Impact of Bilateral Trade on North America`s Economy

U.S. – Mexico Trade Relationship
May 2016
1
I. Mexico’s Trade and Economic Outlook
II. US – Mexico Trade Performance
III. Asia‐Pacific Markets
IV. Bilateral Initiatives for Further Economic Integration
V. Enhancing Economic Growth
2
Mexico is a growing economy
 Mexico has also built a solid framework for macroeconomic stability in the past two decades
Total Exports
$381 billion
 $1.2 trillion economy
 $776 billion in total trade
 $425 billion in FDI attracted since 1999
 125 million consumer market/ 60% middle class
GDP
1.3%
2013
 The 15th largest world economy
 10th largest world exporter and 1st in Latin America
 9th largest world importer
 5th leading recipient of FDI among emerging economies 2.3%
2.5%
2.6%
3.6%
2014
2015
2016e
Total Imports
$395 billion
Source: INEGI, SE‐DGIE (Feb. 2016), WTO, UNCTAD, Brookings Institution, SHCP. e/ Estimate by SHCP Pre Criterios de Politica
Economica 2016 (Apr, 2016)
3
Mexico’s network of trade agreements
 FTAs with 46 countries which account for 70% of world GDP, two‐thirds of global imports and a billion consumers.
Norway
Sweden
Iceland
Canada
Denmark
South
Korea
Finland
Estonia
United
States
United
Kingdom
Netherlands
Lithuania
Germany
Ireland
Liechtenstein
Poland
Czech Rep.
Belgium
Cuba
Japan
Austria
Honduras
Luxembourg
El Salvador
Australia
Colombia
Costa Rica
In 2015, the TPP negotiations concluded successfully Croatia
Bulgary
Switzerland
Spain
France
Slovenia
Italy
Panama
Mercosur
Peru
Slovakia
Romania
Portugal
Nicaragua
Guatemala
Latvia
Malta
Greece
Israel
11 FTAs
Brazil
Chile
Uruguay
Argentina
46 countries
28 BITs
9 ALADI Agreements
4
Mexico’s ongoing trade negotiations
• TPP is currently the most important plurilateral trade initiative
 The 12 current member’s economies will create a combined market of over 780 million 
inhabitants, total exports of $4.3 trillion, and a trans‐pacific $27.5 trillion output.
High‐standard agreement.
• EU – Mexico trade agenda: deepening FTA
 Investment: Negotiate a single agreement for the promotion and protection of investments.
 Agricultural sector: Inclusion of sensitive agricultural and fishery products, recognition of geographical denominations of agricultural products.
 Services: Further liberalization to the foreign investment in financial services, telecommunications, environmental services and energy.
• FTA’s
 Mexico is negotiating FTAs with Turkey and Jordan, and modernizing and expanding a trade agreement with Brazil.
• Trade in Services Agreement (TISA)
 50 countries participate in the negotiations, representing 70% of the world’s trade in services.
5
I. Mexico’s Trade and Economic Outlook
II. US – Mexico Trade Performance
III. Asia‐Pacific Markets
IV. Bilateral Initiatives for Further Economic Integration
V. Enhancing Economic Growth
6
Recognizing the importance of NAFTA  It has created a thriving regional market of 480 million people and a combined GDP of over $20 trillion.
 Trilateral trade has more than tripled, reaching $1 trillion in 2015.
Trilateral Trade between the NAFTA Partners
1,122
1,075
1,033
1,059
1,010
1200
1000
800
846
NAFTA
$ Billion
568
600
289
338
376
942
880
772
661
400
893
419
699
699
615 602 626
476 506
200
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mexico‐Canada Trade
U.S.‐Canada Trade
Source: SE with import data from Statistics Canada, Banxico, and USDOC, and World Bank. Mexico‐U.S. Trade
7
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
494 506
500
461
400
332
NAFTA
$ Billion
300
247
200
131
82 101
100
108
74
157
173
86 95
197
110
233 231
235
136 131
134 138
267
348
156
170
278 280 294 295
305
290
198 211
392
367
263
230
216
177
163
134 137 152 129
120
111
111
102
97 97
71 79 87
42 51 46 57
40
0
534 531
50 62
198 217
226 240 236
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
US Exports to Mexico
US Imports from Mexico
Source: USDOC. 8
Mexico is the U.S.’s second‐largest export market and third‐largest supplier of goods  U.S. exports to Mexico reached $236 billion last year, which represents more than 15.7% of its sales worldwide.
