Navigating the

way forward on trade

feels like an equation that just refuses to add up.

Some voices say we must protect our North America

trade deal

at all costs, no matter how coercive or

unpredictable the demands

from United States President Donald Trump appear to be. Some say we’ve gone it alone before: our economy was robust enough to grant us membership in the G7 long before we’d signed the North America Free Trade Agreement (NAFTA) or other free trade agreements.

Still others say trade diversification is the key to reducing our exposure and risk; that we have more to gain from selling the resources we have in abundance to other parts of the world.

But there is a way to do it all — to focus on the

Canada-U.S.-Mexico Agreement

(CUSMA) and on diversification — and

Mexico is how we do it

. The Team Canada Trade Mission to Mexico this past week, led by Trade Minister Dominic Leblanc, provided a clear signal that there is both the appetite and rationale to give more attention to the third, often overlooked, amigo.

Mexico is already Canada’s third-largest trading partner and Canada-Mexico trade has risen roughly twelvefold since 1994, when NAFTA first came into effect. Yet when you stand back to evaluate how much of our import/export market is trade with Mexico, this top-three ranking seems questionable. Mexico only represents 3.6 per cent of Canada’s total trade and 1.1 per cent of our exports.

That underperformance has led some to treat Canada’s relationship with Mexico as peripheral. It is not. The upside of increased trade with Mexico is clear and it’s already in reach: from our existing connectivity through rails, roads and ports, to sharing the same time zones, to membership in two of Canada’s capstone trade agreements, CUSMA and the Trans-Pacific Partnership.

Too often, the conversation around continental trade has drifted back toward rivalry: who is winning the next major investment, who is getting the next plant and who has unique leverage heading into the 2026 CUSMA review? That framing misses the point.

The winning formula was never meant to be Canada versus Mexico or Canada versus the U.S. If we look at North American trade as two parallel tracks of trade with the U.S., we miss that greater Canada-Mexico integration would profoundly magnify how North America produces, competes and exports to the rest of the world.

Consider the automotive sector. North American vehicles cross borders multiple times before completion. The Canadian and Mexican parts sectors do not compete; they co-produce. Canada provides critical inputs and advanced components. Mexico provides large-scale

manufacturing capacity

and assembly. U.S. companies anchor design, capital and distribution. This is value-chain integration at scale and it only works when all three move in sync.

The same principle applies well beyond autos. Mexico is a manufacturing powerhouse and a hub for near-shoring.

As companies rethink global supply chains, North America has emerged as the world’s most integrated and reliable production platform. Canadian agri-food, machinery and aerospace inputs feed Mexican facilities. Mexican manufacturing strengthens North American exports. U.S. distribution networks bring products to global markets.

This is not theory; it is how the continent already works.

The U.S. Chamber of Commerce agrees: North American integration is a competitive advantage, not a liability. U.S. manufacturers, retailers, agri-food producers and service providers rely on Canadian and Mexican partners to stay globally competitive. Undermining that integration does not strengthen the U.S. Instead, it weakens its own businesses.

That is why recent Team Canada efforts in Mexico matter. The goal is not simply to increase export volumes. It is to help Canadian companies move beyond shipping goods and into partnerships, joint ventures and operational footprints that provide scale and resilience.

The entire continent becomes more competitive when Canadian companies embed in Mexican supply chains and when those supply chains are integrated with U.S. buyers and distributors. It both builds on CUSMA and diversifies how Canada trades.

The service sector is another overlooked pillar. Canadian banks and financial institutions already operate at scale in Mexico, helping companies access both the Mexican market and the broader Central and South America markets.

Don’t forget

tourism and hospitality.

We all understand why Canadians flock to the Mexican sun at this time of year, but there has been a historic migration in recent months. As Canadians reconsider their travel dollars spent in the U.S., many have turned to Mexico. This January, for the first time, the Toronto-Cancun flight path became Mexico’s most-travelled international route, beating out major centres such as Dallas and Madrid.

Our own travel and tourism sector is also considered one of Canada’s top services exports, in that it draws foreign capital into our economy. Mexico’s tourism to Canada has been the fastest of any international market to recover from pandemic-era lows, according to Destination Canada data, and is considered a strategic source of future growth.

However, when Canada introduced new visa requirements, fees and paperwork for Mexican travellers in 2024, it immediately led to a 28 per cent decline in visitors. If we’re serious about our North American project, we should probably revisit this decision.

In a world defined by geopolitical risk and supply chain realignment, North America has an advantage most regions envy: proximity, complementary economies and the underpinnings of a rules-based framework that has already proven its worth. The task now is not to reinvent it, but to defend and deepen it.

Canada–Mexico ties are not a side story to Canada’s current trade dilemma. They are central to the answer.

Matthew Holmes is executive vice-president of the Canadian Chamber of Commerce.

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