Comparing the methods Canada and Mexico use for U.S. tariffs is insufficient, claims Anand

Comparing the methods Canada and Mexico use for U.S. tariffs is insufficient, claims Anand

Canada and Mexico find themselves in different positions when it comes to trade negotiations with the United States, as they each navigate unique challenges and opportunities under the revised North American Free Trade Agreement (CUSMA).

While Canada faces tariffs on non-compliant goods, Mexico has been granted a 90-day reprieve from similar tariffs. This difference in tariff treatment is primarily due to compliance and negotiation timelines rather than economic scale.

Canada, despite a high percentage of goods being theoretically CUSMA-compliant (about 86%), has struggled with paperwork compliance. Only about 38% of Canadian exporters have completed the necessary documentation to prove compliance, leaving their exports vulnerable to tariffs.

On the other hand, Mexico is actively negotiating with the U.S. to maintain tariff relief and secure a new trade agreement.

In terms of negotiation approach, Canada and Mexico have taken notably different paths. Canada emphasises trilateral economic strength and compliance enforcement, while Mexico is focused on active renegotiations for an updated agreement.

Both countries collaborate bilaterally to foster economic growth, but Canada is also dealing with the immediate challenge of tariff enforcement under CUSMA.

Foreign Minister Anita Anand met with Mexican President Claudia Sheinbaum and their ministerial counterparts in Mexico City. According to Anand, these meetings continued the process of repairing the Canada-Mexico relationship.

This complex dynamic reflects the varied economic ties and strategic responses each country has towards maintaining favorable trade terms with the United States under CUSMA.

Here's a summary of the current situations:

| Aspect | Canada | Mexico | |---------------------------|------------------------------------|-------------------------------------| | Tariff status | Subject to 35% tariffs on non-compliant goods | Received 90-day reprieve from tariffs | | Compliance | High product compliance rate (~86%) but low paperwork compliance (~38%) | Negotiating to maintain tariff relief | | Trade relationship with U.S. | Highly integrated, but direct enforcement of CUSMA rules causing tariffs | Focus on renegotiation and gaining extension period | | Negotiation approach | Emphasises trilateral economic strength and compliance enforcement | Focused on active renegotiations for updated agreement | | Collaboration | Works closely with Mexico on trade and security as part of North American economy | Engaged in separate direct talks with U.S. to mitigate tariffs |

These differences in approach and position arise from the distinct nature of their economic relationships with the U.S. Anand emphasised it would be "superficial" to compare Canada’s and Mexico’s approaches due to these differences.

Notably, former prime minister Justin Trudeau and then-deputy prime minister Chrystia Freeland supported Ontario Premier Doug Ford's call for a bilateral trade deal between Canada and the United States last year.

Sources: 1. BBC News 2. The Globe and Mail 3. Reuters 4. The Conversation 5. The Canadian Press

1. The health of the North American economy hinges on the success of ongoing trade negotiations between Canada, Mexico, and the United States.
2. Canada and Mexico each grapple with unique challenges and opportunities under the revised North American Free Trade Agreement (CUSMA).
3. While tariffs on non-compliant goods remain a concern for Canada, Mexico has been granted a 90-day reprieve.
4. A significant disparity exists in tariff treatment between the two countries, primarily due to compliance and negotiation timelines.
5. Canada, with an approximately 86% CUSMA-compliant good percentage, battles paperwork compliance, affecting only about 38% of exporters.
6. Mexico, however, is actively working to maintain tariff relief and secure a new trade agreement with the U.S.
7. In terms of negotiation approach, Canada stresses trilateral economic strength and compliance enforcement, while Mexico prioritizes active renegotiations for an updated agreement.
8. Both countries collaborate to foster economic growth but find themselves taking different paths in navigating their trade relationships.
9. Foreign Minister Anita Anand and Mexican President Claudia Sheinbaum met to repair the Canada-Mexico relationship and discuss ongoing trade matters.
10. This complex dynamic highlights the diverse economic ties and strategic responses of each country in pursuit of favorable trade terms with the United States under CUSMA.
11. Anand underscores the need to acknowledge the differences between Canada’s and Mexico’s approaches to trade negotiations.
12. Last year, former prime minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland supported Ontario Premier Doug Ford's proposal for a bilateral trade deal between Canada and the United States.
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