Premier Ford pitches kicking Mexico out of North American free trade pact
Agreement must be revised starting in 2026 or it will expire after a decade
The head of Canada's largest province is dipping his toe into new territory — talking about removing Mexico from the North American trade agreement.
On Tuesday, Ontario Premier Doug Ford floated the idea of returning to a Canada-U.S. bilateral pact like the one that predated the enactment of NAFTA in 1994.
The impetus for his comments was Donald Trump's U.S. presidential election win, a potentially game-changing event with implications for trade and security arrangements around the world.
Ford alluded to the likely difficult review ahead for the pact known in Canada as CUSMA (the Canada-United States-Mexico Agreement). The agreement must be revised starting in 2026 or it will expire after a decade.
One of the greatest challenges facing that review is U.S. frustration with Chinese-owned car plants popping up in Mexico. Ford referred to those plants in a media statement.
"Free trade needs to be fair," Ford said Tuesday.
"Since signing on to the United States-Mexico-Canada Agreement, Mexico has allowed itself to become a backdoor for Chinese cars, auto parts and other products into Canadian and American markets, putting Canadian and American workers' livelihoods at risk while undermining our communities."
Ford called for Mexico to place tariffs on Chinese imports to keep its car parts from the continental supply chain.
"If Mexico won't fight transshipment by, at the very least, matching Canadian and American tariffs on Chinese imports," he added, "they shouldn't have a seat at the table or enjoy access to the largest economy in the world.
"Instead, we must prioritize the closest economic partnership on earth by directly negotiating a bilateral U.S.-Canada free trade agreement."
Ford was more explicit in a news conference later Tuesday. He made it clear he's proposing that the federal government seek a bilateral trade deal with the U.S., and maybe a separate bilateral deal with Mexico.
Some of the most complex challenges in renewing the continental pact involve Mexico. They include economic issues orders of magnitude larger than U.S. qualms about Canadian dairy and digital taxes.
In addition to the proliferation of Chinese-owned car plants, Washington is also concerned about growing state influence over Mexico's oil companies.
What's not clear is whether Ford is voicing the view of Canada's most relevant player here: the federal government. When asked recently about the idea of returning to a bilateral Canada-U.S. trade pact, a federal official told CBC News this is not Canada's policy — not right now, at least.
While Ottawa did not endorse Ford's message on Tuesday, it didn't distance itself from it either.
Ottawa's take: No criticism of Ford
When asked about it, a spokesperson for Finance Minister Chrystia Freeland on Tuesday pointed to the tariffs Canada has imposed on Chinese electric vehicles, steel and aluminum, and said Canada will not be a backdoor into this continent for state-funded Chinese products that undercut Canadian workers.
It was a similar message from Prime Minister Justin Trudeau. He said democracies worldwide are concerned about Chinese overcapacity and the "unfair trade practices" China is "inflicting on the world."
"We will continue to work with partners like the United States, and hopefully Mexico as well, to make sure that we are united in our desire to protect good jobs that are more responsible about the environment than they are in China, more responsible around labour practices," Trudeau said.
Booting Mexico from the pact would be opposed by large companies with business in all three countries.
It also would be viewed skeptically by some who see Mexico as a political ally in preserving U.S. congressional backing for North American trade.
The huge commercial flow across the Mexico-U.S. border, along with the enormous Mexican-American population, creates support for the pact among southern U.S. lawmakers with fewer connections to Canada.
Canadian auto companies have been sounding the alarm about Chinese investments in Mexico and the potential political blowback in the U.S.
"The premier is hitting an important note that's been making the rounds in Washington for some time," Flavio Volpe, the head of Canada's auto-parts lobby, tweeted Tuesday.
"The Chinese are relentless in their strategies to access the North American market and all partners have a share in the responsibility to protect it."
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With files from Janyce McGregor
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