EnergyFactor By ExxonMobil | Pespectives has a new home

A Constitutional lesson on exports

As the public dialogue progresses on whether the federal government should restrict exports of natural gas, it’s important to note that our nation’s discussion of free trade goes back to its earliest days.

When delegates to the Constitutional Convention met in Philadelphia in 1787, one issue of contention was not energy but products like rice and tobacco (and, after Eli Whitney’s 1793 invention, cotton as well). The economies of some states depended on the ports of other states to reach markets overseas. For instance, North Carolina exported through Virginia. Delaware and New Jersey exported through Pennsylvania. And Rhode Island exported through Massachusetts and Connecticut.

“No Tax or Duty shall be laid…”

Southern delegates, in particular, were worried about Northern interests using their legislative muscle to dictate terms to the Southern economies, and possibly making future claims on Southern products. So to ensure Southern support for a new federal union, the delegates at the Constitutional Convention agreed on language that strongly protects the right to export.

That’s why Article I, Section 9, Clause 5 of the Constitution reads, “No Tax or Duty shall be laid on Articles exported from any State.”

This so-called Commerce Compromise was tied up with a number of the contentious issues on which delegates to the convention had to compromise, including where to site the nation’s capital, how to apportion delegates, and how to deal with the terrible issues of slavery and the slave trade.

While the export clause was borne of compromise, its intent was explicit. As the legendary scholar and Supreme Court Justice Joseph Story wrote of the provision, “The power is, therefore, wholly taken away to intermeddle with the subject of exports.” In other words, the clause was meant to be a clear statement of the need to limit the power of government to interfere in trade flows by rewarding one group at the expense of another (in this case the states).

Present-day application

The principle of limiting the government’s influence over exports has proven to be a wise one. The benefits of free trade are a lot more apparent today than they were when regional interests were sparring over drafts of the Constitution during the Age of Mercantilism – an era when global trade was limited and often manipulated by governments.

With that in mind, it’s worth dwelling on the fact that a general policy hammered out during the Constitutional Convention of not limiting exports has played a positive role in shaping America’s economic history. Since that summer in Philadelphia, our nation has grown from a loose affiliation of disparate colonies into a dynamic and innovative economic powerhouse. Both the United States and our international partners benefit each day from strengthening trade flows and relationships.

That’s one lesson policymakers would be wise to keep in mind as they turn their attention to considering the positive impact free trade in energy would have for creating American jobs, powering our economy and helping alleviate our serious fiscal challenges.

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