The breakdown of trade discussions between Ottawa and Washington may prompt U.S. negotiators to aggressively pursue a favorable outcome with Mexico in their ongoing bilateral talks, according to a former Mexican trade negotiator. Kenneth Smith Ramos, who was Mexico’s former chief technical negotiator during the initial 2017 to 2019 Canada-U.S.-Mexico Agreement (CUSMA) negotiations, anticipates that the U.S. will aim to establish a framework agreement with Mexico before the year’s end, delaying resolutions on more contentious issues to a later date, such as potential restrictions on Mexican agricultural exports.
Smith Ramos, a partner at Mexico City-based Agon, a corporate consulting and legal services firm, stated in an interview with CBC News that there is a likelihood of the U.S. following a similar approach as it did with the European Union by announcing a framework agreement in the upcoming negotiating rounds for political reasons.
Both Canada and Mexico have been individually engaging with the U.S. to address tariff and other specific bilateral trade issues, with the hope of finalizing agreements before embarking on trilateral discussions to amend and extend CUSMA.
The trade talks between Canada and the U.S. collapsed on August 21 when Prime Minister Mark Carney recalled his negotiators from Washington due to last-minute demands from the U.S. pertaining to culture, autos, and sovereignty that Canada found unacceptable. These negotiations were intended to prevent the U.S. from imposing 50% tariffs on approximately $27 billion worth of Canadian goods.
In response, Canada imposed retaliatory tariffs on over 700 different U.S. imports, effective September 8. The ongoing trade dispute has indefinitely postponed trilateral discussions on advancing CUSMA, as per Smith Ramos.
The U.S. announced on July 1 that it would not extend the CUSMA agreement and opted to renegotiate its terms, contrary to the desires of Canada and Mexico, who both believe in the benefits of the continental trade agreement.
Mexico’s Secretary of Economy, Marcelo Ebrard, emphasized the importance of finding common ground to move forward, stressing the need for North American integration. Ebrard mentioned that despite recent tensions between Canada and the U.S., he remains hopeful for a resolution and anticipates progress in future negotiations.
Regarding the trade tensions, Mexican President Claudia Sheinbaum and her administration are cautiously managing their own unresolved trade issues with the U.S., aiming to avoid any complications in their dialogues with Canada.
Solange Marquez, vice-president of policy at the Canadian Council for the Americas, highlighted the need for Canada and Mexico to strengthen their bilateral trade relations independently from their ties with the U.S., emphasizing the potential benefits of a more equitable Canada-Mexico partnership.
In summary, the trade dynamics between the three North American nations are in flux, with ongoing negotiations and disputes reshaping the landscape of regional trade agreements and alliances.