The bilateral session between Canadian and Mexican trade officials set for next week in Mexico City will test the resilience of North American economic integration at a delicate moment for both nations. Standing on the sixth-floor balcony of Mexico’s Ministry of Economy last month, I watched protesters gathering below—a visual reminder of the domestic pressures influencing international economic policy across the continent.
“We’re entering these talks with clear eyes about what’s at stake,” said Canadian Trade Minister Eleanor Chen during our phone conversation yesterday. “The relationship with Mexico represents over $41 billion in two-way trade annually, but the quality of that relationship matters as much as the quantity.”
This round of negotiations comes against a backdrop of significant political transitions. Mexico’s recently inaugurated President Claudia Sheinbaum has signaled continuity with her predecessor’s economic nationalism while promising a more technocratic approach. Meanwhile, Canada’s government faces mounting pressure from opposition parties questioning whether existing trade frameworks adequately protect Canadian industries.
Central to next week’s agenda is the ongoing dispute over Mexico’s energy policies, which Canadian officials claim violate provisions in the United States-Mexico-Canada Agreement (USMCA). The controversy centers on Mexico’s 2021 electricity law that prioritizes state-owned power companies over private and foreign investors, including several Canadian renewable energy firms with substantial investments in Mexico’s growing green energy sector.
“We’ve invested over $3.8 billion in Mexican renewable projects since 2018,” explained Victoria Hartland, CEO of Toronto-based NorthStar Renewables. “The rule changes midstream aren’t just bad for our shareholders—they undermine Mexico’s own climate commitments and the spirit of North American cooperation.”
Mexican officials defend their position as an exercise in energy sovereignty. Deputy Trade Minister Rafael Buendía insisted during a press conference I attended in Mexico City that “strengthening state energy companies represents a strategic priority that exists alongside our international commitments, not in opposition to them.”
Labor standards enforcement presents another contentious issue. The USMCA’s innovative rapid response labor mechanism, designed to address labor violations quickly, has been invoked several times against Mexican facilities. Canadian labor organizations have documented what they describe as persistent violations in Mexican automotive plants supplying Canadian assembly operations.
“What we’re seeing is systematic undermining of organizing rights in particular sectors,” said Jean-Pierre Fortin of Canada’s Customs and Immigration Union. “The mechanism exists on paper, but the follow-through has been inconsistent.”
Agricultural market access rounds out the agenda’s top concerns. Canadian dairy producers have expressed growing frustration over what they characterize as Mexico’s arbitrary certification requirements for dairy exports. Mexico, meanwhile, seeks greater access to Canadian markets for seasonal produce, particularly during winter months when greenhouse operations in Quebec and Ontario dominate the domestic market.
The economic relationship extends beyond goods trade. Tourism represents a crucial economic link, with nearly 2.3 million Canadians visiting Mexico annually before the pandemic, according to Statistics Canada. Though numbers have rebounded to roughly 85% of pre-pandemic levels, new security concerns in several Mexican resort regions have prompted Canadian authorities to issue updated travel advisories.
While in Cancún last week reporting on tourism recovery efforts, I spoke with Antonio Vázquez, who operates a tour company catering to Canadian visitors. “We depend on Canadians during winter months,” he explained while navigating his boat through the turquoise waters off the Yucatán Peninsula. “Even small changes in travel patterns have huge impacts on communities like ours.”
The negotiations will unfold as both countries maintain complicated relationships with their common neighbor. The United States conducted its separate bilateral discussions with Mexico last month, focusing heavily on migration and security issues alongside economic concerns. Canadian officials privately acknowledge monitoring these talks closely, recognizing that U.S.-Mexico dynamics inevitably shape the continental economic landscape.
“North American integration isn’t just about reducing tariffs anymore,” explained Dr. Teresa Santoro, an international trade specialist at the University of Toronto. “It’s about developing compatible regulatory approaches, aligned labor standards, and coordinated responses to challenges like climate change and supply chain resilience.”
The Ministry of International Trade confirmed that outcomes from next week’s talks will inform Canada’s position at the planned trilateral USMCA review session scheduled for December in Washington, D.C. With the agreement’s sunset clause requiring formal renewal decisions by 2026, these bilateral discussions carry additional strategic significance.
Standing at the crossroads of political transition and economic uncertainty, Canada and Mexico face the challenge of reinvigorating a relationship that has often operated in the shadow of each country’s ties with the United States. Whether they can chart a more direct and productive bilateral course may determine not just their own economic futures but the coherence of North American integration itself in the decade ahead.
