Jason McFarland: USMCA would be a huge win for Texas [Opinion]
By Jason McFarland
June 11, 2019
President Donald Trump followed through on his promise to renegotiate NAFTA when he signed a new agreement with Mexico and Canada in November.
The United States-Mexico-Canada Agreement is a huge win for the Lone Star State’s workers, especially those who work in the energy sector.
The oil and natural gas industry is a critical component of Texas’ economy. Last year, the industry directly employed more than 352,000 Texans. And across the nation, the oil and natural gas industry adds $1.3 trillion to the economy each year.
Texas firms owe much of their success to trade with Canada and Mexico. Since NAFTA took effect in 1994, Mexico has become a major importer of American liquefied natural gas. Canada purchases close to 60 percent of American crude exports and 20 percent of our jet fuel exports.
In fact, Texas exported more than $24.3 billion worth of petroleum, coal, oil, and natural gas products to Canada and Mexico in 2017.
USMCA will build on NAFTA’s successes and create new jobs, lift wages, and reduce Texans’ energy bills. For energy consumers, the new pact continues to prohibit tariffs on raw and refined oil and natural gas products, keeping current energy bills stable. New tariffs mean higher energy bills for every household.
USMCA also preserves an important legal provision that protects American companies from exploitation by foreign governments. Called the “investor-state dispute settlement” system, this part of USMCA is essential for energy companies that do business abroad. Without it, companies are at a disadvantage in foreign courts, as they undoubtedly would favor their own country and national government.
America is already the world’s top energy producer — thanks in large part to Texas — and production will continue surging in the years ahead. The U.S. Energy Information Administration predicts that U.S. natural gas production will outpace domestic consumption by 2021. Thanks to USMCA, we’ll be able to sell our excess natural gas to our Canadian and Mexican neighbors, thereby creating more jobs for Americans in Texas and across the country.
McFarland serves as president of the International Association of Drilling Contractors, which is headquartered in Houston.