NAFTA Partners

Author: Renee Berry
International Trade Analyst

Change in 2015 from 2014:

  To view changing data, mouseover the graphic below.

  • U.S. total exports: Decreased by $36.3 billion (6.6 percent) to $516.4 billion
  • U.S. general imports: Decreased by $51.9 billion (8.1 percent) to $589.9 billion
  • U.S. trade deficit: Decreased by $15.7 billion (17.6 percent) to $73.5 billion

U.S. Total Exports

U.S. total exports to its NAFTA partners, Canada and Mexico, declined by $36.3 billion (6.6 percent) in 2015 from 2014 values, falling from $552.7 billion to $516.4 billion. Exports to Canada fell to $280.0 billion, a decline of $32.4 billion (10.4 percent), while exports to Mexico fell to $236.4 billion, a decline of $3.9 billion (1.6 percent). The biggest factor in the decline in the value of exports to NAFTA partners was the nearly $16.6 billion decrease in the value of exports of energy-related products. The most significant factor in reduced export values for energy-related products was a major decrease in global crude petroleum and natural gas prices; for example, the price of crude fell by nearly 50 percent in 2015.1 For many products, including these, 2015 export levels were higher than 2014 levels in volume terms, but lower in value.

The most significant contributor to the $16.6 billion (28.7 percent) decrease in the value of U.S. total energy-related product exports to NAFTA, which fell to $41.2 billion, was a drop in the price of crude petroleum exports to Canada (table NF.1). Canada is the market for 97 percent of U.S. domestic crude exports. In 2015, U.S. total exports of crude petroleum to Canada rose by 28 percent in volume terms, but declined 30.5 percent in value because global crude prices were almost 50 percent lower in 2015 than in 2014 (table NF.2). Exports of petroleum products to Canada and Mexico followed the same pattern, increasing in volume but decreasing in value. Natural gas exports, which the United States ships to both of its NAFTA partners via pipelines, are also an important driver of trade in energy-related products with these countries. The price of pipeline natural gas exports from the United States was about 45 percent lower in 2015 than in 2014, leading to a 41.0 percent decline in the value of U.S. total exports of natural gas to NAFTA partners. In volume terms, the United States exported less natural gas to Canada because Canada’s domestic production rose, but exported more to Mexico because of its increased demand for propane.2

Table NF.1    NAFTA: U.S. total exports, general imports, and merchandise trade balance, by major industry/commodity sectors, 2011–15

