I think the proportionality clause is one of the clauses in the existing NAFTA, and one that's been around for quite some time, with different interpretations from different perspectives. There's a perspective that would suggest that it ties Canada's hand in some way, shape or form by having that particular clause, and that it prevents us from being able to sell energy goods to other countries, if you will, under certain circumstances.
In fact, I think the clause was drafted originally as something that the United States was seeking and Canada provided in the original negotiations. The clause allowed and provided that we would sell it at market rates. The loss to Canada, if that clause were ever to be used, would have been the ability to sell something at a market rate to a particular partner that we had to sell it to at a certain proportion. It was already constructed in a way that was market-based, which means that the risk, if you will, to Canadian producers and Canadian energy companies was that they would have a market to sell their goods at a market rate. They just had to have a particular dance partner, if you will, should that clause ever be put in place.
From Canada's perspective, removing it means that's no longer the case. Of course, we sell our energy goods at market rates, and our ability to move those goods to other parts of the world.... In other parts of the world, demand and interest in Canadian energy goods are rising as different supply-and-demand dynamics around the world change. As cleaner energy and lower-emission energy become part of that supply mix, and the push to meet those commitments is made around the world, Canada's energy products have different opportunities to fare better, based on some of the circumstances under which we produce our goods and the fact that we have very rigorous environmental regimes that document, monitor and account for our ability to produce goods and to be able to present that data in very transparent ways.
As the world moves in that direction, if you can imagine that we don't have the proportionality clause but we have an ability to move more goods to as many places as we like, the market will still demand and drive what the returns in revenues will be for those products. The cost of transporting those goods is also factored into the returns that come. If you can move it somewhere closer to home, it's generally a little less expensive to do that. The infrastructure enables us to move it, by and large, to different places. With some of the things that are under way within the industry, we're seeing movement of the goods in different directions. We actually take in some of the U.S. energy now, more than we used to before, because it's actually less expensive for Canadians to consume that energy and it allows us to export more goods from other parts of the country to the United States.
We have a very integrated relationship. One of the key things on the energy side of the equation is to maintain the integration between the energy systems. It benefits both nations, because we're able to trade those goods where it's most cost-effective for particular regions, but it also creates a degree of resilience, particularly in the electricity transmission sector. When renewables are coming online in different parts of the country, the hydro load and ability to produce energy from hydro sources that are much more prevalent in Canada than in the United States provide a bit more base to the United States grid. By the same token, at certain points in the year Canada needs more electricity energy and the United States fills the void. There's a lot of integration between the two countries.
We've maintained that in the agreement. That was one of the objectives of the team, recognizing the sheer volume of the amount of energy being traded. It is one of the largest commodities in our trade circumstances and a place where Canada has a lot to offer the world. Again, that's something that was part of the agreement. The agreement has less ties, if you will, to our ability to move it around, so we have a much more flexible and broad ability to do that.
