Mexico lowers its dependence on U.S. merchandise

The participation of the neighboring country in Mexican external purchases reached its lowest point since there is a record, falling to 45.6% in January-August of this year; in 2001 it reached its peak with 70.1%.

Of the total imports of products from Mexico from January to August 2019, the United States share as the origin of them was 45.6%, the lowest portion since it has a statistical record.

As a comparative point, in the whole of 2001, the United States share in Mexico’s total foreign purchases reached 70.1 percent.

As for China, it’s second-largest external supplier, Mexico slowed an upward trend. The Chinese portion reached an all-time high of 18% in all of 2016, but in the first six months of 2019, it was 17.9 percent.

However, unlike the United States, China’s trend in this indicator was growing in the previous full years in general terms, from a reduced share of just 2.4% in 2001.

Mexico was last year in the 12th position among the largest merchandise importers in the world, with external purchases of 464,268 million dollars, an increase of 10% compared to 2017.

In fact, Mexico ranked second in America, second only to the United States (2.6 billion dollars), and ahead of Canada (459,839 million dollars) and Brazil (181,230 million dollars).

Apart from the United States, five Asian countries (China, Japan, Malaysia, Taiwan, and India) stand out among the top 10 suppliers in Mexico, while among Europeans, Germany, Italy and Spain stand out. Canada and Brazil also occupy relevant positions.

At the same time, Mexico is positioned as the twelfth exporter in the world and has undergone an interesting transformation of its foreign trade in recent decades.

Its exports have multiplied by a little more than five times in the period 1995-2018, from a base of 79,540 million dollars in that first year.

However, according to Icex, the body that promotes international trade and investments in Spain, Mexico continues to drag some imbalances, such as the excessive concentration of its foreign trade in the United States, which is explained by the logical process of regional integration favored by the 3,000 km of border they share and the important relative weight that the maquila continues to maintain (import of inputs to assemble and export the finished product to the United States).

Currently, Mexico has a network of 13 free trade agreements with 50 nations, which allow it to be an important platform for both export and import.

In particular, it maintains a trade balance of surplus products with its main trading partner, the United States ($ 128.320 million in 2018), in contrast to the deficit balance it maintains with the European Union (-31.589 million dollars) and China ( -76.310 million dollars).

Crucial, trade liberalization

Mexico has liberalized its trade since the mid-1980s, especially since its accession to the GATT in 1986. Thus, currently, the degree of openness of its economy (exports plus imports between GDP) is around 60%, a level that compares favorably with that of other OECD countries.

Finally, Mexico is the most populous Spanish-speaking country in the world; 79% of its 125 million inhabitants live in urban areas; 10% of the population is considered rich; around 44% live in poverty, and the remaining 46% of the population is considered middle class. It has a very young population, with an average age of 28 years, and offers a large market with a GDP estimated by the International Monetary Fund of approximately 1.1 trillion dollars.

Source: el economista

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