The Mexican and Canadian governments signed a milestone partnership agreement last month to promote and strengthen economic and security ties between the two nations.
Canada and Mexico are close economic partners aside from their place in the North American free-trade bloc; bilateral trade between the countries in 2024 totaled about $56 billion and Canada’s total foreign direct investment in Mexico in 2024 was around $46 billion. Canada was Mexico’s fifth largest trade partner and Mexico was Canada’s third largest as of the end of last year.
A key driver of the new accord is the status of the trilateral United States–Mexico–Canada Agreement (USMCA), which is up for renegotiation next year. US President Donald Trump is already questioning its key elements in light of his criticisms that Mexico and Canada are taking a soft approach to cross-border illegal activity in the region, from immigration to drug trafficking, and what he regards as their anti-competitive trade and investment measures. The new bilateral partnership agreement aims to secure the support of economic integration, while the USMCA’s future is less certain.
Canadian Prime Minister Mark Carney and Mexican President Claudia Sheinbaum highlighted several new potential areas of collaboration. The Canadian leadership is interested in more diverse and resilient supply chains via Mexico, while the Mexican government wants to increase bilateral trade through direct access to Canadian ports, making the country less dependent on existing US maritime channels. Together, they are exploring joint production to target the growing Latin American and Asian markets, taking advantage of the Trans-Pacific Partnership.
The new bilateral agreement also addresses key security components, such as enhancing security cooperation to combat synthetic opioid trafficking and social integration of migrant workers and related labor programs. Further meetings between Mexican and Canadian trade officials are expected in the coming months on a range of issues, from health to energy.
Meanwhile, public consultation has begun on the USMCA, which is scheduled for review next year. Public consultation is an integral part of the renewal process, enabling parties to better prepare for the upcoming negotiations. It also give the leadership on each side a better understanding of political trends and their views of key economic issues.