u.s. –mexico trade relationship...brics includes brazil, russia, india, china, and south africa...
TRANSCRIPT
May2017
U.S.– MexicoTradeRelationship
Mexico:the15th largestworldeconomy
a country of young, talented and highly-skilled people
an example of macroeconomic stability
ready to increase productivity through structural reforms
open for business
WithaGDPof1.1trilliondollars andstrongmacroeconomicstability
GDP(billiondollars)
IMF
IMPORTS(billiondollars)
WB
FDI(billiondollars)UNCTAD
JAPAN
EFTA
1.1T
1.1T
NAFTA
COLOMBIA
URUGUAY
ISRAELEUROPEANUNION
333
18
7.2T
9.3T89
0.1
1.2T
0.57
64
6482.7T
5.2T
9
54
300
4.3T
16.3T
2.9
53
292
-2.3
IMF2015.WorldBank,2015.UNCTAD2015FDIoutwardstock
• Mexico’sFTAsnetworkincludes46countrieswhichaccountfor70%ofworldGDP,two-thirdsofglobalimportsandabillionconsumers.
Mexicoisoneofthemostopeneconomies
CHILE
3963
241
PERU2.8
38189
CENTRALAMERICA2.1
62177
PANAMA52
194
19.6T
• 10th largestworldexporterand1st inLatinAmerica
• 9th largestworldimporter• 5th leadingrecipientofFDI
amongemergingeconomies
• $761billionintotaltrade• $457billioninFDIattracted
since1999• 125millionconsumermarket/
60%middleclass
Mexicoisagrowingeconomy
GDP
Source:INEGI,SE-DGIE(Sep.2016),WTO,UNCTAD,BrookingsInstitution,SHCP.
TotalExports$374billion
1.4%2013
2.3%
2014
2.6%
20152.3%
2016
Mexico’stradepolicyhasprovidedthebackboneforgrowthintheeconomy
TotalImports$387billion
0
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-NAFTAwithdatafromINEGI
MexicanExports
$ Million
Mexicohasalsobecomeadiversifiedexport-orientedeconomy
Overtwodecadesofsoundmacroeconomicpolicies&freetradepoliciesarepayingoff:
• Mexicohastransformeditsexportstructureintoamanufacturingglobalpowerhouse
1st Exporter and producer
1stExporter
1stExporter
1stExporter 3th
Exporter
2ndExporter of watermelon, melon and papaya
4thExporter
3thExporter
Exporter4th
of vegetables
Mexicois…aleaderintheagrifood sector:
IT •3rd largest exporter in the world.
ELECTRIC-ELECTRONIC•Leading flat television screen exporter in the world.
AEROSPACE•Mexico is the 6th
supplier to the American aerospace industry.
AUTOMOTIVE AND AUTO PARTS•7th producer and 4th
exporter globally of new light vehicles in the world.
Mexicois…aleaderinadvancedindustries:
Source:ProMéxicowith information from the GlobalTradeAtlas2013.*Percentageofvalueintotalexports.
Lightvehicles
8.1% 5.7%
Autopartsand
accessories
Telephonesand
3.9%
communicationsequipment
Trucks
5.4%
Computersandparts
5.2%4.2%
TVs
2.8%
Electricalconductors
1.2%
Gold
1.6%
Furnitureandparts
1.5%
Medicalandsurgicalinstruments
Refrigeratorsandcoolingsystems
1.1%
Tractors
1.9%
12MainMexicanexports
MainMexicanExports
IMF
WTO
UNCTAD
TURKEY
EFTA
1.1T
2.4
PACIFICALLIANCE
BRAZIL
ARGENTINA
JORDAN
EUROPEANUNION
333
181
60
9.3T0.6
37
45
0.57
20
207
155
5.2T
60
179
37
718
722
6.0
2.9
583
1.8T
-2.3
Mexico’sambitiousongoingtradenegotiations
GDP(billiondollars)
IMPORTS(billiondollars)
FDI(billiondollars)
NEWZEALAND
17
17436
AUSTRALIA
396
1.3T208
MALAYSIA
137
296176
SINGAPORE
92.3
293297
IMF2015.WorldBank,2015.UNCTAD2015FDIoutwardstock
Mexicoisonthelistofthetop10countriestoinvestin2017
NorthAmerica:adynamiceconomicpowerhouse
NAFTAcreatedathrivingregionalmarketof480millionpeopleandacombinedGDPofover$20trillion.
