ACC pushes to modernize NAFTA, Natural gas jobs to rise to 6 m, Dow and DuPont begin comprehensive review
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ACC sees opportunity to modernize NAFTA rules
The renegotiation of the North America Free Trade Agreement (NAFTA) could benefit the U.S., Canada, and Mexico chemical and manufacturing sectors and strengthen the international competitiveness of North American exporters, the American Chemistry Council (ACC) testified.
U.S. chemical manufacturers are in a unique position to capitalize on the shale gas revolution by securing expanded access to foreign markets, including Canada and Mexico, according to ACC Senior Director of Regulatory and Technical Affairs, Greg Skelton.
Skelton unveiled several of the chemical industry’s priorities for a modernized NAFTA, including:
Maintaining duty-free trade for all qualifying chemical products, including the large proportion of chemicals trade within NAFTA that is intra-company;
Modernizing the NAFTA rules of origin to bring them into line with rules adopted in subsequent U.S. trade agreements, such as the Korea-U.S. Free Trade Agreement;
Pursuing a World Trade Organization Trade Facilitation Agreement “plus” approach to customs and trade facilitation efforts, including promoting digital trade, targeting infrastructure projects to remove bottlenecks on the movement of exports, modernizing transport security requirements, and harmonizing clearance procedures;
Strengthening regulatory coherence and implementation of Good Regulatory Practices to help address current and future areas of regulatory divergence among the countries; and
Establishing a Regulatory Cooperation Council that would help set overall priorities and coordinate regulatory cooperation and coherence efforts on a sectoral basis.
The U.S. has a large and growing trade surplus in industrial chemicals, which currently stands at $28.2 billion, according to data from 2016. Canada is the single largest national market for U.S. chemical exports ($24 billion in 2016, a $1.9 billion trade surplus). Mexico is the second largest ($21 billion, a surplus of $14.6 billion).
“That surplus is likely to grow significantly as increased production from more than $185 billion in announced new investment in domestic chemical manufacturing comes on stream,” Skelton told government officials at the U.S. International Trade Commission. “
Natural gas will account for 6 million jobs -API
The natural gas industry supported 4.1 million U.S. jobs in 2015 and $551 billion in total economic value, according to a study commissioned by the American Petroleum Institute (API) in June. Chemical manufacturing was one of the top three natural gas-related sectors.
The number of natural gas related jobs is expected to rise to 6 million jobs by 2040.
In 2015, the natural gas supply chain supported 3 percent of the U.S. economy, including direct, indirect and induced activities and jobs associated with natural gas, according to the study.
Dow, DuPont begin comprehensive review
Dow Chemical and DuPont still plan to merge, cut billions of dollars in costs, and reorganize into three smaller companies. But under pressure from investors, the partners say they have hired corporate consultant McKinsey & Co. for a “comprehensive review” that could lead to changes in their proposals.
If the results of the review demonstrate there is a net greater long-term value creation to be realized thorugh a change in the portfolio, it will be pursued, the companies said in a joint press release.
In the press release issued at the end of June, the companies reaffirmed their expectation to close the merger in August 2017, with the intended spin-offs to occur within 18 months of closing.
“Dow and DuPont leadership are committed to maximizing the tremendous value creation potential of the merger and anticipated spins,” said Alexander (Sandy) Cutler, Lead Director of DuPont. “Our review will provide an in-depth look at the portfolio mix and alignment across divisions to ensure we capitalize on all value-enhancing opportunities.”
The output of the review will be an immediate focus for the Dow DuPont Board following merger close, Cutler said.