Leaders and business organizations in Canada are moving forward to strengthen the nation’s trade ties with Mexico as a response to the economic impacts following the downturn. duties levied by the United States President Donald Trump.
On May 15, Prime Minister Mark Carney of Canada and Mexican President Claudia Sheinbaum discussed enhancing their nations' existing trade ties. They committed to instructing their officials to strengthen bilateral relationships, as reported. readout of the call .
The provincial administrations are seeking ways to expand trading activities, with certain officials traveling to Mexico aiming to fortify relationships.
Leading Canadian companies view expansion of trade with Mexico as an opportunity as well. Canadian Pacific Kansas City Ltd. (CPKC) is utilizing its railway infrastructure to transport products directly from Canada to Mexico. In addition, various agricultural organizations aim to increase their market presence in Mexico, whereas certain business associations express optimism regarding potential growth in commerce with the nation.
These actions are particularly timely for Canada’s economy. In April, the country saw an increase in its unemployment rate by 6.9 percent due to the elimination of 31,000 manufacturing positions and 27,000 roles within the wholesale and retail sectors. Experts cite labor market weaknesses as indicators of this trend. adverse effects of American trade duties on the economy.
Here’s an overview of Canada's present trade dynamics with Mexico, potential benefits from strengthening these connections, and actions being taken to penetrate this market.
How is commerce currently shaping up between Canada and Mexico?
Both nations function under the Canada-United States-Mexico Agreement (CUSMA), signed in 2020 during President Trump’s initial term. Prior to this agreement, they were part of the North American Free Trade Agreement (NAFTA), effective from 1994.
However, trade between the two nations is minimal compared to their trade with the United States.
In 2024, Canada shipped $434 billion worth of products to the U.S., as per data from the United Nations COMTRADE Database. By contrast, Canadian exports to Mexico amounted to $8.6 billion that year, based on figures from the Conference Board of Canada.
In 2024, Mexico exported $47 billion worth of products to Canada, whereas its exports to the U.S. amounted to US$506 billion, as per data provided by the Office of the United States Trade Representative.
The leading exports from Canada to Mexico encompass agricultural goods, automobiles, metals and minerals, as well as chemicals and plastics. Conversely, key imports from Mexico into Canada comprise mainly vehicles, electronic machinery and equipment, and industrial machinery. Notably, agricultural items—particularly fresh produce like fruits and vegetables—are significant imports for Canada from Mexico.
In what ways might Canada increase trade with Mexico?
According to an expert, potential could be found within the energy sector.
Shauna Hemingway, a senior special advisor for the Business Council of Canada located in Mexico City, and someone who formerly worked as a Canadian diplomat in the nation, mentioned that she believes there’s potential for Canada to increase its exports of liquefied propane gas to Mexico.
Reduced gasoline consumption in Canada during summer may lead to excess supply that can potentially be exported. Mexico might consider importing this extra fuel as part of their efforts towards enhancing energy security, she mentioned.
Hemingway stated that Mexico aims to boost energy security as part of its national policy and is equally focused on enhancing its storage capabilities,
Another industry that stands to gain from enhanced relations between these nations is manufacturing. Mexico boasts a workforce with an average age lower than Canada’s, where the typical factory employee is around 35 years old—roughly a decade younger compared to their Canadian counterpart.
"Companies may view the workforce in Mexico as a potential opportunity," Hemingway stated.
She mentioned that potential growth could also be found within the fertilizer and machinery sectors.
Luis Brasdefer, the ex-Mexico trade commissioner to Canada and current trade consultant based in Vancouver, mentioned that he perceives an urgent necessity and willingness to boost commerce between their nations due to uncertainties brought about by American trade strategies. Expanding trade partnerships serves as a strategy for companies reliant on exporting goods.
"A firm requires clarity to effectively plan and particularly to develop an export strategy," he stated.
He thinks there is an opportunity for Canadian and Mexican enterprises to join forces in forming strategic partnerships that would be advantageous to both nations. Such collaborations could see Canadian firms teaming up with their Mexican counterparts to leverage cutting-edge technologies invented in Canada. Conversely, Mexican corporations may assist Canadian businesses in expanding their presence within the Mexican market.
"Opportunities exist in many of the sectors," Brasdefer stated.
The potential for expansion is particularly evident in manufacturing, specifically within sectors like aerospace and automotive, as mentioned.
What makes Mexico appealing as a market for Canada?
Mexico's population is expanding — along with its middle class.
Hemingway stated that an expanding middle class leads to increased demand for consumer products.
"The size of their middle class is already bigger than the entire population of Canada," she stated.
Mexico's population stands at approximately 130 million individuals and has been increasing annually by about one percent. As reported by Statistics Canada, Canada's population reached 41.5 million during the initial three months of 2025.
An additional aspect that renders Mexico appealing for Canadian investments is its role as a portal facilitating trade with various nations across Latin America.