Source:SEwithimportdatafromStatisticsCanada,Banxico,andUSDOC,andWorldBank.
TodayNAFTApartnersmakeup• 15%ofworldtrade,• 28%ofglobalGDP,and• 14%offoreigndirectinvestment
inflows.
Since1994,intra-NAFTAtradehasnearlyquadrupled,exceedingatrilliondollarsin2016.
SinceNAFTA,U.S.-Mexicotradehasmultipliedbysix
• MexicoistheU.S.’third-largesttradingpartner
0
100
200
300
400
500
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
USExportstoMexico USImportsfromMexico
$ Billion
82
235231233247
197173
157131
108101
332290
267
348367
305
392
461
U.S.-MexicoTrade506
Source:USDOC.
494534
• $1.5billiondollarsinproductsarebilaterallytradedeachday
531 525
Source:USDOC.BRICSincludesBrazil,Russia,India,China,andSouthAfrica
MexicoistheU.S.’ssecond-largestexportmarketandsecond-largestsupplierofgoods
• U.S.exportstoMexicoreached$231billionlastyear… morethan16%ofitssalesworldwide.
• U.S.importsfromMexicoreached$294billion.Mexicohasamarketshareof13%ofUStotalimports.
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
Buysmorethan:Suppliesmorethan:
China
US-Mexicostrategicpartners
WhenMexicoexports,theUnitedStatesexports.Thereisa40%U.S.value-addedinMexico’sexportstotheU.S.
Mexico Canada Malaysia SouthKorea China Japan
40%
25%
8%5% 4.0%
2%
Source:NBER,GlobalValuedatabaseinKoopman,Powers,Wang,Wei(September2010,revisedMarch2011)
U.S.exportsalsobenefitfromMexico’snetworkoffreetradeagreementswith46countries,providingpreferentialmarketaccessto70%ofworldGDPandtwo-thirdsofglobalimports.
MexicoandtheUnitedStatesdonotsimplytradegoods;weworktogethertomanufacturethem
U.S.valueaddedinfinalexportsofselectedcountriestotheU.S.
US-Mexicotradeisdiversifiedandhighlyintegrated,strengtheningsupplychainsinkeyindustries
AUTO&AUTO-PARTS• Mexicoisthe7th largestproducerand4th
exportergloballyofnewlightvehiclesintheworld.
• $123billiondollarsincarsandpartsaretradedbetweenMexicoandtheU.S.annually.
• 11%oflightvehiclessoldintheU.S.wereproducedinMexico.
• MexicoisthemainautopartssuppliertotheU.S.,;itisthe5th largestintheworld.
ELECTRIC-ELECTRONIC• $143billiondollarsinelectricaland
electronicequipmentaretradedbetweenMexicoandtheU.S.peryear.
• MexicoistheleadinghomeapplianceexporterinLatinAmerica,andthe6thglobally.
Source:SEwithdatafromBrookingsInstitution,USCensusBureau,Banxico,andComtrade.
NAFTApromotestradespecialization
USagriculturalexportstoMexico2016$18billion
Meat18% Dairy
Products8%
Grains20%OilSeeds
10%
Other44%
• USexportsareconcentratedingrains,meatandoilseeds,accountingfor50%ofagriculturalexportstoMexico.
• Nearly50%ofMexico’sagriculturalexportstotheUSarefruitsandvegetables.
Vegetables23%
Fruits23%Beverages
18%
Sweeteners6%
Other30%
USagriculturalimportsfromMexico2016$24.8billion
Source:USDOC.Agriculturalproductsincludechapters1– 24HS
NAFTAalsopromotesamoreintegratedNorthAmericanagriculturalmarket
• TheU.S.exports$5.6billioningrains,oilseedsandanimalfeedtoMexico,andMexicoproducescattle,hogsandpoultry(2016).
