The Canadian Ambassador to Mexico has reassured Mexico that Canada remains committed to NAFTA after reports saying Canada officials are prepared to go it alone on trade negotiations with the U.S. sparked anger south of the Rio Grande late last month.
Pierre Alarie said Canada values Mexico and the tripartite trade pact, which comprises 470 million people and a $25-trillion regional market.
“NAFTA can be modernized but not eliminated,” Alarie told the Spanish-language Mexican newspaper Reforma on Wednesday. “The Americans want to say, ‘We are going to reopen NAFTA, and we are going to make changes,’ that is a victory in itself. But the truth is that the negotiations cannot be rushed.”
Alaire’s comments come after a recent Reuters report quoting anonymous Canadian officials provoked fears that Canada would abandon its trade partner in negotiations with U.S. President Donald Trump.
“Our national interests come first and friendship comes second,” Reuters quoted one unnamed Canadian official in the Jan. 23 report.
“Mexico is in a terrible, terrible position. We are not,” another official said.
Trump campaigned for president on a pledge to overturn NAFTA, which he has blamed it for a decline in the U.S.’s manufacturing sector and called “one of the worst deals ever.”
His aggressive language on the trade deal and other provocative issues has led to a striking decline in U.S.-Mexico relations.
Trump passed an executive order authorizing construction of his long-promised wall along the Mexican border on Jan. 25. The White House then suggested — and quickly walked back — the idea of imposing a 20-per-cent tariff on all Mexican imports to pay for the wall, enraging Mexicans of all political parties and prompting Mexican President Enrique Pena Nieto to cancel a planned trip to Washington.
Prime Minister Justin Trudeau spoke about NAFTA in a phone call with Pena Nieto on Tuesday. Details of that conversation and of Canadian official expectations for trade negotiations with the Trump administration remain unclear.
Alarie told Reforma the idea of a 20-per-cent tariff is unworkable. The automotive sector is so closely integrated between the three countries that parts can cross the border four times before they become a finished product, he said.
“Are you going to charge a tariff four times? It cannot be done. You have to sit at the table, talk and explain it.”
In 2015, trade between the three countries totalled $1.2 trillion. In Mexico, 116 plants manufacture auto parts destined for Canada.
The first weeks of the U.S. administration have been tumultuous, and Alarie called for calm. Changing a trilateral trade agreement involves legislative branches of three countries and is extremely complex, he said.
“We are in a moment when we don’t know exactly what the U.S. administration wants,” Alarie told Reforma. “It is important to preserve calm, keep a level head and wait to see where we go with all of this.”
Alarie conceded that the trade deal should be modernized, noting that in 1994, when it took effect, e-commerce didn’t even exist.
In a recent op-ed also published in Reforma, Alarie celebrated Canada and Mexico’s 70-year relationship.
“We must not underestimate . . . Canada-Mexico relations,” he said. “Canada and Mexico are partners in NAFTA, we are neighbours, and we are friends.”
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