North American Free Trade Agreement has worked for US oil industry - Executive

With the next round of talks to renegotiate the North American Free Trade Agreement (NAFTA) set to open later this month in Montreal, Jack Gerard, president of the American Petroleum Institute, said it would be a mistake to alter the terms for energy.

"From our vantage point, the energy part of NAFTA is not broken," Gerard told reporters.

President Donald Trump demanded renegotiation of NAFTA to get a better deal for US businesses and consumers.

But many US companies say it has been beneficial to American industry and consumers, and Gerard said it has been critical to the success of the oil industry as well.

"Our greatest concern is that if they are not able to reach agreement on some of those other parts, we believe they should stay with the existing NAFTA construct as it relates to energy as opposed to pulling out of NAFTA," he urged.

Trump has denounced NAFTA as a "disaster" and the worst agreement ever signed by the United States, blaming it for a $64 billion trade gap with Mexico and loss of countless jobs.

But Gerard said the deal "is a great example for what can happen with open borders."

According to government data, US exports of oil and refined products to Mexico has soared under NAFTA, to 880,000 barrels per day in 2016 from just 124,000 before the deal went into effect.

Negotiators have conducted five rounds of talks to date but have stumbled over some thorny issues. And with Mexican presidential elections coming up this summer and US midterm elections late in the year, the discussions become more complicated by political concerns.

Despite his concerns about NAFTA, Gerard praised the Trump administration for the corporate tax cuts approved last month, for its efforts to remove "redundant and duplicative" regulations and permitting requirements, and for the recent decision to open offshore waters to drilling.

The Department of the Interior announced the plan last week to allow drilling in virtually all US waters, reversing the Obama-era rules.

Gerard said 94 percent of offshore areas had been closed to drilling and "we are the only developed nation in the world that puts our energy resources off limits."

He said any leases would require talks with local authorities -- some of whom oppose drilling in delicate environmental areas -- but some areas "haven't been looked at with modern technologies and techniques for over 30 years," he said.

"Why would we continue to deny that opportunity if we can produce it safely and in an environmentally-sound way?"