It seems that Mexico overtook Canada, as second largest importer of goods in USA. For the first 10 months of the year, the imports from Mexico reached 245 billion USD, which is 15 billion USD more than the value of Canada, showed the latest data from the US Commerce Department. If the trend continues, by the end of the year for the first time the US will be imported more goods from its southern neighbor at the expense of the North neighbor. In 2015 the results were almost equal.
The main reason for the change is rising production costs in Canada, which affects the exports. Since 2002, the labor costs rose by 64%. If two decades ago 20% of imports into the United States came from the northern neighbor, now this share has fallen to 13%.
Meanwhile, Mexico increase its competitiveness and attract many manufacturers, especially in the automotive industry. Only Kia Motors Corp and BMW AG have invested over 25 billion USD into the country since 2010. The companies created large manufacturing factories, building automobiles at cheap price and having low logistic costs to export in USA, benefiting from NAFTA agreement.
BMW plans to build as many as 150,000 cars annually in San Luis Potosi plant, from 3-Series model, planning to invest additional 1 billion USD in new equipment and facilities.
Mexico also exports 17.7 billion USD worth of agricultural products to the United States, such as vegetables, wine, beer, fruit, chocolate and other snack foods. Also the trade in services (exports and imports) totaled an estimated 52.4 billion USD.
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