U.S. Completes 22 Straight Years of Merchandise Trade Deficits With Mexico
In September 1993, former President Gerald Ford, Jimmy Carter and George H.W. Bush joined with President Bill Clinton at the White House to express their support for NAFTA. (Screen Capture)
(CNSNews.com) The United States ran a merchandise trade deficit of $5,243,300,000 with Mexico in September, according to newly released data from the U.S. Census Bureau.
That completes 22 straight years in which the United States has run monthly merchandise trade deficits with Mexico.
The last time the United States ran a merchandise trade surplus with Mexico was September 1994—when the U.S. ran a $4,700,000 bilateral surplus with its southern neighbor.
The U.S. Census Bureau has published monthly figures on the export and import of goods to and from Mexico going back to January 1985. In the 31 complete calendar years that have passed since then (1985 through 2015), the United States has run merchandise trade surpluses with Mexico in four years and deficits in 27 years.
Three of those years that the U.S. ran a surplus—1991,1992,1993—were before the North American Free Trade Agreement took effect. The fourth year the United States ran a merchandise trade surplus with Mexico—1994—was the first year NAFTA took effect.
September 1994 was the last month that the United States ran a monthly merchandise trade surplus with Mexico. Two months before that, in July 1994, the U.S. ran a $592,700,000 merchandise trade surplus with Mexico. One month before that, in August 1994, the U.S. ran a $99,700,000 merchandise trade surplus with Mexico.
But the next month--October 1994--the United States ran a $81,600,000 merchandise trade deficit with Mexico.
Since then, the United States has not run a merchandise trade surplus with Mexico in any single month.
Prior to 1991, the U.S. ran up a 45-month stretch of merchandise trade deficits with Mexico, running from January 1985 through September 1988. That string was broken when the U.S. ran a merchandise trade surplus with Mexico of $49,100,000 in October 1988.
NAFTA—which created a free-trade zone between Mexico, the United States and Canada--was signed by the then-lame-duck President George H.W. Bush in December 1992. The deal was not ratified as a treaty, which under the U.S. Constitution would have required a two-thirds majority in the Senate for ratification. Instead, it was approved on a so-called “fast-track” that required only majority votes in both the House and Senate.
The House and Senate approved the NAFTA in 1993 and President Bill Clinton signed it in December 1993.
In the years since NAFTA took effect, bilateral trade between the United States and Mexico has increased, but in every month after September 1994, the value of the goods that the United States imported from Mexico has exceeded the value of the good the United States exported to Mexico. As of September 2016, the U.S. had run merchandise trade deficits with Mexico for 264 straight months.
In 1994, the U.S. merchandise trade surplus with Mexico was $1,349,800,000. In 2015, the U.S. merchandise trade deficit with Mexico was $60,662,8000.
In the first nine months of 2016 (January through September), the U.S. merchandise trade deficit with Mexico has been $46,811,500,000.
In February of this year, the Obama administration signed the Trans-Pacific Partnership (TPP) trade agreement, which includes Mexico and Canada as well as nine other countries, and which now needs to be approved by Congress to take effect.
“The Trans-Pacific Partnership (TPP) is a proposed free trade agreement (FTA) among 12 Asia-Pacific countries, with both economic and strategic significance for the United States,” said the Congressional Research Service in a report published in June. “The proposed agreement is perhaps the most ambitious FTA undertaken by the United States in terms of its size, the breadth and depth of its commitments, its potential evolution, and its geo-political significance.”
The Congressional Research Service says the TPP is intended to be a “living agreement” that can be expanded once it is in place.
“Currently, the TPP includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam, which together comprise 40% of the world’s GDP,” said CRS. “TPP is envisioned as a ‘living agreement,’ potentially addressing new issues and open to future members, including as a possible vehicle to advance a wider Asia-Pacific free trade area.”
“Policymakers in TPP countries have ventured that China may seek to join at some point, provided that it could adhere to the standards of the agreement,” said CRS.
In 2015, the United States ran it largest merchandise trade deficit with China—a record $367,172,900,000, according to the Census Bureau. In the first nine months of this year, the U.S. has run a merchandise trade deficit of $257,671,800,000 with China.
The business and economic reporting of CNSNews.com is funded in part with a gift made in memory of Dr. Keith C. Wold.
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