A stronger Mexico is good for Canada

Jennifer Jeffs

Mexican President Felipe Calderon’s visit to this country this week comes at a crucial time both for Mexico and for the bilateral relationship with Canada.

At home, Mr. Calderon faces enormous challenges in his war on the drug cartels, an opposition-dominated Congress that is blocking or watering down much of his ambitious liberal reform agenda, falling popularity in the opinion polls and the prospect that his party, the Partido de Acción Nacional, will lose the presidential elections in 2012.

For the bilateral relationship, the federal government’s decision last year to impose a visa on Mexicans wanting to visit Canada brought shock and recriminations from Mexico and nearly derailed celebrations of the 65th anniversary of formal relations between the two countries.

Mr. Calderon comes to Canada looking for support on a range of issues, and to revive the relationship after last year’s hiccups. Mexico sees Canada as an important partner, one that offers an alternative to the United States and brings important trade and investment to its emerging economy. Officially, Canada heralds Mexico as a strategic partner, but all too often we have sidelined the country because of a misguided belief that we should not divert attention away from our important relationship with the United States.

Canada was dismayed when president Carlos Salinas de Gortari announced in 1990 his plans to negotiate a free-trade deal with the United States, prompting fears that Canada would lose its preferential access to U.S. markets and forcing it to negotiate the North American Free Trade Agreement.

But NAFTA has been good for all three North American countries, and Mexico’s inclusion has been an integral part of that. Its developing economy allows Canadian and American firms to benefit from lower cost production, which helps to maintain and create jobs not only in Mexico, but also in this country and the U.S. The United States explicitly recognizes this, and indeed the Obama administration has made its southern neighbour a central component of its foreign relations.

Though Canada is not nearly as interdependent with Mexico as the U.S., we should nonetheless take our NAFTA partner more seriously and devote more resources and attention to our relationship with it. Mexico is a country of 110 million people that has recently seen its per-capita income pass the crucial mark of $10,000 (U.S.) a year, considered by some to be the cutoff to be a developed nation. Although it was hit hard last year by the economic recession, the internal market is growing rapidly again, with growth of more than 4 per cent predicted for this year.

Despite its many challenges, Mexico is rich in natural resources and has developed a strong business culture, perhaps best exemplified by Carlos Slim, the world’s richest man. The country has become an important player in global affairs, recently becoming a member of the G20 and of the G5 (with China, India, Brazil and South Africa) and participating twice as a non-permanent member of the United Nations Security Council in the 2000s.

Canada’s private sector sees the potential offered by Mexico. In financial services, Scotiabank has been invested there since 1992 and is now the country’s seventh-largest bank. Canadian mining firms are major players in the extractive resources sector. More than 2,300 Canadian firms are active in Mexico, and Canada is Mexico’s fifth-largest investor. Mexico is Canada’s third-largest trading partner after the United States and China, and Mexico is Canada’s fourth-largest export market, surpassed only by the United States, Britain and China. The North American automobile industry would simply not be able to compete without Mexican companies.

Mexico matters and in the future it is going to matter even more. Now is the time for Canada to step up to the plate and promise this country meaningful help and a meaningful partnership. The Canada-Mexico Partnership, created in 2004, was a good start, but it needs to be further developed. The recently launched Canada-Mexico Initiative has good ideas that need to attract and garner the support of the private sector in both countries. The Canadian government should offer financial, technical and diplomatic support to the Calderon administration at a time when it is most needed. Canada can provide resources, training and valuable support for Calderon’s plan to build “resilient communities” in areas plagued by drug violence.

Aside from being a good continental neighbour, Canada would only benefit from a stronger Mexico.

Jennifer Jeffs is president of the Canadian International Council.