CHINA-MEXICO-THE USA TRADE TRIANGULATION PRACTICES UP TO THE SIGNING OF USMCA

Roberto Gutierrez-Rodriguez — Sun, 25 Feb 2024 00:00:00 +0000

The main question that arises when observing the behavior of Mexico-China- the USA trade relations is whether the obvious statistical association that at the general level exists between Mexico’s imports from China and Mexico’s exports to the USA can be substantiated at higher levels of disaggregation. To face the challenge, the analysis is carried out with the two most representative groups of manufacturing products traded between the three countries: Groups 84 and 85 of the Harmonized Trade System (HTS). The results show that it is feasible to consider that for a considerable number of products disaggregated at the highest possible level, which is item (6-digit HTS), Mexico could have behaved up to 2017 as a liaison country: It acquired industrial inputs from China and used them to elaborate final products to be sold in the USA market. That is to say that at least a part of China’s bilateral trade with the USA -the highest between two countries in the world up to 2017- would be carried out through a triangulation process in which Mexico acted as a processing country. Of course, it cannot be discarded that some final products that Mexico imported from China were straight exported to the USA market

Developing Economy Journal

CHINA-MEXICO-THE USA TRADE TRIANGULATION PRACTICES UP TO THE SIGNING OF USMCA