After months of negotiations the United States and Mexico have replaced the previous NAFTA agreement with the United States – Mexico Trade Agreement. Canada was not part of the deal, they maybe added later, or not. The pressure is now on the Canadians.
After months of negotiations the United States and Mexico have replaced the previous NAFTA agreement with the United States – Mexico Trade Agreement. Canada was not part of the deal, they maybe added later, or not. The pressure is now on the Canadians.
American President President Trump headlines said the deal it is a really good agreement for both countries and called the Mexican President and congratulated him on the deal. Trump said we (U.S.) have not started with Canada yet, we wanted to see if deal with Mexico was possible first. It is clear that Trump is taking a hard line on Canada.
The U.S. President said Mexico promises to start immediate purchase as much farm products as possible with the Mexican President saying that he hopes that the part with Canada will materialize in a quick fashion. Trump aslo added that this is not the right time to talk to China about trade but eventually it will be the right time.
US trade Rep Lighthizer says the deal is likely to be signed in November and be sent to Congress on Friday. Canada for it’s part says: “Canada will only sign a new NAFTA that is good for Canada.” Which begs the response shouldn’t every country do that?
Canada Foreign Minister Freeland expected to arrive for talks in Washington shortly deal would increase US and regional content in autos to 75% from current 62.5%
New Deal Highlights via US trade official via Reuters:
- US and Mexico have reached a trade deal replacing NAFTA
- Expects talks with Canada entrée to accelerate on Monday and wrap up by the end of the week
- US-Mexico deal would see 40 – 45% of auto content made by workers earning average base wage of $16 per hour
- Mexico agrees to lift “de-minimis” duty-free shipment values to $100 from $50 in NAFTA bilateral accord.
- US/Mexico NAFTA included 10 years of data protection for biological drugs
There is still much work ahead with the deal needing to be ratified by congress, the Canadian element and future US elections in November.
US Mexico Trade Facts via USTR
Exports
- Mexico was the United States’ 2nd largest goods export market in 2017.
- U.S. goods exports to Mexico in 2017 were $243.3 billion, up 5.8% ($13.3 billion) from 2016 and up 79.0% from 2007.
- U.S. exports to Mexico are up 485% from 1993 (pre-NAFTA).
- U.S. exports to Mexico account for 15.7% of overall U.S. exports in 2017.
- The top export categories (2-digit HS) in 2017 were: machinery ($43 billion), electrical machinery ($41 billion), mineral fuels ($27 billion), vehicles ($21 billion), and plastics ($17 billion).
- U.S. total exports of agricultural products to Mexico totaled $19 billion in 2017, our 3rd largest agricultural export market.
- Leading domestic export categories include: corn ($2.7 billion), soybeans ($1.6 billion), pork & pork products ($1.5 billion), dairy products ($1.3 billion), and beef & beef products ($979 million).
- U.S. exports of services to Mexico were an estimated $32.9 billion in 2017, 3.8% ($1.2 billion) more than 2016, and 31.6% greater than 2007 levels. It was up roughly 216% from 1993 (pre-NAFTA).
- Leading services exports from the U.S. to Mexico were in the travel, transport, and intellectual property (computer software, industrial processes) sectors.
Imports
- Mexico was the United States’ 2nd largest supplier of goods imports in 2017.
- U.S. goods imports from Mexico totaled $314.3 billion in 2017, up 6.9% ($20.3 billion) from 2016, and up 49.1% from 2007.
- U.S. imports from Mexico are up 687% from 1993 (pre-NAFTA).
- U.S. imports from Mexico account for 13.4% of overall U.S. imports in 2017.
- The top import categories (2-digit HS) in 2017 were: vehicles ($84 billion), electrical machinery ($62 billion), machinery ($54 billion), optical and medical instruments ($14 billion), and mineral fuels ($11 billion).
- U.S. total imports of agricultural products from Mexico totaled $25 billion in 2017, our largest supplier of agricultural imports.
- Leading categories include: other fresh fruit ($6.0 billion), fresh vegetables ($5.5 billion), wine and beer ($3.3 billion), snack foods ($2.1 billion), and processed fruit & vegetables ($1.5 billion).
- U.S. imports of services from Mexico were an estimated $25.5 billion in 2017, 5.8% ($1.4 billion) more than 2016, and 66.2% greater than 2007 levels. It was up roughly 243% from 1993 (pre-NAFTA).
- Leading services imports from Mexico to the U.S. were in the travel, transport, and technical and other services sectors.
Trade Balance
- The U.S. goods trade deficit with Mexico was $71.0 billion in 2017, a 11.1% increase ($7.1 billion) over 2016.
- The United States has a services trade surplus of an estimated $7.4 billion with Mexico in 2017, down 1.3% from 2016.
Source: USTR, Reuters
From the TradersCommunity News Desk