Let’s Win on Trade: Approve USMCA, End Harmful Tariffs and Quotas
Posted May 14, 2019
Winning on trade looks like this:
- 12 million U.S. jobs supported in all 50 states
- Commerce with neighbors Mexico and Canada was nearly $1.3 trillion in 2017 – four times what it was 25 years ago
- In the energy space, trade helps the U.S. natural gas and oil industry, which supports 10.3 million jobs – many of which exist thanks to free North American trade
For these reasons and more, Congress should approve the U.S.-Mexico-Canada Agreement (USMCA), the successor to the North American Free Trade Agreement (NAFTA). From an energy standpoint, the case for USMCA approval is strong.
… which support domestic natural gas and oil development and jobs while benefiting consumers and the economy. A recent United States International Trade Commission report estimates USMCA could increase U.S. real GDP by $68.2 billion and employment by 176,000 jobs.
More to the point, trade with Mexico and Canada has been great for U.S. energy. Mexico is the No. 1 market for U.S. exports of gasoline, fuel oil and total refined products. Canada is No. 1 market for U.S. exports of crude oil and fuel blending components. These exports represent viable markets for U.S. products, spurring more production and economic benefits here at home.
Writing for the the Washington Examiner, API’s Aaron Padilla notes that increased demand stemming from trade generates economic activity beyond the natural gas and oil industry itself:
“Infrastructure construction is just one example. U.S. pipeline capacity to export natural gas to Mexico’s rapidly growing market nearly doubled since 2015. That alone will support thousands of U.S. jobs for construction workers and supply businesses. The more accessible energy markets are, the more energy we produce, and that means more jobs and greater energy security.”
Trade and markets play an important role in sustaining and growing the United States’ global energy leadership – leadership that has made this nation more secure, helped U.S. households with their budgets and make progress toward important environmental and climate goals.
That progress would be hindered without market access and trade protections that would be provided by USMCA. The agreement will help the U.S. energy revolution moving forward:
Approving USMCA is an important step toward a winning trade approach for the United States, particularly in the energy space. Another would be ending the administration’s counterproductive tariffs, including those on imported steel, which have impacted our industry and could affect consumers. More from Padilla:
“Finalizing USMCA is a prime opportunity to jettison the self-defeating tariffs. Instead, the Trump administration is considering replacing tariffs with even worse restrictions: quotas. Where tariffs raise costs for essential supplies, quotas cut off the supply entirely once a pre-determined limit is reached.”
It's like getting a replacement part to fix your car. Padilla:
“Tariffs mean you can get the part, but it’ll cost 25 percent more. Quotas mean you may have to wait a year for the part, with no alternatives. Multiply that experience across the U.S. economy and you’ll get an idea of how steel quotas can gum up the works – by bringing construction projects to build new chemical plants and pipelines to a screeching halt.”
As the world’s leading natural gas and oil producer and know how trade helps sustain and grow that production, the U.S. should be playing a winning hand on trade. Congress should approve USMCA, and the administration should end tariffs and quotas that hinder the country’s energy sector.
This piece first appeared on The Hill’s Congress Blog.
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.
- Europe, California and Natural Gas’ Role in Future Energy Mix
- The Environmental Partnership's Arc of Progress
- Digging Into the Administration's Lease Sale Announcement
- Updated Cybersecurity Standard Helps Protect Infrastructure
- Afghanistan, Uncertainty and Ensuring U.S. Energy Security
- Sorry, America: OPEC+ Oil Rebuff Keeps Focus on Flawed White House Energy Policies