• Mexicoexports$590millionofbovinecalvestotheU.S.andimports$3billioninmeatandpoultryfromtheU.S.(2016)
Mexicoaccountsfor20%oftheU.S.totalmeatexports
Mexicocontributeswith35%oftheU.S.totalbovineanimalsimports
Source:SE-WashingtonwithdatafromWisertrade.
NorthAmericaisemergingasaglobalenergypower
• MexicoistheUS’largestenergymarket,consumingover$20billioninenergygoods
• CanadaistheUS’biggestenergysupplier,providingover$54billionincommodities
$7.6B
$36.2B
$4.6B
$10.3B
$5.1B
$3.7B
$6.0B
$2.8B
$3.4B
$660M
$2.0B
$1.5B
$5.1B
$1.2B
$1.0B$2.2B
$190M
ElectricityDiesel&fuels
CrudeoilGasoline
NaturalgasLiquefiedgases
2016UStradeinenergywithMexicoandCanadatotals$100billion,accountingfor40%ofitstotaltrade
Source:SE-WashingtonwithdatafromUSDOC
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!#REF!
MD
MA
CTRI
NJ
WA
DE
NH
VT ME
NC
SC
FL
GA
VA
NYWV
PAOH
KYTN
MS
LA
AR
IN
MI
IL
WI
IA
MN
MO
OK
TX
KS
NE
SD
NDMT2.7%
WY
CO
NMAZ
UTNV
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%
MexicoisanimportantexportdestinationforeachU.S.state
Source:SE- NAFTAwithdatafromWisertrade.
Mexico’sshareinU.S.exportsbyState(2016)
1
2
2 22
2
2
2
2
2 22
2
22
2 3
1 1
1
1 2 3 Mexico’srankasanexportmarketforthestate
• Mexicoranksamongthetop3exportmarketsfor31states
3
2
22
Morethan15%Between10%and15%Lessthan10%
%inTotalExports
2
2
2
1
13
3
Nearly5millionU.S.jobsdependontradeingoodsandserviceswithMexico
Source:Jobsfiguresarefrom2014,accordingtoGrowingTogether:EconomicTiesbetweentheUnitedStatesandMexico,MexicoInstitute,WoodrowWilsonInternationalCenterforScholars,2016.
U.S.EmploymentRelatedtoTradeinGoodsandServiceswithMexico(Jobsinthousands)
#REF!#REF!
#REF! #REF!
#REF!#REF!
#REF!
#REF!
#REF!#REF!
Greater than 10050 - 99Less than 50
MD
MA
CTRI
NJ
WA106.8
HI
DE
NH
VTME
NC
SC
FL
GA
VA
NYWV
PAOH
KYTN
MS
LA
AR
IN
MI
IL
WI
IA
MN
MO
OK
TX
KS
NE
SD
NDMT16.8
WY
CO
NM
AK
AZ
UTNV
CA
OR ID
565.5
89.3
382.065.4
151.599.7
200.2 178.2
138.0
199.9
322.2
152.5
70.4
61.397.4
96.3
53.1
47.7
92.9
133.8
AL
290.2
57.223.3
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
22.1118.516.961.1140.815.2
96.5
IndustriasCHBanorte
KatconRassini
Kuo
Metalsa
MexicaninvestmentstrengthensUScompetitivenessandsupportsUSjobs
GCC
Cemex
Alpek
GrupoMexico
Mexichem
Kaltex
Bio-Pappel
Lamosa
IUSA
Interceramic
DeAcero
Vitro
Condumex
Helvex
CorporacionEG
Nemak
GIS
Verzatec Xignux
MonexVector
EnlaceInteracciones
Cinepolis
Chedraui
GrupoBal
SofttekAmericaMovil
TelevisaAztecaAmerica
Coppel
BBGWireless
Famsa
Qualfon
OmnilifeNeorisCarso
GrupoSalinas
Financialservices
Automotive
ManufacturingServices
Mexicancompanieshave:
• Investedover$52 billionintheUS;andexportmorethan$1billiontotheglobalmarket• Over6,500businessesintheUS,providingover120,000jobs
Source:SE-WashingtonwithinformationfromiMapData 2015andSelectUSA forexportfigure.*/FDIfigurefrom2016IMFCoordinatedDirectInvestmentSurvey(CDIS),usingoutwardposition(stock)data2015.
