Pierre Alarie
Former Ambassador
Embassy of Canada in Mexico
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View from the Top

Strengthening the Mexico-Canada Relationship

Wed, 10/16/2019 - 17:26

Q: How is López Obrador’s presidency going to impact the Mexican mining industry and what effects do you foresee for Canadian mining companies and investors? 
A: The new president of Mexico has expressed interest in working closely with Canada to define a better mining code for Mexico. We have met with the Ministry of Economy and SEMARNAT to visit Canadian mines and explain how we manage mining and community involvement in our country. It is unfortunate that mining does not have a good reputation in the world but the industry is ever more sustainable, innovative and responsible. We believe the new government wants to make sure that the industry thrives in Mexico. This is music to our ears because Canada is the largest foreign investor in the sector in Mexico, accounting for around 65 to 70 percent of total foreign investment. We are enthusiastic about the future although we know that there is a great deal of work ahead of us.
Q: What is your assessment of the USMCA deal and its potential to disrupt mining investment?
A: I do not think there is going to be any disruption as the new treaty did not touch on the mining sector. In November 2018, our leaders signed the modernized trilateral agreement known as the US-Mexico-Canada Agreement (USMCA), underlining our renewed commitment to trilateral trade relations. We were largely successful in keeping the important provisions of NAFTA, modernizing and improving the agreement to better reflect how trade is conducted today, and protecting market access in North America. We are now looking forward to the ratification of the agreement.
We are by far the most efficient trading platform in the world, with US$1.3 trillion traded in 2018. Data does not lie; the data of the last 25 years proves that the North American sphere as a trading platform works really well.
Nevertheless, our trade relations go beyond this agreement. We are partners in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and are currently negotiating a free trade agreement in the context of the Pacific Alliance. We are also proud signatories of one of the most successful labour agreements in the world: the Seasonal Agricultural Workers’ Program, which is a model of secure, organized and legal labour mobility. Between January and August 2018, over 25,000 Mexican workers travelled to Canada to work on farms and support Canadian producers with personnel shortages. In 2016, they sent over US$150 million dollars in remittances. Mexican workers are valued and appreciated, and many of them come back to Canada year after year at the request of their employers.
Q: How can more Mexican investment in Canada be fostered and why is it desirable?
A: Over the last 25 years, the bilateral relationship between Canada and Mexico has been almost entirely defined through NAFTA. We failed to have a more bilateral relationship but NAFTA’s renegotiation has taught us that we cannot be caught off-guard. This means that most Canadians are ignorant about Mexico and vice versa as Mexican business people do not understand Canada. Mexicans used to be focused in their own country, especially given that the southern part of the US has always been a natural market for the average Mexican company, which does not tend to look further away than that. This is partly our fault as Canadians for not having promoted our country more as an FDI destination for Mexicans but we learned our lesson and are about to embark on this relationship much more aggressively, with a full-time dedicated officer in our embassy to promote Canada as an investment destination for Mexican companies. This is not going to happen only for the mining sector but it certainly opens up really interesting opportunities for it.
 I believe it is a work in progress on which we will be focused for the next couple of years to make sure that the large pool of potential Mexican investors has a better understanding of Canada. We will work to ensure Mexicans understand what Canada stands for in terms of values and as a country.