$6.2 billion surplus in trade with the US

By Dumont

According to an article published by Bloomberg on November 27, 2020, Mexico recorded in October 2020 its highest trade surplus since at least 1984, as exports to the U.S. boomed while internal demand stayed weak.

The $6.2 billion surplus eclipsed analysts’ $3.4 billion projection, made in a Bloomberg survey. The national statistics agency reported a $4.4 billion surplus a month earlier.

“The United States has recovered much faster, almost in a V-shape, while the Mexican economy’s recovery has been quite slow,” said to Bloomberg Gabriela Siller, director of economic analysis at Grupo Financiero BASE. “80% of Mexican exports go to the United States, while imports depend on the state of the Mexican economy.”

The top three U.S. imports from Mexico were passenger vehicles, computers and motor vehicle parts. The top three U.S. imports by tonnage, were oil, pebbles, gravel, and gasoline, other fuels.

Mexico is currently US largest goods trading partner with $614.5 billion in total (two way) goods trade during 2019. Goods exports totaled $256.6 billion; goods imports totaled $358.0 billion in 2019. The U.S. goods trade deficit with Mexico was $101.4 billion in 2019.

In August 2017, Mexico entered into negotiations with the US and Canada seeking to update and rebalance the North American Free Trade Agreement (NAFTA), which had progressively eliminated tariffs and trade restrictions since 1994. The resulting United States–Mexico–Canada Agreement (USMCA) was signed on November 30, 2018, and it entered into force on July 1, 2020. The USMCA replaced NAFTA to modernize and rebalance Mexico trade relations with the US and Canada and to reduce incentives to outsource by providing strong labor and environmental protections, innovative rules of origin, and revised investment provisions. The agreement also brings labor and environment obligations into the core text of the agreement and makes them fully enforceable.