North American Brief
Issue 19 | June 2024
In this issue: The American political story that matters more, Mexican elections, the three Amigas, a Super Pigs Invasion, Beaver Warrior diplomacy, and a provocative “Have we lost Mexico” story.
Before we start . . . .
A reminder to register for our June 12 webinar Mexico’s 2024 election & Western Canada: Trade, politics and the USMCA. Join this ambassadors’ panel to learn what happened during Mexico’s recent election and how results could impact trade in Western Canada.
And now to our regular program . . .
U.S. Congress retirements and Western Canadian trade
The big story for Canada in the U.S. is a small story, the big story obviously being the former president’s guilty verdict in NYC. But what will be more impactful for Canada is a widely reported story that 51 members of Congress, 44 in the House and seven in the Senate, have announced that they will not run again. This tracks with previous elections, quoting from Ballotpedia, “forty-eight members of Congress had announced their retirements at this point in the 2022 election cycle, 39 had in the 2020 cycle, and 46 had in the 2018 cycle.” About 40 of the ‘not run agains’ are running for other offices, but the majority have simply had enough with the dysfunction in Washington, D.C. The Atlantic Journal-Constitution has a good piece on why retirements this year may be more important for us – the “low-key, business-focused congressmen” like Rep. Drew Ferguson of Georgia are leaving while bomb-throwers like Rep. Marjorie Taylor Greene are staying. To illustrate why it matters to Canada – on the USMCA agreement, Ferguson is on record as a strong advocate for the agreement, while MTG has said…well, we couldn’t find anything. The job of “our woman in Atlanta,” Consul General Rosaline Kwan, is about to get harder as we head into the USMCA review.
And the big story from Mexico. A historic election with the first female and the first Jewish president in North America is big news and a good story for Mexico and the hemisphere. But, and unfortunately there’s always a ‘but,’ a disturbing deep analysis by Politico, The Most Important National Security Issue Facing America, With the Least Amount of Attention, provides a sobering and disturbing counterpoint. The quote for the headline comes from the person who ran the CIA’s covert operations in Afghanistan post-9/11. Some experts estimate that nine of Mexico’s 32 regions are controlled by criminal networks. Others say a fifth to a third of the country is “ungoverned spaces,” meaning Mexico’s government has ceded control. By either measure this is the definition of an existential threat, especially as cartels now only get an estimated half of their income from drugs, having moved to human trafficking, extortion and legitimate businesses like transportation and tortillas. And then there’s the violence in the just-completed election, which we examine later in this brief. It all raises some troubling questions, which Canada may lack the capacity to ask or understand, given that the country’s limited capacity for foreign engagement is now tied up in the U.S.
Tariffs from 1971 to the present
The Washington Post Business section had a good analysis of Trump’s latest tariff threats for his return. Check out “Trump advisers explore vast new legal powers for global trade war: Plan that would impose tariffs on all imports would probably prove extremely disruptive to the global economy.” The article quotes U.S. analysts questioning the legal basis for any across-the-board tariffs. But interestingly, the piece makes only a vague, passing reference to the last time a U.S. president enacted across-the-board ‘import surcharges’ on all goods entering the U.S. – the 1971 Nixon Shock when Canadians woke on a Monday morning in August to find that the Nixon administration had, overnight with no warning, imposed a 10 per cent across the board tariff on all goods entering the U.S. from which Canada was not exempted. Policy Options has a well-done, short recap of this episode of Canada-U.S. relations.
The other election in North America
We were surprised, but then again – not really, at the lack of coverage of Mexico’s 2024 in Canada. (CTV being the exception in running a story in advance of voting.) In addition to having a vote on whether the USMCA remains, Mexico is our fifth largest trade partner. But its importance is greater than our fourth largest trade partner, the U.K., which essentially trades one item, gold, with Canada. Trade with Mexico is more diverse and directly impacts more Canadians and the country’s competitiveness. Mexico has been a long-standing market of focus across the Prairies from CentrePort in Manitoba and Winnipeg as the northern terminus of the NAFTA superhighway, to Alberta having two trade offices in the country, to B.C. recently ‘discovering Mexico’ and making the country one of its three new priority markets under its diversification strategy. So, with that introduction:
- We’re hosting an Ambassadors’ Panel to discuss the impacts of the 2024 Mexican elections on Western Canada on Wednesday, June 12th, at 9:30 AM Mountain time (11:30 Eastern time) with former Canadian Ambassador to Mexico Pierre Alarie, former Mexican Under Secretary for North America Sergio Alcocer, and former U.S. Ambassador to Mexico Antonio Garza.
