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Flu-conomics: Mexico and Canada Accelerate USMCA

By Alessa Flores | Thu, 03/26/2020 - 12:15

To put into perspective the impact of COVID-19 on trade relations between Mexico and Canada, it is important to dimension both countries. Canada is a country with a population of just over 30 million inhabitants and 14 free trade agreements (FTAs) that provide the country with access to 49 markets that represent about 63 percent of the world's GDP and 1.5 billion customers, according to Canada's Trade Commissioner Services. Moreover, Canada's exports range from fur and fish to state-of-the-art manufacturing and diverse professional services. 

Mexico, meanwhile, is a country of more than 128 million people and has a network of 13 FTAs with 50 countries, 32 investment promotion and reciprocal protection agreements (APPRIs) with 33 countries and 9 limited-scope agreements (economic complementary agreements and partial-scope agreements) as part of the Latin American Integration Association (ALADI), according to Mexico’s Ministry of Economy. Mexico primarily exports consumer goods, electronics, cars and auto parts, oil and gas products, plastics, fruit, vegetables, coffee and cotton. Moreover, Mexico is the world's leading producer of silver. 

Since 1994, with the signing of NAFTA, the relationship between Mexico, Canada and the US has strengthened. Mexico is currently Canada’s third-largest trade partner, its third-largest source of merchandise imports and its fifth most important merchandise export destination, according to the Government of Canada. 

Because of that, Graciela Márquez, Minister of Economy, announced at today’s morning press conference that she would be having a phone call with Robert Lighthizer, US Trade Representative, and Chrystia Freeland, Deputy Prime Minister of Canada, to speed up USMCA’s implementation. Marquéz stressed that accelerating the treaty’s enforcement could be a significant boost to investment and trade and would help to reduce the economic impact of the COVID-19 crisis in North America.

Despite limited mobility across North American borders due to travel restrictions, trade is still going. Canadian Prime Minister Justin Trudeau said that travelers will no longer be allowed to cross the border for leisure or entertainment, but that important travel will continue, particularly for business and trade.

After Márquez’s meeting with Lighthizer and Freeland, time will be the key ingredient to see how North America economically evolves as USCMA comes into force. As for Mexico, according to the Ministry of Agriculture, there are already possible increases in exports of sugar, chicken, maize and other agricultural products to the US and Canada.
 

The data used in this article was sourced from:  
Government of Canada, Mexico's Ministry of Economy
Photo by:  
by vtgard
Alessa Flores Alessa Flores Senior Journalist and Industry Analyst

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