Quick Take | USMCA trade pact: for Canada and Mexico, throwing China under bus was a no-brainer
Should anyone be surprised the two countries were ready to blow off the Chinese at the insistence of the Americans?
Who knew how far this volatile and inconsistent leader in Washington was willing to go after he denounced the North American Free Trade Agreement (Nafta) – which formed the basis of trade between the three countries for 24 years – as the worst trade deal in the history of his country?
But when the three sides have finally agreed on a replacement trade pact – the so-called United States-Mexico-Canada Agreement (USMCA) – should anyone be surprised that the latter two countries were ready to blow off the Chinese at the insistence of the US?
Article 32.10 in the preliminary agreement – which still has to be ratified by all three governments and so is by no means a done deal – gives Washington virtual veto power over any bilateral deal Canada or Mexico may wish to reach with “a non-market country”, for which read China. Any such deal could mean the end of the USMCA for that country.
This is perhaps the worst feature of the USMCA for Beijing, as it may become a template for future trade talks Washington holds with allies such as Japan, India and the European Union.
China presents itself as a defender of global free trade in the age of Trump, but its real fear is being isolated on multiple fronts, from trade to international politics and military competition.
It appears Article 32.10 was a last-minute demand made by the Americans, but there was probably little Canada and Mexico could or would do to resist it. To be sure, some lobby and business groups with interests in China have complained. The Asia Pacific Foundation of Canada and the Canadian International Council are none too pleased.