An increasing amount of components manufactured in China reach the US market through Mexico and Canada, at the expense of US manufacturers, Commerce Secretary Wilbur Ross said on Friday.
On the eve of the third round of discussions aimed at reorganizing the 23-year North American Free Trade Agreement – which US President Donald Trump has vilified and repeatedly threatened to give up – the figures published by the United States show how China is benefiting from the pact, replacing equipment manufactured in the United States.
"For me, this is the most frightening part, the strong growth is partly coming from outside Nafta, China, Southeast Asia, all these places, "Ross said on CNBC.
The share of US content produced in the US-imported manufactured products from Mexico was only 16 percent in 2011, a sharp drop from 26 percent in 1995, the Commerce Department said in a statement.
But Chinese content in imported Mexican products in the United States grew to 6% in 2011 against 0.3% in 1995, according to the Commerce Department, quoting the OECD trade data. At the same time, the content share of all non-Nafta sources doubled to 27% from 14%.
"When you think about it, the fundamental purpose of a trade agreement is to help countries not make an easier market for outside countries," said Ross.
US Trade Representative, Robert Lighthizer, Supports Increased US Content in NAFTA Trade in Manufactured Goods in Negotiations, which resumes on Saturday in Ottawa with Minister of Foreign Affairs Chrystia Freeland and the Mexican Secretary for Economy, Ildefonso Guajardo.
The share of US parts and components in imports from Canada fell to 15% in 2011, compared to 21% in 1995. Meanwhile, China's share of Chinese content increased by 3% 0.3% and the content share of all non-NAFTA sources increased to 21% from 12%.