Received by Registration Unit 02/07/2018 4:04:45 PM Mexico?s Plan Implementation: 2 0 17 Results "Today, most of the grains are transported through rails if we open the markets that we are Currently negotiating with Brazil and Argentina, it will be through vessel. in fact, we have already begun with that - commercialization.? Economy Secretariat, Ildefonso Guajardo October 2017. Trade DiversificatiOn . In 2017, Mexico moved forward with various trade partnerships that will reduce itsereliance on TNAFTA. . European Union? In December 2017, talks. with the EU were reported to be nearly finished and although an agreement was not reached then, it is expected to be secured during the ?rst qIIarter of 2018.1 Trans PaCi?c Partnership Officials from TPP countries expect to sign a revised deal on March 8, 2018. Additionally, the United Kingdom began informal talks with TPP countriesto join this trade agrdeme nt after Brexit nishes. 2 ThrOughout'the process, TPP countries emphasized that the new framewdrk Would allow the US to join TPP in the future? since then, President Trump has declared that he Is willi'ng to . rejoin TPP at some point. Argentina and Brazil Republican Senator Pat Roberts (KS) raised an alarmto Vice President Mike Pence showing him figures on the volume of soybeans, corn and wheat the'U.S. isn?t selling toMexico anymore because Mexico is buying those products from Argentina and Brazil.3 Russia - According to between 2009 and 2017 Mexican imports from Russia increased by 178 percent, in contrast to a total import growth from other nations of "65 percent. Fhurthermo're, in 2017 Russia promoted Russian-made airplanes "in Mexico and declared its intention to invest in the cauntry's ener?gy'market 4 In 2012, Mexican commercial airline Interjet became the only Western airline to operate Russian- made Sukhoi Superje'ts and their 22 planes fleet could increase due to Russia 5 recent efforts Infrastructure Investment in Support of Trade Diversi?cation Mexico?s current trading infrastructure comprises mostly roads and railways. As part of its diversification plan, in 2017 Mexico in?reased investments in its ports? infrastructure to accommodate its new and growing trade relationships with Asia and Smith America- In 2017, maritime-based trade in Mexico grew close to 13 percent and is expected to continue with double-digit gr0wth in 2018.;5 Infrastructure investments include: - The Lazaro Cardenas Port will be ?nished in 2018,-its capacity will expand from 27 to 47 million tons, making it one of Latin America?s largest vessel ports. The port is in Mexico's west coast and can operate 1 renters cont/article/us- trade-wto- possible-eu- arable-deal ~-as nafta- talks drag? 2 ft. comlcontent/73943036- ef'aS- 1167- b220- 857226d1aca4 . I .3 llmsidetrade. com/daily- news/republican- senators ?tell trump- ?ham mistakes- will- -jeopardize-' -stot_k- market- -gains ele?onomis?ta cor'n. mx/empresas/Rusia- -impulsa- ma?s?ventas- desus- Haeronaves-a -Mexico- 20180101-0100. - I 5 I ?Disclaim-er This material Is distributed by FTI Consulting (3C) Inc. on behalf of the Government of Mexico. Additional Information is available at the Department oflustice, WashIngton D. . Received by Registration Unit 02/07/2018 4:04:45 PM Received by Registration Unit 02/07/2018 4:04:45 PM the lateSt generation of cargo vessels like the ones operated in Asian ports allowing Mexico to increase trade with China and TPP nations. 0 The Veracruz's Port Modernization is expected to quintuple its capacity once the project ?nali?e?s in 2018 -from 22-to 90 million tons.6 It will become one of the largest ports'in the Gulf of Mexico. Other port investments include: ?0 Tuxpan Pbrt- will increase its capacity from 1,3 to 24 million tons, I Ma?nzanil?lo Portwill rea Ch 44 million tons of capacity in 2018, and I Altamira port will increase its capacity from 15 to 36 rr'iilliOn tones bye end of year;7 .5 17/ 1 1?2367 7 nos-movi liza n?470-millones-toneladas-ZDH/ I . Disclaimer --This materia! is distributed by Consulting (SC) Inc. on behalf of the Government of Mexico. Additionqi information is ayqiiaizie at the Department Washington, D.