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The North American Free Trade Agreement (NAFTA) has fostered this relationship by virtue of the agreement's comprehensive, market-opening rules. It is also creating a more equitable set of trade rules as trade barriers in Mexico are reduced and eliminated.
U.S.-Mexico Trade Facts
U.S. goods and private services trade with Mexico totaled an estimated $536 billion in 2012 (latest data available). Exports totaled $243 billion; Imports totaled $293 billion. The U.S. goods and services trade deficit with Mexico was $49 billion in 2012.
Mexico is currently our 3rd largest goods trading partner with $507 billion in total (two ways) goods trade during 2013. Goods exports totaled $226 billion; Goods imports totaled $280 billion. The U.S. goods trade deficit with Mexico was $54 billion in 2013.
Trade in private services with Mexico (exports and imports) totaled an estimated $42 billion in 2012 (latest data available). Services exports were $27 billion; Services imports were $15 billion. The U.S. services trade surplus with Mexico was $12 billion in 2012.
Mexico was the United States’ 2nd largest goods export market in 2013.
U.S. goods exports to Mexico in 2013 were $226.2 billion, up 4.7% ($10.2 billion) from 2012, and up 132% from 2003. It is up 444% since 1993 (Pre-NAFTA). U.S. exports to Mexico accounted for 14.3% of overall U.S. exports in 2013.
The top export categories (2-digit HS) in 2013 were: Machinery ($38.5 billion), Electrical Machinery ($36.7 billion), Mineral Fuel and Oil ($23.0 billion), Vehicles ($21.6 billion), and Plastic ($15.3 billion).
U.S. exports of agricultural products to Mexico totaled $18.1 billion in 2013, the 3rd largest U.S. Ag export market. Leading categories include: corn ($1.8 billion), soybeans ($1.5 billion), dairy products ($1.4 billion), pork and pork products ($1.2 billion), and poultry meat (excluding eggs) ($1.2 billion).
U.S. exports of private commercial services* (i.e., excluding military and government) to Mexico were $27.4 billion in 2012 (latest data available), 6.8% ($1.7 billion) more than 2011 and 57% greater than 2002. It was up 163% from 2003 (Pre-NAFTA). The other private services (business, professional and technical services and financial services), and the travel categories accounted for most of U.S. services exports to Mexico.
Mexico was the United States 3rd largest supplier of goods imports in 2013.
U.S. goods imports from Mexico totaled $280.5 billion in 2013, up 1.0% ($2.9 billion) from 2012, and up 103% from 2003. It is up 603% since 1993 (Pre-NAFTA). U.S. imports from Mexico accounted for 12.4% of overall U.S. imports in 2013.
The five largest import categories in 2013 were: Vehicles (cars, trucks and parts) ($59.6 billion), Electrical Machinery ($57.4 billion), Machinery ($42.6 billion), Mineral Fuel and Oil (crude) ($34.8 billion), and Optic and Medical Instruments ($10.7 billion).
U.S. imports of agricultural products from Mexico totaled $17.7 billion in 2013, the 2nd largest U.S. supplier. Leading categories include: fresh vegetables ($4.6 billion), fresh fruit (excluding bananas) ($3.1 billion), wine and beer ($1.9 billion), and snack foods (including chocolate) ($1.5 billion).
U.S. imports of private commercial services* (i.e., excluding military and government) from Mexico were $15.1 billion in 2012 (latest data available), up 8.8% ($1.2 billion) from 2011, and up 30% from 2002. It was up 104% from 2003 (Pre-NAFTA). Travel and other private services (business, professional, and technical services) accounted for most of U.S. services imports from Mexico in 2012.
The U.S. goods trade deficit with Mexico was $54.3 billion in 2013, a 11.9% decrease ($7.3 billion) over 2012. The U.S. goods trade deficit with Mexico accounted for 7.9% of the overall U.S. goods trade deficit in 2013.
The United States had a services trade surplus of an estimated $12.2 billion with Mexico in 2012 (latest data available), up 4.4% from 2011.
U.S. foreign direct investment (FDI) in Mexico (stock) was $101.0 billion in 2012 (latest data available), a 11.3% increase from 2011.
U.S. FDI in Mexico is primarily concentrated in the manufacturing, nonbank holding companies, and finance/insurance sectors.
Mexican FDI in the United States (stock) was $14.9 billion in 2012 (latest data available), up 14.0% from 2011.
Mexican direct investment in the U.S. is led by the manufacturing, banking and wholesale trade sectors.
Sales of services in Mexico by majority U.S.-owned affiliates were $37.6 billion in 2011, (latest data available), while sales of services in the United States by majority Mexico-owned firms were $4.9 billion.
*NOTE: Refers to private services trade not including U.S. military sales, direct defense expenditures and other miscellaneous U.S. government services.
TWO YEARS OF ENHANCED OPPORTUNITIES: THE U.S.-KOREA FREE TRADE AGREEMENT
March 15, 2014, marks the two-year anniversary of the entry into force of the United States-Korea Free Trade Agreement. In its second year, this landmark agreement continues to provide tangible benefits for American businesses, workers, and farmers exporting to our sixth-largest trading partner. In addition to the three rounds of tariff cuts and eliminations that have already taken place, the agreement has also expanded opportunities for our growing services trade, improved transparency in Korea’s regulatory system, strengthened intellectual property protection, and leveled the playing field for key U.S. exports, including automobiles. Despite headwinds resulting from the slowdown in the Korean economy over the past 2 years, U.S. goods and services exports combined are up 3.8% between 2011 (pre-FTA) and 2013.
