Energy and equipment manufacturing industry representatives are applauding a new trade agreement announced by the White House on Oct. 1.
The United States-Mexico-Canada Agreement (USMCA) replaces the North American Free Trade Agreement (NAFTA) that has been in effect since 1994. President Donald Trump has log criticized NAFTA and promised to renegotiate the deal.
According to a White House statement, the USMCA will “update and rebalance” the 24-year-old deal. The new agreement provides protection for manufacturing jobs in North America, while improving market access for a number of industry sectors.
The American Petroleum Institute (API) welcomed the USMCA and called on its quick approval.
“We urge Congress to approve the USMCA,” said API president and CEO Mike Sommers. “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.”
Key provisions of the agreement related to the U.S. natural gas and oil industry include: continued market access for U.S. natural gas and oil products, and investments in Canada and Mexico; continued zero tariffs on natural gas and oil products; investment protections to which all countries commit and the eligibility for Investor-State Dispute Settlement (ISDS) for U.S. natural gas and oil companies investing in Mexico; requirement that Mexico retain at least current level of openness to U.S. energy investment; additional flexibility allowing U.S. customs authorities to accept alternative documentation to certify that natural gas and oil have originated in Canada or Mexico upon entering the U.S.
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Association of Equipment Manufacturers (AEM) president Dennis Slater called the USMCA “a step in the right direction.”
Nearly 30 percent of all equipment produced in the U.S. is intended for export and Canada and Mexico are the first and second-largest export markets for both U.S. construction and agricultural equipment, according to an AEM statement. Since the creation of NAFTA two decades ago, the equipment manufacturing industry has benefited greatly from duty-free access to our industry’s largest two export markets, Canada and Mexico.
“Trade agreements provide better access to customers across the globe and help us add to the 1.3 million jobs our industry supports in the United States,” Slater said. “We urge this administration to continue working closely with the Canadian and Mexican governments to enact policies that promote continued economic growth for our industry.”