U.S. Mexico Trade Relationship May 2017 Mexico: the 15 th largest - - PowerPoint PPT Presentation
U.S. Mexico Trade Relationship May 2017 Mexico: the 15 th largest world economy With a GDP of 1.1 trillion dollars and strong macroeconomic stability a country of young, talented and highly-skilled people an example of macroeconomic
May 2017
Mexico: the 15th largest world economy
a country of young, talented and highly-skilled people an example of macroeconomic stability ready to increase productivity through structural reforms
With a GDP of 1.1 trillion dollars and strong macroeconomic stability
GDP (billion dollars)
IMF
IMPORTS (billion dollars) WB FDI (billion dollars)
UNCTAD
JAPAN EFTA
1.1 T 1.1 T
NAFTA COLOMBIA URUGUAY ISRAEL EUROPEAN UNION
333 18 7.2 T 9.3 T 89 0.1 1.2 T 0.57 64 648 2.7 T 5.2 T 9 54 300 4.3 T 16.3 T 2.9 53 292
IMF 2015. World Bank, 2015. UNCTAD 2015 FDI outward stock
two-thirds of global imports and a billion consumers.
Mexico is one of the most open economies
CHILE
39 63 241
PERU
2.8 38 189
CENTRAL AMERICA
2.1 62 177
PANAMA
52 19 4 19.6 T
1st in Latin America
among emerging economies
since 1999
60% middle class
Mexico is a growing economy GDP
Source: INEGI, SE-DGIE (Sep. 2016), WTO, UNCTAD, Brookings Institution, SHCP.
Total Exports $374 billion
1.4% 2013
2.3%
2014
2.6%
2015
2.3%
2016 Mexico’s trade policy has provided the backbone for growth in the economy
Total Imports $387 billion
50000 100000 150000 200000 250000 300000 350000 400000 450000 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Oil Manufacturing Other
78% Oil 90% Mfg
Source: SE-NAFTA with data from INEGI
Mexican Exports
$ Million
Mexico has also become a diversified export-oriented economy
Over two decades of sound macroeconomic policies & free trade policies are paying off:
powerhouse
1st
Exporter and producer
1st
Exporter
1st
Exporter
1st
Exporter
3th
Exporter
2nd
Exporter of watermelon, melon and papaya
4th
Exporter
3th
Exporter
Exporter
4th
Mexico is… a leader in the agrifood sector:
IT
exporter in the world.
ELECTRIC- ELECTRONIC
screen exporter in the world.
AEROSPACE
supplier to the American aerospace industry.
AUTOMOTIVE AND AUTO PARTS
exporter globally of new light vehicles in the world.
Mexico is… a leader in advanced industries:
Source: ProMéxico with information from the Global Trade Atlas 2013. * Percentage of value in total exports.
Light vehicles
8.1% 5.7%
Auto parts and accessories Telephones and
3.9%
communications equipment Trucks
5.4%
Computers and parts
5.2% 4.2%
TVs
2.8%
Electrical conductors
1.2%
Gold
1.6%
Furniture and parts
1.5%
Medical and surgical instruments Refrigerators and cooling systems
1.1%
Tractors
1.9%
Main Mexican exports Main Mexican Exports
IMF
WTO
UNCTAD
TURKEY EFTA
1.1 T 2.4
PACIFIC ALLIANCE BRAZIL ARGENTINA JORDAN EUROPEAN UNION
333 181 60 9.3 T 0.6 37 45 0.57 20 207 155 5.2 T 60 179 37 718 722 6.0 2.9 583 1.8 T
Mexico’s ambitious ongoing trade negotiations
GDP (billion dollars) IMPORTS (billion dollars) FDI (billion dollars)
NEW ZEALAND
17 174 36
AUSTRALIA
396 1.3 T 208
MALAYSIA
137 296 176
SINGAPORE
92.3 293 297
IMF 2015. World Bank, 2015. UNCTAD 2015 FDI outward stock
Mexico is on the list of the top 10 countries to invest in 2017
North America: a dynamic economic powerhouse
NAFTA created a thriving regional market of 480 million people and a combined GDP of over $20 trillion.
Source: SE with import data from Statistics Canada, Banxico, and USDOC, and World Bank.
Today NAFTA partners make up
inflows.
Since 1994, intra-NAFTA trade has nearly quadrupled, exceeding a trillion dollars in 2016.
