Indiana Would Be Hit Hard by NAFTA Pullout

The U.S. Chamber recently released its analysis of which states would be most harmed from a NAFTA withdrawal.

Unfortunately, Indiana would be among the Top 10 most hard hit states, with more than 250,000 Hoosier jobs put at risk.

On top of that, nearly half of Indiana’s exports are destined for customers in Canada and Mexico, generating more than $16 billion in export revenue. Indiana’s farmers and ranchers would also suffer a blow, particularly those with soybean crops exported to Mexico.

Indy Event Focuses on Doing Business with Mexico

An August 21 World Trade Club/U.S. Department of Commerce event in Indianapolis will focus on doing business in Mexico. Here are the details

Since NAFTA was implemented, Indiana’s sales to Mexico have grown at an annual average rate of 12.8%. In 2011, Indiana’s exports to Mexico reached $3.27 billion. Transportation equipment alone constitutes 31.8% of total exports, and has increased by over 20% since 2005. Mexico is the United States’ second largest export market resulting in over $850 million of trade taking place each day. Indiana exports to Mexico constitute nearly 11% of total exported manufactured goods, offering growth potential for U.S. companies. It provides a unique opportunity for U.S. manufacturers, particularly small and medium sized enterprises, to participate in Mexico’s manufacturing supply chain.

At this event, the World Trade Club will be presented an Export Achievement Award by the U.S. Department of Commerce.

Keynote Speakers

Michael Camuñez: Assistant Secretary of Commerce, International Trade Administration, U.S. Department of Commerce. He will discuss:

  • U.S. – Mexico Trade Relations
  • Cross-border issues
  • National Export initiative

Juan M. Solana: Consul of Mexico. He will discuss the benefits NAFTA U.S – Mexico trade relations.

Featured Speakers

Dr. Allert Brown: Faculty Fellow, Kellogg Institute for International Studies at University of Notre Dame. He will discuss the current business climate in Mexico.
Chris Felts: Partner, Barnes & Thornburg, LLP. He will discuss the legal opportunities and obstacles in Mexico.
– Randy Goode: Senior Vice President, PNC Bank. He will offer a perspective on financing business deals in Mexico.

Canada Moving Forward After Pipeline Rejection

The January decision by the Obama administration to reject the Keystone XL pipeline drew plenty of criticism in the United States. Canadian officials, while accepting the explanation offered, are concerned, and they are not sitting back and waiting for a potential change of course from their southern neighbors.

Roy Norton, Consul General of Canada, spent last week at meetings and events in Indiana. Norton is responsible for Canadian interests in trade, investment, the environment and more in Indiana, Michigan, Ohio and Kentucky. Norton provided his analysis of the Washington rejection of the pipeline that would transport oil resources from the tar sands of Alberta province to the U.S. gulf coast.

Norton says Canadians are “disposed to take at face value the assurances that President Obama offered Prime Minister (Stephen) Harper that this was a process-related issue, not a substantive decision.” In other words, Obama cited additional environmental review due to Nebraska seeking a rerouting of the pipeline and a deadline set by Congress as the reasons for the rejection at this time.

Although TransCanada, the energy infrastructure company behind the pipeline, has indicated it will reapply for a U.S permit, Norton described the significance of the relationship between the two countries and the next steps for Canada that are already in progress.

“There is concern. Ever since NAFTA (the North American Free Trade Agreement), our resources have been predicated on the notion that we would develop them to export them to you (the U.S.), and 99% of Canadian oil exports have come to the United States. The entire industry has been organized on a principle that suddenly may seem in question: Does the United States continue to want that oil? And if you don’t, we’re not going to just stop developing it.

“The prime minister made clear, in a little jocular way, that we’re not a northern national park for the United States.” Norton continues. “We’re a G7 country with an industrial economy. We happen to sit on the third largest reserve of oil after Saudi Arabia and Venezuela. Ours, other than the U.S., is the only one (oil supply) not government controlled; it’s total private sector investment.”

Harper traveled to Asia earlier this month and entered into an agreement on energy cooperation with the Chinese.

“Our objective, very much,” Norton adds, “is to build a pipeline to (our) West Coast and to be able to sell oil to China, Japan, whoever. Two or three years ago, the prime minister said Canada is an emerging energy superpower. Somebody challenged that and said you can’t be a superpower if you have only one market. So, in business terms, it’s probably true that it’s prudent for us to have more than one market. So we will seek to diversify.”

Norton closes with some of the numbers related to Canadian oil production and potential benefits for the U.S. and Indiana from the proposed pipeline:

  • Sixty cents of every dollar invested in the Alberta oil sands come back to the United States in consumption. “You benefit more from Canadian resource development than you benefit as a country from resource development (anywhere else).”
  • Currently, $160 billion in private sector investment is underway to take production of the oil sands from two billion barrels a day to three and a half billion barrels a day.
  • That increase, with the pipeline, could create “in the order of 343,000 jobs in the United States, 7,500 of those in Indiana” – citing Caterpillar and dozens of other Indiana operations that currently or would supply the oil production and the pipeline.

The Chamber’s May-June BizVoice® magazine will have more from Norton on issues important to Indiana and his country.