The breakdown of trade discussions between Ottawa and Washington might prompt U.S. negotiators to aggressively pursue an advantageous deal with Mexico in their ongoing bilateral talks, according to a former Mexican trade negotiator. Kenneth Smith Ramos, who served as Mexico’s chief technical negotiator from 2017 to 2019 during the initial Canada-U.S.-Mexico Agreement (CUSMA) negotiations, anticipates that the U.S. will aim to establish a framework agreement with Mexico before the year ends. This move could delay the resolution of more contentious issues, such as potential U.S. restrictions on Mexican agricultural exports, until 2027.
Canada and Mexico have been separately engaging with the U.S. to address specific trade disputes and tariffs in an effort to solidify agreements before engaging in trilateral discussions to amend and extend CUSMA. Talks between Canada and the U.S. collapsed on August 21 when Prime Minister Mark Carney withdrew negotiators from the table due to last-minute demands from the U.S. related to culture, autos, and sovereignty. As a result of the breakdown in negotiations, Canada imposed retaliatory counter-tariffs on over 700 U.S. imports, totaling approximately $27 billion.
The trade dispute between Canada and the U.S. has indefinitely postponed trilateral CUSMA talks, as confirmed by Smith Ramos. The U.S. announced on July 1 its decision not to extend the CUSMA agreement, preferring to renegotiate the terms. Despite this, both Canada and Mexico expressed a desire to extend the agreement, emphasizing its benefits for all three nations.
Mexico’s Secretary of Economy, Marcelo Ebrard, stressed the importance of finding common ground between Canada and the U.S., highlighting the need for regional integration and collaboration. Mexican President Claudia Sheinbaum also emphasized the necessity of resolving tensions between Canada and the U.S., underscoring the importance of cooperation in the North American region.
Regarding the trade dynamics, Solange Marquez from the Canadian Council for the Americas suggested that the era of unrestricted trade in North America might be over. She noted that negotiations are now focused on tariffs and trade agreements, with a shift towards bilateral agreements rather than a trilateral approach. Mexican journalist Alex González Ormerod highlighted the challenges faced by Mexico and Canada in dealing with U.S. demands, suggesting that a different approach may be necessary to protect their interests.
Marquez and González Ormerod recommended that Canada and Mexico strengthen their bilateral trade relationships independent of their interactions with the U.S. Both experts emphasized the need to enhance ties between the two countries, suggesting that a more balanced and direct partnership could yield significant benefits outside of the shadow of U.S. influence.