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Environment

Updated North American trade deal could boost U.S. chemical exports

Manufacturers urge Trump negotiators to increase market access

by Glenn Hess
July 9, 2017 | A version of this story appeared in Volume 95, Issue 28

With talks aimed at revising the North American Free Trade Agreement (NAFTA) expected to start soon, chemical manufacturers recently offered advice to the Trump Administration for updating the 23-year-old accord with Canada and Mexico.

2016 U.S. chemical exports

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Canada and Mexico are the top two importers of U.S.-made chemicals, excluding pharmaceuticals.
Sources: American Chemistry Council, U.S. Department of Commerce, U.S. International Trade Commission.
Figure shows the top 10 countries that import U.S. chemicals
Canada and Mexico are the top two importers of U.S.-made chemicals, excluding pharmaceuticals.
Sources: American Chemistry Council, U.S. Department of Commerce, U.S. International Trade Commission.

For chemical manufacturers, capitalizing on the shale gas revolution by securing expanded access to the two largest markets for U.S. chemical exports—Canada and Mexico—is a key goal, said Greg Skelton of the American Chemistry Council (ACC), an industry trade association.

In a June 28 testimony before the U.S. Commerce Department’s International Trade Commission, Skelton noted that the U.S. has a large and growing trade surplus in industrial chemicals that stands at $28.2 billion. It is “likely to grow significantly as increased production from more than $185 billion in announced new investment in domestic chemical manufacturing comes on stream,” said Skelton, ACC’s senior director of regulatory and technical affairs.

An ACC report estimates that exports of chemicals linked to the availability of abundant, cheap natural gas from shale, such as polymers, plastics, resins, and specialty chemicals, will more than double from $60 billion in 2014 to $123 billion by 2030.

But this increased production cannot all be consumed domestically, Skelton said. “To maximize this competitive advantage, it is essential to strengthen and expand access to key foreign markets,” he said.

However, NAFTA has greatly benefited the chemical sectors in Canada, Mexico, and the U.S. Since the deal took effect in 1994, trade in chemicals among the three countries has more than tripled, from $20 billion to $63 billion per year.

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