Carpe Diem

Who’d a-thunk it? Firms objecting to natural gas exports join a US trade mission to promote exports of their products?

On Thursday, the Commerce Department issued a press release that included this information:

U.S. Secretary of Commerce Penny Pritzker today announced the names of 21 U.S. companies that will join her second trade mission, which will make three stops in the Middle East from March 8-14. The trade mission is specifically focused on export opportunities for U.S. businesses in the infrastructure sector, and will specifically focus on areas such as project management and engineering (including construction, architecture and design), renewable energy (solar, wind, waste-to-energy), smart grid and energy efficiency, and environmental technologies (including water/wastewater, air pollution control, and waste management). The delegation will visit the United Arab Emirates, the Kingdom of Saudi Arabia, and Qatar.

“As the country’s Chief Commercial Advocate, a key part of my job is to promote trade and investment and connect U.S. businesses with potential customers across the globe. The fact is that 95 percent of customers worldwide live outside U.S. borders, and that is why promoting exports is essential to our economic growth and job creation,” said U.S. Secretary of Commerce Penny Pritkzer. “The three countries we are visiting on our trade mission to the Gulf Region are among the top 50 export markets for the United States. Since the launch of the National Export Initiative in 2010, exports have increased 111% to the United Arab Emirates, 65% to Saudia Arabia, and 57% to Qatar. Clearly, the Gulf region is a critical area of focus for our nation and its businesses.”

MP: Interestingly, but not too surprising, is the fact that at least one of the 21 US companies traveling on the upcoming trade mission to promote US exports (Dow Chemical Company of Midland, Michigan) is a member of America’s Energy Advantage, which is an organization dedicated to stopping, restricting, and/or otherwise limiting exports of US natural gas.

One objection raised by America’s Energy Advantage (AEA) is that some US natural gas exports could go to countries that have not signed free-trade agreements (FTAs) with the US like Japan and India. For example, in this letter to the Committee on House Energy and Commerce, AEA expresses its “strong disagreement” with the recommendations of an Energy and Commerce Majority Committee policy paper to export natural gas to non-FTA nations.

And yet at the same time, the upcoming trade mission is promoting increases of US exports to Gulf Region countries, none of which have an FTA with the US?

 

14 thoughts on “Who’d a-thunk it? Firms objecting to natural gas exports join a US trade mission to promote exports of their products?

  1. Each publicly held corporation should seek highest profits for ite shareholders ant the lowest taxes and best regulatory climate. They are, by charter and law and fiduciary obligation, amoral organizations. They have no responsibilities to the commonweal or truth or other utopian ideals—by corporate charter. The Pledge of Allegiance is not recited at annual shareholder meetings.
    Dow is doing what it should—the sad part is when our governments cater to special interests, including Dow, women’s groups, farmers, minorities, veterans, the elderly, defense contractors, etc etc etc.

    • see benji, it is precisely this sort of drivel that causes us to laugh at you when you proclaim yourself a libertarian.

      you miss the key issue here which is that when firms, for their own gain, advocate coercing others, they damage/destroy the very system that make them successful in the first place and open themselves up to such attacks.

      this is a huge net loss for the economy.

      your notions here are an absurist pastiche of capitalism and libertarianism.

      • M-
        You are mistaken…of course, in a democracy special interest groups will advocate for special treatment. I expect Dow to be for Dow, Veterans Service Organizations to seek higher benefits, women’s groups to fart on everything.
        You expect Dow to militate for a rule change that would decrease its profits? What of Dow’s first obligation—to its shareholders?

        • Dow should be for Dow, but not if it occurs through government intrusion into what should be a free market. That’s coercion that does not belong in a free economy. Dow can be for Dow, and can even lobby the government, if they are lobbying for less regulation and less intrusion.

          Just because we expect Dow to be for Dow and go rent-seeking doesn’t make it right.

