Mexico and the United States Expand Relationship Through TPP

The United States and Mexico share a deep, longstanding relationship that goes far beyond diplomatic relations to include extensive commercial, cultural, and educational ties, with over $1.6 billion in two-way trade of goods and services and roughly one million legal border crossings each day.  Mexico is our second largest export market and third largest source of imports, with annual two-way trade of $580 billion, reflecting the highly integrated nature of our bilateral value chains.

These deep commercial ties not only make Mexico a favorable market for businesses to expand their operations, but they also make it an ideal first market for new exporters.  Mexico is a high-performing, diversified economy with strong macroeconomic fundamentals.  It provides significant opportunities for U.S. exporters in key sectors such as chemicals, automotive products, metals and ores, machinery, and information and communication technologies. In fact, more than 18,000 U.S. companies have operations in Mexico and more than 57,000 U.S. companies exported goods to Mexico in 2013. These goods exports supported over 952,000 U.S. jobs, and services exports supported an additional 192,777 U.S. jobs. In addition to these market opportunities, initiatives between our governments such as the U.S.-Mexico High Level Economic Dialogue promote mutual economic growth, job creation, and competitiveness.

Our commercial ties have been strengthened by new and existing trade agreements that allow companies to expand and compete in Mexico. The entry into force of the North American Free Trade Agreement (NAFTA) in 1994 created open markets, low tariffs, strong protections for intellectual property, low energy costs, a skilled work force, and integrated supply chains that resulted in U.S. exports of over $240 billion to Mexico in 2014. In fact, a full 40 percent of the content of Mexican exports is comprised of U.S. inputs. That means that of all the products that Americans buy that are manufactured in Mexico, an average of 40 percent of those products’ value-added components are made here in the United States.

The Trans-Pacific Partnership (TPP) represents a further step forward in strengthening our corridor and advancing our regional competitiveness, as the TPP will allow U.S. companies greater market access to 300 million consumers and the fastest growing region in the world in the Asia-Pacific. TPP will enable the strengthening of our global supply chains by providing U.S. exporters with preferential access to our 11 TPP partners and incentivizing stakeholders in North America to engage in greater and deeper integration. The TPP will go beyond NAFTA by adopting higher standards and stronger provisions in areas like e-commerce, anti-corruption, state-owned enterprises, intellectual property rights, small and medium-sized enterprises, environment, and labor.  It will also further expand business opportunities in key sectors such as energy, telecommunications, electronic commerce, financial services, and agribusiness.

Mexico’s sweeping reforms in energy, telecommunications, finance, and labor practices make it an increasingly attractive market for U.S. businesses to become more competitive, and the TPP will further complement these reforms. For further information on the export opportunities to Mexico under the TPP please see our Mexico TPP report. The U.S. Commercial Service team in Mexico stands ready to support your company with offices in Mexico City, Guadalajara, and Monterrey.  We look forward to hearing from you!

Leslie Wilson is the Mexico Desk Officer at the International Trade Administration

The following is a cross-post from Tradeology ITA's Blog.