Since NAFTA, U.S.-Mexico trade has multiplied by six
100 200 300 400 500 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
US Exports to Mexico US Imports from Mexico
$ Billion
82 235 231 233 247 197 173 157 131 108 101 332 290 267 348 367 305 392 461
U.S.-Mexico Trade
506 Source: USDOC. 494 534
531 525
Source: USDOC . BRICS includes Brazil, Russia, India, China, and South Africa
Mexico is the U.S.’s second-largest export market and second-largest supplier of goods
billion last year… more than 16% of its sales worldwide.
$294 billion. Mexico has a market share of 13% of US total imports.
116 130 163 180 231
U.S. Exports 2016
Billion dollars
Mexico
BRICS UK, Germany, France & Italy Hong Kong, Taiwan, Singapore, & South Korea
260 259
294 U.S. Imports 2016
Billion dollars
Mexico
UK, Germany, France & Italy Japan, South Korea, Taiwan & Singapore
Buys more than: Supplies more than:
China
US-Mexico strategic partners
When Mexico exports, the United States exports. There is a 40% U.S. value-added in Mexico’s exports to the U.S.
Mexico Canada Malaysia South Korea China Japan
40% 25% 8% 5% 4.0% 2%
Source: NBER, Global Value database in Koopman, Powers, Wang, Wei (September 2010, revised March 2011)
U.S. exports also benefit from Mexico’s network
providing preferential market access to 70% of world GDP and two-thirds of global imports.
Mexico and the United States do not simply trade goods; we work together to manufacture them
U.S. value added in final exports of selected countries to the U.S.
US-Mexico trade is diversified and highly integrated, strengthening supply chains in key industries
AUTO & AUTO-PARTS
exporter globally of new light vehicles in the world.
traded between Mexico and the U.S. annually.
produced in Mexico.
U.S. ,; it is the 5th largest in the world. ELECTRIC-ELECTRONIC
electronic equipment are traded between Mexico and the U.S. per year.
exporter in Latin America, and the 6th globally.
Source: SE with data from Brookings Institution, US Census Bureau, Banxico, and Comtrade.
NAFTA promotes trade specialization
US agricultural exports to Mexico 2016 $18 billion
Meat 18% Dairy Products 8% Grains 20% Oil Seeds 10% Other 44%
agricultural exports to Mexico.
Vegetables 23% Fruits 23% Beverages 18% Sweeteners 6% Other 30%
US agricultural imports from Mexico 2016 $24.8 billion
Source: USDOC. Agricultural products include chapters 1 – 24 HS
NAFTA also promotes a more integrated North American agricultural market
and Mexico produces cattle, hogs and poultry (2016).
billion in meat and poultry from the U.S. (2016)
Mexico accounts for 20% of the U.S. total meat exports Mexico contributes with 35% of the U.S. total bovine animals imports
Source: SE-Washington with data from Wisertrade.
North America is emerging as a global energy power
$7.6 B $36.2 B $4.6 B $10.3 B $5.1 B $3.7 B $6.0 B $2.8 B $3.4 B $660 M $2.0 B $1.5 B $5.1 B $1.2 B $1.0 B $2.2 B $190 M
Electricity Diesel & fuels Crude oil Gasoline Natural gas Liquefied gases
2016 US trade in energy with Mexico and Canada totals $100 billion, accounting for 40% of its total trade
Source: SE-Washington with data from USDOC
#REF! #REF! #REF! #REF! #REF! #REF! #REF!
MD MA CT RI NJ WA DE NH VT ME NC SC FL GA VA NY WV PA OH KY TN MS LA AR IN MI IL WI IA MN MO OK TX KS NE SD ND MT 2.7% WY CO NM AZ UT NV CA OR ID
15.4% 37.8% 39.8% 11.6% 10.1% 14.2% 15.9% 13.1% 22.1% 10.0% 4.0% 9.9% 6.8% 7.7% 18.4% 14.5% 19.0%
18.5%
12.2% 6.7%
AL
5.4% 1.4% 4.8% 5.1% 6.1% 3.4% 14.2%
42.9%
10.7%
22.9% 24.7% 6.1%
12.0% 9.9% 12.7%
14.1%
3.6% 4.3% 1.6% 10.7% 9.6% 9.2% 7.4% 8.3% 3.2% 4.5% 2.5%
Mexico is an important export destination for each U.S. state
Source: SE- NAFTA with data from Wisertrade.
