The quiet discussions automotive organizations and government officials have been having with their Mexican counterparts about Chinese “transshipping” into North America picked up appreciable volume Tuesday with Ontario Premier Doug Ford calling the practice a threat to Canadian jobs.
Ford said if Mexico doesn’t at least match Canadian and U.S. tariffs on the Chinese products being “backdoored” into North America, they should be cut out of the CUSMA trade agreement.
“His opinion is actually tempered,” said Automotive Parts Manufacturers’ Association president Flavio Volpe, who was part of the Canadian team that negotiated CUSMA. “It’s not just the premier saying this, it’s Washington also saying this.
“The premier may have done the federal government a favour saying the quiet part out loud.”
Ford was blunt about the need for Mexico to come into line with its North American trading partners in a statement he released on the social media platform X.
“Free trade needs to be fair,” Ford wrote.
“Since signing on to the United States-Mexico-Canada Agreement, Mexico has allowed itself to become a backdoor for Chinese cars, auto parts and other products into Canadian and American markets, putting Canadian and American workers’ livelihoods at risk while undermining our communities and doing enormous harm to our shared economic success.
“If Mexico won’t fight transshipment by, at the very least, matching Canadian and American tariffs on Chinese imports, they shouldn’t have a seat at the table or enjoy access to the largest economy in the world.
“Instead, we must prioritize the closest economic partnership on Earth by directly negotiating a bilateral U.S.-Canada free trade agreement that puts U.S. and Canadian workers first.”
Canadian Mold Makers Association executive director Nicole Vlanich said discussions with the Mexicans on this issue have been ongoing for months.
However, with incoming President Donald Trump threatening much bigger trade disruptions with a focus on Mexico and China, there’s an increased sense of urgency.
“I think he’s being pre-emptive and proactive with his comments in the interest of Ontario and Canada,” said Vlanich, whose organization represents the dozens of local mould makers in the area.
“We’re actually happy to see him standing up for Canadian industry and manufacturing.”
Vlanich said CAMM officials had met with their Mexican counterparts as recently as the end of October.
“The Mexicans want to make sure they stay inside the trade agreement,” Vlanich said. “They don’t want to be cut out.
“They listened and were open to all ideas. They learned, that in Canada, we’re not having the Chinese companies come and set up in the same way they’re doing in Mexico.”
Vlanich said just how exposed local firms might be to a rupture in the trade agreements depends on the individual company.
“A lot of our membership is small-and-medium businesses, family operations in Southwestern Ontario,” Vlanich said. “They won’t experience the impact.
“It’s the larger companies that will definitely feel it. They’re hoping there’ll be some agreement that don’t involve tariffs or cutting Mexico out of the trade agreements.”
Volpe said it will take some nimble dancing by all three CUSMA partners to avoid the Trump administration imposing a universal 10 per cent tariff that would rip at the heart of CUSMA agreement that is the basis for Canada’s trading relationship with the U.S.
“It’s important to American and Canadian assemblers to maintain Mexico as supply corridor,” Volpe said. “There’s no hope of competing with China if we concede Mexico.
“We need to make sure the message is clear to Mexico, but we also have to be good partners and help them get there.”
Volpe said there are over 120 Canadian automotive companies employing more than 50,000 workers with a presence in Mexico. If things go sideways, Volpe said we’ll have to rethink the way our supply chain is set up and how much are we willing to pay for the additional security.
“What we don’t want become is a pinball in all this,” Volpe said. “On the ground where the talks are happening, it’s a lot less bombastic than what’s out there on the air.”
Reposted from https://windsorstar.com/news/local-news/premier-ford-urges-mexico-to-address-chinese-transshipping
