The Mexico-Canada economic relationship was significantly boosted by the entry into force of the North American Free Trade Agreement (NAFTA) in 1994, particularly in terms of trade and investment. NAFTA created a regional market worth US$20 trillion and facilitated production and trade integration among its members. Today, the three countries form a highly competitive, productive region with well-integrated global value chains in sectors such as automotive, electronics and aerospace.
From 1993 to 2014, the Mexico-Canada trade relationship grew by 791 percent, reaching US$36 billion. Canada is Mexico’s third-largest trading partner and the fourth largest investor in the country. At the same time, Mexico is Canada’s third-largest trading partner. Canada’s main export products to Mexico are rapeseed, muslin fabric, wheat, automobiles, alloyed unwrought aluminum and airplane parts. In the other direction, the top Mexican exports to Canada are automobiles, trucks, TVs, computers and wiring sets for automobiles.
From January 2000 to March 2015, Canada’s cumulative foreign direct investment (FDI) in Mexico reached US$23.2 billion. Currently, more than 3,500 firms with Canadian investment operate in Mexico, and Canada is the largest foreign investor in Mexico’s mining industry. Mexican FDI in Canada is still well below these figures, but recent acquisitions of Canada Bread and Saputo’s bakery by Bimbo and that of Pacific Rubiales by Grupo Alfa are clear evidence that further economic integration is taking place with this new wave of Mexican companies participating in the Canadian market.
But the economic ties between our two countries go beyond trade and investment; they expand to other areas that have also increased considerably in recent years, such as tourism. Canada is Mexico’s second-largest market for tourism. In 2014, 1.7 million Canadians visited Mexico. Likewise, Mexico is the eighth most important overseas market for Canada in terms of number of visitors, and the third fastest growing. In 2014, close to 170,000 Mexicans visited Canada, approximately half of the peak numbers in 2008, the year before the visa requirement for Mexicans was imposed. Without a visa requirement, Mexico would probably be the fourth- or fifth-largest tourism market for visitors to Canada. We welcome Canada’s decision to eliminate visa requirements for a large number of Mexicans starting in 2016, which will increase tourism.
Mexico and Canada, along with the U.S., are advancing in the integration of the North American region through actions that strengthen competitiveness. We are working enthusiastically on a new agenda for the North American Leaders’ Summit, taking place, presumably, after elections in Canada. North America is entering a new stage and new topics are emerging to exploit opportunities in sectors such as energy, infrastructure and the education-innovation chain. Consolidating a successful integration will allow North America to become more competitive and to more efficiently target markets in Asia, Europe, the Middle East, Latin America and Africa.
Bilaterally, we continue growing our relationship. The economies of Mexico and Canada are complementary and both are facing a new international context that allows us to expand areas of opportunity. There is much more to do to promote strategic alliances between our businesses, mainly our small- and medium-sized enterprises (SMEs). In addition, the ambitious reforms package that Mexico is implementing provides a wide range of opportunities for Canadian companies, particularly in energy, telecommunications and infrastructure.
Since 2004, the Canada-Mexico Partnership (CMP) has been a premier mechanism for bilateral co-operation. Nonetheless, as with any governmental dialogue, the CMP must be constantly reviewed to ensure its work aligns with both countries’ priorities and to address new challenges and opportunities in strategic areas of the relationship. In this sense, Mexico and Canada are working to strengthen this mechanism and discussing options for deepening dialogue and cooperation in the following areas: mobility of people, shortages in skills and labour in certain sectors and regions, tourism, energy, innovation, supply chains, connectivity between our countries, environment, infrastructure and financing, among others.
We are also working with Canada in the framework of the Pacific Alliance (a trade pact between Peru, Chile, Colombia and Mexico). Canada has free-trade agreements with the four member countries for a combined trade of US$43 billion. As an observer of the Pacific Alliance, Canada has been very active and committed to engaging further with this mechanism. It is clear that Canada has a great deal of expertise to share with our countries and together we are developing possible areas of co-operation.
Mexico and Canada maintain a deep, extensive and mutually productive economic relationship and are continually looking for new opportunities to promote greater integration and further development through bilateral, regional and multilateral initiatives. The potential is vast.
Francisco Suarez is the ambassador of Mexico. Reach him at (613) 233-8988.