GrumaLala
Bachoco
Bimbo
LaCosteña
Minsa
SigmaAlimentos
Femsa
ArcaContinental
ElamexZucarmex
Food
Frugo
California- MexicoTradeRelationship
Imports:$46.4billion
Exports:$25.2billion
• In2016,tradebetweenCaliforniaandMexicosurpassed$71billion
• MexicoisCalifornia’slargest exportmarket.
• Mexicoaccountedfor15.4% ofCalifornia'sexportsworldwidein2016.
Source:wisertrade.org(2016)and)withdatafromiMapData asofDecember2015.
California– Mexicotradebyindustry
Source:wisertrade.org(2016),NAICS
California’sExportstoMexicosinceNAFTA
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),Jobsfiguresarefrom2014,accordingtoGrowingTogether:EconomicTiesbetweentheUnitedStatesandMexico,MexicoInstitute,WoodrowWilsonInternationalCenterforScholars,2016.
California’sExportstoMexico(Inmillionsofdollars)
ü 287%increaseinCalifornia’sexportstoMexicounderNAFTA
ü Over565,500jobsinCaliforniadependontradewithMexico
MexicaninvestmentsupportjobsinCalifornia
Source:Mexico’sMinistryofEconomywithdatafromiMapData,asofDecember2015
Mexicancompaniesoperate735businessestablishmentsinCaliforniaandprovide13,296localjobs.
Challenges
• ExpandNAFTAbenefitstoallsectorsandregionsofthethreecountries.
• Streamlineregionalintegration.
• Strengthenregionalvaluechains.
• Efficientbordermanagement.
• Developnewelementsofcompetitiveness.
• Risingprotectionism.
NAFTA2.0
NAFTAmodernizationshouldrelyon:
Liberalizationü Goodsü Servicesü Investment
Economicintegrationü Supplychainsü Energyü Talent
Competitivenessü Innovationü Tradefacilitationü Regulatorycooperationü Borderefficiency
NAFTA2.0
ANAFTA2.0shouldbebasedonthreebasicelements:
è Asharedassessmentthatreflectsabalancedperceptionofthebenefitsthateachcountryhasgained;
è Arecognitionthatthereisroomformodernization,and
è Awin-win-winproposition;theoutcomeofthisprocessmustgeneratebenefitsforall.
Itistimetospeakupinfavoroffreetrade
When skeptics accuse free trade agreements (FTAs) of job losses in U.S.manufacturing they focus on the wrong culprit:
• Globalizationandtechnologicalchangeshaveledtoadjustmentsinthemanufacturingsector.
• FTAsarenottheproblem.Theyarepartofthesolution.
• MexicoandtheUnitedStatesmustcontinuepromotingfreetradeandregionalintegration,otherwisewewillloseinternationalcompetitiveness.
• Bothcountriesneedtoengageinaneducationalcampaignthatcounteractsthefact-free,protectionistvoicesthataredominatingthemedia.
• Governmentscannotdothisalone:theparticipationofbusinessmen,consumers,academiaandcivilsocietyisneededtotelltherealstory.
• Weneedtobetterexplainhowfreetradecreatesjobs,promotesinnovation,andprovidessocietieswiththetoolstofacethechallengesofglobalization.
FranciscoTovarEconomicAffairsEmbassyofMexicoWashington,DC
Moreinformation:www.naftamexico.net
U.S.-Mexicotradeinserviceshasdoubledsince1999
U.S.-MexicoTradeinServices
USExportsUSImports
1999 2015
Source:USDOCwithdatafromBEA.Financialservicesincludefinancialandinsuranceservices,telecommunicationsincludeITservices,royaltiesincludechargesfortheuseofintellectualproperty.
$23.8B
$49.5B Travel52%
Transport14%
Royalties10%
Financialservices5%
Telecommunications3%
Other16%
U.S.EXPORTS
Travel62%
Transport11%
Royalties3%
Financialservices2%
Telecommunications5%
Other17%
U.S.IMPORTS$9.7B
$19.5B
$14.1B
$30.0B
30
US– MexicoagriculturaltradehasmultipliedbyfivesinceNAFTA
• Mexicoisthe3rd destinationforUSagriculturalproductsandits2nd largestsourceofimports
0
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 10.412.215.6
12.514.017.8
18.7 18.019.317.518.0
3.1 3.4 4.44.4 4.8 5.4 5.6 6.0 6.1 6.3 7.2 8.2 9.3
10.511.3
12.012.4
14.7
17.117.7
19.221.122.824.8
USExportstoMexico USImportsfromMexico
$ Billion
6.5
14.813.413.112.110.910.8
9.59.57.77.8
20.918.3
16.3
23.527.6
24.928.7NAFTA
34.9
U.S.-MexicoAgriculturalTrade
37.2
Source:USDOC.Agriculturalproductsincludechapters1– 24HS
36.6
40.4 40.3
31
42.8
ExportstoMexico:millionsofUSdollars ImportsfromMexico:millionsofUSdollars
California– Mexicotradebymainproducts
Product 2016
MotorCars&VehiclesforTransportation
9,203
TVRecorders 3,719
MotorVehiclesfor TransportofGoods
3,004
AutomaticDataProcessMachines
2,180
Medical,surgical,dentalproducts
1,877
FreshFruit 1,261
Parts for MotorVehicles 1,056
SemiconductorDevices 1,052
Product 2016
Parts for MotorVehicles 1,186
ElectricApparatusforLineTelephony
1,058
OilfromPetrol& Bitrum 814
ElectronicIntegratedCircuits 801
Motorcars&Vehicles 615
AutomaticDataProcessMachines
587
Medical,surgical,dentalproducts
535
Electrical Apparatus 453
Source:wisertrade.org(2016),4-digitHTSClassificationSystem
Cross-bordertradefacilitationSetaconcretegoalforreducingthemaximumtimeforcrossingtheborder– somehaveevengoneasfarassuggestingamaximumcrossingtimeof30minutes.
• Borderinfrastructure:Todevelopstrategiccorridorstolinkmajorindustrialclustersonbothsidesoftheborder.
• Borderregulation:toharmonizecustomsproceduresandrequirements.
1millionpeopleand300thousandvehiclescrossingtheborderdaily.
1milliondollarsinproductsaretradedeveryminutealongtheborder.
$15.8
$10.3
$91.6
$38.5
$106.3
$18.4
$28.2
$455billion
bilaterallytradedbysurface
U.S.– MexicoTradebyMainPOEsValuebyallsurfacemodesin$billion,2015
Source:SE-WashingtonwithdatafromUSDOT,BTS33
34
UStimelinefornegotiationusingTPA
NotificationtoCongress
90dayspriortothestartofthenegotiation
StartoftheNAFTAmodernization
Conclusionnegotiation
PublicationoftheConsultativeGroup
reportbyUSTR
30daysafternotificationofintenttosign.
Signing
SubmissiontocongressbytheExecutiveofthelistofnecessaryamendmentstothelegislation
60daysafterthesignature
PublicationoftheUSITCreportontheimpactoftheagreement
Between90and105daysaftersigning
ImplementingbillsubmissiontobothSenate
andtheHouse
ReportbytheHouseWaysandMeans
Committee
45days 15days 15days 15days
VoteintheHouseofRepresentatives
ReportbytheSenateFinanceCommittee
VoteinheSenate
ReporttotheCongresswherebythePresidentdeterminesthattheother
partyhastakenthenecessarymeasurestocomplywiththe
Agreement.
30dayspriortoentryintoforce
Negotiation Reports Congressionalapprovalandimplementation
90daysofsession,bothcamerasmustworksimultaneously
Executive- CongressConsultations
PublicationoftheUSTRreportonthespecificobjectivesoftheAgreement
30daysbeforethestartoftherenegotiation
ConsultationswithallcongressionalcommitteeswithjurisdictionovertheagreementandcompliancewithTPA2015objectives,policiesandpriorities.
Priortosigningtheagreement
PublicationofthetextoftheAgreementbyUSTR
60dayspriortosignature
Submissionofdraftbill,administrativeactionsandsupportmaterials
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