For American Exporters, Mexico Is The China Next Door

Last year was a tough year for American exporters. After steady increases since the bottom dropped out of the U.S. economy in 2008, exports have been on the upswing.  Out of the top 10 U.S. trading partners, however, Mexico stands apart so far this year. U.S. exports are rising and Mexico is one of the reasons why.

First, back in 2009, U.S. exported $1.5 trillion worth of goods and services around the world. That number rose to $1.8 trillion in 2010 and then to $2.1 trillion in 2011, according to the U.S. Census Bureau. In fact, U.S. exports have more than doubled from where they were in 2002. It's as if the U.S. discovered it can make things again.

That's where Mexico comes in. Every major trading partner saw a decline of at least five percent in their imports from the U.S. Only Mexico continued to buy American.

In 2012, Mexican based companies, including American multinationals there, imported $199.9 billion worth of goods and services as of the end of the November, up from $198.3 billion in all of 2011, $163.4 billion in 2010 and $128.8 billion in 2009. Ten years ago, in 2002, Mexico imported $97.4 billion from the U.S.

The U.S. still has a trade deficit with its southern neighbor, but it shrunk last year to $57.4 billion from $64.4 billion in 2011 and $66.4 billion in 2010. The Mexico economy is moving right along, and the rebalancing of global manufacturing away from China is seen helping Mexico even more. U.S. companies, and Mexican multinationals, will be investing more in production there and buying U.S. goods to help them expand.

According to the Office of the United States Trade Representative in Mexico, trade there is up 377 percent since 1993 (the North American Free Trade Agreement began Jan. 1, 1994). U.S. exports to Mexico accounted for 13.4 percent of overall U.S. exports in 2011.

What are they buying? The top export categories in 2011 were electrical machinery ($32.3 billion), capital goods/equipment ($31.5 billion), mineral fuel and oil ($23.6 billion), vehicles ($18.1 billion), and plastic ($12.7 billion). On the commodities side, farm products to Mexico totaled $18.3 billion in 2011, making it the third largest U.S. agricultural export market after China and the E.U. There's also exports of private commercial services to Mexico worth some $25.2 billion in 2011, 4.6 percent more than 2010 and 62 percent greater than 2000.

How about this, computer accessories exports to Mexico in 2011 were $12.2 billion, up from $8.7 billion in 2010, $6.02 billion in 2009 and just $4.2 billion in 2002. Mexico is our next door China.

Forauto parts makers, exports were up to $15.6 billion in 2011 from $12.6 billion in 2010. In 2002, it was $8.6 billion, according to the Census.  Telecommunications equipment exports were $6.06 billion in 2011, up from $5.6 billion in 2010 and $2.7 billion in 2002, according to the most recent data.  U.S. exports also rose last year to France and Russia, two members of the G8.

Although the country is not in the top 10 of U.S. trading partners, France imported $28.4 billion worth of goods and services in 2012, up from $27.8 billion in 2011 and $26.9 billion in 2010. For their part, U.S. exports to Russia were valued at $9.5 billion last year, $8.2 billion in 2011 and $6 billion in 2010.

Exports to India and Indonesia, two other highly populated countries, were also down, though Indonesia was basically flat, Census data shows.