Navigating the
approach ahead on commerce
appears like an equation that simply refuses so as to add up.
Some voices say we should defend our North America
commerce deal
in any respect prices, regardless of how coercive or
unpredictable the calls for
from United States President Donald Trump look like. Some say we’ve gone it alone earlier than: our economic system was sturdy sufficient to grant us membership within the G7 lengthy earlier than we’d signed the North America Free Commerce Settlement (NAFTA) or different free commerce agreements.
Nonetheless others say commerce diversification is the important thing to decreasing our publicity and threat; that we’ve extra to realize from promoting the assets we’ve in abundance to different elements of the world.
However there’s a approach to do all of it — to deal with the
Canada-U.S.-Mexico Settlement
(CUSMA) and on diversification — and
Mexico is how we do it
. The Crew Canada Commerce Mission to Mexico this previous week, led by Commerce Minister Dominic Leblanc, offered a transparent sign that there’s each the urge for food and rationale to provide extra consideration to the third, usually neglected, amigo.
Mexico is already Canada’s third-largest buying and selling associate and Canada-Mexico commerce has risen roughly twelvefold since 1994, when NAFTA first got here into impact. But if you stand again to judge how a lot of our import/export market is commerce with Mexico, this top-three rating appears questionable. Mexico solely represents 3.6 per cent of Canada’s complete commerce and 1.1 per cent of our exports.
That underperformance has led some to deal with Canada’s relationship with Mexico as peripheral. It isn’t. The upside of elevated commerce with Mexico is evident and it’s already in attain: from our present connectivity via rails, roads and ports, to sharing the identical time zones, to membership in two of Canada’s capstone commerce agreements, CUSMA and the Trans-Pacific Partnership.
Too usually, the dialog round continental commerce has drifted again towards rivalry: who’s successful the following main funding, who’s getting the following plant and who has distinctive leverage heading into the 2026 CUSMA overview? That framing misses the purpose.
The successful method was by no means meant to be Canada versus Mexico or Canada versus the U.S. If we have a look at North American commerce as two parallel tracks of commerce with the U.S., we miss that better Canada-Mexico integration would profoundly amplify how North America produces, competes and exports to the remainder of the world.
Contemplate the automotive sector. North American autos cross borders a number of instances earlier than completion. The Canadian and Mexican elements sectors don’t compete; they co-produce. Canada gives important inputs and superior parts. Mexico gives large-scale
manufacturing capability
and meeting. U.S. firms anchor design, capital and distribution. That is value-chain integration at scale and it solely works when all three transfer in sync.
The identical precept applies effectively past autos. Mexico is a producing powerhouse and a hub for near-shoring.
As firms rethink international provide chains, North America has emerged because the world’s most built-in and dependable manufacturing platform. Canadian agri-food, equipment and aerospace inputs feed Mexican amenities. Mexican manufacturing strengthens North American exports. U.S. distribution networks carry merchandise to international markets.
This isn’t concept; it’s how the continent already works.
The U.S. Chamber of Commerce agrees: North American integration is a aggressive benefit, not a legal responsibility. U.S. producers, retailers, agri-food producers and repair suppliers depend on Canadian and Mexican companions to remain globally aggressive. Undermining that integration doesn’t strengthen the U.S. As an alternative, it weakens its personal companies.
That’s the reason current Crew Canada efforts in Mexico matter. The purpose just isn’t merely to extend export volumes. It’s to assist Canadian firms transfer past transport items and into partnerships, joint ventures and operational footprints that present scale and resilience.
Your entire continent turns into extra aggressive when Canadian firms embed in Mexican provide chains and when these provide chains are built-in with U.S. consumers and distributors. It each builds on CUSMA and diversifies how Canada trades.
The service sector is one other neglected pillar. Canadian banks and monetary establishments already function at scale in Mexico, serving to firms entry each the Mexican market and the broader Central and South America markets.
Don’t neglect
tourism and hospitality.
All of us perceive why Canadians flock to the Mexican solar at the moment of yr, however there was a historic migration in current months. As Canadians rethink their journey {dollars} spent within the U.S., many have turned to Mexico. This January, for the primary time, the Toronto-Cancun flight path grew to become Mexico’s most-travelled worldwide route, beating out main centres equivalent to Dallas and Madrid.
Our personal journey and tourism sector can be thought of one in every of Canada’s high providers exports, in that it attracts overseas capital into our economic system. Mexico’s tourism to Canada has been the quickest of any worldwide market to get better from pandemic-era lows, in response to Vacation spot Canada information, and is taken into account a strategic supply of future progress.
Nevertheless, when Canada launched new visa necessities, charges and paperwork for Mexican travellers in 2024, it instantly led to a 28 per cent decline in guests. If we’re critical about our North American challenge, we must always in all probability revisit this resolution.
In a world outlined by geopolitical threat and provide chain realignment, North America has a bonus most areas envy: proximity, complementary economies and the underpinnings of a rules-based framework that has already confirmed its value. The duty now’s to not reinvent it, however to defend and deepen it.
Canada–Mexico ties should not a facet story to Canada’s present commerce dilemma. They’re central to the reply.
Matthew Holmes is govt vice-president of the Canadian Chamber of Commerce.
