With Mexico and the United States planning to convene for formal bilateral talks for the review of the North American trade pact, Conservative MPs are questioning Canada’s “go slow” strategy, but analysts say waiting out the U.S. is the best path forward.  

The U.S. and Mexico agreed to host the first formal bilateral round of negotiations during the week of May 25 in Mexico City, according to the Office of the U.S. Trade Representative. Canada has yet to say when it will start formal negotiations with the U.S. ahead of the mandated review of the Canada-United States-Mexico Agreement (CUSMA).  

“Canada is ready, willing, and able to commence the review of CUSMA,” Canadian Ambassador to the U.S. Mark Wiseman told the House Foreign Affairs Committee on April 23.

Conservative MPs at the committee meeting questioned why Mexico is actively engaged while Canada is taking a “go slow” approach to trade talks with the U.S. 

Trade consultant Eric Miller, president of the Washington, D.C.-based Rideau Potomac Strategy Group, said no one party has control over a negotiation, especially when they are a smaller party in the talks. 


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“Part of Canada’s approach is also about the readiness and willingness of the United States to talk,” said Miller, a former official in Canada’s embassy in Washington. 

He said that another factor in the differing approach are the calls for concessions before the trade talks start. Radio-Canada reported that the U.S. is demanding an “entry fee” from Canada before talks began. Miller said that isn’t the case for Mexico. Prime Minister Mark Carney (Nepean, Ont.) said that U.S. President Donald Trump won’t dictate the terms of the talks. 

Canadian Ambassador to the U.S. Mark Wiseman says Canada is ‘ready, willing, and able to commence the review of CUSMA.’ The Hill Times photograph by Andrew Meade

“Canada has developed … a classic kind of model that it has used in the past, which is diligent, relatively slow, really analytical, and so that’s where it is approaching things,” said Miller, remarking that the dynamics between Canada and the U.S., and Mexico and the U.S. are different. 

“In Mexico, the prevailing view has been we need a deal no matter what, and we’ll pay a lot to get a deal if we have to,” Miller said. “In Canada, the prevailing view as defined by both [former Conservative prime minister] Stephen Harper and [former Liberal deputy prime minister] John Manley is that no deal is better than a bad deal.” 

“We don’t want to risk locking Canada into a structurally disadvantageous position or capping its ability to do trade deals with other countries in other parts of the world, which would cap future growth potentially,” he said. “I don’t see it as a viable option that Canada can take the same approach as Mexico.” 

Carlo Dade, director of the New North America Initiative at the University of Calgary’s School of Public Policy, said that it hasn’t benefitted any country to make an agreement with the U.S. instead of waiting.

He said that Canada was one of the lone countries that reacted correctly to the tariffs enacted under the International Emergency Economic Powers Act (IEEPA) last year. After the tariffs were put in place, many countries signed agreements with the U.S. that set in place a baseline levy, but Canada did not. Those tariffs were ruled unlawful by the U.S. Supreme Court this past February. 

“We were the one country that didn’t make concessions on threats that were based on IEEPA,” he said. 

Dade said that it was wise for Canada to wait out the court’s IEEPA decision, but now it is important to wait to see the results of the upcoming U.S. Congressional midterm elections. 

Calls build for transparency 

At the April 24 committee meeting, Wiseman said that he wouldn’t delve into details about Canada’s strategy for approaching the review, and wouldn’t confirm whether Canada is taking a deliberate approach of delay. 

“In my career as a business leader, an investor, a deal maker, I’ve never done a deal on the front pages of the newspaper that has been successful,” Wiseman said. 

Conservative MP Michael Chong (Wellington–Halton Hills North, Ont.), his party’s foreign affairs critic, questioned the transparency of the government during the meeting.

“It’s not an investment bank here, it’s a democracy, and this is the heart of the democracy. Canadians have the right to know what’s going on,” he said. “We don’t know what’s going on.” 

Jamie Tronnes, executive director of the Center for North American Prosperity and Security, said that there haven’t been enough updates from the Canadian government about what it is seeking to accomplish. 

“The line of ‘trust me, I know what I’m doing’ ends when you don’t show that you’re doing something with people’s trust,” she said. 

“There needs to be more official government information sharing so businesses can feel that trust with the government,” Tronnes said. “The problem that the Liberals are having at the moment is that they are relying on ‘elbows up’ as a strategy to shore up that trust, and that’s a mistake because we can still be very patriotic people, but we also have to feed our families and know that the people we’ve elected to do the job of negotiating with the U.S. have a plan.”

