Trump ready to announce revised US-Mexico trade deal

President Trump’s announcement with Mexico on Monday is being taken as an encouraging sign by the U.S. oil and natural gas industry.

“We are encouraged that negotiators have reached a preliminary agreement to modernize our trade relationships,” said Mike Sommers, the new president and CEO of the American Petroleum Institute, the oil industry’s top lobbyist in Washington.

“America’s natural gas and oil industry depends on trade to continue to grow U.S. jobs and our economy, and deliver for consumers,” he added.

Trump announced Monday morning that progress had been made toward a deal with Mexico on renegotiating the North American Free Trade Agreement. Negotiations with Canada, the final piece in the agreement, are still ongoing.

The American Petroleum Institute (API) said Monday that the industry relies on open trade and modernized relationship with Mexico.

“We are encouraged that negotiators have reached a preliminary agreement to modernize our trade relationships,” said API President and CEO Mike Sommers in a statement. “America’s natural gas and oil industry depends on trade to continue to grow U.S. jobs and our economy, and deliver for consumers.”

Mexico in 2017 was the leading importer of American oil and petroleum products, according to the U.S. Energy Information Administration.

If Canada is excluded in the new deal, it would mark a major shift in U.S. trade policy.

While the negotiations have largely focused on crafting a deal on auto trade, bilateral talks between the U.S. and Mexico have been bogged down by a split opinion between Mexican administrations over energy policy — some who have long been skeptical of foreign oil companies entering the Mexican oil industry.

There was hope in the steel and aluminum industries that a renegotiated US-Mexico trade deal could mean removing Section 232 tariffs on those metals, but officials said there has been no such change.

Mexican Economy Secretary Ildefonso Guajardo said Monday the quotas on aluminum and steel continue, but sides remain in negotiations.

“We are still stranded on this issue beyond an action and a balanced and proportional reaction, but we don’t discard the possibility in the horizon, closer to the [trade agreement] signing, that we retake this dialogue to find a solution,” Guajardo said.

In May, the White House imposed a 25% tariff on steel and 10% tariff on aluminum for NAFTA trading partners. The administration said it was imposing duties because the US had not reached satisfactory trade agreements with them that “meet the national security requirements of the United States.”

Canada and Mexico are important partners in steel and aluminum supply chains.