TIPRO News Releases and Statements

“USMCA Bolsters Opportunities for Texas Economy”

By Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association (TIPRO)

With the United States-Mexico-Canada Agreement (USMCA) officially entering into force last Wednesday, July 1, our nation is now able to embark on a historic new era of trade with our North American partners. The USMCA, which replaces the 1994 North American Free Trade Agreement (NAFTA), promises to bring new opportunities for job and economic growth between the United States, Mexico and Canada, while also delivering strong, rebalanced policies for trade and investment. The modernized trade deal will increase prosperity for the United States, Mexico and Canada, keep us economically competitive compared with other regions around the world and enhance enforcement of important labor and environmental laws.

Texas in particular stands to gain from this vital trade pact, which will help support our economy as well as boost key industries operating in the Lone Star State, including the energy sector. With the most ports and longest border of any other state in the contiguous United States, as you can imagine, Texas conducts a significant amount of business each year with Mexico and Canada. For perspective, total trade between Texas and Mexico surpassed $216 billion in 2018 ($109.7 billion in exports and nearly $107 billion in imports) while trade with Texas and Canada topped $47 billion that year ($27.5 billion in exports and $20.2 billion in imports). Given Mexico and Canada are our largest export markets, this updated international trade policy will offer increased access to trade for Texas businesses and grow cross-border trade opportunities. Now that USMCA is effective, new rules will also make it easier to move energy products between countries, help to streamline regulatory processes for future exports of liquefied natural gas (LNG) to Mexico and Canada, and extend new flexibilities in rules of origin certification requirements for oil and gas being moved between the United States, Mexico and Canada.

Since the negotiation of this comprehensive trade pact was initiated by President Trump and his administration more than two years ago, TIPRO has been supportive of the landmark reforms that will strengthen economic growth in America, improve exports with our top trading partners and help our state and nation’s energy industry to expand. Throughout the negotiation process, our organization and members worked diligently to advocate for policymakers to maintain zero tariffs on oil and natural gas products and pushed for other terms in the USMCA that would benefit independent oil and natural gas producers.

The USMCA’s entry into force meanwhile comes at a critical time for the United States, and partnering countries, given other global economic disruptions presented this year from the novel coronavirus (COVID-19) pandemic. With the ongoing public health crisis combined with economic upheaval to oil and gas markets in recent months, we must remain vigilant in preventing further disruption to supply chains and work together to increase trade activities and investment in North America. This effort will be supported with the implementation of the USMCA, which will strengthen trade partnerships in North America and increased production of Texas oil and natural gas.

"Oil and Gas Tax Revenue Critical in Supporting Te...
Blue Ribbon Task Force for Oil Economic Recovery O...