Conservative MP Michael Chong has called on the Liberal government to be more transparent about its negotiation strategy ahead of the CUSMA review. The Hill Times photograph by Andrew Meade

She said that with a mixed view among Canadians about a delayed approach to the negotiations, there is a need for the government to be more transparent about its objectives and the state of the looming review, as well as the sectoral tariffs.

“The fact that there isn’t a lot of transparency is harming the government’s case that they have a plan, they’re doing what is in accordance with that plan, and going slow is a key part of the plan that they have in mind,” Tronnes said. 

Dade said there is an issue that increased transparency could result in a Trumpian reaction. 

“There has to be a balance between transparency and informing Canadians versus transparency and informing our adversaries and those whom we are negotiating with,” he said. “That’s not a clear line.”

‘Divide and conquer’ 

In an interview with the Council on Foreign Relations, U.S. Deputy Trade Representative Rick Switzer called Mexican President Claudia Sheinbaum “a serious leader.” On the other hand, he said that Carney has made the trading relationship “personal,” calling it “political malpractice” for a Canadian prime minister to “pit” himself against a U.S. president as Canada is “dependent on the U.S. economy.”   

Miller said that the Trump administration has become “deeply frustrated” with Canada.

“Part of why they’re frustrated is that everybody else in the world has basically agreed to the U.S. terms—the Europeans, the Japanese, not China, but pretty much everyone else,” he said. 

Dade, who is a member of the Mexican Council on Foreign Relations, said that while Mexico has engaged, it has not agreed to any concessions with the U.S.

“Mexico has a different relationship on their end, but they’re not giving away the farm. They’re not making concessions. They’ve got demands of the administration.” 

He said the Trump administration will try an approach of “divide and conquer” with Canada and Mexico. 

“The first Trump administration tried that. It was their go-to strategy. And I think they’re simply repeating it,” Dade said, remarking that while Mexico and the U.S. signed an agreement during the NAFTA renegotiations, it was the Mexicans who continued to brief Canada on the state of their bilateral talks with the U.S. 

“The alliance between Canada and Mexico held last time. I see no reason for it not to continue this time,” said Dade, remarking that it is likely to expand this go around.  

Carney spoke with Sheinbaum on April 24 during which the two leaders discussed the looming CUSMA review and “agreed to work in close co-ordination to address shared economic priorities and challenges, and deliver greater certainty, security, and prosperity for their peoples,” according to a PMO readout. 

Mexican President Claudia Sheinbaum, left, and Prime Minister Mark Carney spoke on April 24 during which they agreed to work in ‘close collaboration.’ Photograph courtesy of X

Diego Marroquín Bitar, a fellow at the Center for Strategic and International Studies, said that the approach of Canada and Mexico differs because of the domestic political realities in each country. 

“For Mexico, it’s important to be at the table. For Canada, they don’t have the same urgency,” he said.

He noted that Mexico’s export economy is heavily dependent on the U.S., and it is essential for the survival of CUSMA for Sheinbaum’s electoral future.

Despite the differing approaches, Marroquín Bitar said that, so far, Canada and Mexico are in the same spot, noting that when changes were made on the steel and aluminum tariff regime they were offered to both Mexico and Canada. 

Future Borders Coalition executive director Laura Dawson said that Canada and Mexico’s approaches can’t be judged against each other given the difference in their markets. 

But she noted that Canada needs to be careful with a “go slow” approach, remarking that a delayed approach to wait for the effects of tariff costs on U.S. businesses and consumers has not altered Trump’s negotiations strategy as of yet. 

“Canadian businesses who operate in highly integrated supply chains with the U.S. are more vulnerable the longer that Canada drags its feet. The effects of such a strategy have to be worth the potential costs,” she said. 

Dawson said that if Canada is appearing uncooperative, then the Trump administration may threaten a withdrawal from the agreement and replace it with a U.S.-Mexico bilateral pact. 

nmoss@hilltimes.com

The Hill Times

 

Neil Moss is a reporter with The Hill Times who covers federal politics, foreign policy, international trade, Canada-U.S. relations, and defence, as well as leading the newspaper’s annual Top 50 list of foreign policy influencers. See all stories BY NEIL MOSS