Received by Registration Unit 02/07/2018 4:04:45 PM Mexico?s Plan Implementation: 2017 Results ?Today, most ofthe grains are transported thrbugh 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, lldefonso .Guajardo, October 2017. Trade Diversification In 2017, Mexico moved forward with v?ari0us trade partnerships that will ?reduCe reliance on NAFTA. . 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 qUarter of 2018} Trans Paci?c Partnership- Of?cials from TPP countries expect to sign a revised deal on, March 8, 2018., Additionally, the United Kingdom began informal talks with TPP countries to join this trade agreement after Brejxit finishes,2 Throughout the process, TPP countries emphasized that the new framework would allow the US to join the future - since then, President Trump has declared that he is willing to . rejoin TPP at some point. I Argentina and Brazil - Republican Senator Pat Roberts (KS) raised an alarmto Vice President Mike Penc?e showing him figures on the volume 0f soybeans, corn and wheat the US. isn?t selling toMexico anymore because Mexico is buying those products from Argentina and Brazil.3 Russia -According to Banxico, between 2009 and 2017 Mexican imports from Russia increased by 178 percent, in contrast to a total irn port growth from other nations of65 perCent, Furthermore, in 2017 Russia promoted Russianemade airplanes in Mexico and declared its intention to invest in the country's energy'market.? In 2012, Mexican commercial airline Interjet became the only Western airline to operate Russian-made Sukhoi Superjets and their 22 planes ?eet could increase due to Russia?s recent efforts. Infrastructure Investment in Support of Trade Diversification Mexico's current trading infrastructure comprises mostly roads and railways. As part of its diversification plan, in 2017 Mexico increased inveStrnents in its ports? infrastructure to accommodate its new and growing?trade relationships with Asia and SoUth America; In 2017, maritime-based trade in Mexico grew close to 13 percent and is expected to continue with double-digit growth inv2018i,s Infrastructure investments include: The Lazaro Cardenas Port will be finished 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 m/a rticle/us-tra de-wto~rn l-as-nafta-ta lks-d E7ZZA I I .3 .com. mx/empresaszusia-im 5 milenio .comln ego cios/p uerto_la za ro__ca 74 2. "Disclaimer - This material is distributed by FT Consulting (SC) Inc. on behalf of the Government of Mexico. Additional is available at the Department oflustice, Washington, D.C . I 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. "The Veracru'z?s Port Modernization is expected to quintuple its capacity once the project finalizes in 2018 frOm 22-to 90 million tons.? It will become one of the largest ports 'in the Gulf of Mexico. other port investments include:- 0. Tuxpan Port will increase its capacity from 13 to 24 million tons, Manzanillo Port. will reach 44 million tons of capacity in 2018, and Altamira port willincrease its capacity from 15 to 36 million tons bye end of'year.7 5 I "Disclaimer This materiel is distributed by Consufting (SC) inc. on behalf of the Government of Mexico. Additionai information is avaiiabie at the Department aflustice, Washington, D. Received by Registration Unit 02/07/2018 4:04:45 PM Received by Registration Unit 02/07/2018 4:04:46 PM NAFTA Fact Sheet: Jobs and Wages 1.4.miuion . I I Co'st goods for'Ar?nerican consumers Nearly 5 million at rile if negotiationsfail and . _.co__untries pull out i ~74. i .I i i . -.. "The payoff [of free trade] is hidden within familiar channels: fatter paychecks. lower prices and better product choices. - Gary Clyde and Paul L-.E. Grieco; authors 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 jobs since its founding. and-800,000 new manufacturing jobs in the 0.8.2 The effects of a trade war among NAFTA countries can be unbearable to American communities. More trade not artificial barriers and tarifl?s - will continue to increase jobs. growth and opportunity. If trade between the US and Mexico ceased. 