June 20, 2017

Report: Arizona's Trade With Mexico Down by 9% in Past Year

A devalued Mexican peso may be to blame, one economist says.

Mariposa port hero Fruit stacked at the Mariposa Port of Entry. (PHOTO: AZPM Staff)

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Numbers released this month on Arizona’s trade relationship with Mexico are causing concern in the business community. But economists say it is too soon to know for sure if Arizona's trade relationship with Mexico is in trouble.

The annual report from the University of Arizona’s Arizona-Mexico Economic Indicators project shows Arizona’s exports to Mexico fell by more than 9 percent from one year to the next.

MariposaPortCBP3-spotlight Commercial trucks inspected at the Mariposa Port of Entry. (2015) (PHOTO: Fernanda Echavarri, AZPM)

The news is making nervous some Southern Arizona business leaders, who depend on trade with Mexico. But UA economist George Hammond, who oversaw compilation of the report, said the important information is not so much year-to-year but over the past decade.

“What we have seen over the past decade is very big increases in Arizona’s exports to Mexico,” said Hammond. “They are up over 50 percent over the past decade.”

Hammond said the downturn from last year may have to do with a devalued Mexican peso.

“We think that is now having a big negative impact on our exports. Arizona’s exports to Mexico fell by just over 9 percent last year. And a chunk of that was driven by the dollar is so much stronger than the peso is much weaker.”

And a weaker peso means Mexican businesses can’t afford to buy as much.

MORE: Business, Mexico, News
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