 U.S. imports from Mexico reached $295 billion. Mexico has a market share of 13.1% on US total imports.
U.S. Exports 2015
U.S. Imports 2015
236
Mexico
Mexico
295
182
BRICS
UK, Germany,
France & Italy
153
Hong Kong, Taiwan,
Singapore, & South
Korea
135
Billion dollars
Source: USDOC . BRICS includes Brazil, Russia, India, China, and South Africa
Japan, South
Korea, Taiwan &
Singapore
262
UK, Germany,
France & Italy
274
Billion dollars
9
US – Mexico Trade is not only large, but also diversified…
2015 US‐Mexico Trade by Sector
US imports from Mexico
US exports to Mexico
Transportation equipment
33.5
97.6
Computer & electronic products
58.1
43.2
Electrical equipment
16.6
25.4
Machinery
US – Mexico Trade
2015 Annual value change in billions
Electrical
equipment
$22.3
$2.1
$9.5
$10.7
‐$21.5
Electronics
Chemicals
5.5
Primary metal manufacturing
10.6
8.5
Fabricated metal products
10.7
7.9
Processed foods
10.1
Agricultural products
10.1
6.7
Oil refined products
1.1
Oil & gas and
refined
products
15.4
Plastics
10.7
4.9
Oil & gas
12.5
Source: SE‐Washington with data from USDOC
22.8
6.9
Transportation
equipment
19.9
17.3
2.9
Billion of US dollars
10
… highly integrated, strengthening supply chains in key industries
ELECTRIC‐ELECTRONIC
 $143 billion dollars in electrical and electronic equipment are traded between Mexico and the US per year.
 Mexico is the leading home appliance exporter in Latin America, and the 6th globally.
 Leading flat television screen exporter in the world.  The second refrigerator exporter.
AUTO & AUTO‐PARTS
 Mexico is the 7th largest producer and 4th
exporter globally of new light vehicles in the world.
 $131 billion dollars in cars and parts are traded between Mexico and the US annually.
 11% of light vehicles sold in the US were produced in Mexico.
 Mexico is the main auto parts supplier to the US.  The Mexican auto parts industry became the 5th largest in the world.
Source: SE with data from Brookings Institution, US Census Bureau, Banxico, and Comtrade.
11
Mexico is a strategic production partner for U.S. goods and exports worldwide
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.
U.S. exports also benefit from Mexico’s network of free trade agreements with 46 countries, providing preferential market access to 70% of world GDP and two‐thirds of global imports.
MEXICO
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)
12
U.S.‐Mexico trade in services has doubled since 1999
US‐Mexico Trade in Services
US Exports
US Imports
$49.5 B
Other
16%
Financial services
5%
Royalties
10%
$23.8 B
US Exports
Telecomm
unications
3%
Travel
52%
Transport
14%
$19.5 B
US Imports
$9.7 B
$30.0 B
$14.1 B
1999
2015
Telecomm
unications
5%
Financial services
2%
Transport
11%
Royalties
3%
Source: USDOC with data from BEA. Financial services include financial and insurance services, telecommunications include IT services, royalties include charges for the use of intellectual property. Other
17%
Travel
62%
13
Mexico has become a magnet for investment
 The U.S. is Mexico’s #1 source of foreign direct investment, accounting for nearly 50% of total FDI.  More than 61,000 companies in Mexico have FDI.
47% of FDI in manufacturing Accumulated FDI in Mexico
Billion dollars
U.S.
Others
397
282
238
306
426
372
326
256
209
130
32
62
86
155
176
105
Expanding market access to the world will also increase U.S. FDI’s rate of return 14
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Mexico’s Ministry of the Economy. 14
Mexican companies are also investing and creating jobs across the U.S.
