Just as Mexico and Canada enter into their 6th round of NAFTA negotiations with the United States, the members of the Trans-Pacific Partnership have announced their intention to sign a new pact without the United States on March 8, in Chile. Most of the news up to this point has stressed the fact that TPP comprises a kind of “insurance policy” for Mexico and Canada countries should NAFTA negotiations break down. But I think there is more to each country’s TPP strategy—even beyond the critical fact that the agreement will still represent the largest trade agreement in the world.
First, Canada’s belated participation reflects in part a cunning bargaining strategy by Justin Trudeau. It has been reported (here, for example) that the Prime Minister was able to extract more concessions by signing on at the very end of the negotiating process. As Trudeau himself announced at Davos:
“We.. stood up for the auto sector, making sure we have a side letter for Japan to provide the greatest market access ever for the auto industry.”
Canadian officials, speaking on background, said Canada [also] obtained binding letters on culture with each of the other 10 nations that recognized Canada’s right to protect its cultural sector.
The side letter with Japan is intended to resolve non-tariff trade barriers on automobiles, and requires Japan to give Canada the same terms as any auto makers in Europe and Japan. It also includes a formal dispute resolution process.
Canadian officials say both the letters and the dispute-resolutions mechanism are gains from the original deal.
Meanwhile, Mexico’s interests are as much derived from its internal politics as it is international strategy. Notably, the timeline to seal any trade agreement is short given the upcoming national elections. Moreover, national sentiment is on the rise, and it is far from clear whether or not future Mexican leaders will be in favor of NAFTA, or international trade. There is, as a result, much more interest in the government in doing whatever can be done, now—whether it be TPP or a renegotiation of NAFTA.