Canada should pursue bilateral trade agreements with U.S. and Mexico, says Alberta premier

Alberta Premier Danielle Smith recently suggested that Canada should consider pursuing bilateral trade agreements with the United States and Mexico, as the three countries prepare to review and potentially renegotiate the Canada-United States-Mexico Agreement in 2026. Smith highlighted the existing trade imbalances between the three partners, with Canada having a trade surplus with the U.S. and Mexico having a larger surplus with the U.S.

Smith emphasized that the incoming Trump administration is focused on achieving balanced trade relationships and addressing any problematic areas of imbalance. She noted that the U.S. is eager for Canada to buy as much from them as they buy from Canada, and any trade disparities could lead to concerns being raised.

The Alberta premier also raised concerns about Mexico’s increasing collaboration with Chinese investors, particularly in the automotive sector. This has led to worries about Chinese-owned car plants in Mexico supplying the U.S. market and potentially disrupting the North American trade dynamics.

Smith proposed that Canada explore the possibility of pursuing separate bilateral agreements with the U.S. and Mexico, rather than continuing with the trilateral agreement. Ontario Premier Doug Ford echoed similar sentiments, advocating for Canada to consider dropping Mexico from the trade deal and aligning tariffs with the U.S. to address concerns about Chinese imports.

While Prime Minister Justin Trudeau expressed hope for continued trilateral negotiations, the looming threat of tariffs from the U.S. remains a concern. President and CEO of Cleveland-Cliffs Inc., Lourenco Goncalves, reassured that the Canada-U.S. trade relationship will endure any temporary disturbances. He emphasized the importance of enhancing the co-dependency between the two countries, especially under the Trump administration.

Goncalves suggested that a Canada-U.S. bilateral trade agreement could serve as a model for future agreements pursued by the United States. He highlighted the preference for bilateral agreements over multilateral ones, indicating a potential shift in trade strategies under the new administration.

Smith and Goncalves both emphasized the need for Canada to avoid potential tariffs and focus on achieving mutually beneficial trade agreements. By pursuing bilateral deals with the U.S. and Mexico, Canada could navigate the evolving trade landscape and ensure economic stability for the future.