George H. W. Bush and the Democratic administration of U.S. President Bill Clinton during its implementation. It created the largest free trade area in the world at the time. Since implementation, total trade between NAFTA countries grew 280%; in comparison while trade to non-NAFTA partners grew by 195%. Critics of NAFTA claimed that it had contributed to a loss of manufacturing jobs to Mexico, increased inequality in all countries, and undercut environmental laws. Those who supported NAFTA, however, noted that in addition to trade, output, and overall employment, investment among the three nations increased, and productivity also grew. Furthermore, the agreement led to lower prices. By 2018, all countries experienced low unemployment rates. With changes in NAFTA looming, many questioned whether the accord had brought more benefits than costs to its signatories. Could the costs be minimized under a new agreement without reducing the benefits? Did buying local goods help create the most jobs in a country? What was the role of business? Everyone wondered what the potential ramifications of the new NAFTA, or lack of, would be.

  Keywords: Trade; Negotiation; Agreements and Arrangements; Cost vs Benefits;

  Citation:

  Alfaro, Laura, and Haviland Sheldahl-Thomason. "Renegotiating NAFTA." Harvard Business School Case 318-143, June 2018. (Revised December 2018.)  View Details

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• Case | HBS Case Collection | June 2015 (Revised August 2018)

  American Electric Power: Facing the Challenges of Distributed Generation

  Richard H.K. Vietor and Hilary White

  American Electric Power, like most utilities in the USA, is currently exposed to distributed generation and the problem of net-metering. Solar installations in particular have been heavily subsidized, by the state and by regulation, which does not allow grid operators to recover their fixed costs. This results in stranded assets and cross-subsidies from poor to rich.

  Keywords: energy; Electricity; utilities; Electric Power Generation; net metering; distributed generation; disruptive innovation; energy markets; solar power; wind power; solar; wind; subsidies; legislation; regulation; Disruption; Energy; Energy Generation; Renewable Energy; Problems and Challenges; Risk and Uncertainty; Technology; Business Strategy; Corporate Strategy; Energy Industry; Green Technology Industry; Utilities Industry; United States;

  Citation:

  Vietor, Richard H.K., and Hilary White. "American Electric Power: Facing the Challenges of Distributed Generation." Harvard Business School Case 716-008, June 2015. (Revised August 2018.)  View Details

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• Case | HBS Case Collection | April 2017 (Revised August 2018)

  The U.S. Shale Revolution: Global Rebalancing?

  Laura Alfaro and Richard H.K. Vietor

  The American shale revolution has upended oil and gas markets for nearly a decade. Prices have risen then plunged, production has surged and then waned, LNG has boomed, and technology and productivity have improved. The U.S. energy policy, under the Obama administration, authorized a handful of gas exporters, despite pressure from domestic chemical and utility interests, and approved oil exports for the first time in 40 years. Environmental issues and questions remain unresolved. No one knows for certain what America’s energy trajectory will look like in the next decade.

  Keywords: shale oil; shale gas; LNG; energy; energy policy; drilling technology; Energy; Trade; Economics; Macroeconomics; Policy; Energy Industry; Manufacturing Industry; United States; Middle East;

  Citation:

  Alfaro, Laura, and Richard H.K. Vietor. "The U.S. Shale Revolution: Global Rebalancing?" Harvard Business School Case 717-056, April 2017. (Revised August 2018.)  View Details

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