More Exports to Korea of Made-in-America Manufactured Goods
U.S. manufacturing exports to Korea were up 3.1 percent – from $34.4 billion in 2011 to $35.4 billion in 2013. Exports of transportation equipment have experienced a significant increase – up 27.1 percent to $5.1 billion. Exports of electrical equipment, appliances, and components, such as air purifiers and compressors, also experienced gains of 22.5 percent to $1.3 billion; exports of pharmaceuticals were up 52% to $1.2 billion. While starting from a small base, sales of “Detroit 3” cars in Korea increased 40 percent, and overall U.S. passenger vehicle exports to Korea increased 80 percent. Thanks to the agreement’s groundbreaking provisions on non-tariff measures, such as motor vehicle safety standards, for the first time ever, U.S.-made tractor trailers are hauling steel in Korea.
More Exports to Korea of Grown-in-America Agricultural Products
U.S. exports of key agricultural products that benefited from the tariff cuts under the agreement continued to post significant gains, and in 2013 Korea was our fifth largest market for agricultural exports. For example, exports of tree nuts were up 51 percent to $300 million in 2013 as compared to 2011, and exports of soybean oil were up 119 percent to $40.5 million. Exports of prepared foods were up 25 percent to $270 million, and distillers grains exports were up 40 percent to $126.1 million. Exports of wine and beer were up 41 percent to $25 million, and dairy exports were up 35 percent to $301 million.
More Exports to Korea of Straight-from-America Services
U.S. services exports to Korea experienced robust growth since the entry into force of the agreement, and were up 25.3 percent to an estimated $20.5 billion in 2013 as compared to 2011. Royalties and license fees were up 63 percent to $7.3 billion, and travel services were up 22 percent to $4.5 billion. The United States’ private services trade surplus with Korea increased by 43 percent to $11.1 billion in 2013 as compared to 2011.
Under the agreement, Korea has opened up new areas for U.S. services providers and investors. The agreement has provided greater access to Korea’s market for U.S. express delivery services. Korea has also undertaken reforms to allow U.S.-based financial institutions in Korea to process data in their regional and global offices, which will enhance their efficiency and competitiveness. In addition, Korea now allows U.S. investors to wholly own Korean telecommunications operators, which has expanded opportunities for some of America’s most competitive sectors. Korea has also opened its legal services market, and over a dozen U.S. law firms are now offering their services to Korea’s increasingly global businesses.
More Exports through Elimination of Non-Tariff Barriers
Thanks to the agreement, there have been significant improvements to transparency in the Korean regulatory system, increasing opportunities for stakeholder input in the development of regulations in a wide range of sectors, including pharmaceuticals, information technology, motor vehicles, and financial services. For example, the agreement significantly lengthened public comment periods for proposed laws and regulations with potential impact on trade so that affected stakeholders can weigh in on the proposed measures.
The agreement also strengthened intellectual property protection, including by lengthening copyright terms and enhancing enforcement against violations of U.S. copyrights, patents, and trademarks.
The agreement leveled the playing field for American-made cars through innovative provisions allowing U.S. exporters to market cars in Korea built to U.S. safety standards rather than Korean standards, greatly reducing the cost of supplying U.S.-made autos to the Korean market. Under KORUS, Korea modified its motor vehicle taxes so that U.S. cars are in the same tax brackets as their Korean competitors. And transparency provisions in the agreement ensure that automakers have sufficient opportunity to participate in the setting of new regulations and time to adjust to changes.
Economic Factors Affecting U.S. Exports to Korea
Economic factors unrelated to the FTA have also affected U.S. exports to Korea. A slow-down in economic growth in Korea in 2012 and 2013 reduced demand for imports across the board, particularly from countries that did not have an FTA with Korea. This fall in U.S. exports of commodities, especially mineral fuels (primarily coal), which dropped by $1.0 billion). In addition, the severe drought in the United States in 2012 led to a steep decrease (of $1.7 billion) in U.S. exports of corn to Korea. Largely due to these two external factors, total U.S. goods exports to Korea were down 4.3 percent in 2013 compared to the same period in 2011 (pre-FTA). Excluding these two categories, whose changes are unrelated to the trade agreement, U.S. exports to Korea increased by 2.3 percent between 2011 and 2013, while Korea’s imports from Japan fell 12 percent and its imports from China fell 3.9 percent. As the Korean economy began to improve late in 2013, overall U.S. exports also began to increase, and beginning with October 2013 there have been four consecutive months in which total U.S. exports to Korea increased compared to the same month in the previous year.
Enforcement and Implementation
The obligations of the agreement are backed up by a strong dispute settlement mechanism. And, USTR has made full use of the consultations mechanisms set up under the agreement to ensure that Korea fully implements its obligations, and to provide a productive forum to resolve issues and increase cooperation. Since KORUS has been in force, 28 meetings of Committees and Working Groups established under the FTA have been convened, and the Ministerial-level Joint Committee has met twice.
* On March 19, 2014, this fact sheet was updated to reflect goods and services export growth to Korea*