4.9 million American 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 on trade 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 ijIiOn from trade with Mexico. These regional partner's accOunted for 32% of 'g?oods-exportsbased jobs in 2015.5 Alabama Illinois: 2? Alaska 'A'tiz'eha .. Indiana lc?Ma.? - Arkansas Kansas - --Keri_tucky' Colorado Louisiana Conn. I Maine Delaware Maryland . 1i" I 5 - 543.551" - Florida I Michigan Georgia: A Hawaii Ms 'ldaho; I Montana. The total number ot'jobs supported by goods exports increased by 890.000 from2009 to 2015 including 296.000 from Mexico and 110.000 from Canada. 5 Services exports to Canada and Mexico supported 360.000 and 201,000 jobs. respeCtively (12% of total service exports- supported jobs). From 2009 to 2015. services exijrts to Canada increased US. jobs by 37,000 and Mexico jobs by 30.000.7 Total exports to NAFTA partners accounted for 2.767.077 jobs (24% of export-so pported labs) in 2015.5 NAFTA did not cause the loss of US. industrial jobs. In fact. studies haveshowh that automation and China's adherence to the WTO were the principal forces in charge of industrial jobs loss in the 0.8.9 According to the Wilson Center, 87% of m'anufacturin'g'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 jobs.10 Only 13% of job losses Were caused by trade and the maiority of these losses were due to increased trade with China. Even though more automotive manufacturing occurs outside the I U.S.. NAFTA has strengthened a that 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 Nebraska .. SC Nevada - so . NH - . {Tennessee NJ Texas NM. y. . Utah. NY Vermont Wrgihia ND I Washington . . . . OK I WisConsin I'Moming Received by Registration Unit 02/07/2018 4:04:46 PM Received by Registration Unit 02/07/2018 4:04:46 PM NAFTA Fact Sheet: Jobs and Wages WAG ES Wages. in real terms. have increased since the NAFTA was enacted. Real wages for U.S. workers are 12.6% higher now than when NAFTA took effect.12 The average manufacturing Worker today? is nearly twice as productive as in 1994 and real compensation per hour has increased by over 20% to reflectthat.13 NAFTA allows families to buy better products for Is money. NAFTA and other trade agreements have reduced trade barriers. benefitting Americans consumers with access to better-priced products.15 Access to a wider variety of goods atlower prices boosts American consumers' purchasing power. The'Council of Economic Advisers found that the purchasing power of the middle- class has increased 29% due to trade and tariff reductions since World War According to a 2005 study. access to 'lower' price imports boosted American purchasing power by about $10,000 per household on average annually." Mexico complies with mOre ILO conventions than both Canada and the disproving the argument that the country intentionally keeps wagesdown. Mexico has ratified 79 conventions. including7 out of8 Fundamental Conventions.? Canada has ratified 36 ILO conventions. including 8 out. of 8 Fundamental Conventions.19 Finally. the 0.8. has ratified 14 ILO conventions, including 2 outof 8 Fundamental Conventions.2? Additionally. the Mexican Government has already begun the process of updating its lab0r justice system. The intended reforms will bring. additional transparency and establish more efficient ways for workers to negotiate and?resolve disputes with employers}.1 OUTPUT, COMPENSATION snow STRONG GROWTH REAL MANUFACTURING OUTPUT (INDEX 2009:100) T30 -.. . - Q1 2014: 119.5 Re'tression 60 - . 1-1-.. . I i 3990 1995 21:00 2005 2020 20141 REAL WAGES AVERAGE REAL WAGE INDEX IN LOCAL CURRENCY (2005:100) 1 . . q, 13593 1993 7000 2010 20.1 '1 .CHART 4: Real wages in the US. are 12.6 percent higher today than they were in 1994 when NAFTA was enacted. Source: Economic Intelligence Unit, (accessed June 2. 