Mexican‐owned companies operate more than 6,500 business establishments in the U.S.,
 Employing more than 122,000 workers
The U.S. is the main destination for Mexican FDI, with Mexican companies investing over $43 billion
Mexican companies in the U.S. (density) Bimbo
GCC
Cemex
Industrias CH
Grupo Alfa
Grupo Mexico
Mexichem
La Costeña
Sanluis Rassini
Cinepolis
Metalsa
Softtek
Katcon
Chedraui
Kaltex
Lala
Kuo
Bachoco
Bio‐Pappel
Grupo Bal
IUSA
Gruma
Banorte
Minsa
Lamosa
Source: SE‐Washington with information from iMap 2015. FDI figure from Bilateral FDI Statistics 2014 by the UNCTAD, using a historical‐cost basis 2012
15
6 million U.S. jobs depend on trade in goods and services with Mexico U.S. Employment Related to Trade in Goods and Services with Mexico
(Jobs in thousands)
WA
ME
VT 14.4
128.3
OR
ID
75.6
ND
MT
20.6
MN
15.6
117.4
29.8
WY
CA
#REF!
111.2
IL
40.6
#REF!
MO
KS
59.3
#REF!
692.2
NM
#REF!
64.8
CO
105.8
AZ
381.2
175.2
UT
54.9
MI
IA
NE
53.6
NY
WV 30.3
117.7
12.3
NV
WI
SD
18.0
OK
27.7
68.5
119.8
AR
51.4
36.2
TX
#REF!
LA
#REF!
463.1
IN
252.9 120.8
KY
PA
#REF!
246.4
OH
#REF!
DE
224.5
VA
75.6
NH 28.5
MA 142.6
RI 20.4
CT 74.5
NJ 174.3
MD 115.5
161.4
NC
#REF!
183.4
122.1 TN
#REF!
85.8
MS
AL
50.0
86.2
GA
SC
186.2
83.2
FL
AK
342.1
14.8
HI
29.4
Greater than 200
100 - 199
50 - 99
Less than 50
Source: Jobs figures are from 2008, according to Trade Partnership Worldwide LLC/ U.S. Chamber of Commerce, 2010 as reported by the Mexico Institute, Woodrow Wilson International Center for Scholars in “Working Together: Economic Ties Between the United States and Mexico”.
18.3
16
Mexico is an important export destination for each U.S. state
Mexico ranks among the top 3 export markets for 33 states
Mexico’s Share in U.S. Exports by State 2015
WA
VT 6.7%
2.2%
OR
MT
2.9%
ID
2.0%
ND
7.6%
11.9%
6.1%
WY
1
CA
UT
5.2%
CO
6.4%
2
2
#REF!
16.2%
1
AZ
1
#REF!
40.6%
Ranking
17.0%
OK
2
44.6%
1
10.7%
TX
#REF!
37.6%
More than 15%
Between 10% and 15%
Less than 10% 1 2 3 Mexico’s rank as an export market for the state
Source: SE‐ NAFTA with data from Wisertrade.
15.9%
MO
2
NM
2
19.2%
KS
13.5%
2
IA
3.8%
20.9%
#REF!
OH
IL
PA
10.6%
2
2
IN
#REF!
12.8%
14.3% 14.3%
3
VA
6.8%
8.1%
2
14.2%
MS
10.5%
#REF!
LA
11.8%
2
2
3
KY
2
TN
#REF!
2 14.8%
AL
14.5%
GA
2
2
NH 12.5%
MA 10.4% 2
RI 8.5% 2
CT 8.6%
NJ 8.2% 2
DE
2
2
2
18.6%
AR
NY
WV 3.2%
MI
13.2%
2
NE
2
WI
23.8% SD
2.5%
NV
2.2%
2
MN
2
ME
10.6%
2.7%
MD 4.4%
NC
7.9%
SC
9.0%
3
FL
5.0%
3
17
Missouri‐ Mexico Trade Relationship
• In 2015, trade between Missouri and Mexico surpassed $5.6 billion
• Mexico is Missouri’s 2nd largest export market
Source: wisertrade.org (2015)
Exports: $2.4 billion
Imports: $3.2 billion
18
Missouri – Mexico trade by industry Top Export Industries to Mexico $907 M
Transportation Equipment
10%
$236 M
$245 M
Machinery
10%
Other
36%
Processed Food
18%
$438 M
$243 M
Primary Metal Agricultural Manufacturing
Products
10%
16%
$403 M
Top Import Industries from Mexico
$1.1 B
Transportation Equipment
36%
Source: wisertrade.org (2015), NAICS
Electrical Fabricated Equipment, Metal Products appliances and 5%
component
25%
$168 M
$806 M
$574 M
$167 M
Other
18%
Machinery
10%
Computer and Electronic Products
5%
$331 M
19
Missouri's Exports to Mexico since NAFTA



528.3% increase in Missouri's exports to Mexico under NAFTA
All‐time high set for Nebraska's exports to Mexico in 2015
Mexico accounted for 18.2% of Missouri’s exports worldwide in 2014
1,257
1,281
2,005
1,822
119,793 jobs in Missouri's depend on trade with Mexico
1,228
1,166
1,441
1,304
1,354
1,327
1,034
947
597
504
394
479 570
426
685 673 694 749
555
Missouri’s Exports to Mexico
(In millions of dollars)
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Sources: wisertrade.org (2015), jobs figures are from 2008 as reported by the Wilson Center’s Mexico Institute.
20
Missouri – Mexico trade by main products
Exports to Mexico: millions of US dollars Imports from Mexico: millions of US dollars Product
2015
Soybean Oilcake & Other Solid 258
Residue
Electric Motors And Generators 449
Corn 219
Parts for Motor Vehicles 430
Soybeans 153
Tractors
280
Beer Made From Malt 141
Spark Ignition Reciprocating Engines
224
Refined Copper & Alloys 127
Seats & Parts 217
Parts for Motor Vehicles 102
Space & Soil Heaters
97
Cleaning Appliances 72
89
Parts Of Electric Motors
65
Telephony Line for Electric Apparatus Motor Vehicles for Transportation of Goods
62
Air Conditioning Machines 87
78
Electrical Apparatuses 37
Springs & Leaves For Springs, Iron Or Steel Electrical Apparatuses 63
Product
Source: wisertrade.org (2015), HTS 4 digit code
2015
21
Mexican investment supports jobs in Missouri
• Mexican companies operate 138 business establishments in Missouri and provide 1,481 local jobs.
(Dura‐line)
(Mid Continent Steel & Wire)
(Cambridge‐Lee Ind.)
Sources: SE‐NAFTA with data from iMapData as of December, 2015.
22
Kansas‐ Mexico Trade Relationship
• In 2015, trade between Kansas and Mexico surpassed $2.8 billion
• Mexico is Kansas’s 2nd largest export market
Source: wisertrade.org (2015)
Exports: $1.8 billion
Imports: $1 billion
23
Kansas – Mexico trade by industry Top Export Industries to Mexico $135 M
$201 M
Chemicals
7%
Other
$319 M
Machinery
4%
Agricultural Products
29%
$519 M
$74 M
Transportation Equipment
31%
Food and Kindred Products
18%
$560 M
Top Import Industries from Mexico Electrical Equipment
3%
$28 M
Transportation Equipment
66%
$673 M
Source: wisertrade.org (2015), NAICS
$106 M
$89 M
Machinery
Other
10% 9%
$85 M
Goods Returned to Canada
8%
Chemicals
3%
$32 M
24
Kansas’s Exports to Mexico since NAFTA



539.4% increase in Kansas’s exports to Mexico under NAFTA
All‐time high set for Nebraska's exports to Mexico in 2015
1,813
1,784
Mexico accounted for 17% of Kansas’s exports worldwide in 2014
1,533
1,621
1,397
59,341 jobs in Kansas's depend on trade with Mexico
955
1,437
1,281
1,208
916
855
661
437
284
391 316
380 418 382
523
547
601 644
Kansas’s Exports to Mexico
(In millions of dollars)
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Sources: wisertrade.org (2015), jobs figures are from 2008 as reported by the Wilson Center’s Mexico Institute.
