Mexico Explains Trade Deficit With U.S

Mexico’s government filed an 11-page report to the U.S. Commerce Department trying to explain the U.S.-Mexico trade deficit, saying in large part it is because of the massive supply chains that have formed as a result of NAFTA."Mexico is the main supplier for many U.S. industries, and this supplier relationship naturally creates trade deficits," Mexico said in its comments. "Imports from Mexico enable U.S. manufacturers to remain competitive in global markets, enhancing their ability to export to other countries and to provide American consumers with high quality goods at more competitive prices."A revival in U.S. manufacturing was also cited by the Mexican government’s in boosting its trade deficit — from $54.6 billion in 2013 to $63.2 billion in 2016. The development, Mexico said, fed demand for more intermediate goods to be used to make larger, finished products in the U.S. Some 75 percent of Mexican exports to the U.S. are inputs to the U.S. production process, the report detailed.Mexico defended NAFTA's impact on jobs in the U.S., stating that U.S. manufacturing employment grew in the first seven years of NAFTA, but only started declining after China's entry into the WTO. "American manufacturing jobs depend on Mexican manufacturing jobs and vice versa, since workers on both sides of the border work together in the production of goods to successfully compete in global markets," the comments noted.