Prime Minister Trudeau Heads To Mexico Amid Signs That NAFTA Is In Trouble

Prime Minister Justin Trudeau arrives for meetings in Mexico today amid growing signs that the North American Free Trade Agreement (NAFTA) is in serious jeopardy.

Prime Minister Trudeau met with U.S. President Donald Trump and his advisors in Washington, D.C. on Wednesday in an effort to break a tightening deadlock on negotiations aimed at reforming the trilateral NAFTA agreement between Canada, Mexico and the U.S. Yet, Prime Minister Trudeau was told at the meeting that the U.S. is considering scrapping the trade deal and interested in negotiating a new trade agreement with Canada that excludes Mexico.

During talks at the White House Wednesday, President Trump suggested the possibility of replacing NAFTA with a new U.S.-Canada deal that would leave Mexico out entirely. According to reports by Canadian media, Prime Minister Trudeau told President Trump behind closed doors that his preferred option was to modernize the continental accord. But speaking to media after the talks, the Prime Minister said he is open to a new two country accord if that is what it takes to save free trade between the U.S. and Canada.

Today, Prime Minister Trudeau arrives in Mexico for meetings with President Enrique Pena Nieto. The original free trade agreement signed between the United States and Canada in 1988 did not include Mexico. In 1994, Mexico joined NAFTA and has been a full member of the agreement ever since.

But Mexico has always been the lone developing country in the trade pact, with wages that are significantly lower than in Canada or the U.S. Critics say this fact gives Mexico an unfair advantage in NAFTA – a criticism that President Trump has echoed. Labour unions within Canada, such as Unifor, have lobbied for the NAFTA renegotiation to address those same disparities brought up by the U.S. President.

For its part, the Mexican Government seems resigned to the possibility that NAFTA may be coming to an end for the country. Comments this week by the two senior Mexican ministers handling the NAFTA file suggest a growing acceptance that Mexico may have to go it alone on trade.

“Mexico is much bigger than NAFTA,” Foreign Minister Luis Videgaray told the Mexican Senate earlier this week. “We have to be prepared for the different scenarios that could come out of this negotiation.”

Economy Secretary Ildefonso Guajardo is the man in charge of Mexico's NAFTA team, and he said this week that Mexico’s economy has advanced to a point where it can live without the trilateral trade accord.

“Without a doubt, there's life after NAFTA,” he said, “And that's what gives us strength in the (current) negotiations.”