Canada's Carney in Mexico for Talks    09/18 06:15

   

   TORONTO (AP) -- Canadian Prime Minister Mark Carney heads to Mexico on 
Thursday in an effort to diversify trade as America's neighbors brace for a 
review of the free trade deal with United States.

   The United States-Mexico-Canada trade pact, or USMCA, is up for review in 
2026. More than 75% of Canada's exports and more than 80% of Mexico's go to the 
U.S.

   Canadian Sen. Peter Boehm said Carney and Mexican President Claudia 
Sheinbaum will commiserate about U.S. President Donald Trump.

   "What are they hearing from the Americans, what we are hearing. It's an 
opportunity to talk about how to handle the U.S. administration going forward," 
Boehm said.

   Carney is looking to improve relations with Mexico during his two-day visit 
after some of Canada's provincial premiers talked last year about cutting 
Mexico out of any new free trade deal with the U.S.

   Trump lumped Canada in with Mexico on fentanyl smuggling and promised 
sweeping tariffs on both countries.

   Ontario Premier Doug Ford said then that Trump comparing Canada to the 
Mexico was "the most insulting thing I've ever heard from our friends and 
closet allies, the United States of America."

   Boehm said the comments by the premiers, which he deemed out of their lane, 
upset the Mexicans.

   "The Mexicans are particularly sensitive on these matters and there was 
concern about that, no doubt," Boehm said.

   Boehm represented the Canadian government when Sheinbaum was sworn in as 
Mexico's president last year and is pushing for more engagement with Mexico. He 
said relations recently improved, noting Mexico appreciated Carney inviting 
Sheinbaum to the G7 summit in Alberta in June. Carney also sent his foreign 
minister as well as his finance minister to meet with Sheinbaum in August.

   "A lot of people don't realize that we trade more with Mexico than we do 
with the entire European Union, all of the Europe, including the U.K.," Boehm 
said. "It's a pretty big deal for us."

   Mexico is Canada's third-largest trading partner after the U.S. and China. 
Canada was Mexico's fifth-largest trading partner in 2024.

   But trade with the U.S. remains paramount for both countries and preserving 
the free trade pact will be critical.

   A key exemption for Canada and Mexico shields the vast majority of goods 
from the punishing duties. Canadian and Mexican companies can claim 
preferential treatment under the USMCA. But Trump has some sector-specific 
tariffs, known as 232 tariffs, that are having an impact. There is a 50% tariff 
on steel and aluminum imports.

   "Trump looms over this visit. Mexico and Canada now share a common threat 
from the U.S," said Nelson Wiseman, professor emeritus at the University of 
Toronto.

   "While both leaders are interested in expanding their countries trade with 
each other, I think their priority is to strategize on how to deal with Trump 
and the coming renegotiation of the USMCA. Carney and Sheinbaum now recognize 
that tag-teaming Trump may be more effective than competing for separate deals 
with Trump, although they are still angling for them."

   Mexico and Canada have had different approaches to manage the negotiations 
with Trump's administration but both countries want to increase bilateral 
commerce within the North American treaty.

   "What we have discussed is how to strengthen trade between Mexico and Canada 
as part of the trade agreement," Sheinbaum said on Wednesday.

   "We obviously want to maintain the USMCA, and fortunately, the working 
groups related to its review are already being set up," she added. This period 
of evaluation of the tripartite agreement will take place before the formal 
review of the treaty that will begin early 2026.

   Mexico also wants to encourage more Canadian investment in the country but 
Sheinbaum said the mining companies should respect Mexican laws. "They have to 
follow with all environmental regulations, which they have not necessarily 
fulfilled," she said.

   Canadian companies are the largest foreign investors in Mexico's mining 
sector, accounting for almost 70% of foreign investment in the sector.

   Carney will have a one-on-one meeting with Sheinbaum on Thursday. There will 
then be a working lunch, which the leaders will be joined by their cabinet 
ministers and secretaries. Carney will visit the Canadian embassy on Friday.