-C Received by ARA Registration Unit 02/07/2018 4:04:45 PM Received by Registration Unit 02/07/2018 4:04:46 PM i NAFTA Fact Sheet: Jobs and Wages quEY TAKEAWAYS . i million i' . . i ?ncreased wages j- #Lower costgoods for American consumers ii'II'II'Nearly 5 million S. iobs at i'lSk if negotiations fail and ountries pullout - 3 ?The payoff [of free trade] is hidden within familiar channels: fatter paychecks. lower p'riCeS and better prodUct choices." Gary Clyde and . Paul LE. Griecorauthors of The Unites States and the World Economy JOBS . NAFTA . supports 14 million jobs throughout the trade region. There were an estimated 5 million new job'ssince its founding, and 800,000 new manufacturing jobs in the us.2 The effects of a trade War among NAFTA countries can be unbearable to American communities. More trade not artificial barriers and tariffs - will contim?ae to increasejobs. g?ramri and opportunity. if trade between the US. and Mexico ceased. 4.9 million Am?e?ritan workers would be at risk. The Wilson Center estimates that NAFTA benefits thousands ofjobs in each state of the country:3 Millions of American jobs depend directly ontrade with NAFTA nations. According to a 2015 US. Department of Commerce report: Goods exports alone maintain more than 1.2 million jobs from trade with Canada and almost 1 million from trade with Mexico. These regional partner?s accounted for 32% of goods?exports?ba'sed jobs in 2015;5 1 .1 .. ?ilui??isy? :1 Alaska Indiana Am? Iowa . Arkansas Kansas . . - Kentucky Louisiana 7. California Colorado Ic'em; .. .- 51:. . Milne? Delaware Maryland Dc .. Mass Florida . MiChigan Georgia an Hawaii 3 I I Ms The total number ofjobs supported by goods exports increased by 890,000 from 2009 to 2015 from Mexico and 110.000 from Canada. 5 Services experts to canada and Mexico supported 360.000 and 201,000 jobs. respectively (12% of total service exports- supported jobs). From 2009 to 20515. services-exports to Canada increased US. jobs by 37,000 and Mexicpgjobs by 30,000? - Total exports to NAFTA partners accounted for 2,767,077 jobs (24% of expo?rt-su pported'iobs) in 2015.8 i NAFTA did not cause the loss of US. industrial job's. In fact. studies have shown that automation and China's adherence to the WTO were the principal forces in char'ge of industrial jobs loss in the use AccOrding to the Wilsdn center, 87% of [manufacturing job losses between 2000 and 2010 were due to technological innovation. The. causal effects of innovation are further evidenced by the doubling of US. manufacturing output and increased wages despite the loss of manufacturing tops.? Only 13% at job Ios'ses were caused by trade and the majority of these losses were due to increased trade with China. Even though mere automative manufacturing occurs outSide the I .U.S.. NAFTA has strengthened asupply chainlthat supports millions of jobs. For example. the US. Motor Equipment Manufacturing Association recently found that "the total; employment impact of the motor vehicle parts manufacturing industry is 4.26 million [American] jobs. an increase of nearly 18 percent? [since 2012]?? . SC Nevada SD NH Tennessee NJ A Texas NY Vermont ND Washington OK Wisconsin Received by Registration Unit 02/07/2018 4:04:46 PM Received by Registration Unit 02/07/2018 4:04:46 PM .3 i NAFTA Fact Sheet: Jjobs and Wages I I I U.s: REAL WAGES AVERAGE REAL WAGE INDEX IN 306ALcunREch WAGES Wages. _inlreal terms, have increased since the NAFTA was enacted. 