The US’s Win-at-Mexico Strategy Won’t Be So Easy

The collapse of Canada-US trade talks has sent shockwaves through the North American trading community, leaving both countries scrambling to salvage their respective deals. Some are whispering about a potential US strategy: seeking a win with Mexico in place of Canada.

Kenneth Smith Ramos, a former Mexican trade negotiator, suggests that the US may try to push through a framework agreement with Mexico before year’s end, kicking thornier issues like agricultural exports down the road until 2027. This approach would be a calculated risk, relying on Mexico’s willingness to accept concessions from the US.

If successful, such a strategy could create a scenario where Canada is left out in the cold, forced to navigate a new trade landscape without its traditional partners. However, even if the US manages to craft a favorable agreement with Mexico, there’s no guarantee that this would come at little cost. As one analyst notes, “the Mexicans are quite good at speaking softly but not complying” – a nod to their reputation for tactfully resisting pressure from their northern neighbor.

Canada and Mexico have been engaging in bilateral talks with the US in an effort to settle specific trade irritants, all while waiting for the dust to settle on the collapsed trilateral talks between the three countries. The US has made it clear that it will not extend the current CUSMA agreement without renegotiating its terms – a move that has left both Canada and Mexico scrambling.

In this context, some are urging Canada and Mexico to re-evaluate their relationship with the US. Solange Marquez of the Canadian Council for the Americas notes that “the era of free trade in North America has ended.” What we’re seeing now is a new reality, one where countries are negotiating under a framework that prioritizes tariffs and protectionism over cooperation.

This shift has significant implications for the future of trade in North America. CUSMA “might end up being a weird Frankenstein deal” – a hodgepodge of competing interests and concessions that reflects the US’s dominant role in the region, according to Alex González Ormerod. However, what if Canada and Mexico were to break free from this dynamic, forging a stronger bilateral relationship that’s not beholden to Washington’s whims?

The idea may seem utopian, but it’s worth exploring. By solidifying their trade ties outside of the US-dominated framework, Canada and Mexico could create a more equal partnership that benefits both countries – rather than simply being pawns in a larger game of diplomatic chess.

In the end, however, it’s unclear whether this vision will come to fruition. The US’s strategy may ultimately prove too clever by half, with Mexico resisting pressure to accept concessions that would benefit the US at its own expense. As Marcelo Ebrard, Mexico’s Secretary of Economy, noted in an interview this week, “the North American region needs to integrate” – but this integration will only happen if Canada and Mexico can find common ground, despite the dominant influence of their northern neighbor.