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Prime Minister Stephen Harper (right) shakes hands with with Mexican president-elect Enrique Pena Nieto on Parliament Hill in Ottawa on Wednesday, November 28, 2012. (FRED CHARTRAND/THE CANADIAN PRESS)
Prime Minister Stephen Harper (right) shakes hands with with Mexican president-elect Enrique Pena Nieto on Parliament Hill in Ottawa on Wednesday, November 28, 2012. (FRED CHARTRAND/THE CANADIAN PRESS)

Globe editorial

Mexico, a natural partner for Canada Add to ...

In our goal to become less reliant on the U.S., Canada is right to reach out to emerging markets, in particular, strengthening trade and political links with Brazil, a powerhouse economy that accounts for 40 per cent of Latin America’s total GDP.

However, the visit of incoming Mexican President Enrique Peña Nieto on Wednesday is a reminder that Canada should not lose sight of its NAFTA partner in the process. Mexico, Canada’s third largest trading partner, is an inviting market for Canadian companies, with low tariffs, a less complex tax regime and superior infrastructure. More than 2,500 Canadian companies already have offices and operations in Mexico, compared with about 400 in Brazil.

With the new president, from the Institutional Revolutionary Party, taking office on Dec. 1, there is a sense of optimism that the Congress will finally pass energy, labour and fiscal reforms. These reforms are supported by the outgoing government of Felipe Calderon, of the National Action Party. While Brazil’s economy falters, due in part to a slowdown in China’s economy, Mexico’s is predicted to grow at the rate of 4 per cent, twice as fast as Brazil’s. Mr. Peña Nieto, who met with Prime Minister Stephen Harper, has pledged to open up the Constitution to allow for private investment in the state-owned oil sector, modelled in part on Brazil’s Petrobras. This will create new opportunities for Canadian energy firms. “The Canada-Mexico relationship is an important one,” says Michael Harvey, president of the Canadian Council for the Americas. “Mexico’s manufacturers already sell to the world, while Brazilian manufacturers still rely on their vast internal market, though the country sells its commodities to the world.”

A central challenge for Canadians is to see beyond the chronic negative publicity about Mexico’s drug violence. That is not to say that drug trafficking is not a serious security threat; the drug-related death toll has reached more than 60,000 in the last six years. Mr. Peña Nieto has pledged to expand the federal police, and change the focus from capturing drug capos to increasing citizen security. That is easier said than done.

In spite of these concerns, Mexico’s economy is surprisingly buoyant. It has free trade deals with 44 different countries. It is the world’s fourth largest car manufacturer. For the first time in decades, net emigration to the U.S. is at zero. Mexico is a dynamic partner for Canada.

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