2014) 7 nuance REAL WAGES AVERAGE REAL WAGE INDEX IN LOCAL CURRENCY (2005:100) mi .. --.., . - 102.5 I 1'00}? 31105 3010 205 CHARTS: Realwagesin Mexico'have risen significantly?3O percent?since its peso crisis ended in the late 19905. Source: Economic Intelligence Unit, (accessed Junez. 2014) MANUFACTURING SECTOR. REAL COMPENSATION PER HOUR (INDEX 2009:100) 100 A e? 982014 CHART 2: U.S. Manufacturingoutput today is 42 percent higher than it was in 1994 when NAFTA took effect. Additionally. compensation for manufacturing Workers is up 21 percent.? SOurce: Federal Reserve of St. Louis. ?Manufacturing Sector: Real Output," (Accessed May 29. 2014) Redeived by ARA Registration Unit 02/07/2018 4:04:46 PM Received by Registration Unit 02/07/2018 4:04:46 PM NAFTA Fact'Sheet: Jobs and Wages REFER ENCES 'Gary C1yde Hui'oatier and Paul L. E. Grimm, "The Payoi? fiuni' Globalization." Trie Washington Post. June 7. 2005 5-and-cans-3970481 JImps: /gi'owi I?ttps: tenors/sites states_ Jan; Supported by Export Destination 20-1-5. Deaartment of Commerce. International Trade Administration iJobs Supported by Expert Destination 2015. Department of Commerce. International Trade Administration ?Jobs Supported by Export Destination 2015. Department of Commerce, International Trade Administration I Jobs Sup poncd by Expert Destination 2015. Department ofCo'mmerce. International Trade Administration ?9 httrisJ/w ww.w:isonr.en '1 The Truth about NAFTA: Lessons for ?l?ra'de Negotiations. The Heritage Foundation (Data Iron-i Economist lntetligenoe Unit) ?The T_ruth about NAFTA: Lessons for Trade Negotiations. The Heritage Foundation (Data from Economist Intelligence Unit) i? Federal Resen'te of St. Louis. "Manufacturing Sector: Real Output? Freedom to Trade: A Guide for Policyma keno The Heritage Foundation Th White House. "The- Eco-?iomlc Benefits of US Trade." May 2015 1' Gary Clyde I lutbauer and Paul L.E. Griecs. "The Fay-at? from Globalization." Ilia Washington Post. June 2005 1" yn/normlex Ien/t?p= NO 1? http://w ww. len 3? mversaleomtn?u /e ntrada-de-oninion Received by Registration Unit 02/07/2018 4:04:46 PM Received by ARA Registration Unit 02/07/2018 4:04:47 PM NAFTA Fact Sheet: SeasonalAntidumping I- .. 'Retal'iat?ory measures from Mexico 0r. Canada could be devastating toindu'St'rie's i'n?Whi?cih America pr??im'ejsj. - . . i. - Seasonal restrictions Will'pi't Amefi'can producers against e'ac'li'other. . ?restgri'c'tions will jaffe?xt'he agribusiness ,scornpanj?lsr have. sizable" long-term across NAFTA'Bbuntries; - -. - -. Seasonal a'r'itidumping restrictions would ultimately reduce . Americans 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 of 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'o?pposite. For instance. Mexico is the No. 1 export market for US. apples. and Canada is the No; 2. market- If the US. w'e'reto restrict access to Mexican or Canadian seasonal fruit and vegetable sector these countries could implement similar seasonal im?pOrt restrictions on US. apples to prot'e'Ct-domestic apple growers in Mexico I and Canada. This will raise prices for consumes and potentially lead to seasonal shortages of fruits and vegetables American censumers rely on in their grocery stores.1 According to MIT's Observatory for Economic Complexity. U.S. growers of apples and pears are highly dependent on the Mexican market and therefore significantly vulnerable to retaliation (see figure 1). 2 Seasonal antidumping measures have extremely narrow benefits for regional producers citrus and tomato farmers in Florida) and the interests of these producers are not representative of the U5. agribusiness sector more generally. exports a tremendous amount of agricultural products to Mexico and Canada. ha'Ving'reached numbers that would not have been possible without the implementation of NAFTA. Since the trade .agreement'was put in place. U.S. agricultural exports'to Canada and Mexico h'av'etripled and quintupled. respectively. Special interest provisions can put the current agricultural trade between the three partners at risk.10 American producers of corn and soybeans - the country?