Vamos – let’s go! While Canada procrastinates, the competition is wooing Mexico
uesday, Feb. 11 2014 Colin Robertson
Two million Canadians visit Mexico every year. Next week Prime Minister Harper will be one of them. In advance of the North American leaders summit, Mexican President Enrique Pena Nieto has personally invited Mr. Harper to discuss a more meaningful Canada-Mexico relationship.
At this time of year many of us go south to seek sun and sand, but increasingly others go because Mexico is a foreign investment magnet.
Much credit is due to Pena Nieto. Initially but incorrectly assessed as a handsome lightweight, he has sustained the multiparty, reform-minded ‘Pacto por Mexico’ that is transforming Mexico. Most impressive are the structural reforms in education, banking, labour, competition policy and energy.
While the reforms were the catalyst, Export Development Canada’s chief economist Peter Hall attributes the Mexican manufacturing renaissance to reshoring as a hedge against supply chain vulnerability and the pool of young, skilled Mexicans compared against the rising costs in China, especially labour.
In its celebratory essay on NAFTA at 20, The Economist points to Canada’s Bombardier. Its aerospace plant in Queretaro is both prototype and poster child for successful investment in Mexico. Mexico is becoming a global hub for auto manufacturing, with Canadian companies like Magna and Linamar having significant operations.
Mexico wants Canada as a partner. President Pena Nieto is considering a Team Mexico visit here this fall to explore our proven capacity in energy and environmental technology as well as engineering and infrastructure project management. This means jobs for Canadians.
But to travel here Pena Nieto and his delegation would be obliged to tender their passports for up to six weeks, provide personal information that would make even the NSA blush and then, if lucky, get a one-shot visa for seven days.
All this was imposed, without notice, on Mexico in 2009 because of Canada’s dysfunctional refugee system.
Jason Kenney mostly fixed the problem and, at their end, Mexico has cracked down on unscrupulous operators. Yet we have still not responded to the Mexican request for a road map to visa resolution.
As a prerequisite for the Canada-Europe trade deal, we lifted the visa requirements for visitors from the Czech Republic, imposed at the same time as Mexico.
Let’s do the same for Mexico, our NAFTA partner and a priority market in our new economic diplomacy. One solution would be to accept Mexicans holding a U.S. visa. Then incorporate Mexico into NEXUS, our trusted traveller program with the U.S.
We complain about low Mexican investment in Canada but how can they invest if they can’t get here? We recently launched an international education strategy to attract foreign students. Mexicans want to come but we need to be more welcoming.
Put this irritant to bed. Then get onto a forward-looking agenda around North American competitiveness.
We both need to make contingency plans in the event that U.S. President Barack Obama is denied trade promotion authority – essential for U.S. implementation of trade deals like the Trans Pacific Partnership (TPP).
Neither Canada nor Mexico can afford to wait for the U.S. to get its act together. Given supply chain dynamics, we need to sit down and figure out a strategy to serve our mutual interests.
First, figure out how together we can improve competitiveness. Autos and aerospace are obvious. We could take lessons in food production from Grupo Bimbo. Instead of ragging the puck on recognition of Mexican meat producers, we should be collaborating in the fight against US country-of-origin labelling and ongoing U.S. protectionism.
A Canada-Mexico summit should be an annual event. Mexico should top the list in our new foreign policy objective of tying trade and development assistance. Start with police and judicial training.
Second, establish an agenda of what we can reasonably achieve with the U.S. Even with a constipated Congress, the President has executive authorities. Obama’s State of the Union address prioritized infrastructure. Why not a trilateral project to improve our transportation arteries and to secure and modernize our electricity transmission networks?
Third, should the TPP stall, Pena Nieto and Harper should carry on regional trade liberalization. Start with like-minded leaders – Shinzo Abe of Japan, Tony Abbott of Australia, John Key of New Zealand, Park Geun-hye of South Korea, Susilo BambangYudhoyono of Indonesia – and those of the Pacific Alliance.
While we procrastinate, the competition is wooing Mexico. ‘Vamos – Let’s Go’ should be our operating principle.
In marking seventy years of Canada-Mexico diplomatic relations, Foreign Minister John Baird recently declared Mexico to be a “trusted and long-term partner of choice for Canada.” Let’s make the words mean something.
