The breakdown of trade discussions between Ottawa and Washington may prompt U.S. negotiators to pursue a favorable outcome with Mexico in their ongoing one-on-one talks, according to a former Mexican trade negotiator. Kenneth Smith Ramos, Mexico’s former chief technical negotiator for the initial Canada-U.S.-Mexico Agreement (CUSMA) negotiations from 2017 to 2019, anticipates the U.S. aiming to establish a preliminary agreement with Mexico before the year concludes. This move could defer resolutions on more challenging issues, such as potential restrictions on Mexican agricultural exports, to a later date.
Both Canada and Mexico have been independently engaging with the U.S. to resolve specific trade disputes and tariffs in anticipation of reaching agreements before engaging in trilateral negotiations concerning CUSMA amendments and extensions. The recent breakdown in talks between Canada and the U.S. occurred on August 21 when Prime Minister Mark Carney withdrew negotiators due to last-minute demands from the U.S. on cultural, automotive, and sovereignty issues. The impasse aimed to prevent the U.S. from imposing 50% tariffs on approximately $27 billion worth of Canadian goods, leading Canada to retaliate with equivalent counter-tariffs on over 700 U.S. imports effective September 8.
The unresolved Canada-U.S. trade dispute has indefinitely postponed trilateral discussions on advancing CUSMA, as noted by Smith Ramos. The U.S. announced on July 1 its decision not to extend the CUSMA agreement, opting instead to renegotiate its terms. Despite Canada and Mexico’s desire to extend the deal, both countries believe in the benefits of the trilateral trade agreement.
Mexican President Claudia Sheinbaum and Mexico’s Secretary of Economy Marcelo Ebrard have emphasized the importance of finding common ground amongst the North American countries. Ebrard stressed the necessity of regional integration and expressed optimism for future agreements despite the current challenges. However, the uncertainties surrounding tariffs and threats remain a concern.
Solange Marquez, vice-president of policy at the Canadian Council for the Americas, highlighted the delicate handling of trade negotiations by the Mexican government amidst the ongoing trade tensions. Marquez noted Mexico’s cautious approach to avoid discord in negotiations, especially following Canada’s withdrawal. The shift towards bilateral agreements raises questions about the future of free trade in North America.
Mexican journalist Alex González Ormerod suggested a potential unconventional outcome for CUSMA negotiations, where Mexico and Canada may opt out of certain U.S.-imposed terms. He emphasized Mexico’s firm stance in negotiations compared to Canada’s response to unfavorable deals. The call for Canada and Mexico to strengthen their bilateral trade relations independent of the U.S. resonates with experts, who believe that a more direct partnership could enhance trade ties between the two countries.