Canadian Prime Minister Justin Trudeau, United States President Joe Biden and Mexican President Andres Manuel Lopez Obrador walk to a meeting at the North American Leaders’ Summit in Washington, D.C., on November 18, 2021. The trio will meet again this week as the so-called "Three Amigos" summit series resumes in Mexico City. THE CANADIAN PRESS/Adrian Wyld

Uzelman: 3 amigos summit and opportunities For Canada and Mexico

A column by Bruce Uzelman

~BW Uzelman

Canadian Prime Minister Sir Wilfred Laurier famously said, “The nineteenth century was the century of the United States. I think we can claim that Canada will fill the twentieth century.” On another occasion, he stated it more directly, “the twentieth century shall be the century of Canada and Canadian development.” It did not quite work out that way. Perhaps Canada’s day is yet to come. If so, it is likely to be not as a single nation, but rather as a member of team North America.

The North American Leaders’ Summit took place last week in Mexico City. Goldy Hyder, CEO of the Business Council of Canada (BCC), addressed government officials and business leaders, “Far too often, we’ve acted as either three independent countries or two bilateral relationships. In today’s world, that is going to leave us far behind.” He advised all three leaders to view North America as a single unit, not as separate entities. “How the world is taking shape is really strength in numbers and blocs.”

Indeed, North America has been moving in that direction for some time. Since the advent of NAFTA in 1994, Canadian imports from Mexico have grown from approximately $3 billion to $27 billion in 2021. Canadian exports to Mexico, have grown from about $2 billion to $11.5 billion. The U.S. is responsible for more than 75% of the international trade of both Canada and Mexico.

The BCC along with the U.S. Chamber of Commerce and Mexico’s Consejo Coordinador Empresarios, wrote an open letter to the leaders of Canada, the U.S. and Mexico in advance of the Summit. “Collectively our three countries account for almost a third of world economic activity.” The three organizations point out that North America represents a market of 500 million people.

The letter states that continent could become the world’s leading producer of electric vehicles (EVs), but only, “if we work together to overcome shortages of key raw materials, encourage investment in new manufacturing capacity, and make it easier for consumers to purchase EVs.” The region could also be a supplier, “of cleaner energy, critical minerals, and low-carbon technologies to global markets”.

The Governments of Canada and Mexico bilaterally agreed to support labour mobility. That was crucial given Canada’s labour shortage. In the Declaration of North America (DNL), the three leaders committed to promote workforce development, regional supply chains and investment in key industries like semi-conductors and EV batteries. The DNL also notes that “critical minerals” are essential to the clean energy transition, and commits each country to map out reserves of such minerals.

It’s important, though, that governments temper their desire to pick winners. Mexico will maintain its current strengths in auto production, which represent about 35% of its’ exports to Canada. And Mexico has the competitively priced and sizable workforce necessary to exploit other manufacturing opportunities like medical and consumer products. China dominates much of the global manufacturing industry. Canada and the U.S. need alternate suppliers that can offer proximity and certainty of supply.

Encouragingly, post-Summit, the Mexican Foreign Minister said the three countries had agreed to work together to manufacture 25% of what they import from Asia. He said that Mexico would have to invest to accelerate the process, and that Canada and the U.S. had committed to help develop industry in the northern border state of Sonora. Canada and the U.S. are well-positioned to support Mexico with the necessary investment. The Globe and Mail reports that, since 1999, Canada has invested US$50 billion in Mexico, while Spain has invested US$80 billion and the US has invested US$310 billion. Canada has been increasing the capital flow, though, and seems poised to overtake Spain in annual investment.

Canada has opportunities for both more export to and more investment in Mexico. BCC suggests Canada has expertise in areas where Mexican demand is growing, “including aerospace, financial services, green technology and energy infrastructure”. From 2015 to 2020, TC Energy accounted for 56% of Canadian investment in Mexico, says the Globe. The company recently secured a $4.5 billion agreement for a new Mexican pipeline. TC Energy is only one of the Canadian success stories in Mexico.

Prospects for North America look promising. If Canadian business and government work adeptly and swiftly, we can become an increasingly integral part of team North America. Then, the twenty-first century shall be ours – collectively, of course. Laurier may have essentially had it right.

Bruce

Bruce W Uzelman

I grew up in Paradise Hill, a village in Northwestern Saskatchewan. I come from a large family. My parents instilled good values, but yet afforded us, my seven siblings and I, much freedom to do the things we wished to do. I spent my early years exploring the hills and forests and fields surrounding the village, a great way to come of age. My parents owned a successful general store. My siblings and I were required to help out in the business, no choices allowed there!

I attended the University of Saskatchewan in Saskatoon. I considered studying journalism at one point, but did not ultimately pursue that. However, I obtained a Bachelor of Arts, Advanced with majors in Economics and Political Science in 1982.

My career has consisted exclusively of small business, primarily restaurant and retail. I was originally based in Alberta, and then BC, first in Summerland, then Victoria and finally Kelowna (for over 20 years). I was married in Alberta, and we have two daughters, who have returned to Alberta as adults for career reasons, as did my now ex-wife. My daughters are successful, and now have families of their own.

I have maintained a healthy interest in politics throughout my adult years, and wish to put that and my research skills to work as a political columnist.

Contact: urbangeneral@shaw.ca

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