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 stability ready to increase productivity through structural reforms open for business
Mexico is one of the most open economies • Mexico’s FTAs network includes 46 countries which account for 70% of world GDP, two-thirds of global imports and a billion consumers. EFTA 1.1 T 333 JAPAN 1.1 T 4.3 T 19.6 T 648 NAFTA 1.2 T 2.7 T ISRAEL 16.3 T 7.2 T EUROPEAN 5.2 T 300 UNION 9.3 T 64 52 89 -2.3 19 PANAMA 177 4 0.57 CENTRAL 62 COLOMBIA 2.1 AMERICA 292 54 189 18 2.9 PERU 38 2.8 GDP IMF (billion dollars) CHILE IMPORTS URUGUAY WB (billion dollars) 241 53 63 9 39 UNCTAD FDI (billion dollars) 0.1 IMF 2015. World Bank, 2015. UNCTAD 2015 FDI outward stock
Mexico is a growing economy Mexico’s trade policy has provided the backbone for growth in the economy Total Exports $374 billion $761 billion in total trade • $457 billion in FDI attracted • since 1999 • 125 million consumer market/ 60% middle class GDP 2.6% 2.3% 1.4% 2.3% 2014 2013 2015 2016 10 th largest world exporter and • 1 st in Latin America 9 th largest world importer • 5 th leading recipient of FDI • Total Imports among emerging economies $387 billion Source: INEGI, SE-DGIE (Sep. 2016), WTO, UNCTAD, Brookings Institution, SHCP.
Mexico has also become a diversified export-oriented economy Over two decades of sound macroeconomic policies & free trade policies are paying off: • Mexico has transformed its export structure into a manufacturing global powerhouse Mexican Exports 90% Mfg Oil Manufacturing Other 450000 400000 350000 $ Million 300000 250000 78% 200000 Oil 150000 100000 50000 0 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 Source: SE-NAFTA with data from INEGI
Mexico is… a leader in the agrifood sector: 1 st 3 th Exporter 4 th Exporter Exporter 1 st Exporter 3 th and producer Exporter 1 st 2 nd Exporter Exporter of watermelon, melon and papaya 1 st 4 th Exporter Exporter of vegetables
Mexico is… a leader in advanced industries: AEROSPACE IT •Mexico is the 6 th •3 rd largest supplier to the exporter in the American aerospace world. industry. AUTOMOTIVE ELECTRIC- AND AUTO PARTS ELECTRONIC •7 th producer and 4 th •Leading flat television exporter globally of new screen exporter in the light vehicles in the world. world.
Main Mexican Exports 8.1% 5.7% 5.2% 5.4% 4.2% Light vehicles Auto parts Computers Trucks and TVs and parts accessories 3.9% 1.1% 12 Main Mexican exports Refrigerators and Telephones and cooling systems communications equipment 1.5% 1.6% 1.9% 2.8% 1.2% Medical and surgical Furniture Electrical Tractors instruments and parts conductors Gold Source: ProMéxico with information from the Global Trade Atlas 2013. * Percentage of value in total exports.
Mexico’s ambitious ongoing trade negotiations EFTA 2.4 718 333 207 1.1 T 45 TURKEY 6.0 SINGAPORE EUROPEAN 5.2 T 37 UNION 293 9.3 T 20 297 0.6 -2.3 JORDAN 92.3 0.57 MALAYSIA BRAZIL AUSTRALIA 296 1.8 T 1.3 T 176 179 208 137 PACIFIC 181 2.9 396 ALLIANCE GDP IMF (billion dollars) 722 155 NEW IMPORTS ARGENTINA ZEALAND WTO (billion dollars) 60 583 174 60 FDI 36 37 UNCTAD (billion dollars) 17 Mexico is on the list of the top 10 countries to invest in 2017 IMF 2015. World Bank, 2015. UNCTAD 2015 FDI outward stock
North America: a dynamic economic powerhouse NAFTA created a thriving regional market of 480 million people and a combined GDP of over $20 trillion. Today NAFTA partners make up • 15% of world trade, • 28% of global GDP, and • 14% of foreign direct investment inflows. Since 1994, intra-NAFTA trade has nearly quadrupled, exceeding a trillion dollars in 2016. Source: SE with import data from Statistics Canada, Banxico, and USDOC, and World Bank.
Since NAFTA, U.S.-Mexico trade has multiplied by six • Mexico is the U.S.’ third-largest trading partner • $1.5 billion dollars in products are bilaterally traded each day U.S.-Mexico Trade 534 506 531 525 494 500 461 392 400 367 348 332 305 290 267 300 247 235 231 $ Billion 233 197 173 200 157 131 108 82 101 100 0 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 US Exports to Mexico US Imports from Mexico Source: USDOC.