3 (200531030) Real wages for U. 8. workers are 12.6% higher now than when NAFTA took effect. '2 The 11:" i i . ~m32?ii . i 3 3 average manufacturing Worker tooay lS nearly tWice as prodUCtive as in 1994 and real - compensation per hour has increased lay over 20% to re?ect that ?3 NAFTA allw?amiliesto buy better products for less money NAFTA and other trade. agreements have reduced trade barriers. benefitting 3 . Awmericansconsumerswith accessto better-priced products ?5 3 i . Access to a wider variety of goods at lower prices boosts American consumers' -- 3_ 3 pUrchasing power 3 1347": 3-15 313W) i 7731') Will CHART 4: Real wages in the are 12 6 percent higher The 00mm! of Economic AdVIsers foundthat thepurchasmg power of the middle- 3 today than they were in 1994 when NAFTA was. enacted. ciass has increased 29% due to trade and tariff reductions since World War ll.Source: EconomiclntelligenceUnit http: com/home. aspx According to a 2005 study, access to lower prIce Imports boosted American (acc?sedJuneZ. 2014) purchasing power by about $10000 per household on averageannually." MEXICO- REAL WAGES 3 Mexico complies with more .ILO conventions than both Canada and the U.S.. REAL LOCAL CURRENCY. dis?proving the argument that the-coontry intentionatty keeps we?g?es down. --I -?-?-73343 'Mexicohas of8FundamentatConventions?? Canada has ratified 36 ILO conventions. including 8 out. of 8 Fundamental Conventions 19 Finally. the S. has ratified 14 conventions including 2 Out of 8 Fundamental Conventions. 2? I Additionally. the Mexican Government has already begun the process of updating its labor justice SyStem. The intended reforms wiil bring additional transparency and establish more efficient ways for workers to negotiate and resoive disputes with employers 2? . . percent?since its peso crisis ended In the late 19903. Source; Economic Intelligence Unit. (acceSLSed J3une32. 2014) eiucom/homeasox U. .5: MANUFACTURING OUTPUT SHOW STRONG GROWTH . REAL MANUFACTURING OUTPUT MANUFACTURING SECTOR. (INDEX 2009:1610) REAL COMPENSATION PER HOUR 130(INDEX 2009:100) I 012014;119011994: 84Re'cession149:: . 22m 2073.5 20 2014 011994 . Q12014 CHART 2: U. S. Manufacturing output today Is 42 percent higher than it was in 1994 when NAFTA took effect. Additionally. compensation for manufacturing workers IS up 21 percent. 14 - Source: Federal Reserve of St. Louis. "Manufacturing Sector: Real Output." (Accessed May 29. 2014) Received by ARA Registration Unit 02/07/2018 4:04:46 PM Received by Registiration Unit 02/07/2018 4:04:46 PM NAFTA Fact Sheet: Jobs and Wages. REFERENCES ?Gary Clyde Huf'oauer and PapiLE. Gricco Payoff h'om' Globaiizationf? The Washington Pest. JLne 7. 2005 . ?ht tps: ?default. Tiles/gr a wing_ togatneL economic _tics_ betweon_ 1hr: _uniled_ ates_ and magma ,0 4f I r'ente Borg/53:05 ldeia- lt/fiies/g' cwing_\ogether_ economic _ties_ belt-Vie! the_ uni 'ed_ slates ?and mango Jobs Supported by ?xport Destination 2015. Department of Commerce International Trade Administration ?Jobs Supported by Expert De'stinaiiori 2015 Department of Co'mmerc'e, internatIonal TradeAdn-I?Inistration ?Jobs Supported by Export Destination 2015. Department of Commerce. international Trade Administration 3 Jobs Supported by Export Destination 2015_Departrn'ent of commerce internatIonal Trade Administration . Ics/erowi mema. org/us- -automctive parts manufacturing -jobs- nearly?g- percent . '3 The Truth about NAFTA: Lessons for Trad? Negotiations The Heritage Founqationwata from Economist Intelligence Unit) "The Truth about NAFTA: Lessons ?or grade Negotiations .The HerItachoundation (Data from Economist Unit) - Fedora! Reserve of St. Louis,"Mar1ufacturing Sedor: Real Output? 