USMCA Approval Essential to Economic Progress, Energy Security
Posted October 23, 2019
Given bipartisan consensus on the importance of trade to America and our allies, finalization and approval of the U.S.-Mexico-Canada Agreement (USMCA) in Congress is long overdue. Because North American markets are highly interdependent, maintaining the tariff-free, intracontinental flow of natural gas, oil and refined products will help ensure that American families have continued access to affordable and reliable energy, and to our export markets in Canada and Mexico.
When it comes to the U.S. economy, the advantages of the USMCA are clear. Trade with Canada and Mexico supports 12 million American jobs across every state, according to the Business Roundtable, and totaled nearly $1.3 trillion in 2017. A U.S. International Trade Commission report estimates that approving USMCA could raise real GDP by $68.2 billion and create 176,000 jobs, relative to a baseline, six years after the trade deal enters into force.
In terms of U.S. energy, the benefits of USMCA are equally clear. North America’s natural gas and oil markets are multi-directional, so integration results in more affordable energy for consumers in all three countries. The U.S. relies on our neighbors for supplying the heavy crude oil used in the American refining sector, which supports thousands of jobs. Mexico and Canada, in turn, rely on U.S. refined products, such as gasoline and jet fuel, and energy-intensive manufactured goods, such as petrochemicals and plastics.
As early as 2020, the U.S., Canada and Mexico will achieve self-sufficiency with respect to liquid fuels, according to the U.S. Energy Information Administration. This translates into greater energy security, but the unobstructed flow of natural gas, crude oil and refined products between the U.S., Mexico and Canada is essential to maintaining America’s position as a global leader in energy production.
Passing USMCA will allow the natural gas and oil industry to continue providing the affordable, reliable and cleaner energy that powers North America’s economic prosperity. Because free trade benefits manufacturers, small businesses and good-paying American jobs, we urge Congress to swiftly approve this critical trade agreement.
About The Author
Mike Sommers is the 15th chief executive of API since its founding nearly a century ago. Prior to coming to API, Mike led the American Investment Council, a trade association representing many of the nation’s leading private equity and growth capital firms and other business partners. He spent two decades in critical staff leadership positions in the U.S. House of Representatives and the White House, including chief of staff for then-House Speaker John Boehner. Mike is a native of Naperville, Illinois, and a graduate of the honors program at Miami University in Oxford, Ohio. Mike and Jill Sommers, a former commissioner at the Commodity Futures Trading Commission, have three children and live in Alexandria, Virginia.
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