25
Kansas– Mexico trade by main products
Exports to Mexico: millions of US dollars Imports from Mexico: millions of US dollars Product
2015
Product
2015
Civilian Aircraft & Parts 304
Parts of Aircraft
198
Corn
212
Parts for Motor Vehicles 192
Aircraft & Spacecraft Vehicles 182
134
Wheat And Meslin
173
Spark Ignition Reciprocating Engines
Soybeans
119
Insulate Wire & Fiber Cables 76
Meat Of Bovine Animals, Fresh
111
Fats, Bovine, Sheep Or Goat
59
Carbonates Expts Of Repaired Impts; Impts 70
Of Returned Expts
Tractors 55
39
37
Parts For Machinery Of Headings Trailers 37
Synthetic Filament Yarn 28
Cereal Grains
25
Centrifuges for Liquids or Gases 24
Motor Vehicles for
Transportation of Good
19
Source: wisertrade.org (2015), HTS 4 digit code
26
Mexican investment supports jobs in Kansas
• Mexican companies operate 79 business establishments in Kansas and provide 637
local jobs.
Sources: SE‐NAFTA with data from iMapData as of December, 2015.
27
I. Mexico’s Trade and Economic Outlook
II. US – Mexico Trade Performance
III. Asia‐Pacific Markets
IV. Bilateral Initiatives for Further Economic Integration
V. Enhancing Economic Growth
28
TPP is currently the most important plurilateral
trade initiative
• TPP will substantially boost the 12 current member’s economies by enhancing access to a thriving combined market of over 780 million inhabitants and a trans‐
pacific $28 trillion output. GDP 2014
 High‐Standard
Agreement
Billion dollars 17,418
United States
4,616
Japan
1,788
Canada
TPP members combined exports surpassed $4.3 trillion  21st Century
Agreement
Australia
1,444
Mexico
1,282
Malaysia
327
Singapore
308
Chile
258
Peru
203
New Zealand
182
Vietnam
171
16
Brunei
0
Source: WTO and IMF. 2000
4000
6000
8000
10000 12000 14000 16000 18000
29
TPP economic importance
(2014)
2.4
949
53.8
CANADA
2.4
USA
4,033
MEXICO
12 TPP Members| 35% of World GDP | 25% of trade| 11% of the population| 28% of FDI attraction JAPAN
‐0.1
2
Mexico | 85% exports | 59% imports | 72% trade 55%
sources of FDI
6.0
92.3
9.2
VIETNAM
300
‐2.3
6.0
MALASIA
2.1
798
24
PERU
2.4
7.6
IMF
GDP real growth (%, 2014/2013)
WTO
2014 World Trade
(billion dollars) 10.7
82
Annual exports rate to Asia (2010‐2014) is more than double of that with NAFTA partners [16% vs. 7.5%]
UNCTAD
FDI 2014 (billion dollars)
FMI, October 2015
23
443
NEW ZEALAND
3.3
SINGAPORE
3.3
67.5
2.7
Year of accession
0.57
776
1.9
149
BRUNEI
14
2.9
CHILE
P4 (2006)
TPP 11 (2012)
TPP 8 (2008)
TPP 12 (2013)
1,506
51.8
AUSTRALIA
478
30
84
Increased trade with Asia‐Pacific
Trade Growth in Mexico
% Change 2000‐2015
575
600
Exports
Imports
500
424
400
300
200
217
216
129 127
184
163
113
121
50
70
100
0
World
FTAs
Source: SE‐Washington with data from INEGI
NAFTA
LATAM
EU
Asia‐Pacific
31
TPP: new model of trade agreements
Ambition, scope and standards never reached before
•
Defines new frameworks of competition, productivity
and competitiveness
•
Strengthens certainty in trade and investment flows;
•
Includes a new generation of disciplines
Strategic pillar for Mexico’s trade policy
32
Mexico at the forefront of trade policy
•Complements Latin American Integration
Latin •Consolidates trade preferences [Chile and America Peru]
North America
•Expands trade policy in the region •Access to 6 new markets* •Strengthens production integration and competitiveness in the North American region [US and Canada]
•Fosters NAFTA as an export platform to Asia‐Pacific
Asia‐Pacific
•Deepening market access to Japan
*Australia, Brunei, Malaysia, New Zealand, Singapore and Vietnam
33
I. Mexico’s Trade and Economic Outlook
II. US – Mexico Trade Performance
III. Asia‐Pacific Markets
IV. Bilateral Initiatives for Further Economic Integration
V. Enhancing Economic Growth
34
Challenges for the NAFTA Partners
 Expand NAFTA benefits to all sectors and
regions of the three countries.