5 Freedom to Trade; A Guide for Policymakers, The Heritage Foundation loThe While house. ?The Emma?J: Benefits o? U. 5. Trade Gary Ciyde' lufbauc" one Pm! I he Payoff from Clobel-za cn,1hc Washington Post. June I 2005 iIo. NORM 11200202: NQ: iD:1_02764 http?. iio. 11200 11200. ID: 102582 ?hitp '1 lemrada-de-ooinion/articii Received by Registration Unit 02/07/2018 4:04:46 PM Received by Registration Unit 02/07/2018 4:04:47 PM NAFTA Fact Sheet: Seasonal Antidumping KEY TAKEAWAYS . Retaliatory measures from Mexico or Canada could tie devastating [to industries In which America primes. - - ._Sea'sonal restrictions will pit AmerIcan producers against each other ~Season restrictions wilt affect the U. 8.. as American agribusiness Companies have sizable long- -term Investments across all three .NAFTA- countries1.1.31 Seasonal antidumping restrictions would ultimately reduce .American's options at the grocery store. limit the amount of year-round fresh produce available. stifle trade and market access for all seasonal agricultural goods and ultimately harm producers and consumers alike. Seasonal policies will have the detrimental effect Tot pushing?American farmers against each other. American sectors that are not dependent on NAFTA trade will push for seasonal restriction. while NAFTA-dependent sectors will do the?opposite. For instance. Mexico is the No. 1 export market for US. apples. and Canada is the No.2 market. If the US. wereto restrict access to Mexican of Canadian seasonal fruit and vegetable sector these c0untries could implement similar seasonal . import restrictions on U.S. apples to protect domestic apple growers in Mexico I and Canada. This will raise prices for consumers and potentially lead to seasonal . shortages of fruits and vegetables American censumers rely on in their grocery stores.1 According to Observatory for Economic Complexity. U.S. growers of apples and pears are highly dependent on the Mexican market and therefore Significantly vuinerable to retaliation (see figure 1). 2 Seasonal antidumping measures have. extremely narrow bene?ts for regional producers (e3. citnls and tomato farmers in Florida) and the interests of these producers are not representative of the U. S. agribusiness sector more generally. exports a tremendous amount of agricultural products to Mexico and Canada. having reached numbers that wo?uld not have been possible without the implementation of NAFTA. Since the trade agreement was put in place. 0.8. agricultural ex portsto Canada and Mexico have tripled andquintupled. respectively. Special interest provisions can put the current agricultural trade between the three partners at risk.10 American producers of corn and soybeans - the count?ryl'stwo largest crop exports to Mexico (worth a combined $4.452 billion in 2016) have far more to lose from reciprocal trade measures than tomato and citrus farmers have to gain. ?2 For reference In 2015, the United States exported $141 million13 in total tomato exports globally and $215 million in total lemon/lime exports globally.? These figures are pale in comparison to the corn and soy exports that the US. distributes to Mexico alone (see Figure 2). Received by Registration Un?it 02/07/2018 4:04:47 PM U.S. EXPORTS TO MEXICO In Millions of USD - Source: MIT OEC I Apples and Pears . Citrus $432 2013 2014 I Figure! I I APPLES AND FEARS EXPORTS: 3 1015 - --.. . 20154 20136 {29% ?33% . or totai usapples and pears exports wentLto Mexico cnnus EXPORTS I 2015:] 2mg 2013:9? 1.4% 12% 1.10% Of total U. citrus exports went to Mexico U.S. EXPORTS T0 MEXICO . .ln Billions of USD - MIT OEC ICorn I Soybeans I I I I I aim EXPORTS: I 2015: 20:4: 2013: $2.39 $2.38 $1.87 billion billion bill-ion Of total US corn exports went to Mexico SOYBEAN EXPORTS: . . 2015: =3 20w 3.9 2013: 20 $1.46 $1.83 I $1.51 billion billion billion Of total 8- corn export'swe I enztto Mexico -. Received by Registration Unit 02/07/2018 4:04:47 PM Sheet: Seasonal AntidUmping Given the close ties-between the u.s. and Mexico, a policy that restricts market access to Mexican produce will hurt American agribusiness investments in Mexico. NAFTA allows Ar'r'i?rican produce companies build Operations that work year-round by investing on both sides of the U.S.?Mexico Border. A policy that affects American investments and operations in Mexico will have negative repercussions on these companies, their Workforce in the US. and the communities that depend on those jObs. According to-the