Mexico eager to be Canada’s trade partner

Opinion

Hey there, time traveller!
This article was published 27/06/2016 (2859 days ago), so information in it may no longer be current.

The Canadian visit this week of Mexican President Enrique Peña Nieto could not be more opportune for Canada. Our chances of winning a free trade deal with the European Union have suddenly dimmed on account of Britain’s decision to quit the European trade bloc. Now, right on cue, here comes a trade partner we had nearly forgotten, eager to do business.

Mexico and Canada have been linked by the North American Free Trade Agreement (NAFTA) for the last 22 years, but you would hardly know it during the 11 years of the Harper government. Stephen Harper was not much interested in Mexico. He imposed a visa requirement on Mexican visitors to Canada for fear of bogus refugee claimants. He cancelled the February 2015 Ottawa summit meeting that would have brought U.S. President Barack Obama and Mr. Peña Nieto to Ottawa. The formal structure of NAFTA remained, but the relationship withered.

That cancelled summit will be held this week, and the Mexican president is taking the opportunity to make his own series of visits in Ontario, Quebec and on Parliament Hill to help revive Canadian interest in his country and the commercial opportunities it offers. With its 120 million population (more than three times Canada’s), abundant resources and rapidly growing middle class, Mexico offers economic expansion possibilities far beyond those of either Canada or the U.S.

The country also has terrible problems that impede its expansion and modernization. Corruption is endemic among public officials. Drug cartels are more powerful than the public authorities in parts of the country. The police are practically useless. The enormous underclass of native people is terribly abused. An ancient land-holding system still impedes modernization of agriculture. The low price of oil is forcing Mexico — like Canada — to seek other sources of wealth.

An early step to opening Mexican doors for Canadian commerce will be to ease the visa requirement on Mexican visitors to Canada. This is insulting to Mexicans. It is also extremely onerous since visa applicants must produce a vast volume of documents and wait many months — at the end of which they may still be turned down without grounds and without appeal by a minor official in the Canadian embassy. Small wonder few Mexicans come to visit, work or study in Canada.

Canada’s Comprehensive Economic and Trade Agreement with the European Union concluded nearly two years ago and was supposed to offer trade expansion for Canadian exporters. However, the Trudeau government procrastinated over it and now the opportunity has perhaps been lost on account of the U.K. decision to pull out. The 27 remaining EU members probably have different priorities in Canadian trade, but in any event their trade policy will be in turmoil for the next couple of years. The Trans-Pacific Partnership, linking Canada and the U.S. to 10 other Pacific Rim countries, was the other trade-growth strategy. The Canadian government has started a long review of that one, too, and the U.S. Congress, in its recent protectionist mood, seems unlikely to ratify it.

In this context, the chance to expand trade with Mexico is looking better and better. Canada and Mexico share a long and difficult relationship with the United States, the dominant partner of the continental threesome. They share a need to recover from an era of heavy dependence on oil exports to finance public services. If the U.S. wants to join its two neighbours in discovering new sources of economic expansion, so much the better, but Canada and Mexico need not wait for the U.S. to point the way.