 Streamline the integration of the three
economies.
 Develop new elements of competitiveness.
 Strengthen regional value chains.
 Efficient border management.
 Economic environment of increased
competition and growth.
35
Building a competitive North American Partnership: Bilateral initiatives
High Level Economic Dialogue 2015 plan: Vice President Biden hosted the January 6, 2015 meeting in Washington – the second cabinet‐level meeting of the dialogue –. It was an opportunity to take stock of the accomplishments between Mexico and US to date and establish new priorities for 2015.
 Energy and climate change cooperation.  Deepen regulatory cooperation.
 Strengthen and modernize the border.
 Increase educational exchanges and boost workforce development.
 Support transparency and anti‐corruption efforts
 Promote entrepreneurship and innovation.
 Promote investment.
 Promote women’s economic empowerment.
36
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. 1 million people and 300 thousand vehicles crossing the border daily.
1 million dollars in products are traded every minute along the border.  Border U.S. – Mexico Trade by Main POEs
Value by all surface modes in $ billion, 2015
$455 billion bilaterally traded by surface
$10.3
$28.2
$91.6
$15.8
$38.5
$106.3
Source: SE‐Washington with data from USDOT, BTS
infrastructure: To develop strategic corridors to link major industrial clusters on both sides of the border.  Border regulation: to harmonize customs procedures and requirements. $18.4
37
US ‐ Mexico border infrastructure is being expanded and modernized
Improving border infrastructure projects
 West Rail Bypass International Bridge connecting Matamoros and Brownsville, opened in August 2015.
• First rail open first new rail link in over a century.
 Tijuana Airport Pedestrian Facility, opened in December 2015.
• First project to join a site in the U.S. with a foreign airport terminal.
 The “Puerta Este” pedestrian crossing at the San Ysidro‐El Chaparral ports of entry, opened in August 2015.
 Guadalupe‐Tornillo Port of Entry at Cd Juarez‐El Paso, opened in February 2016. • A six‐lane bridge, two customs clearance modules, dedicated lanes.
 Veterans – Los Tomates International Bridge at Matamoros‐Brownsville
• Doubling traffic capacity, dedicated lanes
 Otay II border crossing in the Tijuana‐San Diego border region
• Doubling clearance capacity, trusted trader’s dedicated lanes
 Mariposa Port of Entry at Nogales, AZ
• Doubling northbound traffic capacity
38
Enhancing border flows of people and products
Mexico and the US have also fostered border crossing efficiency through seamless border operation along the supply chains.
 Trusted trader programs: U.S.’ CTPAT and Mexico’s NEEC, a WCO Authorized Economic Operator (AEO), MRA signed it in Oct 2014
• It includes fewer inspections when shipping cargo, a faster validation process, commons standards, efficiency for Customs and business.
 Trusted traveler programs: Viajero Confiable – Global Entry, operated since Dec. 2013
• Currently available at the airports of Mexico City, Cancun, and Cabo.
 Cargo pre‐inspection program: MOU signed in Oct. 2015
• Implementation of 3 six‐month pilot programs for commercial goods to reduce wait time and congestion at the ports of entry of Laredo International Airport, Mesa de Otay (Tijuana) for US‐bound agri‐products, and San Jeronimo (Cd Juarez) for US‐bound electronics (Foxxconn facilities).  Import / Export Single Manifest and declarations: • Implement a single, shared customs manifest for all transportation modes. The Single Rail Manifest (northbound) is operating at four crossing points. Truck Single Manifests for Truck, Air and Vessel will start in 2016.
39
Mapping US – Mexico economic clusters
To catalyze economic development in the border region, the United States works with Mexico on expanding the U.S. Cluster Mapping Project1 to map Mexican industrial, manufacturing, and financial communities through the Mexico‐United States Entrepreneurship and Innovation Council (MUSEIC).  Using interoperable asset mapping tools, US and Mexican companies will be able to make smart decisions about exports, imports, and investments based on assets across the border.
 A binational, compatible cluster map that identifies geographic concentrations of interconnected companies, suppliers, service providers, and associated institutions will contribute to better understand and shape the competitive landscape for a wide range of industries.  This data will provide with the information to make strategic investments, promote new companies, and lay the groundwork for new industries.
