It feels like the movie “Groundhog Day.” Another round of negotiations among Canadian, Mexican and U.S. officials on the North America Free Trade Agreement; another round with nothing resolved. And President Donald Trump continues to place conditions — Mexican immigration control is the latest — on a new deal, or threatening to terminate the current agreement altogether.

A breakdown in NAFTA talks and a U.S. withdrawal from the trade agreement likely would take away markets for U.S. producers and investors. This would be most unfortunate, both for the country and for states like Pennsylvania that rely heavily on international trade. Conversely, a modernized agreement is likely to provide new opportunities for U.S. companies and workers.

As one example, let’s look at the energy sector — which is one of Mr. Trump’s priorities. Since NAFTA was signed in 1993, the North American energy situation has come a long way. From 1993 to 2016, U.S. crude oil and other petroleum exports to Mexico increased almost eight-fold, and U.S. exports of crude oil and petroleum products to Canada rose 13-fold.

During the same period, U.S. imports of crude oil and petroleum products from Canada tripled, and are now about three times the amount of crude oil imports from Saudi Arabia. Canada is the No. 1 supplier of crude oil to the U.S and remains our largest energy trading partner. Mexico is the biggest export market for U.S. natural gas. In 2016, the value of U.S. energy exports to Mexico ($20.2 billion) was more than twice the value of energy imports ($8.7 billion).

NAFTA also has supported overall U.S. economic growth. According to the U.S. Chamber of Commerce, an estimated 14 million jobs in the United States rely on trade with Canada and Mexico, with about 5 million of them resulting from increased trade due in part to NAFTA. Dartmouth College’s business school dean Matthew Slaughter, writing in The Wall Street Journal, placed the cost of withdrawing from NAFTA at $50 billion per year.

This matters a lot to Pennsylvania. The commonwealth now accounts for 19 percent of U.S. natural gas production and 76 percent of Marcellus Shale production, which is hitting almost 10 billion cubic feet per day. Much of this gas will flow to international markets, either through LNG terminals like the new Cove Point terminal in Maryland or through pipelines to our neighbors. Since 2009, Mexico has doubled its purchase of U.S. natural gas.

Pennsylvania businesses ship nearly $60 billion in goods and services worldwide, with more than half of those exports going to free-trade-agreement markets such as Canada and Mexico. Pennsylvania’s top export markets for goods are Canada, Mexico and China. Its top market for services is Canada. 

Since NAFTA went into effect in 1994, Pennsylvania’s exports to Canada and Mexico have increased by $11.4 billion (269 percent). According to the U.S. Commerce Department, the vast majority of the more than 14,000 Pennsylvania companies that send goods abroad are small and medium-sized businesses. These businesses, as well as the more than 190,000 Pennsylvania workers they employ, depend heavily on the future of NAFTA.

There’s no question that NAFTA could and should be updated. But as negotiations continue, the Trump administration needs to recognize the tremendous benefits that come from trade with Canada and Mexico.

Officials need to appreciate the importance of retaining the investor state-dispute-settlement system, which provides for a private right of action before an independent, neutral arbitration tribunal, ensuring that American companies are treated fairly in foreign investment disputes.

And U.S. officials need to pay special attention to the changes in our energy relationships during the last few decades. North America has become an increasingly integrated market, and it is vital to continue the free flow of natural gas, crude oil, petroleum products and electricity across our borders. This benefits all Americans, especially businesses and workers in Pennsylvania.

Jeffrey Kupfer, a former acting deputy secretary in the U.S. Energy Department, is an adjunct faculty member at Carnegie Mellon University’s Heinz College.

First Published: May 27, 2018, 4:00 a.m.