 
Million $
 
Item 2011 2012 2013 2014 2015 Absolute change,
2014–15
Percent
change,
2014–15
U.S. total exports:              
    Agricultural products 42,685 44,903 45,442 47,481 44,247 -3,234 -6.8
    Forest products 16,284 16,431 16,741 16,614 16,032 -582 -3.5
    Chemicals and related products 68,681 72,536 74,250 77,041 72,243 -4,798 -6.2
    Energy-related products 43,683 43,821 49,368 57,732 41,177 -16,556 -28.7
    Textiles and apparel 9,731 10,223 10,782 11,267 11,151 -116 -1.0
    Footwear 460 516 580 618 630 12 2.0
    Minerals and metals 49,615 51,949 51,905 53,665 49,140 -4,524 -8.4
    Machinery 45,319 50,386 51,866 55,330 52,384 -2,946 -5.3
    Transportation equipment 101,844 112,307 116,646 119,374 115,533 -3,840 -3.2
    Electronic products 78,554 80,841 83,087 85,818 86,297 479 0.6
    Miscellaneous manufactures 11,064 12,125 12,087 12,921 11,879 -1,042 -8.1
    Special provisions 11,660 12,489 14,072 14,809 15,682 873 5.9
        Total 479,580 508,526 526,825 552,669 516,394 -36,275 -6.6
U.S. general imports:              
    Agricultural products 39,054 40,966 44,237 47,557 48,165 607 1.3
    Forest products 18,012 17,989 19,740 20,753 20,009 -744 -3.6
    Chemicals and related products 42,474 42,670 42,951 44,174 42,909 -1,265 -2.9
    Energy-related products 146,639 143,608 145,043 148,215 84,871 -63,343 -42.7
    Textiles and apparel 8,202 8,198 8,153 8,276 8,142 -134 -1.6
    Footwear 427 542 596 557 567 9 1.7
    Minerals and metals 57,287 54,429 51,949 52,665 47,801 -4,864 -9.2
    Machinery 35,766 38,702 39,948 42,583 42,808 225 0.5
    Transportation equipment 132,165 151,302 156,696 170,508 177,703 7,194 4.2
    Electronic products 72,140 75,149 74,288 73,741 81,023 7,283 9.9
    Miscellaneous manufactures 8,604 9,479 9,784 10,626 11,781 1,155 10.9
    Special provisions 17,429 18,823 19,727 22,216 24,152 1,936 8.7
        Total 578,198 601,857 613,113 641,872 589,931 -51,941 -8.1
U.S. merchandise trade balance:              
    Agricultural products 3,631 3,937 1,205 -76 -3,918 -3,842 -5,027.2
    Forest products -1,728 -1,558 -2,999 -4,139 -3,977 162 3.9
    Chemicals and related products 26,207 29,866 31,298 32,867 29,334 -3,533 -10.7
    Energy-related products -102,956 -99,788 -95,675 -90,483 -43,695 46,788 51.7
    Textiles and apparel 1,529 2,025 2,629 2,991 3,009 17 0.6
    Footwear 33 -25 -16 60 63 3 4.7
    Minerals and metals -7,672 -2,479 -44 999 1,339 340 34.0
    Machinery 9,554 11,684 11,918 12,747 9,576 -3,172 -24.9
    Transportation equipment -30,321 -38,996 -40,050 -51,135 -62,169 -11,035 -21.6
    Electronic products 6,413 5,692 8,799 12,078 5,274 -6,804 -56.3
    Miscellaneous manufactures 2,460 2,646 2,303 2,295 98 -2,197 -95.7
    Special provisions -5,769 -6,334 -5,656 -7,407 -8,470 -1,063 -14.3
        Total -98,618 -93,331 -86,288 -89,203 -73,537 15,665 17.6

Source: Compiled from official statistics of the U.S. Department of Commerce for the 2011–15 period. These reflect all official revisions of previously published data up to June 2015 (accessed February 10, 2016). Note: Import values are based on Customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data. Sectors are ordered by the level of processing of the products classified within each sector.

Table NF.2: NAFTA: Leading changes in U.S. exports and imports, 2011–15

 
Million $
 
Item 2011 2012 2013 2014 2015 Absolute change,
2014–15
Percent
change,
2014–15
U.S. total exports:

 

 

 

 

 

 

 

    Decreases:              
     Energy-related products:              
      Petroleum products (EP005) 31,679 32,555 34,132 34,142 25,654 -8,488 -24.9
      Natural gas and components (EP006) 7,735 6,460 8,202 9,872 5,820 -4,052 -41.0
      Crude petroleum (EP004) 2,049 2,634 5,073 11,664 8,108 -3,557 -30.5
      Steel mill products (MM025) 12,155 12,994 12,416 12,668 10,138 -2,530 -20.0
     Chemicals and related products:              
      Certain organic chemicals (CH006) 6,087 6,204 6,084 6,063 5,079 -984 -16.2
      Organic commodity chemicals (CH004) 2,633 2,737 2,750 2,573 1,662 -911 -35.4
      Polypropylene resins in primary forms (CH026) 2,344 2,230 2,441 2,515 2,078 -437 -17.4
      Polyethylene resins in primary forms (CH025) 3,095 3,245 3,392 3,763 3,339 -424 -11.3
     Agricultural products:              
      Oilseeds (AG032) 1,984 2,201 1,824 2,163 1,658 -505 -23.3
      Dairy products (AG010) 1,508 1,597 1,872 2,092 1,689 -403 -19.3
    All other 408,312 435,670 448,640 465,156 451,170 -13,986 -3.0
        Total 479,580 508,526 526,825 552,669 516,394 -36,275 -6.6
U.S. general imports:              
    Increases:              
     Electronic products:              
      Computers, peripherals, and parts (EL017) 15,896 17,116 15,907 15,330 18,573 3,243 21.2
       Telecommunications equipment (EL002) 12,977 11,610 12,271 10,868 13,446 2,578 23.7
    Decreases:              
        Crude petroleum (EP004) 107,660 110,083 108,594 110,894 59,461 -51,433 -46.4
      Minerals and metals:              
        Steel mill products (MM025) 8,431 8,154 7,697 8,962 7,017 -1,945 -21.7
        Precious metals and non-numismatic coins (MM020) 17,336 15,584 14,031 11,264 10,094 -1,170 -10.4
    All other 415,899 439,310 454,612 484,554 481,341 -3,213 -0.7
        Total 578,198 601,857 613,113 641,872 589,931 -51,941 -8.1

