Carney heads to Mexico looking for an ally — and alternatives

[ad_1] Prime Minister Mark Carney heads to Mexico Thursday with two separate, however associated, objectives.

The primary is to search out methods to work with Mexico to protect North America-wide free commerce, or a minimum of as a lot of it as may be saved from essentially the most protectionist U.S. administration in a century.

The second is to develop a bilateral buying and selling relationship with Mexico that operates independently of the whims of the White Home, and might survive no matter destiny lies in retailer for the Canada-U.S.-Mexico Settlement (CUSMA) when its renegotiation lastly occurs.

The journey is predicted to provide an settlement on a brand new Canada-Mexico complete partnership and a safety dialogue targeted on points resembling transnational crime and drug-smuggling.

"We're targeted on elevating our partnerships in commerce, commerce, safety and power," Carney mentioned in a written assertion earlier than his departure for Mexico Metropolis. "Collectively, we are going to construct stronger provide chains, create new alternatives for staff and ship higher prosperity and certainty for each Canadians and Mexicans."

However there has additionally been some turbulence within the relationship, as there was throughout U.S. President Donald Trump's first time period, and the journey is an effort to construct belief between the 2 companions that neither will throw the opposite underneath the bus.

Mending fences with Mexico The Mexicans are maybe those with higher motive to really feel cautious of the Canadian embrace.

"There's been issues in Mexico about statements that have been made by premiers Doug Ford and Danielle Smith," mentioned Laura Macdonald of Carleton College's institute of political financial system, and that members of the Trudeau authorities had additionally hinted "we might be higher off with out Mexico" quickly after Trump's re-election.

However Canadian leaders, each federal and provincial, appear to have dropped the notion that Canada can escape Trump's sights by pushing Mexico out in entrance.

WATCH | Nov. 15, 2024: Alberta premier suggests slicing Mexico out of CUSMA: Alberta premier joins pitch to chop Mexico from North American commerce pact

Alberta Premier Danielle Smith says Canada cannot 'sacrifice' its relationship with the U.S. if Mexico is a 'commerce irritant.' She says she and the Ontario premier are 'in sync' on his pitch to pursue a bilateral take care of the U.S. In August, Smith visited Mexico and appeared to do some fence-mending. Finance Minister François-Philippe Champagne and International Affairs Minister Anita Anand visited Mexico the identical month and met with Mexican President Claudia Sheinbaum, constructing on Carney's bilateral talks on the G7 summit.

"I feel now, after some eight months of Trump, it is grow to be clear that Canada just isn't higher off with out Mexico," mentioned Macdonald.

"We actually have to work with our companions and allies, the Mexicans," she mentioned, given the unpredictability of Trump's tariffs and different strikes. "Going at it individually from the Mexicans would simply weaken us."

Bilateral commerce rising The buying and selling relationship with Mexico has grown lately, although a lot of the progress has been in Mexican imports to Canada.

Canadian direct funding in Mexico, all the time huge within the mining sector, has diversified because it has expanded.

For the primary time this summer season, extra new automobiles entered Canada from Mexico than from the U.S., largely a perform of automakers resembling GM and Volkswagen sourcing automobiles from their Mexican vegetation to keep away from Canadian counter-tariffs that apply to American, however not Mexican, automobiles.

Flavio Volpe of the Automotive Components Producers' Affiliation says Canadian politicians who disparaged the connection have been within the unsuitable: "Donald Trump tried to place a wedge between us. We took the bait."

He mentioned "buddies of the auto business" have been fast to say they did not want Mexico in an try and defend Canada's financial system.

"Effectively, the reality is we do want Mexico to be as affluent as we've got been," he mentioned, pointing to Canadian-owned auto elements vegetation primarily based in Mexico.

"Once we discuss to the Mexican authorities and Mexican pursuits, we discuss as Mexican traders and Mexican employers."

Totally different approaches, comparable outcomes Within the early days of the Trump administration, Sheinbaum was heralded by some worldwide observers as a frontrunner who appeared to have cracked the code for coping with a truculent U.S. president.

Trump has all the time spoken respectfully of Sheinbaum, a lot as he has of Carney, in sharp distinction to his demeaning tone towards former prime minister Justin Trudeau.

Mexico's strategic resolution to not retaliate to U.S. tariffs permits for a straight comparability. Earlier than Canada dropped lots of its counter-tariffs, the White Home singled out Canada and China as the one international locations to hit again.

However it's onerous to see how Mexico gained any actual benefit with that method, says Volpe.

"I feel we're each in the identical boat," he mentioned.

'Benign neglect' Each side have usually talked about increasing free commerce exterior of CUSMA, however neither has actually achieved a lot to advertise the concept, says Carlo Dade of the Canada West Basis, a member of the Mexican Council on International Relations (COMEXI).

"There is a baseline of benign neglect," he mentioned. "We do not capitalize on alternatives, however we're not inflicting issues. I might characterize it as that is the place we have returned to, after the premiers of Alberta and Ontario, let's be blunt right here, threw Mexico underneath the bus."

Dade mentioned that even inside CUSMA, neither Mexico nor Canada have "absolutely taken benefit of the entire settlement."

Speak of a brand new Canada-Mexico commerce hall has but to maneuver a lot past the inspirational section. One Mexican official who spoke to CBC Information on background mentioned Mexico had doubts concerning the capability of Canadian infrastructure to deal with commerce that might, by definition, largely need to go by sea round the USA.

Mexico has a number of ports on every coast, most notably Manzanillo and Lazaro Cardenas on the Pacific and Veracruz and Altamira on the gulf. Manzanillo is present process a significant growth that can enable it to deal with the equal of 5 million containers a 12 months by 2030 — twice the quantity that strikes via the ports of Montreal and Vancouver mixed.

WATCH | Extra concerning the Port of Montreal growth: Why the Port of Montreal growth venture is a nationwide precedence

The Port of Montreal’s plan to construct a brand new terminal in Contrecoeur, Que., is without doubt one of the 5 main initiatives Prime Minister Mark Carney plans to quick monitor. On the finish of its development in 2030, the terminal within the Montérégie area will deal with a couple of million containers a 12 months. Mexican officers are keen to debate expansions of these two Canadian ports (one in all which is on Carney's main initiatives listing), and the potential development of devoted services to help Canada-Mexico commerce in items resembling minerals and elements which are used within the development of electrical automobiles.

Dade says there are alternatives for the international locations to affix collectively in producing items for rising Asian and South American markets — they usually have a aggressive benefit over the U.S. in doing in order members of the Complete and Progressive Settlement for Trans-Pacific Partnership.

"It has nothing to do with Donald Trump, has nothing to do with the U.S. We may truly work collectively within the Pacific, but we have not," he mentioned.