Federal and state governments must resolve trade and business regulation issues. For Louisiana, not doing so could see the wrong kind of exports — like chasing its oil and gas industry out of state or out of the country, an executive said Thursday.
Eric Danos, executive vice president of oilfield service company Danos and a panelist at the Louisiana Association of Business and Industry's annual meeting, said the offshore energy industry invests billions in projects that take five to 10 years just to produce the first dollar of revenue.
"That's not an industry that thrives in an area of regulatory uncertainty or cost uncertainty," Danos said.
So when changes are swirling around regulations, trade policies, taxes or methods of assessment, those billions of investment dollars tend to move to a place where there's more certainty, he said.
South Louisiana is known for its oil and gas expertise and technoloigy, with its experts stationed all over the world, Danos said. If the state is not careful, Louisiana will encourage the development of the industry and the export of that technology at the expense of state and local economies.
Panelist Thomas Donohue, president and chief executive officer of the U.S. Chamber of Commerce, said the Trump administration and Congress have to figure out a trade policy solution for the economy to grow faster than the sluggish 2 percent seen for the last decade or so.
"The president of the United States has proven in many examples of late that when he gets better informed he moderates his view," Donohue said.
That was seen after visits by Canada's and Japan's prime ministers, he said. The chamber expects to see a more moderate approach to trade.
But the business group, which supports the Trans-Pacific Partnership and the North American Free Trade Agreement criticized by President Donald Trump, will not be pressing the issue for a few weeks, Donohue said. The commerce secretary and trade representatives need to be approved and get familiar with their roles. Once that happens, the chamber will accelerate the discussion.
The Trans-Pacific Partnership writes the rules for global trade. NAFTA covers trade with Mexico and Canada.
Donohue said growth opportunities lie in international trade. For example, China has about 1.4 billion people, four times the U.S. population.
"If we don't fix the trade deals philosophically and factually, we'll never get out of this new normal of 2 percent, and, if that's the case, our children and our grandchildren will have a big damn problem," Donohue said.
Forbes publisher Rich Karlgaard, the meeting's lunch speaker, said he expects the Trump administration's trade stance will shift to more bilateral agreements instead of those covering several countries.
To get an idea where the Trump administration will end up when it comes to trade, regulations, taxes and currency, it's best to look at the Ross-Navarro Plan, a much more nuanced approach to these issues, he said.
In a speech just prior to the panel, Donohue said growing the economy should be the country's top priority.
This is the longest period in modern history that U.S. growth has failed to reach 3 percent, he said. The idea, espoused by experts in Europe and the U.S., that 2 percent growth is the new normal is "a dumb idea" and will choke the economy to death, he said.
To spur economic growth, impediments to it must be removed. Those include a heavy regulatory burden, an outdated tax code and lawsuits that act as a millstone around the neck of the business community, especially small businesses, he said.
"Growth won't solve all of our problems by the way, but you can't solve any of them without it," Donohue said.
In the coming years, Karlgaard said, the digital disruption that shocked the retail and newspaper industries will do the same for just about every other industry, including agriculture, oil and gas, manufacturing, transportation, tourism and health care.
He said the key for Louisiana is to be the digital disruptor, to be the ones not only using technological advances — such as those in the oil and gas industry — but spreading its commercialization.
"The world wants what Louisiana is good at and is going to get better at," Karlgaard said. "When you combine the industries and the universities you have here, and the sense of purpose, and the sense of boldness, I think that there's great opportunity for Louisiana to be this hub of reinvention in an era where we're going to see massive reinvention going across all industries."