Free Markets, Free Trade
Before I close, I would now like to return to my earlier point about free markets and free trade, which are vital to innovation and sustainable growth.
Free trade is the life blood of the chemical industry. New industry investments in the Middle East, Asia and now North America will increase trade flows, benefiting producers and consumers worldwide.
But with this opportunity comes obstacles.The prospects of growing exports often prompt calls for protectionism from competitors seeking to protect their domestic advantage. Protectionist pleas are often wrapped in pious appeals to nationalism, but the real agenda is to unlevel the playing field and stifle the competition. As an industry, we must vigorously oppose protectionist measures that limit access to global markets. We must also promote free trade initiatives such as the U.S. - EU Free Trade Agreement and the TransPacific Economic Partnership. The American Chemistry Council actively supports both. Likewise, we must oppose protectionism in our home countries, such as calls to restrict U.S. natural gas exports. These proposals to block LNG investments, justified by artificial price caps, represent a selective and harmful departure from free-market and free-trade principles. Blocking LNG exports would be an affront to America’s trading partners and undermine the efforts under way to strengthen our trading ties. For example, why should the EU drop tariffs on U.S. chemicals, made from advantaged natural gas, if the U.S. blocks exports of that gas in liquefied form? Likewise, how can the U.S. secure sanctions against China for restricting exports of rare-earth minerals, without inviting sanctions on the U.S. for restricting natural gas exports? And, how can the U.S. ask Japan, a close ally suffering from energy shortages, to stop importing oil from Iran, if we prevent it from importing gas from the U.S.? The answers are obvious, yet the damage would go beyond the chilling effect on trade. Restricting LNG exports would also be harmful domestic policy. It would return the U.S. to the era of price controls, which in the 1970s and ‘80s caused falling natural gas production, supply shortages equaling one-quarter of demand, price spikes and diminished economic opportunity.