Mexico’s share in U.S. exports by State (2016) 1
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3
1 1 1
1 2 3 Mexico’s rank as an export market for the state
3 2 2 2 More than 15% Between 10% and 15% Less than 10%
% in Total Exports
2 2 2
1 1
3 3
Nearly 5 million U.S. jobs depend on trade in goods and services with Mexico
Source: Jobs figures are from 2014, according to Growing Together: Economic Ties between the United States and Mexico, Mexico Institute, Woodrow Wilson International Center for Scholars, 2016.
U.S. Employment Related to Trade in Goods and Services with Mexico
(Jobs in thousands)
#REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Greater than 100 50 - 99
Less than 50 MD MA CT RI NJ WA
106.8
HI DE NH VT ME NC SC FL GA VA NY WV PA OH KY TN MS LA AR IN MI IL WI IA MN MO OK TX KS NE SD ND MT 16.8 WY CO NM AK AZ UT NV CA OR ID
565.5 89.3 382.0 65.4 151.5 99.7 200.2 178.2 138.0 199.9 322.2 152.5 70.4 61.3 97.4 96.3 53.1
47.7
92.9 133.8
AL
290.2 57.2 23.3 43.6 46.7 9.1 88.0 26.8 10.7 23.6 50.6
33.9 15.4 13.4
41.6 40.8 67.2
95.5
23.3 11.4 22.4 22.1 118.5 16.9 61.1 140.8 15.2 96.5
Industrias CH Banorte Katcon Rassini Kuo Metalsa
Mexican investment strengthens US competitiveness and supports US jobs
GCC Cemex Alpek Grupo Mexico Mexichem Kaltex Bio-Pappel Lamosa IUSA Interceramic DeAcero Vitro Condumex Helvex Corporacion EG Nemak GIS Verzatec Xignux Monex Vector Enlace Interacciones Cinepolis Chedraui Grupo Bal Softtek America Movil Televisa Azteca America Coppel BBG Wireless Famsa Qualfon Omnilife Neoris Carso Grupo Salinas Financial services Automotive Manufacturing Services Mexican companies have:
Source: SE-Washington with information from iMapData 2015 and SelectUSA for export figure . */ FDI figure from 2016 IMF Coordinated Direct Investment Survey (CDIS), using outward position (stock) data 2015.
Gruma Lala Bachoco Bimbo La Costeña Minsa Sigma Alimentos Femsa Arca Continental Elamex Zucarmex Food Frugo
California - Mexico Trade Relationship
Imports: $46.4 billion Exports: $25.2 billion
between California and Mexico surpassed $71 billion
largest export market.
for 15.4% of California's exports worldwide in 2016.
Source: wisertrade.org (2016) and ) with data from iMapData as of December 2015.
California – Mexico trade by industry
Source: wisertrade.org (2016), NAICS
California’s Exports to Mexico since NAFTA
7.7 16.3 17.5 26.8 25.2
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Sources: wisertrade.org (2016), Jobs figures are from 2014, according to Growing Together: Economic Ties between the United States and Mexico, Mexico Institute, Woodrow Wilson International Center for Scholars, 2016.
California’s Exports to Mexico (In millions of dollars)
ü
287% increase in California’s exports to Mexico under NAFTA
ü
Over 565,500 jobs in California depend
Mexican investment support jobs in California
Source: Mexico’s Ministry of Economy with data from iMapData, as of December 2015
Mexican companies operate 735 business establishments in California and provide 13,296 local jobs.
Challenges
the three countries.
NAFTA 2.0 NAFTA modernization should rely on:
Liberalization
ü Goods ü Services ü Investment
Economic integration
ü Supply chains ü Energy ü Talent
Competitiveness
ü Innovation ü Trade facilitation ü Regulatory cooperation ü Border efficiency
NAFTA 2.0
A NAFTA 2.0 should be based on three basic elements:
è A shared assessment that reflects a balanced
perception of the benefits that each country has gained;
è A recognition that there is room for modernization,
and
è A win-win-win proposition; the outcome of this
process must generate benefits for all.
