International trade experts said Wednesday that struggling Acadiana energy sector companies might want to look overseas for new markets, especially if a trade pact among 10 Pacific Ocean-rim countries and the U.S. is ratified and lowers tariffs.
The Trans-Pacific Partnership, called the TPP, is the “next greatest trade agreement,” said John Henry Jackson, international trade specialist for the U.S. Commercial Service in New Orleans.
The TPP would eventually give U.S. companies an almost tariff-free entry into the 10 Pacific-rim countries where economies and energy demands are growing. TPP countries include Japan, a nation that imports almost all of its energy, and the smaller but economically robust Brunei and Malaysia, both oil and gas countries that could use Louisiana companies’ energy expertise.
The TPP, which has not been approved by Congress yet, would also include Australia, Canada, Chile, Mexico, New Zealand, Peru, Singapore and Vietnam.
Edward Hayes, an international law attorney in New Orleans, said the U.S. has no real import tariffs, and the other countries’ tariffs would be lowered in 10 years. Hayes said the TPP would also strengthen labor laws in many of the countries to bring them closer to the laws that protect American workers.
Jackson and Hayes joined others Wednesday for a session on international trade sponsored by the U.S. Commercial Service, the World Trade Center in New Orleans and the Lafayette International Center.
Mark Zappi, the dean of the College of Engineering at the University of Louisiana at Lafayette, keeps a close eye on the energy industry. He said a country to watch and consider doing business in is India, which is third-fastest-growing energy consumer in the world.
Zappi said the current oil price downturn — brought on by America’s technical prowess in drilling methods — will not last forever. But it is here for a while, he said, and the sub-$40 a barrel price of oil could last a while.
The current price environment presents a challenge to producers and the service companies that help them get oil to markets, Zappi said. They must conserve cash while not letting their companies lose their competitive edge.
“When it turns around, you’d better be in the game,” he said.
Mary Shaddock Jones, an attorney in Lake Charles, said that before a company gets into the international arena, there’s a ton of homework required, including how not to run afoul of U.S. laws that prohibit bribery to land a contract.
Jones said having a compliance program in international laws that all employees know and practice can save the company down the road if corruption charges are ever brought against them.
Jones helped international marine construction company Global Industries fight through such charges after the company self-reported a possible violation of the Foreign Corrupt Practices Act. Jones said it took 30 months and $12.5 million before the Justice Department dropped its investigation. She said that by the time the company was cleared, investigators had crawled through reams of long-ago emails and other company documents.
“The compliance program we had in place is what saved the company from a major fine,” she said.