Economic Research Service of the US. Department of Agriculture?1 Since the implementation of NAFTA. US. investment in the Mexican food and beverage industries increased substantially from billion in 1993 to billiou in?2012. declining to US$7.5bilIion in 2016. - direct investment in pr?oductiOn agriculture in Mexico - increased from million in 2010 to billion in 2016. - A prime example of this is DriscOll, the largest berry company in the to Politico; Driscol?l "supplies a long list of major retailers who fuel the year-round demand for large. predictable supplies of produce. Consider the humble raspberry: In January. Driscoli?s sources berries from OXnard. Calif.. Baja, Mexico. and elseWhe?re in M?xiCo. By April. it's still getting berries from those locations. while also bringing online harvests from Watsonville. Salinas. and Santa Maria. Calif. By July or August. it-?s mostly?sourcing raspberries from California. In September. Baja berries are back in the mix. Soon thereafter.- other sources in Mexico are feeding the demand.? And so the cycle continues, every month. all year. along the West Coast." 22 Received by Registration Unit NAFTA guarantees competition and increased. market access. Increased competition means that American consumers pay the best prices for the highest quality products..- Trade policies that limit American consumers' access to p?rOduce from Mexico and Canada Will increase prices. This policy in . partiCular would act like an unfair benefit for farmers in a narrow set of states that will be paid off by consumers when prices in the grocery store increaSe due to a lack of competition. According to Reuters, American retail. restaurant and agriculture groups have already warned. U.S. Trade Representative liobert Lighthizer of the potentially "dangerous implications for 0.5. businesses and consumers" that implementing additional perishable anti-dumping measures can have. 23 ,map/hs 92/expo'rt/u sa/mex/show/ZOIS/ 'http: ?atlas media mit edu/en/VIsualiu/lree ?http; ?atlas. media mit edu/cn/Visualizc/trec http. ?atlas. media. mit. edu/en/VIsuaIize/tree http. llatlas media ..rr'IIl edu/en/visualize/tree map/ http: ?atlas. media. rrIIi .edu/en/Visualizc/trcc http: ?atlas. media. mit. edu/en/visualize/tree http: ?atlas. media mit. edu/en/visualioe/lree http; nega. corn/news- and-resOurcos/news- stories/ariicIe/ZOJ?Oi/trump administration takes- early- -trade -action- -and- ~what- It- ?means ?for ?us grams export gov/article?id= Mexico Agriculture '1 export gov/anclc?hd: i :llatlas. media mIt edu/en/viscalize/tr'ee htlp: ?atlas. medIa. mil 3? _ma n/hse Z/cxoart/u sa/s: new/1005/2014/ tree_ma p/ h592 /e'xpo rt/ use/sh ml 10 05/ 2013/ http: //atlas. media Init. edu/en/Visialize/lree ht'p: l/allas media mit. cod/en/ViSualizc/lr'cc 1? http: llatlas media. mi: edu/en/visuahze/tree . 11 hugs: ers. usda gov/topIcs/internirtional markets- -lra'de/countrics regions/naha- -I:anada:rrIexic'0/ moxico- ?trade fail I http: poiitico com/story/2017/08/25/nafta- us- produce- grower's- 242031 reuters. com/article/us- trade- naita produce/amencan- retailers- resiaurants- oppose- u- nafta- Uproduce proposai- . . 02/07/2018 4:04:47 PM Received by Registratic'm Unit 02/07/2018 4:04:48 PM NAFTA Fact Sheet: Trade ImbalanCe - Deficits can actually speak of a stronger economy America's deficit with Mexico makes American tinai . products more competitive when trading with other i econdmie's. "l have a "deficit'with my local supermarket. but i offset what i owe by earning money elseZWhere. not by stocking shelves at night to pay for my groceries. ?Robert B. Zoellick. former World Bank president. US. trade representative and deputy secretary of state.1 Leading economists agree that the trade imbalance between the US . and Mexico' is not a good measure of the US's trading or economic strength. In fact. it has more to do with Ame?ca'sstrength. its low saving rates and the dollar's status as the warld?s resenie