Without doubt, North America is rapidly evolving. Our dynamic region is always in constant motion, yet the recent shift in political tone, coupled with concerning tariff announcements, have infused a new and uncomfortable degree of uncertainty. 

While many key decisions seemingly rest within the oval walls of one office, and others will be taken at negotiating tables beyond the public view, broad consultations with diverse stakeholders across all three countries have already begun. Industry, business, labour representatives, Indigenous leaders and trade policy experts are already being asked, and will soon be formally invited, to opine on the future of the North American trade relationship. It’s time, and I would argue long overdue, that Canadians and Mexicans ask ourselves, what is our vision for the future of our North American region? 

So far, business leaders in both Canada and Mexico, together with many private sector leaders in the United States, have been unequivocal in their support for a renewed trilateral trade agreement and continued investment in bolstering, not abandoning, a regional focus. But a key question remains: if Mexicans and Canadians are committed to continuing and deepening the trilateral trade relationship, as I believe we are, are we doing all we can to champion our vision for North America and our deeply integrated trade relations? Is the third pillar of our trilateral grouping – the Canada-Mexico relationship – as strong and resilient as it needs to be?

Despite more than 80 years of bilateral relations and more than 30 years as partners in what has been one of the world’s largest and most successful free trade areas, the Canada-Mexico trade and business relationship remains underdeveloped and far below its potential. Canadians and Mexicans quickly became accustomed to being convened by our mutual neighbour for trilateral discussions and letting our engagement wane when the United States lost its focus on and vision for North America.

We are used to seeing our products move rather seamlessly across efficient and increasingly busy distribution chains over our respective borders with the United States, without contemplating the amount that ends up in each other’s markets. We accept that a significant portion of our value to each other as bilateral trading partners is lost statistically as products transit through a complex and efficient system centered on the United States. Our inability to accurately assess what we mean to each other’s economies, independent of our shared trilateral identity, naturally impacts our decision-making and both countries tend to look much more readily to the east to Europe and west to Asia for expansion. What are we leaving on the table by failing to explore more seriously the opportunities created by our two highly complementary economies and labour markets?

“North America Number One”

Despite quite significant differences in the profiles of our bilateral relations with the United States, the reaction in Canada and Mexico to recent developments has been remarkably similar: both countries quickly assessed what leverage they had and what fell outside of their control as they scrambled individually to make the case for bilateral and trilateral trade. Appreciating the enormous value of USMCA-compliant trade, Canada and Mexico are both realizing that the main message may need to be “North America number one,” as former U.S. Trade Representative Robert Lighthizer once put it to Goldy Hyder, president and CEO of the Business Council of Canada. Essentially, the onus has fallen on Canada and Mexico to make the case for North America. 

The fact that Mexico and Canada are each the largest other trading partner of our largest trading partner (the United States) is central to our global competitiveness as a region. The Business Council of Canada has long recognized that “Canada, the United States and Mexico are in a global competition … for resources and influence.” (1) In critical sectors like energy, and very soon artificial intelligence, that drive all aspects of our industrial production, we need to be working together in an unbreakable alliance that also respects national sovereignty. This seems obvious at the continental level but are Canada and Mexico aligning their resources and effort sufficiently to ensure this strategic goal is not lost?

Unapologetic self-interest: where exactly are those bilateral opportunities?

Understanding the true value and volume of our bilateral trade is essential, but we should also examine how expanding our relationship can lower costs, increase revenues and ensure North America is as competitive as possible. 

This past April, Export Development Canada’s Chief Economist, Stuart Bergman, pointed out that “there are many products, for example, that Mexico imports through China, which can easily be sourced from Canada, and vice versa. Of the US$114 billion worth of products that Mexico imports from China, Canada exports about US$4.8 billion worth of comparable products to China, including autos and parts.”(2) He goes on to note that Canada’s highly skilled workforce and technological advantages in key sectors, including energy, infrastructure, pharmaceuticals, aerospace and chemicals, could be beneficial for Mexico. Canadian capabilities are well-aligned with Mexico’s vision for where it wants to grow and the sectors in which it is actively seeking private investment under Plan México.(3)

Canada is a close third in terms of Mexico’s largest sources of foreign direct investment after the United States and Spain.(4) While not without its irritants, the Canada-Mexico investment relationship has been critical to Mexico’s economic development, including in strategic sectors like mining, energy and agrifood, which were the focus of the Business Council of Canada’s recent publication Selling to our strengths.(5)

With all these critically important and common interests, it is surprising that Canada and Mexico still do not have the instinct to look towards each other when global conflict and crises threaten our economic and security wellbeing. With both countries sending more than three-quarters of their exports to the same mutual neighbour and relying on that same partner as their top foreign direct investor, it is surprising that our bilateral figures are so low, but this also suggests that there is ample room to grow. According to official statistics, we buy less than three per cent of each other’s overall exports and, while Canadian direct investment in Mexico has increased dramatically since 2010, Mexican direct investment in Canada has effectively stalled at just USD $3.1billion in 2023.(6)

The “perfect” must no longer be the enemy of our “good” trade relationship

Our irritants and challenges are distinct. Our respective relationships with the United States are vast, complicated and critical – they will remain the priority for each of us. But, at the same time, we have many more essential interests in common than points of discord. We both believe, and this is indeed evident in our respective national statistics, that Canada, Mexico and the United States are much more competitive and have a much more prosperous future ahead if we continue to grow and innovate together. 

While there are influential voices in Canada and Mexico that have wavered in their faith in our collective commitment to trilateral trade, the leaders of all three countries have repeatedly recognized the unique and enduring value of the USMCA. President Trump has consistently exempted USMCA-compliant trade from tariffs and, when Canada announced retaliatory tariffs on the United States on April 3, 2025, Prime Minister Carney was explicit in exempting Mexico as a committed USMCA partner.(7)

As in our relationships with the United States, our bilateral Canada-Mexico trade and investment has not been immune to disagreement over policies that impede each other’s interests. Yet the evidence is apparent, and we should point to it more often, that Canada and Mexico have much to gain by promoting a unified and cooperative North America based on a strong and aligned trade and investment partnership. We could serve our mutual interests well by often repeating the same shared message, including at this October’s North Capital Forum, that a strong Canada and a strong Mexico working collaboratively is good for the United States and good for the future of North America.