Increased trade ties between Canada and Mexico are a certainty no matter what happens in the U.S. November 2016 general election but if Donald Trump should win the vote, the relationship will take on even greater importance.
Canada’s move to grant visa-free travel to the Mexicans is by no means a minor diplomatic policy change.
It represents a key relationship-strengthening shift that the Canadian federal government hopes will see them benefit from the fall out of a potential spat between the Mexicans and the U.S.
Should trade drop between the two neighbours to the south, Canada is sitting pretty to pick up some of the slack, particularly after the decision to remove the visa requirement.
The numbers show the U.S. imports were worth $260 billion from both Canada and Mexico in 2015, and exports to both countries were also more than $200 billion.
By contrast, Canada imported goods worth $24 billion from Mexico, also in 2015, and its exports were worth $5 billion.
As well as illustrating the dominance of the U.S. in the region, which is governed by the North Atlantic Free Trade Agreement (NAFTA), these figures also lay bare exactly how lucrative a break down in U.S.-Mexico relations could be for Canada.
A reduction of $10 billion in U.S.-Mexico trade would seem relatively small compared to the above numbers. But an additional $10 billion for Canada-Mexico trade would represent a massive increase.
Trump has promised to scrap NAFTA, which he calls ‘the worst trade deal ever’, if he reaches the White House. He also reckons there should be a wall along the U.S.-Mexico border.
Exactly how much of Trump’s off-the-cuff rhetoric would actually become policy if he won power is anyone’s guess, but at the very least U.S.-Mexico relations would thaw.
This could play into Canada’s hands.
Canada originally imposed the Mexico visa requirement in 2009 because of the overwhelming number of asylum claims. The number of claims dropped from 9,000 to 1,199 as a result of the move, with associated costs falling from $304 million to $44 million.
However, the Tourism Industry Association of Canada estimates $465 million was lost as a result of the restriction.
Trudeau welcomed Mexican President Enrique Pena Nieto on an official state visit in June, after which Barack Obama joined the fray for the Three Amigos summit.
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