U.S.-Canada-Mexico Agreement Supports U.S. Energy
Posted October 3, 2018
Announcement of the United States, Mexico and Canada Agreement (USMCA) – locking in Canada and Mexico as our nation’s closest trading partners – is good news for the U.S. energy renaissance. Attention now turns to Congress, which should ratify the deal. API President and CEO Mike Sommers:
“We urge Congress to approve the USMCA. Having Canada as a trading partner and a party to this agreement is critical for North American energy security and U.S. consumers. Retaining a trade agreement for North America will help ensure the U.S. energy revolution continues into the future.”
We’ve detailed how USMCA’s predecessor, the North American Free Trade Agreement (NAFTA), played an important role in creating and supporting a distinct North American energy market (see here, here and here), which has helped increase U.S. energy security and economic growth.
Because zero or reduced tariffs, market access between the three countries and trade liberalization all worked to the benefit of U.S. energy under NAFTA, our industry’s chief goal was an updated agreement was to keep in place features that have supported U.S. energy. USMCA does that – and Americans will be the beneficiaries.
It was critically important, for example, that an updated trade agreement include investment protections that covered significant future operations. Under the new agreement, U.S. natural gas and oil companies can be eligible for Investor-State Dispute Settlement (ISDS) processes for those investments in Mexico. As we’ve posted on before, ISDS provisions safeguard U.S. energy investments from unfair treatment by host nation governments. ISDS doesn’t guarantee those investments; it guarantees a neutral, international arbitration forum for settling disputes. ISDS strengthens respect for contracts, which is fundamental to markets.
USMCA is a good deal for the American energy consumer, and Congress should move to approve it.
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.