Mexico is the U.S.’s second-largest export market and second-largest supplier of goods • U.S. imports from Mexico reached • U.S. exports to Mexico reached $231 $294 billion. Mexico has a market billion last year… more than 16% of its share of 13% of US total imports. sales worldwide. U.S. Exports 2016 U.S. Imports 2016 Mexico 231 Buys more than: Mexico 294 Supplies more BRICS 180 than: UK, Germany, France & Italy Japan, South 163 259 Korea, Taiwan & Singapore Hong Kong, Taiwan, 130 Singapore, & South Korea UK, Germany, 260 France & Italy 116 China Billion dollars Billion dollars Source: USDOC . BRICS includes Brazil, Russia, India, China, and South Africa
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. U.S. value added in final exports of selected countries to the U.S. 40% U.S. exports also benefit from Mexico’s network of free trade agreements with 46 countries, 25% providing preferential market access to 70% of world GDP and two-thirds of global imports. 8% 5% 4.0% 2% Mexico Canada Malaysia South Korea China Japan Mexico and the United States do not simply trade goods; we work together to manufacture them Source: NBER, Global Value database in Koopman, Powers, Wang, Wei (September 2010, revised March 2011)
US-Mexico trade is diversified and highly integrated, strengthening supply chains in key industries ELECTRIC-ELECTRONIC $143 billion dollars in electrical and • electronic equipment are traded between Mexico and the U.S. per year. Mexico is the leading home appliance • exporter in Latin America, and the 6th globally. AUTO & AUTO-PARTS Mexico is the 7 th largest producer and 4 th • exporter globally of new light vehicles in the world. $123 billion dollars in cars and parts are • traded between Mexico and the U.S. annually. • 11% of light vehicles sold in the U.S. were produced in Mexico. Mexico is the main auto parts supplier to the • U.S. ,; it is the 5 th largest in the world. Source: SE with data from Brookings Institution, US Census Bureau, Banxico, and Comtrade.
NAFTA promotes trade specialization • US exports are concentrated in grains, meat and oilseeds, accounting for 50% of agricultural exports to Mexico. • Nearly 50% of Mexico’s agricultural exports to the US are fruits and vegetables. US agricultural exports to Mexico 2016 US agricultural imports from Mexico 2016 $18 billion $24.8 billion Meat Vegetables 18% Dairy Other 23% Products 30% Other 8% 44% Grains Oil Seeds 20% Sweeteners Fruits 10% 6% Beverages 23% 18% Source: USDOC. Agricultural products include chapters 1 – 24 HS
NAFTA also promotes a more integrated North American agricultural market • The U.S. exports $5.6 billion in grains, oilseeds and animal feed to Mexico, and Mexico produces cattle, hogs and poultry (2016). • Mexico exports $590 million of bovine calves to the U.S. and imports $3 billion in meat and poultry from the U.S. (2016) Mexico contributes with 35% of the U.S. total bovine animals imports Mexico accounts for 20% of the U.S. total meat exports Source: SE-Washington with data from Wisertrade.
North America is emerging as a global energy power • Mexico is the US’ largest energy market, consuming over $20 billion in energy goods • Canada is the US’ biggest energy supplier, providing over $54 billion in commodities 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 $36.2 B $3.7 B $5.1 B $3.4 B $1.0 B $2.2 B $190 M $2.8 B $4.6 B $5.1 B $1.5 B $6.0 B $10.3 B $2.0 B $1.2 B $660 M $7.6 B Crude oil Natural gas Electricity Gasoline Liquefied gases Diesel & fuels
Mexico is an important export destination for each U.S. state Mexico ranks among the top 3 export markets for 31 states • Mexico’s share in U.S. exports by State (2016) WA ME VT 4.3% 2.5% ND MT 2 1.6% MN 6.1% 2 2.7% 2 2 OR ID 10.7% NY NH 12.2% WI 3.6% WV 2 1.4% MI MA 9.6% 4.0% 14.5% 4.8% 24.7% SD 2 WY 2 9.2% 3 RI 22.1% 2 2 CT IA #REF! 7.4% 3.4% PA 2 2 10.0% NJ NE 8.3% 19.0% OH IL NV IN 22.9% UT 1 #REF! DE 3.2% 13.1% 14.1% 15.9% 2 CO 5.1% 1 2 6.1% CA MO VA 2 MD 4.5% 2 3 KS 14.2% 18.5% 6.7% 7.7% 1 18.4% 15.4% #REF! KY NC 2 10.1% TN 1 14.2% 2 3 #REF! AZ 1 OK AR NM 10.7% 6.8% 2 12.0% SC GA AL MS 37.8% #REF! 42.9% 9.9% 2 12.7% 9.9% 1 TX LA #REF! 2 #REF! 39.8% 11.6% % in Total Exports FL 2 More than 15% 5.4% Between 10% and 15% 3 Less than 10% Mexico’s rank as an export market for the state 1 2 3 Source: SE- NAFTA with data from Wisertrade.
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