Source: Compiled from official statistics of the U.S. Department of Commerce for the 2011–15 period. These reflect all official revisions of previously published data up to June 2015 (accessed June 30, 2016). Note: Import values are based on Customs value; export values are based on free along ship value, U.S. port of export. Calculations based on unrounded data.

Lower prices for petroleum derivatives also affected NAFTA trade in chemical products. The value of U.S. total exports of chemicals and related products to NAFTA partners fell $4.8 billion (6.2 percent), to $72.2 billion. Several petroleum derivatives that account for a significant share of U.S. chemical product exports registered export levels that either increased or changed very little in volume terms, but decreased in value. The decrease in exports to Canada was driven by lower prices across a wide range of chemical products, while the decrease in exports to Mexico was concentrated in a smaller number of products. Specifically, trade in methyl-tert butyl ether (MTBE), a gasoline additive, contributed to the decrease in exports to Mexico. This was due to Mexico's implementation of a mandate to increase the use of ethanol as a fuel additive, which in turn lessened demand for MTBE. 3

Exports of minerals and metals to NAFTA partners fell by $4.5 billion (8.4 percent) to $49.1 billion. The biggest factor in this decline was lower exports of steel mill products. Exports of these products to Canada fell by $2.0 billion, and to Mexico, by $518 million. This decrease was mostly related to the developments in the energy-related products market described above: lower crude petroleum prices led to a reduction in oil–drilling activity in Canada, which, in turn, lessened its demand for the steel mill products used in such drilling projects.

Exports of agricultural products to NAFTA partners decreased by $3.2 billion (6.8 percent) to $44.2 billion. One of the main reasons for the decline in the value of exports was lower soybean prices, with global prices falling because of near record-high production in both the United States and Brazil in 2015.4 Partly as a result of these price declines, the value of oilseed exports to Mexico fell by $418 million (22.1 percent) despite an increase in the quantity of soybeans exported. Lower exports, by value, of dairy products to Mexico—down $360 million, or 22.6 percent—were also a factor in the overall decrease in agricultural exports to NAFTA partners. Over $200 million of this decline was in nonfat dry milk/skim milk powder, for which the drop in value was also due to low prices. Exports of this product to Mexico increased by 23.7 percent in quantity terms, but fell by 26.3 percent in value.5 After receiving high prices in 2014, producers in many of the major dairy-producing countries expanded production in 2015.6 The increased supply, combined with low demand in some other export markets, led to low prices for dairy exports to Mexico. 7

Re-exports

Except where otherwise noted, this section discusses U.S. total exports. U.S. total exports are made up of both domestic exports and re-exports (see landing page for definitions). In some sectors, flows of re-exported products to NAFTA partners are substantial. For example, it is common in the electronic products sector for 30 to 50 percent of total U.S. exports to Canada and Mexico to be re-exports; for some electronics, the share is as high as 75 percent. Other product groups for which re-export volumes are substantial and constitute a majority of total U.S. exports to NAFTA partners include apparel; footwear; toys and games; electrical transformers, static converters, and inductors; and tropical fruit.8

U.S. General Imports

In 2015, the value of U.S. general imports from NAFTA partners was $589.9 billion, a decrease of $51.9 billion (8.1 percent) from 2014. The main factor in this decline was a $63.3 billion decrease in the value of imports of energy-related products from NAFTA partners. Imports of minerals and metals from these countries also declined. These decreases were partially offset by increased imports in most other product groups. The largest increase was a $7.3 billion (9.9 percent) increase in imports of electronic products from NAFTA partners, mostly Mexico.

The same lower price trends that affected U.S. exports of energy-related products, as described above, also affected imports. Energy-related product imports from NAFTA countries are mostly crude petroleum, as Canada is the leading supplier of crude petroleum imports to the U.S. market and Mexico is an important supplier as well. Of the $63.3 billion decline in the value of energy-related product imports from NAFTA partners, $36.2 billion was a decrease in crude petroleum imports from Canada and another $15.3 billion was a decrease in such imports from Mexico. Due to low prices, the Canadian decrease represented a 43.5 percent decline in value from 2014 levels, but a 10 percent increase in volume. The low prices led to an increased volume of imports from Canada because the prices were associated with reduced U.S. domestic petroleum exploration and a build-up of inventories.9 U.S. imports of petroleum products also declined in value but increased in quantity, with much of the increased quantity coming from Canada. This increase in the quantity of imports from Canada was partly due to labor strikes at 12 U.S. refineries that lowered production levels.10

U.S. imports of minerals and metals from NAFTA partners declined to $47.8 billion in 2015, a decrease of $4.9 billion (9.2 percent). The decrease spanned a wide range of mineral and metal product groups, but the largest were steel mill products, which declined by $1.9 billion (21.7 percent), and precious metals and non-numismatic coins, which declined by $1.2 billion (10.4 percent). The decline in imports of steel mill products was due to weak demand from the U.S. construction and petroleum and gas drilling sectors. U.S. construction activity increased, but most demand for these steel mill products from this industry was met by reductions in U.S. inventories, so there was less need for imports. U.S. petroleum and gas drilling activity was down in 2015 due to low prices.

The decrease in precious metal imports from Canada was driven by a $648 million decline in imports of unwrought gold in the form of unrefined doré and refined bullion and grains. This reflected both lower gold prices and reduced import quantities; U.S. gold consumption remained relatively flat from the previous year’s level with a significant share of demand being met from domestic inventories rather than by imports.11 The $635 million decrease in precious metal imports from Mexico was driven by both lower silver prices and reduced quantities of imports of silver bullion and minted bars. The decline in imports of bullion and minted bars outweighed an increase in the quantity of silver doré imports from increased mine output in Mexico. U.S. refineries also recovered less silver from secondary (recycling) operations than in previous years, which reduced demand for imports of silver waste and scrap.12

U.S. imports of electronic products from NAFTA partners increased to $81.0 billion in 2015, an increase of $7.3 billion (9.9 percent). The increase was driven mainly by U.S. imports from Mexico of computers, peripherals, and parts, which rose $3.3 billion (22.9 percent), and telecommunications equipment (mainly cellular telephones and data transmission machines), which rose $2.6 billion (27.1 percent). These gains were a response to increased demand in the United States for wireless telecommunications services and infrastructure for advanced mobile communication technologies which stimulated upgrades of transmission equipment.13

Increased production of electronics products in Mexico represented the continuation of a trend in U.S. manufacturing of shifting labor intensive portions of electronics production to low-wage countries.14 As a result, Mexico has become a world leader in the consumer electronics industry; this sector is one of the fastest growing industrial sectors in Mexico in terms of employment and exports.15 The growth and development of the Mexican consumer electronics industry has benefitted from substantial foreign direct investment, low component manufacturing costs, a skilled workforce, and close proximity to the large U.S. market.16 Mexican telecommunications liberalization legislation that came into effect in 2015 likely further encouraged the development of telecom manufacturing in Mexico, as one of its key goals was to lower costs and increase competition in the sector.17

