NAFTA Trade Drops

North America's Super Corridor Coalition (NASCO) reported US trade using surface transportation between its North American Free Trade Agreement (NAFTA) partners Canada and Mexico fell by 33.1% in April 2009 from the same month a year earlier. Citing Bureau of Transportation Statistics (BTS) figures, NASCO said trade was $49.7 billion for the month.

April was the fourth consecutive month with a yearly decline of greater than 27%. Surface transportation consists largely of freight movements by truck, rail and pipeline, noted the NASCO report. About 88% of US trade by value with Canada and Mexico moves on land.

Imports in April were up 19.5% compared to April 1999, while exports were up 24.9%.

US-Canada surface transportation trade totaled $30.2 billion in April, down sharply by 38.2% compared to April 2008. The value of imports carried by truck was 32.8% lower in April 2009 when compared to April 2008, while the value of exports carried by truck was 31.2% lower during this period.

US-Mexico surface transportation trade totaled $19.5 billion in April, down 23.4% compared to April 2008. The value of imports carried by truck was 22.0% lower in April 2009 than April 2008 while the value of exports carried by truck was 18.0% lower.

The report continued, noting US trade with Canada, its single-largest trading partner, is down far sharper than bilateral trade with Mexico for two key reasons. First, the US-Canada trade since 1965 has been dominated by trade involving parts and whole autos of US domestic brands and the recession combined with the the massive disruption by the bankruptcies of GM Corp. and Chrysler Corp. has had a major impact in trade and sales. Secondly, the border states and provinces with the large auto and auto parts manufacturing industry layoffs have seen much lower consumer consumption, much of which is satisfied in cross-border trade.

Meanwhile, US-Mexico trade has benefited from Mexico requiring imports from the US for materials and mid-level components to complete major exports. And Mexico has benefited from Texas' economy. The second-largest state economy in the US, the Texas economy was the strongest in the US for the last six months, and among the latest to reflect the impact of the US economic slowdown and national unemployment trends. Texas is Mexico's largest and strongest US state trading partner.

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