A breakdown of the Mexico-Canada sans US plan

Lessons from having integrated through the US rather than with each other.

The Big News Breakdown. Unpacking this week’s most important news.

Mexico was the one who invited Canada to the original North American trade treaty—NAFTA. The plan was to counterbalance the overbearing influence of the US. It backfired. Decades later, now under NAFTA’s successor, the Canada-US-Mexico Agreement (CUSMA, as it is known in Canada), Mexico and Canada are both overwhelmingly dependent on trade with their common neighbour to the extent that Canada recently turned on Mexico to curry favour with Donald Trump.

The Premiers of Alberta and Ontario went out of their way to accuse Mexico of all sorts of unproven malfeasance to match Trump’s own accusations. Kowtowing to the bully didn’t work either though. Now President Claudia Sheinbaum and Prime Minister Mark Carney are trying a new tack.

Last week, among much smiling and words of camaraderie, both leaders met in Mexico City to set up a joint plan to bolster relations.

Specialisation suspicion

Trade with Canada makes up just 3% of Mexico’s total international exchange, compared to over 80% with the US. Yet, years of CUSMA have provided an important common platform for integration unlike any other in each country’s trade relations with the rest of the world.