Yesterday, the leaders of Canada and Mexico spoke out in favor of their three-way free trade deal with the United States. They also agreed to attempt to make it “fairer” in light of President Donald Trump’s threats to raise tariffs.
Canadian Prime Minister Mark Carney claimed that he and Mexican President Claudia Sheinbaum were “committed” to the United States-Mexico-Canada Agreement (USMCA) after negotiations in Mexico. He said that the agreement has “helped make North America the economic envy of the world.”
According to AFP, Sheinbaum said she was “optimistic” about the future of the agreement. Trump wants to change the terms so that they are better for US producers.
“I think the USMCA will win,” she said at a press conference alongside Carney.
Next year, the agreement that has been in place since 2020 will be looked at again.
It is quite important for the economies of both Mexico and Canada, who send about 80% and 75% of their exports to the US, respectively.
Trump has already put tariffs on some goods that Canada and Mexico send to the US that aren’t covered by the pact. He has also threatened to punish them more if they don’t stop drug trafficking and illegal immigration across the border.
The North American Free Trade Agreement (NAFTA) from the 1990s was replaced with the USMCA.
Over the course of three decades, the successive treaties changed North America’s economy in a big way, making the three parties very dependent on each other.
But Trump’s trade war has already caused a lot of problems for supply chains that transcend borders.
He has put 35% tariffs on Canadian items that aren’t included by the deal and 25% tariffs on Mexican ones that are.
The tariffs are affecting Canada’s important car, steel, and aluminum industries, which is costing jobs. They are also hitting Mexico’s auto and steel industries.
“We make the United States stronger; we are all stronger together,” Carney remarked.
He said it was “a good thing” that Washington was already looking at UMSCA because it meant that choices about tariffs and local content could be “made in a calm, deliberate manner.”
“Go forward together”
Both Sheinbaum and Carney have been trying to make side deals with Trump. But yesterday they said they weren’t trying to beat each other.
“We will move forward together,” Carney said, holding up the FIFA World Cup next year, which will be held in the US, Canada, and Mexico as a sign of how well the countries work together.
Carney and Sheinbaum also said they wanted to increase commerce and investment between Canada and Mexico, using Canadian and Mexican ports instead of sending goods across the US.
Last year, the two countries traded less than $32 billion, which is more than 20 times less than what they each trade with the United States.
Canada is Mexico’s fifth-largest trading partner, whereas Mexico is Canada’s third-largest.
The two leaders also said they would work together more closely on security, agriculture, the environment, foreign affairs, and other areas.
Some Canadian officials have said that Trump unfairly linked their country, which is a modest player in the global drug trade, to Mexico when it comes to fentanyl trafficking.
Carney remarked, “The sad truth is that there are gangs from one country in another country and vice versa.”
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