Brasdefer indicated that setting up a venture in Canada provides executives with greater insight into adjacent markets and governmental rules. This enhanced comprehension might facilitate expansion efforts as businesses can more easily move past Mexico’s boundaries into a significantly broader marketplace.
"We're discussing approximately 500 million individuals," Brasdefer stated.
What additional measures are being taken to boost trade between Canada and Mexico?
Canada's main railway companies have implemented measures to simplify the process of transporting goods directly from Canada to Mexico, essentially bypassing the United States as an intermediary.
CPKC, the nation's second-largest railway, stated that they are endeavoring to enhance direct commerce between Canada and Mexico via their rail infrastructure.
Keith Creel, the head of the railroad company, mentioned during a recent conference call with financial experts that CPKC is collaborating with business and governmental figures from both nations to boost trading activities. He viewed the present uncertainties within the trade sector as a chance for the railway industry to thrive.
Uncertainty breeds opportunity," Creel stated. "That's the mindset we're adopting when dealing with these tariff and trade policy issues.
He mentioned that the railway has already produced $100 million in fresh commerce by transporting liquefied gas, as well as various refined fuels and plastics, from Alberta to Mexico.
Canadian National Railway Co. (CN), the nation's biggest railroad, has likewise invested in initiatives to boost commerce between Canada and Mexico.
In an emailed statement, the railway pointed to a number of initiatives, including Mexico Gulf Express set to launch later this year, which provides round-trip service to connect parts of the U.S. and Canada with central Mexico. CN said it has also partnered with a company that ships rail cars into Mexico via sea ferry.
"This enlarged network improves our logistical efficiency and opens up new avenues for trade and collaboration," according to CN’s statement.
Air travel to Mexico is likewise on the rise. As Hemingway pointed out, airlines have noticed more travelers heading to this nation. Notably, both Air Canada and Air Transat recently introduced additional routes. Guadalajara To assist with meeting the increasing demand, she added. However, this expansion isn't confined solely to transporting tourists;
That indicates additional flight routes," Hemingway stated. "Cargo will undoubtedly be part of that as well.
How are Canadian business organizations working towards increasing trade with Mexico?
Several groups have already begun efforts to market their products in Mexico. Among these is the Prairie Oat Growers Association (POGA), an organization dedicated to advancing the concerns of oat farmers.
Oat farmers have already seen benefits from efforts aimed at expanding trade with Mexico. In March, CPKC delivered an oat shipment from Saskatchewan to Mexico for the first time ever. Before this, such deliveries required transit via alternative U.S. railroads to complete the journey to Mexico.
Shawna Mathieson, who serves as the executive director of POGA, mentioned that Mexico ranks as the second-largest importer of Canadian oats. According to her, the organization has made efforts to boost oat sales in various markets such as Mexico, aiding producers in shifting their focus away from the United States.
In 2011, our dependence on the U.S. reached as much as 97 percent," Mathieson stated. "Currently, however, we have dropped to around an 80 percent reliance.
In 2024, Canadian oat exports to Mexico increased to 177,000 kilograms from just 48,000 kilograms in 2014.
POGA has been advocating for oats in Mexico via social media initiatives and collaborations with influencers. Additionally, they have established an important alliance with Mexico’s national diabetes organization, sharing oat-based recipe ideas tailored for individuals managing this condition.
"We established booths at several of their sites, collaborated with their nutritionists, and conducted both face-to-face and online cooking classes," according to Mathieson.
How are provinces working towards expanding trade between Canada and Mexico?
Several provincial leaders are heading to Mexico to foster trade relations.
In February, Saskatchewan Premier Scott Moe headed a trade delegation to Mexico. According to an email statement from the province’s Ministry of Trade and Export Development, the visit strengthened ties with both governmental officials and key figures in agriculture and related industries.
Previously, in 2022, Saskatchewan established a regional trade office in Mexico.
In 2024, Saskatchewan shipped more than $637 million worth of products to Mexico, primarily consisting of canola seed and oil, as well as non-durum wheat, canary seeds, and malt. According to the ministry, the agriculture industry presents the most promising prospects for expansion.
British Columbia has likewise been striving to connect with Mexico to enhance relationships and boost trade, and the province established a trade office there in June 2024.
Diane Gibson, who serves as the minister for jobs, economic development, and innovation, stated that due to the present global political landscape, it is essential to diversify trade. Expanding commerce with Mexico stands out as a key objective within British Columbia’s new trade diversification initiative, which was introduced in 2023.
According to Gibson’s emailed statement, Mexico, alongside Taiwan and Vietnam, were recognized as the three primary high-potential markets in this strategic plan.
In 2024, British Columbia shipped $122 million worth of products to Mexico, with the leading exports including coal, timber, radiation and electric devices, as well as animal fodder and pet food.
Gibson mentioned that various industries offer potential for expansion, such as agritech, agri-food, clean tech, mining, and mining technology.
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