President-elect Enrique Peña Nieto’s visit to Ottawa this week offers a major opportunity to upgrade bilateral relations between Canada and Mexico to the level of a strategic partnership.
Although Canada joined the North American free-trade agreement talks to preserve the gains from the earlier Canadian-U.S. free-trade agreement, this “reluctant” decision has proved to be remarkably rewarding. Canada not only succeeded in protecting its primary market with its most important trading partner – the United States – but it also found a new partner in Mexico. Since NAFTA, Canadian trade with Mexico has grown nearly sixfold. Mexico is now Canada’s third-largest trading partner, with two-way trade reaching $34.4-billion in 2011.
The growth in the bilateral economic relationship has not been limited to trade. Canadian investments in Mexico have more than doubled since the late 1980s, as Canada has become one of Mexico’s largest sources of foreign direct investment. More than 2,500 Canadian companies have offices and operations in Mexico. Many have used their Mexican operations as launch pads to reach other markets in Central and South America. Mexican firms are now also showing greater interest in Canada.
After the United States, Mexico is now the most popular foreign destination for Canadians. The majority of these are short-term visitors, but there are also a growing number of business people, students and other long-term residents living in Mexico. In the other direction, Mexico is the second-largest source of temporary foreign workers for Canada, boosting the productivity of Canada’s agricultural sector through the Seasonal Agricultural Workers Program. As Canada’s labour force continues to age, Mexico offers a rich source of younger workers upon which to draw.