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."1 These figures are pale in comparison to the corn and soy expOrts that the US. distributes to Mexico alone (see Figure 2). 0.5. EXPORTS T0 MEXICO In Millions of USD - Source: I Apples and Pears I Citrus $432 2013 20l4 2015 Figure] APPLES AND FEARS EXPORTS29% _0f total and'pears exports Went to Meatico :cneusiexeoms . I 3 . 2015:? I. - 2014;: - 12%- 2100/97. - or wields citrus exports Went t'o'Me?ki?o" . us. EXPORTS TO MEXICO Jn Billions of USD- SoUrce: I Co'rn I Soybeans 2013 2914 2015 Figure? coma ~2015; 11? I 20131:? I 2013: 1? $2.39 $2.38 $1.87 billion billion billion Of' total US corn exports went to Mexico SOYBEAN EXPORTS: . 2015:18' - 2014: 99 2'013:'20 $1.46. $1.83 $1.51 billion billion billion Of total corn exportswent to Mexico Received by Registration Unit 02/07/2018 4:04:47 PM Received by Registration Unit 02/07/2018 . 4:04:47 PM NAFTA Fact Sheet: Seasonal Antidumping Given the close ties I-het'w'een the U.S. and Mexico, a policy that restricts market access to Mexican produce will hurt American agribusiness imestments in Mexico. NAFTA allows American produce companies build operations that work yea r-rou nd by investing on both sides of the U.S.-Mexico Border. A policy thataffects American investments and operations in Mexico will have negative repercussions on these companies. their'w'orkforce in the U.S. and the communities that depend on those jobs. According to the Egonornic Research" Service of the U.S. Department of Agriculture?1 - Since the implementation of NAFTA. U.S. investment in the Mexican food and beverage industries increased substantially from billion in 1993 to billion in 2012. declining to billion in 2016. - - direct investment in production agriculture in Mexico increased from million in 2010 to billiOn in 2016. - A prime example of this is Driscoll. the largest berry company in Politico: Driscoll "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. Driscoll's sour?Ces berries from Oinar'd. Calif.. Baja. Mexico. and elsewhere in Mexico. By April. it's still getting berries from those locations. while also bringing online harvests from Watsonville, Salinas. and Sante 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 2 Received by Registration Unit 02/07/2018 4:04:47 PM NAFTA guarantees competition and increased market access. Increased- competition means that-AmerECan consumers pay the beSt-?rioes for the highest quality products. Trade policies that limit American con5u me rs' access to produce 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 grocerystore increase due to a lack of competition. Acco rding to Reuters. American retail. restaurant and agriculture groups have already warned'US. Trade Representative Robert Lighthizer; of the potentially ?dangerous implications for U.S. that perishable-anti-du'mping measures can have. 23 businesses and consumers" implementing additional s?orod uce-growcrs-Z 62 031 map/h'592/export r?u sa/mex/s how/2015f http://atlasmofdia. miredu/cn/visualile/tree _n1 ap/ sQZ/export/u summits howl 2015/ D/h'snge! Dort/usa/show/OSOS/ZOIEI sa/sh ewmsd'a/ 2014/ 9 map/5592a: po'rl/usa/s hOw/0808/2013/ _map/hs?2/exoort/u sa/show/OEO 5/2015! aiize/tme_Ma plh'sBZ/ex port/usa/s how/OBOS/ZOld-l a ma p/h592/ex port lusa/show/OBOS/ 2013/ 2017/01 re - e?id= _m'ao/hs92/export/u sa/s how/ONE {2015/ ?4 sa/s how/0505300015! '5 _':11ap/ 592/export/u salshow/ 1005/201 5/ _map/hs92/oxport/u 58/: how! 1005/2014/ ht h592/exp'ort/u sa/sh raw/1005! 