It’s a big world out there, with three-quarters of the world’s producing power outside the United States.
For a numbers-oriented CEO, the realities of our dependence on world trade are ever-present, and Louisiana as a big exporting state has much to lose if, as one CEO recently put it, "we don't get trade right."
For the second time in as many years, the head of Union Pacific railroad warned a Louisiana audience of the problems with the new and combative approach of the Trump administration to international trade.
Last year, at the Port of New Orleans, he deplored the prospects of tariffs on steel and aluminum — the original shots in the Donald Trump trade wars — and this year, he gave a somewhat more upbeat report at the annual meeting in Baton Rouge of the Public Affairs Research Council. But it was still a cautionary speech.
Acknowledging that the new president had reason to object to some trade practices in China, Lance M. Fritz said he had advised Trump and others: “If you do anything, get trade right.”
For the railroad he runs, Fritz said, about 40 percent of business is dependent on international trade, moving products to and from 23 U.S. states to ports like those in California and Louisiana. Trade-related jobs pay better across the economy, and American exports now include oil and gas, because of “a wonderful revolution in oil and gas production” onshore in the United States.
Getting commodities to market, though, is one part of the trade equation; another is having someplace for them to go. Fritz regretted that the new administration pulled out of a proposed Trans-Pacific Partnership, but he added that the good news is that the president appears committed to one-by-one trade agreements with partners like Japan.
But of the TPP benefits that would have been gained for the United States, Fritz said he expected that about 85 percent would be covered under the new bilateral agreement worked out with Japan, as an example of the new approach.
Fritz said the conclusion of a trade deal that revised the North American Free Trade Agreement with Mexico and Canada was constructive. “For now, it appears to be working out,” he said.
But he also noted that Congress must still approve the new language.
“We can’t take that lightly in terms of getting it ratified,” he said.
With a strong economy emerging from the chaos of the 2008 financial crisis, America is poised for growth, and Louisiana’s markets — Mexico and Canada in the new trade agreement, but also countries in Asia as well — must be connected with trade agreements.
NAFTA 2.0, as it is should be called, is good for Louisiana as well as the rest of the country. We urge Louisiana members of Congress to support its ratification.