American Oil and Gas Reporter - March 2018 - 16

IndustryDigest
Texas Alliance, API Urge
Care On NAFTA Rewrite
WICHITA FALLS, TX.-As the
United States continues its negotiations
with Canada and Mexico on the North
American Free Trade Agreement, the
Texas Alliance of Energy Producers
and the American Petroleum Institute
are making it known that the 1994
treaty has become part of the U.S. oil
business.
"NAFTA is important to Texas, and
if renegotiated, its impact on our
markets for oil and gas needs to remain
positive and profitable," says Alliance
Chairman Bob Osborne.
The Trump administration
informed Congress on May 18 it
intended to begin negotiations with
Mexico and Canada on NAFTA
provisions, saying it seeks to support
higher-paying jobs in the United
States and to grow the U.S. economy
by improving domestic opportunities
to trade with the two countries.
Alliance President John Tintera says
the heavier grades of crude oil the
United States imports from Canada are
a necessary part of the U.S. oil supply
mix, with many domestic refineries
built to handle those grades. He adds
that heavy crude is needed to make
several vital consumer products.
The Alliance Board of Directors
passed a resolution in early February
reaffirming the association's
commitment to maintaining a profitable
and thriving trade climate for the oil and
gas industry. It says the Alliance will
continue working with government
officials to ensure that if NAFTA is
renegotiated, the trade pact will:
* Retain a low/zero tariff structure
in a way that continues to foster the
expansion of unfettered energy trade
and investment between the United
States, Canada and Mexico;
* Be enacted with no sunset
provision; and
* Retain its current form if an
agreement cannot be reached out of the
renegotiation process.
"The North American Free Trade
Agreement is an energy economics
success story by virtually every
measure," assesses Karr Ingham, the
Alliance's petroleum economist. "Taken
as a whole, North America is on the
verge of achieving energy selfsufficiency-a longstanding goal that has
16 THE AMERICAN OIL & GAS REPORTER

enjoyed significant advancement under
NAFTA."
Jack Gerard, president and chief
executive officer of API, says his group
urges the White House to retain critical
protections for U.S. businesses during
the NAFTA talks. API opposes
withdrawing from NAFTA, and warns
that weakening or eliminating the
treaty's investor-state dispute settlement
(ISDS) provisions threaten U.S.
businesses.
"NAFTA has created a North
American energy market that benefits
American consumers, creates American
jobs and promotes U.S. national
security interests," Gerard says.
"Ongoing negotiations to modernize
NAFTA must advance our role as a
global energy leader by retaining U.S.
access to Mexico's newly opened oil
and natural gas market, and providing
strong protections, including ISDS, for
these U.S. energy investments." r

Commerce Department
Recommends Tariffs
On U.S. Steel Imports
WASHINGTON-A finding by the
U.S. Department of Commerce that
imports of steel and aluminum
"threaten to impair national security"
doesn't make sense, according to the
American Petroleum Institute.
The Commerce Department released
a report on Feb. 16 that the steel and
aluminum imports threaten to impair
national security as defined by Section
232 of the Trade Expansion Act of 1962.
Along with the report, the agency
recommends the president consider
imposing:
* A global tariff of at least 24
percent on all steel imports from all
countries;
* A tariff of at least 53 percent on
imports from Brazil, China, Costa Rica,
Egypt, India, Malaysia, the Republic of
Korea, Russia, South Africa, Thailand,
Turkey and Vietnam along with a quota
by product on steel imports from all other
countries equal to 100 percent of their
2017 exports to the United States; or
* A quota on all steel products from
all countries equal to 63 percent of each
country's 2017 exports to the United
States.
However, "These tariffs would
undoubtedly raise costs for U.S.

businesses that rely heavily on steel and
aluminum for the majority of their
products-and ultimately consumers,"
contends API, which adds that
Commerce's recommendations "don't
make sense for the U.S. economy" and
are "inconsistent with the
administration's efforts to bolster the
U.S. economy, support U.S. businesses,
and strengthen U.S. infrastructure."
API references its policy position
and analysis in which it and 11 other oil
and gas industry trade associations
"urge the administration to define
national security under Section 232
narrowly so as to exclude steel supplies
to the U.S. oil and natural gas industry."
The policy paper notes that only
mills in Japan and Germany produce
tubulars used in high-pressure, hightemperature deepwater offshore drilling
and production. The report also says 72
percent of the steel used in line pipe in
recent years was imported, and that
while the United States imports $2.2
billion of steel products related to line
pipe from 29 countries, it exports $11.1
billion of steel and steel products to
those same countries.
The Independent Petroleum
Association of America mentions that
Commerce's report recommends a
process for granting requests from U.S.
companies to exclude specific products
if there is insufficient U.S. capacity, or
for national security considerations.
API adds that while its member
companies support trade remedy
measures consistent with Article VI of
the General Agreement on Tariffs and
Trade, the United States already has
applied 79 cases of anti-dumping (AD)
and countervailing duties (CVD) to
address imports of oil country tubular
goods, steel plates and line pipe. In
addition, API says, half of U.S. imports
of steel used in line pipe come from
counties on which the United States has
levied AD/CVDs.
In a separate announcement dated
Feb. 12, the Department of Commerce
says it also has initiated AD
investigations of imports of largediameter welded pipe from Canada,
China, Greece, India, Korea and Turkey,
and CVD investigations of imports of
large-diameter welded pipe from China,
India, Korea and Turkey.
Commerce says the product covered
by its investigations is welded carbon
and alloy steel pipe more than 406.4
American Oil and Gas Reporter - March 2018

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