Home' Trinidad and Tobago Guardian : August 14th 2014 Contents AUGUST 2014 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
THE ECONOMIST | BG21
Canada and Mexico share the
fortune, or misfortune, of a
border with the world s
most powerful country,
which looks down on both
of them. For 20 years, as
privileged trading partners of the United
States, they have had the opportunity to
influence it by creating a shared vision for
North America. Instead the two have bick-
ered like rivals in a tawdry menage a trois.
Canada plays the part of the wronged
partner. It has jealously sought to protect
its special relationship with its neighbour,
fearing that Mexico may steal its thunder.
"Canada is quick to give offense and Mex-
ico is quick to take it," says Laura Dawson,
author of a report on the bilateral relations
for the Canadian Council of Chief Execu-
tives, a business group.
That could be shrugged off as irrelevant
in a region where the only bond that matters
is with the United States. There are economic
costs for North America as a whole, however,
including the United States, because more
could be done to link supply chains and
energy markets trilaterally rather than bilat-
Canada was a reluctant participant in the nego-
tiations for the North American Free Trade Agreement,
which was launched in 1994. It agreed to join largely
to safeguard the advantages it had won from a prior
free-trade deal with the United States.
After the terrorist attacks on September 11, 2001,
efforts to strengthen NAFTA through trilateral nego-
tiations lost momentum. Instead the United States,
Canada and Mexico have sought to tackle border and
security issues bilaterally.
Relations between Canada and Mexico have become
more brittle this year, as the leaders of both countries
have pointedly snubbed each other.
Visas are the cause of much of the ill will. President
Enrique Pena Nieto of Mexico canceled a visit to
Canada in June, after the government of Prime Min-
ister Stephen Harper refused to lift a "temporary"
visa requirement imposed in 2009 following a sharp
rise in Mexican asylum requests. Mexico feels
demeaned: It used to enjoy visa-free status in Canada,
which is rare for a Latin American country.
"President Pena would not subject himself to the
horrors of having to present a visa," says his ambas-
sador in Ottawa, Francisco Suarez Davila.
Pena had hoped that a meeting with Harper, held
earlier this year on the sidelines of the "three amigos"
summit with President Barack Obama, would lead
to a breakthrough on the issue. Instead Harper publicly
refused to budge, saying that visas were a sovereign
matter and not open to negotiation.
Mexican experts say that the visa issue represents
more than simply wounded pride. They acknowledge
that Harper s government originally responded to a
rise in spurious asylum claims at a time of soaring
crime in Mexico. The situation has improved since
then, however, and they are irked by the Canadians
unwillingness to discuss the issue, even though busi-
ness and tourism between Canada and Mexico have
Business groups in both countries are eager to see
warmer ties. Although trade between the two countries
under NAFTA has grown almost sevenfold, most of
it is linked to the United States, and two-way invest-
ment is modest. There is potential to develop sup-
ply-chain linkages of the sort that now crisscross
the border between Mexico, the United States and
Canada, but only a few Canadian companies---notably
Bombardier, the aerospace and rail firm---have taken
The most promising area for further integration
of the three economies is energy, which could further
strengthen North America s competitiveness as a
manufacturing hub. Pena s now-scrapped visit to
Canada s oil heartland, Calgary, had been intended
to give him a chance to promote landmark reforms
allowing private investment in Mexico s oil and gas
industries for the first time in more than 75 years.
On August 7 and August 8, senior officials from
both countries were due to meet in Mexico City to
revive negotiations on the visa issue. A recent decision
to expedite permits for seasoned travelers from Mexico
to Canada was seen as a mildly positive step.
Mexican officials have little optimism that Harper
will scrap the requirement altogether, however. Many
will quietly hope that the more Mexico-friendly Lib-
erals will oust him from power in elections scheduled
for October 2015.
@2014 The Economist Newspaper Ltd. Distrib-
uted by the New York Times Syndicate
The junior partners
Business groups in both
countries are eager to see
warmer ties. Although trade
between the two countries
under NAFTA has grown
almost sevenfold, most of it
is linked to the United
States, and two-way
investment is modest.
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