2013/ '1 tree_ map/ h592/exportfu sax/shawl 1201/ 2-015! ?9 sa/sh ow/1201/2014/ 1? su alize/tree _map_/ h592 {export Iusa/show?lOl/ZOIB/ . menace-tradede 1? s-prod uce-growers-Z 42031 1? merlcan-retaile rs-restauran ts-oppo sc-u-s- Received by Registration Unit 02/07/2018 4:04:48. PM NAFTA Fact Sheet: Trade Imbalance . economies. .momma""1?" --, - Deficits can actually Speak of a stronger economy. America's deficit with Mexico makes American final 1 .products more competitive when trading. with other i "l have a "deficit"'with my local supermarket. but oi?fset what i owe by earning money elsewhere. not by stocking shelves at night to pay for my groceries. ?Robert B. Zoellick?. former World Bank president. U.S. trade re presentative and deputy secretary of state.l 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 America?s strength, its low saving rates and the dollar?s statusas the world's" reserve currency. There are a number of reasons why the U.S. maintains a trade imbalance. including: The stronger exchange rate of the dollar in the international financial market makes foreign products cheaper for American consumers. thus allowing them to buy more and save less.2 I A growing U.S. 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 U.S. official at the NF and as - the World Bank's chief economist, argues that the low 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 administr?ation'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 defitit - either by reducing the fiscal government's spending or raising taxes. Imposing arti?cial trade barriers to cut down the trade imbalance would weaken America's competitive advantages against China and other global economies. Mexico and the U.S. do not simply trade goOds?; they work together to A manufacture them. For instance. there is a 40% U.S. value-added in MexiCo's eXpOrts to the U.S.. meaning that 40% of goods imported to the U.S. contain U.S.- made products?. in fact. trade with Mexico makes American exports more competitive as more than half of U.S. imports from Mexico are either parts or raw material. crucial for the development of America?s value-added eXport products? U.S. 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 Americasreach to these markets. 5 Received by Registration Unit 02/07/2018 4:04:48 PM The U.S. trade imbalance is largely driven by U.S. energy imports. In fact. if you exclude crude oil and other energy Imports. the United States had a $41.4-bi1licn trade surplus with Canada and MeXico in 2014? The U.S. trade deficit is driven by America's need to im?pdrt energy. Pursuing energy independence and maintaining strong ties with our NAFTA partners would reduce the trade imbalance. increase North American competitiveness. and make the U.S. less reliant on foreign energy producers. I In the meantime. trade in the energy sector is beneficial fOr all three NAFTA partners. While the imports crude oil from Mexico and Canada. it then exports refined products back to those countries and the rest'of the world. while securingaccessible energy prices for American consumers. in 2014. 7.1% of American exports. worth $103 billion. were refined petrbleum products.8 in 2014. $13.7 billion worth of refined petroleum were exported to Canada.9 $19.3 billion worth of refined petrOIeum were exported to Mexico. 1? I 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: 11 Manufacturing-z U.S. trade surplus of $21.5 billion in 2014. U.S. manufacturing output rose faster in the 15 years after NAFTA entered into force than in the 15 years before. Services: U.S. trade surplus of $41.8 billion in 2014. Agriculture. food beverages: U.S. trade surplus of $1.8 billion in 2014. o1504653219?mg=p rod/acmu nts-wsi t? ups our 634-8730-3f0f- grid Source: BER. Glooafvalue database in Kc uama n. Powers. Wang. Wei [September 2010. revised March 2011) 5 Bad-8730 -3f 01'- Source: BER. Global Value database in Pawe rs. Wang. Wei (September 2010. revised March 2011) hm; http/Iatlasmcdia. ?9 http://atlasmediamif .edu/en/vi suaHle/trce_map/ h592 Iexport/usa/mex/show/ZO 14/ e-sfo?ry-of-nafta/