CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Mexico Discusses US Trade Deficits Ahead Of NAFTA Review

Mexico Discusses US Trade Deficits Ahead Of NAFTA Review

by Mike Godfrey, Tax-News.com, Washington

12 May 2017


The Mexican Government has responded to the United States' request for comments on its investigation into trade deals wherein the US runs significant trade deficits.

In its response, the Government argued that tariff rates are unlikely to be the reason behind the US running a "moderate" trade deficit under the North America Free Trade Agreement with Mexico and Canada. He cited a recent article from the Peterson Institute for International Economics which said "tariffs and trade barriers have little or no correlation with trade deficits." It noted fiscal deficits and currency manipulation (to depreciate foreign currencies) have a strong and positive correlation with trade deficits.

Nevertheless, the Mexican Government said that, under NAFTA, US exporters have gained significant tariff preferences. "Without NAFTA," the Mexican Government said, "the average tariff on Mexican exports to the United States under the Most Favored Nation (MFN) treatment would be 3.5 percent, whereas the average tariff on US exports to Mexico would be 7.1 percent. Moreover, Mexico's bound rates under the WTO average 36.2 percent, well above its applied MFN tariffs; while US bound rates average 3.5 percent, virtually the same as its applied MFN tariffs. Therefore, NAFTA not only provides certainty to US exporters regarding applied tariffs, it also protects them from much larger potential tariff increases in Mexico."

Concluding, the Government said NAFTA has fostered a symbiotic relationship, with Mexico enabling the US manufacturing industry, rather than substituting it. It cited the automotive, electronics, agriculture, and energy industries as examples of where Mexico and the United States have developed mutually beneficial supply chains that have boosted both countries' competitiveness.

TAGS: energy | tariffs | Mexico | manufacturing | United States | trade | North America | Economy

To see today's news, click here.

Leave a comment

Read our Posting Guidelines

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 






Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Tax-News+ Updates

Receive FREE daily updates from Tax-News.com, straight to your inbox. Register Now!

For a tailored solution, choose to receive selected news updates for your preferred jurisdictions and topics, with our enhanced Tax-News+ subscriber service. Read more...

 

Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »