Mexican International Trade Experiences Sharpest Fall Since 2009By Gabriela Mastache | Mon, 05/25/2020 - 15:47
Mexican exports reached US$23.38 billion in April 2020, a 40.9 percent fall from April 2019, according to Banxico. The fall is the result of COVID-19 pandemic and the social distancing measures, as well as the closure of businesses deemed non-essential.
According to a report from El Economista, in April 2020 oil exports experienced a 66.4 percent decrease the equivalent to US$758 million while non-oil exports dropped 39.4 percent or US$22.62 billion.
Within non-oil exports segment, agricultural exports experienced an 8.2 percent decrease and manufacturing activities a 41.9 percent fall, while extractive activities experienced a 20 percent increase. Automotive exports were severely hit by as well and experienced a 79.1 percent fall equivalent to US$2.62 billion.
According to the report, manufacturing activities that were most hit are the automotive sector; textiles, clothing and leather industry with a 48 percent fall; equipment and electronics with a 25.5 percent drop; professional and scientific equipment decreasing by 22.3 percent, machinery and special equipment for different industries with a 21.6 percent fall.
However, not only exports suffered. Imports also experienced a 30.5 percent fall, representing the steepest fall in this sector since August 2009, when an international financial crisis broke out. This crisis left the country’s overall trade balance experiencing a US$3.08 billion deficit. According to INEGI, this is the highest negative result the country’s trade balance has experienced since February 2009.
Mexico is not the only country that will experience a decrease in international trade. The World Trade Organization (WTO) expects exports for 2020’s first semester to l plummet as a consequence of COVID-19. In May 2020, the Goods Trade Barometer showed a 87.6 points reading, down from the 95.5 points registered in February 2020. Before COVID-19, international trade was already experiencing a decline with 2019 being the first year in which international commerce experienced a decrease since 2009. Readings below 100 points indicate a growth that is lower to medium term trends on a global level.
According to the WTO all of the barometer’s indexes are below the trend, with automotive products being the component of the index that has experienced the weakest performance. Electronic components and agricultural raw materials indexes, which registered 94 and 95.7 points respectively, show signs of stability while their components remain below the trend.
Luz María de la Mora, Deputy Minister of International Trade, said that in light of COVID-19 pandemic, the Minister of Economy has tried to make life easier for exporters and producers. “Mexico is a country that has not imposed any restrictive measures to exports as a result of the pandemic, what we have done is promote measures to facilitate trade. In Latin America, we are promoting exports and trade without the need of presenting a certification of origin, and for European Union and Japan products, it is only necessary for the export to have an authorization number,” said de la Mora to El Financiero.