TALKING TRADE
Trudeau has a chance to repair relations with Mexico during the North American summit next month.
Ottawa is gearing up for a rare opportunity to legitimize, in the minds of mostly U.S. doubters, the growing benefits of collaboration among Mexico, Canada and the U.S.
In the lead-up to the next “Three Amigos” summit, June 29 in Ottawa, federal work teams are already preparing the case for even stronger ties among the three countries, which together account for about 440 million people.
Justin Trudeau, the Canadian PM, might be the one to watch most closely, more than U.S. and Mexican counterparts Barack Obama and Enrique Pena Nieto, respectively.
Mexico and the U.S. have suffered strained relations for more than a century. Canada may have long neglected Mexico, but there’s no time like the present to rectify that. And Trudeau might be just the leader to do it.
The timing is right: Populist U.S. hostility to immigrants and especially Hispanics has poisoned the current U.S. election cycle, and a corrective is long overdue.
As for Trudeau’s suitability, at the Paris climate-change summit late last year, the tenderfoot Canadian PM successfully pushed more than 200 fellow countries to adopt more ambitious CO2 emissions reductions than anyone expected possible. And before arriving at Obama’s annual anti-nuclear proliferation talks in Washington last month, Trudeau had already committed $42 million in additional spending to prevent terrorists from obtaining “loose nukes.”
Trudeau, unusually popular in the U.S., can deploy Canada’s longstanding “honest broker” role to set the record straight on Mexico.
Trudeau could be the one to point out, for instance, that men in the U.S. illegally are more likely to work, and to work at sub-minimum wages, than either native-born Americans or legal immigrants. And to note that today more Mexicans are returning to their homeland than are coming into the U.S.
All three of the U.S. presidential candidates still in the contest have noisily criticized “job-sapping” free-trade deals, notably the North American Free Trade Agreement (NAFTA), which Donald Trump describes as a “disaster.”
Here again, it would be useful for Trudeau to note that the U.S. economy produced a record 23 million new jobs in the mere seven years after NAFTA was ratified.
Job loss is inevitable in trade deals, with low-skill, low paying jobs replaced by those requiring more elaborate training.
To scapegoat NAFTA and other trade deals is to give a free pass to governments, like that of Brian Mulroney, that didn’t come through with promised retraining and other adjustment programs.
It also ignores the fact that most of the jobs lost in Southern Ontario and the U.S. “Rust Belt” states have been to low-wage jurisdictions in the Pacific Rim, South Asia, the Caribbean and the U.S. South. Canada and U.S. have no sweeping trade deals in those regions.
Meanwhile, the more integrated NAFTA economy is an efficient one, which likely saved jobs in the auto sector, for instance, during the Great Recession.
U.S. components account for up to 40 per cent of Mexican vehicles destined for the U.S. market, a much higher rate of U.S. content than vehicles imported from elsewhere. And thanks to the Auto Pact and its NAFTA successor, Windsor, Ont. is the world’s sole source of marketleading Chrysler minivans.
Mexico has worked tirelessly, in collaboration with Canada and the U.S., to better secure its borders. The new measures not only keep disqualified Mexicans from entering the U.S., but would-be U.S. immigrants from all of Latin America, as well.
Fact is, Mexico is helping keep America safe, but you don’t read that in the papers. What Mexico and Canada would like from the U.S. is an end to the U.S.-made firearms flooding into Mexico and Canada.
All three “amigos” are experimenting with the full range of alternative sources of energy. All three are major oil producers that have learned their hard lessons from careless profit maximization, in both their terrestrial and deep-sea oil patches. And each has worked, with varying success, to adjust their workforces to a new world of global competition, in which free trade scarcely plays a role.
It’s time the three amigos thoroughly shared their trial-and-error triumphs and failures across all realms.
Like Canada, Mexico is an export economy. Its trading volume exceeds that of Brazil and Argentina combined. But Canada lags Mexico in diversifying its export markets.
Mexico has succeeded in reducing its reliance on its chief trading partner, the U.S., to just under 80 per cent of exports. That compares with about 90 per cent when the U.S. Great Recession tipped Mexico into recession. Mexico has since managed the feat of reclaiming its U.S. markets even as it has created and expanded markets in Europe and elsewhere in Latin America.
Mexico has recently ordered drivers to keep their vehicles off the road for one day each week. Might that measure prove worthy of emulation in Toronto or in China, where approximately 4,000 people die each day from conventional air pollution?
Finally, as noted, Mexico has expertise in processing would-be immigrants to the U.S. from the more than 20 countries of Central and South America. Mexico keeps dangerous people out of the U.S. without benefit of a wall. Is that a lesson for multicultural America and Canada, each attracting wouldbe immigrants worldwide?
Mexicans who are engaged in trade and investment are frustrated that the world news agenda for Mexico is dominated by reports of violence, banditry and the Mexican Army’s war with drug lords. Those are necessarily major concerns, but they don’t entirely define Mexico.
Trudeau is ideally placed, in the time leading up to the Three Amigos summit, to identify Mexico as something other than a trouble spot. Canada has the chance to commit to learning from a Mexico with much to teach, and with which we have a great deal in common. That would amount to a foreign-policy renaissance, after generations of Canada’s failure to exploit a mutually beneficial relationship.
“Major energy sector reforms in Mexico, new non-conventional oil and gas technology developed in the United States, and the commitment to the environment by the new government in Canada open the door to previously unthinkable policy co-ordination,” says Earl Anthony Wayne, a former U.S. ambassador to Mexico, now a fellow at the Wilson Center think tank.
Under that closer-ties scenario, North America “becomes a model for regional co-operation,” Wayne says.
Mature countries know better than to meddle in the affairs of others. It wouldn’t be appropriate for Nieto or Trudeau to denounce Donald Trump’s views on Mexican “rapists” and drug smugglers.
It would suffice for Trudeau to emphatically detail the benefits North Americans have already reaped from NAFTA’s creation of a powerhouse regional economy of truly integrated continental industries, including autos, cattle and lumber. And to anticipate even greater rewards we expect to gain from emulating each others’ best practices. dolive@thestar.ca