It is time to speak up in favor of free trade
When skeptics accuse free trade agreements (FTAs) of job losses in U.S. manufacturing they focus on the wrong culprit:
manufacturing sector.
regional integration, otherwise we will lose international competitiveness.
counteracts the fact-free, protectionist voices that are dominating the media.
consumers, academia and civil society is needed to tell the real story.
innovation, and provides societies with the tools to face the challenges
Economic Affairs Embassy of Mexico Washington, DC
ftovar@sre.gob.mx More information: www.naftamexico.net
U.S.-Mexico trade in services has doubled since 1999
U.S.-Mexico Trade in Services
US Exports US Imports
1999 2015
Source: USDOC with data from BEA. Financial services include financial and insurance services, telecommunications include IT services, royalties include charges for the use
$23.8 B $49.5 B
Travel 52% Transport 14% Royalties 10% Financial services 5% Telecommunications 3% Other 16%
U.S. EXPORTS
Travel 62% Transport 11% Royalties 3% Financial services 2% Telecommunications 5% Other 17%
U.S. IMPORTS
$9.7 B $19.5 B $14.1 B $30.0 B
30
US – Mexico agricultural trade has multiplied by five since NAFTA
and its 2nd largest source of imports
5 10 15 20 25 30 35 40 45 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
3.4 4.4 3.3 5.1 4.7 5.4 5.3 6.1 7.0 7.1 7.6 8.1 9.0 10.412.215.612.514.017.8 18.7 18.019.3 17.518.0 3.1 3.4 4.4 4.4 4.8 5.4 5.6 6.0 6.1 6.3 7.2 8.2 9.3 10.5 11.3 12.0 12.4 14.7 17.1 17.719.221.122.824.8
US Exports to Mexico US Imports from Mexico
$ Billion
6.5 14.8 13.4 13.1 12.1 10.9 10.8 9.5 9.5 7.7 7.8 20.9 18.3 16.3 23.5 27.6 24.9 28.7
NAFTA
34.9
U.S.-Mexico Agricultural Trade
37.2 Source: USDOC. Agricultural products include chapters 1 – 24 HS 36.6 40.4 40.3 31 42.8
Exports to Mexico: millions of US dollars Imports from Mexico: millions of US dollars
California – Mexico trade by main products
Product 2016
Motor Cars & Vehicles for Transportation 9,203 TV Recorders 3,719 Motor Vehicles for Transport
3,004 Automatic Data Process Machines 2,180 Medical, surgical, dental products 1,877 Fresh Fruit 1,261 Parts for Motor Vehicles 1,056 Semiconductor Devices 1,052
Product 2016
Parts for Motor Vehicles 1,186 Electric Apparatus for Line Telephony 1,058 Oil from Petrol & Bitrum 814 Electronic Integrated Circuits 801 Motor cars & Vehicles 615 Automatic Data Process Machines 587 Medical, surgical, dental products 535 Electrical Apparatus 453
Source: wisertrade.org (2016), 4-digit HTS Classification System
Cross-border trade facilitation
Set a concrete goal for reducing the maximum time for crossing the border – some have even gone as far as suggesting a maximum crossing time of 30 minutes.
infrastructure: To develop strategic corridors to link major industrial clusters on both sides of the border.
to harmonize customs procedures and requirements. 1 million people and 300 thousand vehicles crossing the border daily. 1 million dollars in products are traded every minute along the border.
$15.8 $10.3 $91.6 $38.5 $106.3 $18.4 $28.2
$455
billion bilaterally traded by surface
U.S. – Mexico Trade by Main POEs
Value by all surface modes in $ billion, 2015
Source: SE-Washington with data from USDOT, BTS
33
34
US timeline for negotiation using TPA
Notification to Congress 90 days prior to the start
Start of the NAFTA modernization Conclusion negotiation
Publication of the Consultative Group report by USTR 30 days after notification of intent to sign.
Signing
Submission to congress by the Executive of the list of necessary amendments to the legislation 60 days after the signature Publication of the USITC report on the impact of the agreement Between 90 and 105 days after signing
Implementing bill submission to both Senate and the House
Report by the House Ways and Means Committee 45 days 15 days 15 days 15 days Vote in the House of Representatives Report by the Senate Finance Committee Vote in he Senate Report to the Congress whereby the President determines that the other party has taken the necessary measures to comply with the Agreement. 30 days prior to entry into force Negotiation Reports Congressional approval and implementation 90 days of session, both cameras must work simultaneously Executive - Congress Consultations Publication of the USTR report
the Agreement 30 days before the start of the renegotiation Consultations with all congressional committees with jurisdiction over the agreement and compliance with TPA 2015 objectives, policies and priorities. Prior to signing the agreement Publication of the text
USTR 60 days prior to signature Submission of draft bill, administrative actions and support materials No deadlines