Exports from Mexico to the US grow, but fall to Latin America and the European Union

Factors such as the trade tensions between China and the United States and the lower demand for goods exported by Latin America were the main causes for exports between the countries of the region to stop its uninterrupted growth for 27 months, falling 1.6 percent during the first quarter of the year.

While Mexico's foreign sales remained on positive territory, they sufficed a sharp slowdown between late 2018 and early 2019. Image: Pixabay
While Mexico's foreign sales remained on positive territory, they sufficed a sharp slowdown between late 2018 and early 2019. Image: Pixabay

According to Trade Trends Estimates, prepared by the Inter-American Development Bank (IDB), Mexico's exports to Latin America and Europe plummeted 15.5 and 4.0 percent, respectively, while shipments to the United States and China advanced 3.9 and 2.0 percent.

While Mexico's exports remained on positive territory, they suffered a sharp slowdown between late 2018 and early 2019, as the cumulative year-on-year rate between January and March was 2.3 percent. For the IDB, in addition to the tensions, shipments also fell due to the accumulation of inventories, which together with the renegotiation of the T-MEC, exports slowed, even for Latin America.

In other words, Mexico's export performance, determined by a marked slowdown in volumes, ceased to support the aggregate regional result, as had been presented during the previous year.

Nevertheless, the IDB maintains that Mexico and Chile were the only countries in the region that showed improvements in the performance of real exports, since our country, in 2017, the expansion of volumes was 8.0 percent, and in 2018 was 9.0 percent. While Chile reversed last year's 2 percent retraction and expanded export volumes by 7.0 percent in 2018.

Data from the Ministry of Economy (SE) detail that the trade balance of Mexico in 2018 fell more than 13,617 billion dollars, ie exports were in excess of 450,684 billion dollars, while imports were more than 464,302 billion dollars.

Also, data from the Inter-American Development Bank (IDB) detail that the rate of expansion of Mexico's exports accelerated in 2018 compared to 2017 (11.5 and 9.5 percent, respectively), while the rise in sales to the United States (10.5 percent) explained three-quarters of the total increase.

However, the most dynamic was shipments to the European Union (15.8 percent), China (13.2 percent) and the rest of Asia (12.2 percent). The

Vehicles and their parts accounted for one-third of the increase and fuels for an additional 20 percent.

In addition, the international organization explains that our country, unlike other Latin American economies, recorded an increase of 2.3 percent in exports during the first three months of the year.

While Mexico's foreign sales remained on positive territory, they sufficed a sharp slowdown between late 2018 and early 2019.

But this still represented a slowdown, which is explained by the slower growth of exports to the United States and the decline in sales to the European Union and the rest of Latin America and the Caribbean, ie, despite the brake, grew, as exports from Brazil and Argentina fell 4.1 and 12 percent, respectively.

Behavior of FDI

During the first quarter of 2019 10,161.9 billion dollars were captured, the net result of the difference between 16,786.5 billion dollars recorded as inflows and 6,624.6 billion outflows.

If we compare the total FDI captured in the first three months of this year with the preliminary figures reported for the same period of 2018 when there was an arrival of $9,502.4 billion dollars, an increase of 7.0 percent.

By Agencies

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