Merchandise trade between the United States and Mexico has increased exponentially since the North American Free Trade Agreement (NAFTA) went into effect.
Mexico increased its product exports to the United States by 6.1% last May, to US$43,881 million, the Census Bureau reported this Wednesday.
In contrast, Canada's corresponding exports decreased 2.8%, to US$35,669 million, and China's decreased 2.3%, to US$35,037 million.
Merchandise trade between the United States and Mexico has increased exponentially since the North American Free Trade Agreement (NAFTA) went into effect, and U.S. imports from Mexico have increased faster than U.S. exports.
In this way, the merchandise trade balance went from a surplus of US$1.7 billion in 1993 (the year before NAFTA came into force) to a deficit that reached US$152.5 billion in 2023.
In May 2024, US exports of goods to Mexico were US$29,088 million, an increase of 6.4% over the same month in 2023.
Towards the Canadian market, sales of products from the United States totaled US$30,285 million, which represents a decrease of 2.2% year-on-year.
From that same origin, shipments to China grew 3.4% last May, to US$ 11,061 million.
Consequently, Mexico remained the United States' first partner in product trade that month, with a market share of 16%, followed by Canada (14.8%) and China (10.4%).
Also as a result of the previous trade flows, the United States recorded a trade deficit with China of US$23,976 million, while with its two neighbors it reported negative balances of US$14,793 million with Mexico and US$5,384 million with Canada.
But all these data do not show the added value in the exports of each of the countries, which would show that there is greater integration in the supply chain between the countries of North America compared to that between the United States and China. .
As an example, an analysis released by the Federal Reserve shows that the data does not say what the supply chain link is that indicates how American auto parts are placed in the cars that Mexico returns to its northern neighbor.
The data that would say something about integration in the NAFTA region is exactly what is missing. The reason this is so difficult to charge or resolve is because Mexico also ships cars to other places, like Germany.
The current approach is to assume that at the industrial level in a given country, everything is produced in exactly the same way. For example, for this exercise we must assume that of all the auto parts that Mexico purchases, 40% come from the United States.
If 40% of all auto parts in Mexico come from the United States, and if every Mexican car is produced the same way, that means that every time Mexico ships a car to consumers in the United States, that car will have 40% parts. Americans.
Every time Mexico sells cars to Germany, these cars have 40% American parts.
International trade is much more complicated because there are products that cross borders several times.
