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Tightening Canada-Mexico bonds key to future prosperity: Senator Mockler
Tightening Canada-Mexico bonds key to future prosperity: Senator Mockler
March 15, 2018
OPINION
image Percy Mockler
Percy Mockler
C - (New Brunswick)

In the 21st century, protectionism will not be a winning strategy. The same way arteries carry oxygen to parts of the human body, trade links feed the prosperity of nations. While the European Union rededicates itself to integration in the aftermath of Brexit and China pushes forward with its own Asian integration project, North Americans are witnessing the demise of the 24-year-old North American free trade agreement (NAFTA).  This is troublesome for Canada — and perhaps a sign that it’s time to strengthen bonds with new partners.

First and foremost, as the seventh round of NAFTA talks continues in Mexico City, saving NAFTA should remain the priority.

The United States has long been our biggest trading partner, with over $2 billion in goods and services crossing our border every day. Indeed, the coming into effect of NAFTA in 1994 solidified the Canada-U.S.-Mexico trading bloc as one of the most efficient in the world — and one that accounts for more than one-quarter of the world’s GDP. Predictability is good for business and NAFTA has provided that in immeasurable ways.

But beyond real negotiating hurdles, the U.S. administration’s protectionist leanings could make any deal dead on arrival anyway. This volatility explains the low performance of Canadian stocks in the past year. To secure Canada’s interests, the federal government must do whatever it takes to maintain a market for our resources, goods and services even if that means looking elsewhere in the meanwhile.

Now is the time for Canada and Mexico to build on their relationship. Faced with the same dilemma of defending the same deal, Canada and Mexico have never seen more eye to eye.

Thanks to NAFTA, our economies have already become linked. Mexico is Canada’s third-largest trading partner, with bilateral merchandise trade valued at roughly $40 billion in 2015. Mexico is Canadians’ second-most-popular tourist destination and it supplies the largest group of Canada’s seasonal agricultural workers.

As negotiations continue, this spirit of cooperation goes beyond technocrats and heads of government. In February, I met with some Mexican and Canadian legislators to discuss NAFTA and beyond. These types of meetings help parliamentarians bring local issues to an international discussion, grounding them in the need to help workers across North America achieve better standards, wages and working conditions. This is what free trade is supposed to be about.

From New Brunswick’s perspective, NAFTA matters.

Since its earliest settlement, New Brunswick’s economy has been closely tied to its natural resources, with forestry products as the province’s economic mainstay. Other important sectors include farming, fisheries and aquaculture. Together, these account for tens of thousands of jobs — all in sectors that could be affected by a termination of NAFTA. Indeed, 51% of the province’s GDP is tied to exports, more than 90% of which are destined for the United States.

In short, New Brunswick’s historical industries are at a disadvantage should our relationship with the United States change. Not to say things have been easy otherwise.

New Brunswick already lost out on the benefits of a TransCanada investment in the Energy East Pipeline despite Saint John having the largest oil refinery in North America.

For many, securing trade will determine whether they can put roofs over their heads and food on their tables. That’s why it’s crucial we start looking further south.

In 2015, New Brunswick did $19 million worth of trade with Mexico. Despite the small figure, momentum is building.  That number rose by almost 25% between 2006 and 2011.

Most of the products leaving New Brunswick for Mexico come from the frozen food sector. While that sector could still grow, we also see potential in forestry products, fish and seafood, as well as maple syrup. The province already offers supports for businesses looking to expand into that market and should continue to build on this.

Mexico’s economy has great growth potential. It’s also a signatory, like Canada, to the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership — an accord among 11 Pacific nations — from which the U.S. has already withdrawn.

As NAFTA talks continue, Canada and Mexico should stick together. A renewed trilateral deal is still in all our best interests — and the goal of deepening integration in North America remains key to stability on the continent and beyond.

But it’s also well past time to start preparing for the worst. In this disappointing story, there’s perhaps a silver lining — the budding relationship between Canada and Mexico.

Percy Mockler is a senator representing New Brunswick. He is chair of the Senate Committee on National Finance and a member of the Senate Committee on Energy, the Environment and Natural Resources

This article appeared in the March 10, 2018 edition of The Telegraph Journal.