  2. Well the trade mission stops are all in the middle east. Wouldn’t trying to export NG to them be a bit like selling snow to Eskimos?

  3. ““As the country’s Chief Commercial Advocate, a key part of my job is to promote trade and investment and connect U.S. businesses with potential customers across the globe.”

    Great. Let the U.S. businesses promote trade and investment with their own money, since they’re the ones that will gain the most from successful promotion. This is more proof that the Constitution, whatever else it might be, isn’t a framework for the operations of the federal government.

  4. I’m confused, but maybe I figured it out. Please let me know if I did.

    1) DOW has little loss / benefit from the NG market.

    2) DOW could definitely benefit if FT agreements were put in place with more countries.

    3) If we constrained ourselves to trade NG with only FTA countries, then a strong political incentive would exist to create more FTA’s with more countries.

    4) Therefore, DOW gets a FTA with the countries they are interested in, while not being hurt themselves.

    Is this what I am reading or am I missing something?

    Thanks for helping,

    Andy

    • Andy

      1) “DOW has little loss / benefit from the NG market.

      Dow benefits from current low domestic NG prices, (low compared to global prices) and lobbies to limit NG exports in order to deny non-US NG customers the opportunity to bid up prices, and thereby possibly increase the price Dow must pay for one of its important raw materials.

      At the same time, Dow is part of a trade mission, at least partly funded by taxpayers, to promote exports of Dow’s products to foreign markets.

      “Help us export our products, but don’t let those NG companies export theirs, because that might raise the price we pay for NG.”

      2) “DOW could definitely benefit if FT agreements were put in place with more countries.

      Keeping in mind that countries don’t trade, but people and companies do, FTAs are a strange misnomer. They are political agreements between governments, seldom make good economic sense, and almost always place LIMITS on free trade rather than expanding it.

      True free trade would require government to cease all involvement in, and interference with, global trade, and allow people and companies to trade with any willing partner they wished. More choice is always better than fewer choices.

      3) “If we constrained ourselves to trade NG with only FTA countries, then a strong political incentive would exist to create more FTA’s with more countries.

      “Constrained” is the problem here. Why should government have any say-so in who you or I can voluntarily trade with for mutual benefit? By “we”, I assume you mean the US government. I don’t have any NG to sell, and I don’t know that you do, so you and I probably aren’t part of that “we”.

      4) “Therefore, DOW gets a FTA with the countries they are interested in, while not being hurt themselves.

      Basically yes. Dow wants to increase trade with foreign customers while denying NG producers the ability to do the same.

      • Thanks for getting back to me and answering my questions.

        I am in agreement with you that, whatever name you give it, actual free trade is correct. In fact, the older I get and the more I think of economics / personal freedoms, the stranger the idea of political boundaries becomes. (And the more I travel around the world and have to put up with restrictions, which is another topic, but similar)

        Yes, companies should be trading among themselves in the same way I want to find the best value product or service, whether that be domestic or abroad. (Which, in itself becomes an odd definition. Are we trading ‘abroad’ with Hawaii or Puerto Rico? The definition of ‘Domestic’ applies to inside USA, but not within my city or state?)

        Protectionism leads to a loss of economic / personal freedoms on the whole / in the long run. It’s too bad that policies are put in place that promote protectionists’ agendas.

        As Vonnegut wrote, ‘So it goes’

        • Andy

          It sounds like you have a good handle on it.

          Political boundaries are just arbitrary lines in the sand that tend to interfere with people’s ability to trade and associate with others.

          Protectionism leads to a loss of economic / personal freedoms on the whole / in the long run. It’s too bad that policies are put in place that promote protectionists’ agendas.

          Yes. It’s too bad political power is for sale to the highest bidder. It’s our fault for giving so much power to those who we select to act in our interest as our agents. Instead they represent the interests of those who help get them elected and re-elected. That’s often companies that can benefit from favorable regulations that disadvantage their competitors. That’s political economy, not market economy, which always favors consumers (all of us).

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