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To advance 'North American Idea,' fortify bond between Canada, Mexico, experts say

WASHINGTON — The relationship between Canada and Mexico has long been the weak link in North America's trilateral triangle, and foreign policy experts say reinforcing it will be key if the continent is to realize its true economic potential.
Mexican President Andres Manuel Lopez Obrador embraces United States President Joe Biden and Prime Minister Justin Trudeau following a joint news conference at the North American Leaders Summit, Tuesday, January 10, 2023 in Mexico City, Mexico. THE CANADIAN PRESS/Adrian Wyld

WASHINGTON — The relationship between Canada and Mexico has long been the weak link in North America's trilateral triangle, and foreign policy experts say reinforcing it will be key if the continent is to realize its true economic potential. 

Canadian Sen. Peter Boehm, a former deputy minister and diplomat, was among several officials from all three countries who took part Friday in an online panel assessing the effectiveness of last week's North American Leaders' Summit in Mexico City.

"The relationship is essentially characterized, in my view, by an isosceles triangle," Boehm told the panel, hosted by the Americas Society and the Council of the Americas. 

The two longer, equal sides represent the more prominent, long-standing ties the United States has with its two closest neighbours, he said.

"And then that very short one is the Mexico-Canada relationship, which I think has to grow. And it can grow in a number of ways."

The summit showcased several areas where that is already happening, said Louise Blais, a retired Canadian envoy who now serves as a senior adviser to the Business Council of Canada and as diplomat-in-residence at Laval University in Quebec.

Blais, who was at the summit, said Mexican President Andrés Manuel López Obrador surprised the Canadian delegation by echoing the sentiment that all three countries would be stronger if they were better able to function as a single unit. 

His position on that front was "not something that had been really made clear, especially not to the Mexican business community," Blais said. "We're really getting from him a sense that he believes in this." 

López Obrador — whose strategy of preferring Mexican energy suppliers was expected to be a sticking point in the meetings — also signalled a willingness to discuss the question further, she added.

"I mean, let's not be naive, but there is a sense that maybe there is hope that we can resolve this."

Canada could also be taking a more active role in working with Mexico to protect against some of the threats to democracy that exist in Latin American countries like Venezuela, Nicaragua and Cuba, Boehm added.

Prime Minister Justin Trudeau's last day in Mexico City was dedicated entirely to reinforcing ties with Mexico, beginning with a speech to business leaders that portrayed Canada as a free-trade champion and a wise place to invest.

Already, foreign direct investment in Canada in the last year has fuelled the growth of electric vehicle manufacturing and critical minerals development that has created some 17,000 jobs, Trudeau told his audience.

Trade between Canada and Mexico has increased nine-fold since 1993, while Canada was second only to Spain last year on the list of the largest sources of foreign investment in Mexico, he added.

"We are a reliable partner, with an abundance of talent, a very attractive investment climate, and a great quality of life," Trudeau said. 

"There's huge potential for growth between our countries. So let's continue this momentum. Let's keep doing what leaders did a generation ago: Hold fast to our belief in open trade and collaboration."

The two countries "need to do more" to expand their relationship for the good of the broader vision of making the entire continent more competitive globally, agreed José Antonio Meade, a former foreign affairs secretary in Mexico under Enrique Peña Nieto.

"I think that that relationship is underdeveloped, it's underappreciated, and as important as Canada is to Mexico and Mexico's potential is to Canada, we don't do as much as we should," Meade said. 

For all three countries, in particular the U.S., realizing the continent's true economic potential will require a commitment of time and effort to cultivate their trilateral ties, he added.

"I think that the most important challenge to overcome is that leaders are willing to commit the necessary time to nurture the relationship, and really through that nurturing, to identify the opportunities and make them happen."

The panellists also agreed on the importance of how the U.S. chooses to respond to a key dispute tribunal ruling on auto rules of origin that was officially released after the curtain came down on the summit, although all three parties were well aware of its contents.

The panel, part of the dispute resolution mechanism established under the U.S.-Mexico-Canada Agreement, found the U.S. had erred in its interpretation of how the trade deal treats core parts when calculating a vehicle's regional value content. 

The U.S. has so far stayed silent on how it plans to respond to the ruling, which sided with Mexico and Canada and is integral to determining whether a vehicle qualifies for tariff-free treatment under the USMCA. 

"I think it will be very, very telling to see whether the Americans will comply with the decision," said Blais, who noted that the agreement, referred to in Canada as CUSMA, will be due for review by all three countries in 2026. 

"I think I'll set the tone for the USMCA review that's coming up in less than three years now." 

This report by The Canadian Press was first published Jan. 20, 2023.

James McCarten, The Canadian Press

Note to readers: This is a corrected story. A previous version misstated the former title of Sen. Peter Boehm.