The United States and Mexico have reached an agreement to revamp the North American Free Trade Agreement. The governments were short on the details, but one thing that is certain is that Washington would like to change the pact’s name to “The United States-Mexico Trade Agreement.” Noticeably absent from this name is Canada. Mexico has said it hopes Canada will join, but what Mexico hopes for is irrelevant. This now comes down to whether Canada and the U.S. can work out their bilateral issues in the same way Mexico and the U.S. just did.
NAFTA is a trilateral agreement in name. It’s better thought of as two distinct bilateral economic relationships: one between the U.S. and Canada, and one between the U.S. and Mexico. Mexico and Canada simply don’t trade that much with each other. Canada imported more from China in 2017 than it did from Mexico, and just 1.4 percent of its exports went to Mexico. Just under 3 percent of Mexico’s exports went to Canada, and just over 2 perc
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