currency. There are a number of reasons why the US. maintains a trade imbalance. including: . The Stronger exchange rate of the doilar in the international financial market makes foreign products cheaper for American consumers. thus allowing them to buy more and save less.2 - A growing US. economy often leads to a larger deficit. since American consumers have more income to buy more goods from abroad. . Anne Krueger. who served as the top US. official at the IMF and as the World Bank's chief economist. argues that the U.S.'s law saving rates are to blame for the trade deficit and that if trade deficit is the Administration's primary concern. the better option would be for the administration to focus on incentives for consumers to save more.3 -. Krueger also argues that improving the Government's fiscal position would also help balancing the trade deficit - either by reducing the fiscal government?s spending or raising taxes. Imposing artificial trade barriers to cut down the trade imbalance would Weaken America's co'rr'ipetitive advantages against China and other global economies. Mexico and the U. 8. do not simply trade goods: they work together to manufacture them. For instance. there is a 40% S. value-added in Mexico's exports to the U. 8. meaning that 40% of goods imported to the U. 8 contain S. - made products; In fact. trade with Mexico makes American exports more competitive as more than half of US. imports from Mexico are either parts or raw material. crucial for the development of America?s value-added export products.5 US. exports to MeXico benefit from Mexico's network of free trade agreements with 46 other countries. providing preferential access to 76% of the world's GDP. Therefore. restricting NAFTA access limits America's re'ach to these markets. 5 The 0.8. trade imbalance is largely driven by US. energy imports. In fact, if you ekclude crude. oil and other energy imports. the united States had a $41.4 billion trade surplus with Canada and Mexico in 2014.7 The US. trade deficit is driven by America's need to impOrt energy. Pursuing energy independence and maintaining strong ties with our NAFTA partners would reduce the trade imbalance, increase North American competitiveness. and make the US. less reliant on foreign energy producers. .In the meantime. trade in the energy sector is beneficial for all three NAFTA partners. While the US. imports crude oil from Mexico and Canada. it then exports refined products back to those countries and the rest of the world, while securing accessible energy prices for American consumers In 2014. 7.1% of American exports. worth $103 billion were refined petroleum products. 3 5 . In 2014. $13.7 billion worth of refined petrole?lum were exported to Canada.9 $19.3 billion worth of refined petroleum were exported to Mexico. 3" *Trade deficits and surpluses vary over time. For instance in 2014 America enjoyed a trade surplus with NAFTA partners across all three major sectors of the US. ecOnomy: Manufacturingrus. trade surplus of $21.5 billion in 2014. US. manufacturing output rose faster in the 15 years after NAFTA entered into force than in the 15 years before. Services: US. trade surplus of $41.8 billion in 2014. Agriculture. food beverages: US. trade surplus of $1.8 billion in 2014.- 2" .?tps cf! urgibackgrou: tide Ls- -ll3de- deficli- how- -rnuc'i does ?It ?lter hilps: l/Ww. ft com/contentl33138fda belb- elsalldacOOd?myfi :my news; grid ?Sourcc NBER Global Value databasein Kcopman. Powers. Wang Wei (September 2010 revised March 2011) ?htips: com/content/33l38fda- a20f lle7- b797 b61809486fe2hnymopics= d4a3c634?87a0- 3fOi- helb- -eIS31Id6c00d8myft: my news: and ?Squrcez NBER. Global Value databasein Koopman Powers. Wang Wei revised March 2011) l/waysandmcans house. guv/thc- surprising true starve! nafta/ max/atlas. mediamitedu/en/visualizie/tree _map/ r1392 IexporI/usa/ca n/sh aim/2011i I Received by Registration Unit 02/07/2018 4:04:48 PM