U.S. may seek win with Mexico in wake of collapsed trade talks with Canada, says ex-negotiator

U.S. Trade Representative Jamieson Greer, right, walks with Mexican President Claudia Sheinbaum in Mexico's National Palace on July 23. Secretary of Economy Marcelo Ebrard is on the far left. (Office of Mexican President Claudia Sheinbaum/handout)

Photo: (Office of Mexican President Claudia Sheinbaum/handout)

The collapse of trade talks between Ottawa and Washington could see U.S. negotiators try to « aggressively » secure a win with Mexico in their ongoing bilateral talks, says a former Mexican trade negotiator.

Kenneth Smith Ramos, Mexico's former chief technical negotiator during the initial 2017 to 2019 Canada-U.S.-Mexico Agreement (CUSMA) negotiations, says he expects the U.S. to try to fashion a framework agreement with Mexico before the end of the year, pushing resolutions around thornier matters into 2027 — like the U.S. seeking to put restrictions around Mexican agricultural exports.

"It is a possibility that in the upcoming [negotiating] rounds, weeks or months … that the U.S., for political reasons, like it did with the European Union (new window) … comes out and says, 'we have a framework agreement,'" said Smith Ramos, a partner with Mexico City-based Agon, a corporate consulting and legal services firm, in an interview with CBC News.

Canada and Mexico have both been engaging with the U.S. individually to settle tariff and other specific bilateral trade irritants in hopes of firming up agreements before entering into trilateral talks on amending and extending CUSMA.

Talks between Canada and the U.S. fell apart on Aug. 21 when Prime Minister Mark Carney pulled his negotiators back to Ottawa. Carney said the U.S. introduced last minute demands (new window) on culture, autos and sovereignty that Canada could not stomach.

The talks were aimed at forestalling a U.S. threat to impose 50 per cent tariffs on a wide range of Canadian products, impacting about $27-billion worth of Canadian goods.

Canada has since retaliated with dollar-for-dollar counter-tariffs on more than 700 different U.S. imports that come into force on Sept. 8.

The Canada-U.S. trade dispute has now indefinitely delayed any trilateral talks on advancing CUSMA, said Smith Ramos.

We don't know what is going to happen with these tariffs and threats.

The U.S. announced on July 1 that it would not extend the CUSMA agreement (new window) in favour of renegotiating the terms of the deal.

Canada and Mexico both wanted to extend the agreement. The two countries are adamant the continental trade agreement is good for all three countries.

Mexico's Secretary of Economy Marcelo Ebrard told reporters Thursday that tensions between Canada and the U.S. don't favour Mexico and that it's in everyone's interest to find common ground and move forward.

Hopefully they will come to some agreement, they were very close just a few days ago, said Ebrard, who is heading to Washington, D.C., next month for another round of bilateral talks.

The North American region needs to integrate, we need to work together one way or another, and we expect it to happen, but it's difficult to know when.

WATCH | Who is to blame for failed talks?:

Greer blames Canada for failed talks as premiers weigh further retaliation

U.S. Trade Representative Jamieson Greer told CBC News that Canada was responsible for the collapse in talks and denied Ottawa's claims that last-minute U.S. changes scuttled a deal. Meanwhile, the premiers of Ontario and Saskatchewan weighed further retaliatory action.

Mexican President Claudia Sheinbaum also chose her words carefully when asked about Canada-U.S. trade tensions earlier this week. Sheinbaum spoke with Carney on Aug. 20, the day before the prime minister pulled the plug on trade talks.

I spoke with Prime Minister Carney on Thursday. I believe that this breakdown hadn't happened yet. I don't want to call it a breakdown, this disagreement — it's better said that way, this disagreement in talks, said Sheinbaum, during her Monday morning news conference.

Mexico Secretary of Economy Marcelo Ebrard, left, walks with Canada-U.S. Trade Minister Dominic LeBlanc in Toronto on May 6, ahead of the launch of a Mexican trade mission to Canada. (Mexico Secretariat of Economy)

Photo: (Mexico Secretariat of Economy)

The Sheinbaum administration has to handle the matter delicately while managing their own unresolved issues at the trade talk table with the U.S., according to Solange Marquez, vice-president of policy with the Canadian Council for the Americas.

They are trying to avoid … any contamination of the dialogue, of their conversations, with what is happening with Canada, said Marquez.

From the Mexican side, I am seeing more fear about making the U.S. authorities angry. ... Now that Canada is out of the negotiations, Mexico is trying to protect their own side.

Marquez said it seems the era of free trade in North America has ended.

What we're seeing now is there is no conversation about a free trade agreement. We are negotiating on tariffs, a new trade agreement, without the word free there, she said.

We are negotiating under the framework for a trilateral agreement, but what we see in reality is two bilateral agreements.