Mexico Institute, 5/16/12
Perhaps it is a metaphor for the bilateral economic relationship in general. Without celebration or even much recognition, U.S.-Mexico goods and services trade probably reached the major milestone of a half trillion dollars in 2011.
This incredible volume of commerce is testament to a vast network of cross-border ties that have intimately linked the economies of the United States and Mexico, forging a natural economic alliance between the two countries. In recent years, the incredible expansion in mutually beneficial bilateral commerce has gone relatively unnoticed behind the headlines about drugs and violence, despite its very real positive impact on the lives of Americans and Mexicans alike.
Bilateral trade is made not only of finished products like cars, washing machines, tomatoes and grains, but also the parts that factories on each side of the border use to build everything from small electronics to massive airplanes. In fact, it is this trade in industrial inputs that most deeply binds the U.S. and Mexican economies as the integrated North American manufacturing sector works across national boundaries to build final products for sale on the world market.
Perhaps the statistic that best illustrates the unique nature of U.S.-Mexico trade is that, on average, 40% of the content in Mexican exports to the United States actually comes from U.S. sources (see Working Together: Economic Ties between the United States and Mexico).
Behind the Number
The foreign trade section of the U.S. Census Bureau reported that there was $461 billion in bilateral merchandise trade. The 2011 data for services trade is not yet available, but the Department of Commerce’s Bureau of Economic Analysis reported $38 billion in bilateral services trade in 2010.
By applying the 2009-2010 growth rate in services trade to the $38 billion dollar figure, services trade in 2011 is projected at $39 billion dollars. Summing the $461 billion in merchandise trade and $39 billion in services trade, one finds that in 2011 the United States and Mexico trade totaled exactly $500 billion dollars.
To be fair, if a little less rounding is used, a more precise figure of $499.8 billion dollars in total 2011 U.S.-Mexico bilateral trade could be calculated, and of course the 2011 figure for services trade is only a projection at this point. Nonetheless, it is quite clear that bilateral trade was hovering right around the incredible half-trillion dollar level for 2011, and we should expect even greater levels of trade in 2012.