REGISTER HERE
- Our friends at the Woodrow Wilson Center in Washington, D.C., have a good, one-stop background.
- The Economist has an analysis of how the new Mexican administration can reset relations with the U.S.
- If there’s one theme to this election, it’s how dangerous it has been for the candidates. Under the heading of ‘sometimes a headline says it all’, the Washington Post leads with The elections next door: Mexico’s cartels pick candidates, kill rivals while the NYTimes ran, One of the Deadliest Jobs in Mexico: Running for Office’ The paper did its own investigation to find that 36 candidates were killed while running for office.
- Violence plagued not just minor candidates but also the newly elected President, who was stopped and briefly detained by during a campaign trip by armed members of what one observer of the incident said were members of the Sinaloa Cartel. This according to U.S. National Public Radio, which played a clip of the encounter. The incident was downplayed by former president Manuel Lopez Obrador when it occurred.
- Everstream Analytics, a supply chain risk consultancy, sees the elections and their aftermath as bringing increased risk to U.S.-Mexico supply chains, including increasing public protests over mining and disruptions to freight movements because of human trafficking, something that’s happening in British Columbia as well. See stories in CBC, CTV and the Vancouver Sun.
The Three Amigas
That’s right, Amigas, as in Trade Minister Mary Ng, USTR Katherine Tia and Secretaria de Economía Raquel Buenrostro Sánchez who met last week to keep the North American trade agreement on track. A good line we read somewhere is that North America is a series of contradictions. Doom-scrolling news like that above is counterbalanced by continued economic growth (at least in the rest of the trade bloc) and progress on economic integration. This included an addendum to the current CUSMA/USMAC/T-MEC agreement negotiated at the recently completed meeting of the three trade ministers of each country, an event we’re calling the three Amigas. We reported on this meeting in the last brief; now we have the announceables. The addendum applies lessons from the COVID-19 pandemic and sets out new procedures for emergency coordination that could disrupt North American trade flows. One way to look at this is that the agreement can be updated without the world ending. It is really, though, a reminder that one of the strengths of the new agreement is the addition of mechanisms to make these sorts of tweaks.
Other news
- Mexico’s ban on GMO corn for human consumption may actually be a blessing in disguise as it may create a market for premium non-GMO corn in that market, according to a webinar hosted by the Institute for Agriculture and Trade Policy, a progressive Minnesota ag think tank. We’re doubtful. What drives the market in Mexico is price, not premium.
- The Washington Post had a devasting series on the U.S.’s Indian boarding schools history.
- Staying with First Nations news from the U.S., Politico has an analysis of how tribes in our southern neighbour, Montana, could determine the makeup of the next Senate.
- A water war is brewing between the U.S. and Mexico, with political leaders in Texas calling on the U.S. to cut aid to Mexico over its failure to meet obligations for sharing water from the Rio Grande.
- Something we wish was a joke: super pigs taking over the continent. According to CBC, wild pigs from Canada are a threat to invade the U.S. This stops being funny once one realizes how much of a problem wild pigs already are south of the border. Some readers may remember Hogizilla, the 800-pound feral pig that terrorized Georgia. Feral pigs cost an estimated US$2.5 billion in economic damage in the U.S. annually. News of more pigs now coming from the northern border, especially from the Canadian prairies, is the type of publicity Canada does not need. The issue has been in the news before, which makes it all the more frustrating as this is the type of issue where action by Canada would be an ‘easy win’ for Canada’s charm offensive in the U.S. But there’s no news that this is the case.
- And a personal note of congratulations to R. Glenn Williamson, Founder and Chief Executive Officer of the Canada Arizona Business Council (CABC), on the opening of a new Canadian government trade office in Phoenix. For those in western Canada, Glenn has been a virtual one-man, permanent force of nature propelling the Canada-Arizona relationship and its growing, vital economic linkages. His work sometimes has us wondering if Arizona isn’t our number one trade partner. The office is, of course, the result of hard work by the governments, but we’d just like to acknowledge Glenn for the length and depth of his involvement. We look forward to being invited to celebrate this coming January or February or whenever it hits minus 40 up here.
- And finally, the “beaver warrior” reference. CWF published another of a series of op-eds on a theme of ours, the need to rethink, retool and reform how we engage the U.S. This time in the Globe and Mail “Canada has become roadkill in global economic competition.”
Carlo Dade, Director, Trade and Trade Infrastructure
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 are those of the articles’ authors and don’t necessarily reflect the views of the Canada West Foundation and our affiliates.