1\ The project is led by Harvard Business School's Institute for Strategy and Competitiveness in partnership with the U.S. Department of Commerce and U.S. Economic Development Administration in the U.S., and by INADEM’s Ministry of the Economy in Mexico.
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I. Mexico’s Trade and Economic Outlook
II. US – Mexico Trade Performance
III. Bilateral Initiatives for Further Economic Integration
IV. Asia‐Pacific Markets
V. Enhancing Economic Growth
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Ambitious domestic policies to strengthen economic competitiveness
Mexico continues its economic transformation that started over 20 years ago with the enactment of NAFTA through the implementation of structural reforms in such areas as:
 Economic reforms
• Labor
• Education
30% of Mexico’s GDP is now open to private investment
• Competition
• Energy
• Financial sector
• Telecommunications
 National Infrastructure Plan 2014‐2018
• $ 600 billion to better integrate Mexico to the global economy
 Regulatory improvement
• Eliminate red tape and enhance transparency, • Recognize equivalence of some U.S. standards,
• Expedite process to start a business (www.tuempresa.gob.mx).
 Trade facilitation
• Foreign trade regime simplification, including a single window for trade (www.ventanillaunica.gob.mx)
• Customs modernization.
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Structural reforms that will enhance Mexico’s productivity
The economic reforms will add to economic growth to Mexico’s GDP between 2015 and 2018:
• ENERGY
1.0%
 By expanding the supply of inputs at lower price for energy production.
 By increasing domestic financing to the private • FINANCIAL
0.4%
sector as a percentage of GDP of 25% in 2012 to 40% by 2018.
 By increasing the penetration of fixed lines, • TELECOMMUNICATIONS
0.3%
mobile services, Internet and broadband in Mexico in order to approach levels observed in developed countries.
 By introducing simplified procedures that • FISCAL
Source: Mexico’s Ministry of Finance (SHCP). 0.2%
stimulate the formalization of new entrepreneurs and informal businesses, the fulfillment of tax obligations, and the establishment of a more equitable tax regime.
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Mexico’s energy reform opens investment opportunities Oil & Gas
Upstream
 Exploration
 Production
Investment in pipelines
$13 billion
Midstream




Transport
Storage
Distribution
Liquefaction, regasification, compression and expansion
 Retail
 Integrated natural gas systems management
Downstream
 Oil treatment and refining
 Natural gas processing
 Oil products imports and exports
 Transport, storage, distribution, and retail of gasolines, diesel and LPG
Electricity
Wholesale Market
 Power generation
 Transmission
 Retail
Investment in 60 GW of new power capacity
$99 billion
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National Infrastructure Plan 2014‐2018
The Program seeks to consolidate Mexico as a major global logistics center to take full advantage of its privileged geographic location and network of FTAs.
743 projects
Investment Share
Source: SE‐NAFTA with data from Mexico’s Presidency Office
Transportation Goals
 3,000 km of highways expanded and modernized,
 Increase sea‐port cargo capacity from 280 million tons to 500 million tons per year,
 14 airports will be constructed, expanded and modernized, including the new Mexico City International Airport,
 Railways improvement and modernization to reduce travel time.
Increased private investment through PPPs
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Mexico’s competitive advantage
Coupled with these structural reforms, Mexico is working to fully unleash its competitive advantages:




Mexico ranks as the second largest economy in Latin America and
the fourteenth worldwide.
Mexico has competitive manufacturing costs and has been
consolidating itself as a leader in advanced manufacturing and
high‐technology.
Privileged location connecting the Atlantic and Pacific oceans, as
well as major consumer markets, making the country a natural
platform for exports and increasingly sophisticated manufacturing.
Mexico has a demographic bonus similar to that experienced in
Asia over the last two decades. The Mexican population is the real
driving force for development, and in Mexico 50% of its population
is 26 years or less.
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Kenneth Smith Ramos
Trade and NAFTA Office
SECRETARIA DE ECONOMIA
MEXICO
[email protected]
Kensmithramos
MX‐US Trade
www.naftamexico.net (202) 728‐1776
Washington, DC
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