Following the breakdown of trade discussions between Ottawa and Washington, a former Mexican trade negotiator predicts that U.S. negotiators may intensify efforts to secure a favorable outcome with Mexico in their ongoing bilateral negotiations. Kenneth Smith Ramos, who was Mexico’s primary technical negotiator during the initial Canada-U.S.-Mexico Agreement (CUSMA) talks from 2017 to 2019, anticipates that the U.S. may aim to establish a preliminary agreement with Mexico before the year concludes, deferring resolution of more challenging issues to a later date, such as potential restrictions on Mexican agricultural exports.
Smith Ramos suggests that the U.S. could announce a framework agreement with Mexico in the near future, mirroring actions taken with the European Union. Both Canada and Mexico have been separately engaging with the U.S. to address specific trade disputes in anticipation of forthcoming trilateral discussions to amend and extend CUSMA.
Talks between Canada and the U.S. collapsed in August when Prime Minister Mark Carney withdrew negotiators due to last-minute demands from the U.S. on cultural, automotive, and sovereignty issues. This breakdown aimed to avert U.S. threats of imposing significant tariffs on Canadian products amounting to approximately $27 billion. In response, Canada imposed equivalent counter-tariffs on over 700 U.S. imports effective September 8.
The impasse between Canada and the U.S. has indefinitely postponed trilateral discussions to advance CUSMA, leaving uncertainties about the future of tariffs and trade negotiations. Mexico’s Secretary of Economy Marcelo Ebrard emphasized the importance of finding common ground to move forward, highlighting the region’s need for unity and cooperation.
With the U.S. opting not to extend the CUSMA agreement and instead seeking renegotiation, Canada and Mexico have expressed interest in extending the agreement, underscoring its benefits for all parties involved. Mexico’s cautious approach in light of the ongoing trade tensions between Canada and the U.S. aims to safeguard its interests and maintain dialogue with Washington.
Analysts note a shift away from traditional free trade negotiations in North America, with a focus on tariffs and new trade agreements. Mexican journalist Alex González Ormerod suggests that CUSMA could evolve into a unique arrangement where Mexico and Canada diverge from certain U.S. demands. The challenges faced by Canada and Mexico underscore the need to strengthen their bilateral trade relationships independently of the U.S., fostering a more balanced partnership between the two nations.
