This piece is part of a series in the lead up to the North American Competitiveness and Innovation Conference — NACIC 2014 — held this week, Oct. 30-31 in Toronto. Earlier this month, Duncan Wood explored the opening of Mexico’s energy sector, Raul Pacheco-Vega called for regional leadership on environmental policy, Brian Bow wrote on infrastructure security since 9/11 and Stephen Blank rated North American infrastructure in his in-depth report card.
When it comes to statecraft, there is no better place to show the flag than the deck of a warship. This past week, HMCS Athabaskan moored at the Mexican port of Veracruz to help celebrate 70 years of Canada-Mexico diplomatic relations and 20 years of economic integration through NAFTA.
Canadians love Mexico – close to two million of us will visit this year making it our most popular foreign destination after the United States.
We do not reciprocate the Mexican welcome mat.
A visa requirement – imposed pre-emptively in the summer of 2009 after a surge in Mexican refugee claimants – remains in place. The Mexicans have since cracked down on the nefarious operators at their end, while the Harper government reformed our once-lax refugee system.
Lifting our visa requirement, or at least identifying a path to resolution, continues to be Mexico’s main “ask” of Canada.
For the Mexicans, the lack of progress on the visa situation is frustrating and poisons the relationship. It sticks in their craw the same way that the Obama administration’s rag-the-puck approach on the Keystone XL permit frustrates us.
Potential insult on injury lies ahead if Mexico is not included in the electronic travel authorization system that the Harper government will roll out in the coming months.
We need to find a way to include Mexico or to have a specific road map, resolving the visa issue, before the next North American Leaders’ summit, scheduled for Canada in the early spring.
Beyond its effect on official relations, the visa situation deters Mexicans from visiting, studying and doing business in Canada.
In 2008, the year before the visa requirement, Mexicans were our sixth source country for tourism, spending an estimated $364-million. They have since fallen to tenth place and their spending has halved. Mexican investment in Canada ($22-million) is dwarfed by Canadian investment in Mexico ($12-billion).
This hassle over getting to Canada is the biggest deterrent and led to the cancellation earlier this year of a buying mission to have been led by Mexican President Enrique Pena Nieto. With the passage of its energy reforms opening doors to foreign investment and partnership, Mexico is actively looking for the kind of energy and engineering skills that Canada has developed.
The provinces get it and they are taking the initiative to work with Mexican states and its national government. In June, Alberta’s Energy Regulator signed an agreement to work collaboratively on best practices in hydrocarbon development with its Mexican counterpart.
The conditions for North American integration have never been better even if the personal chemistry between the three leaders – Stephen Harper, Enrique Pena Nieto and Barack Obama – is such that their meetings do not require air conditioning.
Commerce has expanded significantly since NAFTA took effect 20 years ago. The goal over the next decade should be to double the current trillion dollars plus in annual continental trade.
It’s doable if we can get our act together. Together, we have a market of 500 million with the resources, thanks to technology, to fuel a new manufacturing revolution revitalizing North America’s industrial base.
This week, the three trade ministers – Canada’s Ed Fast, Mexico’s Ildefonso Guajardo and Penny Pritzker of the U.S. – meet in Toronto at the North American Competitiveness and Innovation Conference (NACIC). Their meetings with the business community and beyond are designed to advance North American competitiveness discussions, begun last October in San Diego, from “vision to action.”
They should start by looking at North American auto production. Last week’s decision by Ford to site their new engine production plant in Mexico rather than Windsor is a reminder that supply-chain dynamics have long outpaced the 50-year-old Canada-U.S. Auto Pact.
The ministers should prioritize developing a North American Auto Pact and position the countries, not as competitors, but collaborators in regional and bilateral trade deals.
It is estimated that 25 per cent of the content of goods Canada exports to the United States originated in the U.S. For Mexican exports to the United States, the U.S.-originated content is 40 per cent (contrasted with China, Brazil and India at 4 per cent, 3 per cent and 2 per cent respectively).
A beggar-thy-neighbour approach will only diminish our collective economies. We have evolved from the classic trade in goods to making things together.
All three nations have a vested interest to ensure that there is convergence in the rules-of-origin in the new trading pacts in which we are involved together – like the Trans-Pacific Partnership or independently.
NAFTA worked. It’s now time to move forward with a new regime that acknowledges the realities of North American economic integration and the benefits of “Made in North America.”