North America Brief
Issue 05 | February 1, 2023

The North America Brief is a compilation of stories and links on the United States and Mexico’s trade relationship with Canada’s Prairie provinces focusing on stories and topics not always “on the front page” of mainstream media.

In this issue: Smuggling eggs, U.S. turns to Canadian uranium, violating FTAs and so much more.

Smuggling eggs…

Rising egg prices in the U.S. have cracked open a black market for eggs smuggled from Canada and Mexico and officials are scrambling to levy fines up to $10,000, BBC reports. U.S. Department of Agriculture statistics show a 108 per cent increase in egg and poultry seizures between October and December of 2022. And while many think high egg prices are just another consequence of inflation, Forbes reveals the real reason: a deadly avian flu that has affected more than 58 million birds.   

The U.S. turns to Canadian uranium…

The U.S. faces pressure to sanction Russia’s state-owned nuclear power conglomerate, Rosatom, for supplying Russian weapon makers tied to the Ukraine War. The U.S. nuclear power industry, purchases 14 per cent of its uranium from Russia. According to The Washington Post as the U.S. tries to boost its domestic uranium production, it is turning to Canada. Cameco, the world’s second-largest supplier of uranium, has agreed to reopen the two of the world’s highest grade mines in Northern Saskatchewan. 

Violating CUSMA/USMCA/T-MEC left, right and centre…

Mexico’s push to ban U.S. “bio-tech corn” continues. Reuters reports that recent developments in the dispute come from U.S. Trade Representative (USTR) Katherine Tai saying that the U.S. has made it clear that “if this issue is not resolved, [the U.S.] will consider all options, including taking formal steps to enforce rights under the USMCA (U.S.-Mexico-Canada Agreement).” In an email statement U.S. Secretary of Agriculture, Tom Vilsack, wrote that “banning biotech corn would deliver a blow to American farmers and exacerbate current food insecurity in Mexico by drastically raising prices for corn, according to Inside Trade. Mexican Deputy Agriculture Minister Víctor Suárez has admitted that it will be impossible to cut U.S. corn imports altogether by 2024, but the aim is to reduce current imports by 30 to 40 per cent, Inside Trade reports.   

In our last brief we noted that Canada would also take a hit from this corn ban, but apparently many Canadians are actually on Mexico’s side. Days before the North American Leaders’ Summit, Canadian farming and biotech organizations urged government to support Mexico’s plan to phase out GMO corn and the pesticide glyphosate, iPolitics reports. In a letter to government officials, 28 signatories including National Farmers Union, Canadian Biotechnology Action Network, and Council of Canadians, called for Canada to back Mexico despite opposition from the Biden administration. The full letter can be read here. Ottawa has not yet made an official statement.  

And to no surprise, U.S. senators urge Biden to take action against Mexico and Canada for not complying with the tri-national free-trade agreement, Bloomberg highlights. Inside Trade notes that the three countries met last week in San Diego at the second USMCA deputies meeting to address the corn disputes along with other disputes: Dairy Quotas and Online Streaming in Canada.  

Canada-Mexico relationship beyond trade…

Mexico-Canada trade has grown significantly over the decades seeing a nine-fold increase since 1993. And last year Canada was Mexico’s second largest source of foreign investment.  

Despite the impressive growth, experts have dubbed the relationship as the weak link in North America’s tri-national alliance, CTV reports. Canadian Sen. Peter Boehm, a former Deputy Minister at foreign affairs and Latin America hand at the foreign ministry, compares the trilateral ties of the continent to an isosceles triangle, with the Canada-Mexico relationship as the shortest side, according to Global News. Former senior diplomat and special adviser for international affairs for the Business Council of Canada, Louis Blais, recently emphasized this idea in the Globe and Mail calling for increased academic and cultural exchanges, trust building and leveraging of unique strengths of the two countries. Adding that now, more than ever, it is vital for Canada and Mexico to establish a strong partnership that goes beyond trade, in the face of global disruptions and uncertainty. 

One bright note from the summit, and something that did not get a lot of attention, our Trade and Investment Centre Director’s call that the summit would produce a statement on First Nations’ issues turned out to be correct.   

In other trilateral news, Biden plans to visit Canada in March and it’s speculated that the cross-border dispute over the trusted-traveller program known as Nexus is top of the agenda, CP4 News reports.  

Trilateral energy…

Also following the North American Summit last month, Canada, Mexico and the U.S. plan to build a North American clean hydrogen market, Hydrogen Insight reports. Nothing actionable has been cemented at this stage, but Canada and the U.S. are expected to sign off on their H2 subsidies this year, a move expected to initiate a flood of investment in the sector. Mexico does not currently have a hydrogen strategy. 

Ottawa and Washington continue to have concerns over Mexico’s energy policies and no progress has been made on resolving the dispute. According to Reuters, it was not on the agenda at the North American Summit. However, and credit where credit is due, Prime Minister Trudeau did nonetheless raise the issue with Mexican President AMLO who agreed to meet with four Canadian energy firms separately to resolve their problems case-by-case, the Financial Post reports. Overall, it looks like the talks went well enough, but the same article notes that industry sources are skeptical this will diffuse the formal dispute.  

Poor water management…

Groundwater and river mismanagement have reached a critical point, warns Dr. Jay Famiglietti, professor emeritus in hydrology at the University of Saskatchewan (USask). He cites the Central Valley in California as a dire example. His research shows that if groundwater and rivers continue to vanish, it will threaten food production, causing prices to soar and shortages to occur. Famiglietti stresses that this should serve as a warning for Canada, where a large portion of the population relies on groundwater for drinking. This is especially critical for Saskatchewan which aims to boost its food production. He urges caution to prevent similar situations in Canada because the country’s rivers are already over-allocated. 

Rivers in the U.S. are also over-allocated and seven states dependent on the shrinking Colorado River just missed an important federal deadline. Laws from the early 20th century regarding the Colorado River, which allot different levels of priority to users based on their tenure of water usage, are going head-to-head with climate change and water usage concerns, the New York Times highlights.  

U.S. debt ceiling…

The U.S. has hit its debt ceiling and according to Treasury Secretary Janet Yellen, if the debt ceiling is not raised or suspended before early June, government will be unable to pay its bills resulting in a potential default.  Canada is not immune to “spillover effects” says Kristen Hopewell, a public policy professor at the University of British Columbia’s School of Public Policy and Global Affairs. But Bank of Montreal economist Doug Porter mentioned that Canada’s economy may have a stronger recovery than the U.S. economy due to strong commodities, Global News reports. 

Other news

  • What’s on the horizon for Canada-U.S. relations in 2023? Our friends over at the Wilson Center have made some predictions. Check it out 
  • The U.S. is borrowing from Canada when it comes to refugee sponsorship. CTV News covers more on this. 
  • “Unjustified” U.S. duties on Canadian softwood lumber leave Canada’s international trade minister and the Canadian forestry sector frustrated, Global News reports.  
  • In a surprise to no one, a bipartisan group of senators reintroduced a bill that would require country-of-origin labelling on U.S. beef products. “Unfortunately, the current beef labeling system in this country allows imported beef that is neither born nor raised in the United States, but simply finished here, to be labeled as a product of the USA,” says Senate Agriculture and Finance Committee member John Thune (R-SD). More from Inside Trade.  

— Taylor Blaisdell, policy analyst

The North America Brief is a compilation of stories and links related to the U.S. and Mexico’s relationship with Canada’s West. The opinions expressed in the links don’t necessarily reflect the views of the Canada West Foundation.