MacLean’s shares Kevin Carmichael’s argument that there are sound reasons for Canadian negotiators to not sacrifice Mexico out of the desire to stabilize trade relationships with the United States of Donald Trump. Ignoring the ethical concerns of dropping a partner and the question of whether this tactic could actually work, the considerable and growing value of Canadian-Mexican trade is not to be ignored.
The months ahead will feature a lot of what I call, “Little Canada.” By that I mean the impulse to narrow Canada’s world view to what goes on in the United States, which I mentioned in a piece on January 27. As if on cue, Evan Solomon documented unofficial Ottawa’s willingness to abandon Mexico if doing so would allow Canada to protect its “special” relationship with the United States. Solomon spoke to Derek Burney, the former Canadian ambassador to the U.S. who helped negotiate NAFTA. “The U.S. war of words with Mexico is dangerous, and Burney, among others, is convinced the first thing that Canada has to do is abandon the Three Amigos relationship,” Solomon wrote at Maclean’s on January 30. He quoted Burney as saying the following: “We should not indulge in ridiculous posturing—like getting together with Mexico to defend our interests, when Canada has very different economic interests than Mexico. It is a fundamental error to conflate them.”
Are the economic interests of Canada and Mexico really so different? Both are middle powers that depend on access to international markets because their populations are either too small (Canada) or too poor (Mexico) to consume all the goods and services they are capable of producing. Economic gravity pulls most of what they sell into the United States. But the post-War commitment to more-the-merrier trade agreements has created a system in which smaller countries can trade under rules that aren’t entirely skewed in favour of the two or three biggest players.
Much of what Trump has proposed to do on trade would violate the terms agreed at the World Trade Organization, but it is possible the new president may not care. Suing the U.S. at the WTO would take years, and Trump, who has called the Geneva-based trade watchdog a “disaster,” could follow through on his threat to quit it. “He may believe (possibly correctly) that the next day, trade ministers will be lining up in Washington to negotiate bilateral FTAs, ready to accept U.S. terms, thus handing him another victory,” Oonagh Fitzgerald, director of the international law program at the Centre for International Governance Innovation (CIGI), and Hector Torres, a member of the International Monetary Fund’s executive board, wrote in an op-ed on January 30. (Disclosure: I am a senior fellow at CIGI.)
Clearly, it would be a mistake for Canada to go out of its way to pick a fight with the White House. But Trudeau also is making a mistake by failing to contain talk that Canada’s interests are best served by becoming Trump’s patsy. Mexicans are “perplexed by some of the recent calls in Canada for ‘dumping’ Mexico from NAFTA and negotiating a bilateral deal with Washington,” Andrés Rozental, a former Mexican deputy foreign minister, wrote in the Globe and Mail on January 27. “This is both short-sighted and a mistake. If NAFTA is torn apart, Canadian investment and trade with Mexico will be adversely affected, as will the overall relationship.”