Examining the Bilateral Relationship between Mexico and South Korea through the Trade in Value-Added Perspective, 2000–2021

This article examines the trade relationship between Mexico and South Korea through the lens of trade in value-added perspective. Using the global input–output model, we dissect gross exports into their value-added components to analyze the sectors benefiting most from value-added generation in both...

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Bibliographic Details
Published in:Mathematics (Basel) 2023-08, Vol.11 (15), p.3352
Main Authors: Morales-López, Rodrigo, Quintana-Romero, Luis, Mun, Nam Kwon, Oh, Inhye
Format: Article
Language:English
Subjects:
Development banks
Exports
Food science
Free trade
global value chains
input–output analysis
International economic relations
International trade
Manufacturing
Manufacturing industry
Mexico
Mineral industry
Mining industry
North American Free Trade Agreement
Reconfiguration
South Korea
Trade deficit
trade in value-added
Trade relations
Trade surplus
Trends
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Summary:This article examines the trade relationship between Mexico and South Korea through the lens of trade in value-added perspective. Using the global input–output model, we dissect gross exports into their value-added components to analyze the sectors benefiting most from value-added generation in both countries. To do this, we use the multiregional input–output matrices developed by the Asian Development Bank (ADB). The results show a growing bilateral relationship between 2000 and 2021, with South Korea having a stronger position by generating a larger share of value-added linked to the bilateral relationship. Nevertheless, the gap has narrowed over time. Notably, South Korean exports to Mexico have substantially contributed to value-added generation in technology-based manufacturing sectors such as machinery, equipment, electronics, electrical, and optical products. Similarly, Mexico’s mining sector increasingly relies on exports to South Korea for value-added generation. The trends observed in this study’s findings persist even amidst the reconfiguration of Global Value Chains, indicating that a free trade agreement between Mexico and South Korea has the potential to further enhance value-added generation.
ISSN:2227-7390
2227-7390
DOI:10.3390/math11153352