When Agendas Align, Opportunities Abound
As published on Substack
Canada and Mexico are making headlines lately with an historic exchange of ambitious trade missions.
Earlier this month, Mexico’s Economy Secretary, Marcelo Ebrard, led a commercial delegation of no less than 244 Mexican companies to Toronto and Montreal. This followed a similarly large trade mission in February of Canadian business leaders to Mexico City, Monterrey and Guadalajara, organized by Minister Dominic LeBlanc.
One would think this peak in bilateral curiosity and unprecedented engagement is warranted solely on the basis of our two countries sharing a continent and being joined under two hugely consequential trade agreements: the U.S.-Mexico-Canada Agreement and Trans-Pacific Partnership.
However, the debate about whether Canada and Mexico will become essential, integrated trading partners is as old as the Business Council of Canada (BCC), which is marking its 50th anniversary this year. The BCC has been a leading advocate for strengthening trilateral North American competitiveness and integration for just as long. Now, amidst growing geopolitical risk and global policy uncertainty, the BCC’s long-standing faith in the Canada-Mexico relationship appears poised for vindication.
The numbers add up
Mexico and Canada’s combined GDP would situate us together as the world’s fourth largest economy at more than USD $4 trillion. We rank each other in our top three trading partners, albeit far behind the behemoth that is the U.S. economy and right on the coattails of rival China.
When you sell three-quarters of your exports to one partner with whom your trade represents a fifth or more of your national GDP, as is the case for Canada and Mexico with the U.S., the consequence of that relationship diminishes the comparative value of all others. Yet, it’s possible the calculation of that comparative value is shifting.
While the Mexican and Canadian governments are pursuing very different negotiating strategies with our mutual neighbour, we have more in common today than not. We have simultaneously awoken to the risk of our heavy concentration of economic interests on one common client and vendor. It is in part this external force that is driving us to seek out new markets, and we naturally look first to our other North American partner.
The easy wins
Proximity to market, existing trade routes and a shared North American business culture all matter.
Canada and Mexico have relatively easy land, sea and air access to each other’s markets. Our joined-up rail networks, headquartered in Canada, have capacity to spare and are growing both in terms of innovations, such as new refrigerated railcars, and in what they are carrying. New orders arrive daily in the form of agrifood, energy and manufactured products.
Flights and visitor volumes in both directions have increased by as much as 20 per cent since President Donald Trump came to office and this adds significantly to the air cargo capacity offered by Canadian carriers like Air Canada, West Jet and Air Transat.
On the cultural side, business leaders in both Canada and Mexico have tailored their companies’ offers and approaches, over decades of increasing integration, to meet the demands of U.S. buyers. For our two countries today, facing a new reality in the U.S., this history still provides a common reference point from which we can launch new ventures and explore each other’s markets.
So, as both countries look to grow trade with partners beyond the U.S., it makes all the sense in the world to start with each other.
The results thus far
The two complementary trade missions undertaken in February and May went far beyond exploration and introductions. Immediately after being announced, Canada’s trade mission to Mexico in February attracted an unprecedented flood of interest from Canadian companies, many of whom had been working in or at least eyeing the Mexican market for some time.
After a careful screening process to ensure their export readiness, 270 companies and trade associations were selected and about 400 business leaders booked their flights south from across Canada. When Mexico’s turn came just a few short months later, nearly as many companies signed up in half the time and planned their own travel north from Mexico for programs in Toronto and Montreal.
In February, Canadian firms announced concrete deals across target sectors including solar projects, low‑carbon cooling systems, reseller agreements for cross‑border digital services, cultural-tech partnerships and a biomanufacturing MOU to boost joint production and R&D. The flow of Mexican capital north to acquire a Canadian mining project was matched by discussions around port infrastructure and increased capacity to increase trade south in energy and minerals.
Meanwhile, the May mission from Mexico was marked by a Grupo Bimbo announcement of a CAD $200 million investment to modernize its facility in Canada. A string of MOUs in life sciences, agrifood, education and the creative sector were also finalized with the aim of deepening two-way supply chains and R&D collaboration. What’s more, at a reception in Toronto, Secretary Ebrard announced that the Mexican trade mission would be repeated one year later in May 2027.
An uncertain future tempered by facts
The pivot of Mexico and Canada toward each other is not circumstantial. Regardless of where our trilateral reality lands over the course of 2026, the merits of Canadian companies looking further south than the Rio Bravo are evidenced in significant and longstanding success stories. Since NAFTA in 1994, bilateral trade with Mexico has grown 12-fold and, in just the last ten years, Canadian investment in Mexico has tripled.
The Mexican economy has opened and matured far beyond what it was when the Salinas government signed NAFTA back in 1994. Today, the country’s many sophisticated and multinational companies are coming to Canada, in large part because our economies are highly complementary due to climate, geography, demography and proximity.
Growing our bilateral trade further and improving our respective business environments to be more welcoming to outside investment only solidifies the progress we have achieved to date and the prosperity we have created jointly. That should bring us some peace of mind in uncertain times.
The disruptive transformations facing our populations today, from AI and climate change to the threat of pandemics and the rise of the China-U.S. rivalry, only make it easier and more logical for Mexico and Canada to invest in each other. What’s more, this investment will serve to make North America stronger.
If our respective diversification strategies fail to gain traction and do not lead to early success in each other’s markets, this will be a clear signal that we both have more work to do at home in order to succeed abroad. This is a path we need not walk alone, and it is one in which both our countries are determined to succeed.