U.S. Trade Balance  

The trade balance with the NAFTA partner countries improved by $15.7 billion, lowering the deficit with NAFTA partners to $73.5 billion for 2015. While imports from NAFTA and exports to NAFTA partners both declined, the decline in imports was larger than the decline in exports, improving the trade balance. This was particularly true in energy-related products, where imports declined much more sharply than exports in value terms, leading to a $46.8 billion decrease in the trade deficit with NAFTA partners in this product group. The other significant change in the trade balance was an increase in the trade deficit in transportation equipment. This was mostly driven by a $7.2 billion increase in imports of transportation equipment from NAFTA partners, although there was also a $3.8 billion decrease in U.S. exports of transportation equipment to these partners, which widened the deficit. The widening of the deficit was driven by a nearly $4 billion increase in imports of motor vehicles from Mexico. Mexico's sizeable passenger vehicle manufacturing industry continued to attract foreign direct investment owing to its competitive wages, its position as a strong export hub to Europe, South America, and the rest of North America, which is at least partially a result of Mexico’s trade agreements with major consuming markets in North America, Asia, and the EU.18

 



1 For more information, see the “Energy and Related Products“ webpage and the special topic chapter.
2 Statistics Canada, Energy, 2016 (accessed July 7, 2016); PEMEX, Annual Report, December 2015.
3 USDOC, ITA, Renewable Fuels, July 2015; Reuters, “Mexico's Pemex Launches Ethanol Biofuels Program,” March 19, 2015.
4 USDA, PSD Online (accessed June 2, 2016); Doering, “Low Commodity Prices,” August 25, 2015.
5 GTIS, Global Trade Atlas database (accessed June 3, 2016).
6 Agri-View, “2015: The Year of Milking for a Loss,” September 11, 2015; Mulvany, “Milk Prices Plunge,” August 4, 2015.
7 See the agricultural products section for additional details.
8 USITC DataWeb/USDOC (accessed February 10, 2016).
9 As detailed in the “Energy and Related Products” analysis, producers use crude stockpiles to smooth out the impact of changes in supply and demand. The higher the inventory levels, the lower the price of the crude.
10 Oil and Gas Journal, Refining Report, April 15, 2015. For additional information, see the “Energy and Related Products“ webpage.
11 Monthly average gold prices on the London bullion market fell by $106.08 per troy ounce (9.1 percent) from the annual average of $1,266.20 in 2014 to $1,160.12 in 2015. LBMA, “LBMA Gold Prices” (accessed April 25, 2016).
Apparent domestic consumption is calculated by Commission staff as refinery production plus imports for consumption less exports (105 metric tons). The difference between apparent domestic consumption less reported consumption (150 metric tons) is the amount drawn down or dishoarded from industry and private inventories (45 metric tons). George, “Gold,” January 2016, 72.
12 Monthly average silver prices on the London bullion market fell by $3.38 per troy ounce (17.7 percent) from the annual average of $19.08 in 2014 to $15.70 in 2015. LBMA, “LBMA Silver Prices” (accessed June 6, 2016).
George, “Silver,” January 2016, 152–153.
13 Ulama, “Telecommunication Networking Equipment Manufacturing in the US,” April 2016, 4, 8-9.
14 See the “Electronic Products” webpage for additional details.
15 PR Newswire, “Mexican Consumer Electronics Industry,” October 6, 2011.
16 Ibid.
17 Manatt Jones Global Strategies, “Mexico’s Telecom Reform,” September 2014.
18 Bailey, “The Acceleration of Mexico’s Auto Manufacturing Industry,” August 6, 2015; Althaus and Boston, “Why Auto Makers Are Building New Factories in Mexico,” March 17, 2015; Priddle and Snavely, “More Car Manufacturing Jobs Move South,” June 15, 2015.