Why keeping a trade deal with Mexico matters for Windsor-Essex mould-makers, produce companies

A free trade deal between Canada and Mexico must be maintained. That's according to organizations that represent two key sectors in Windsor-Essex — the tool and mould industry and produce companies such as greenhouses.

"There would be a strong negative impact," if Canada only negotiated a bilateral trade deal with the U.S. and left Mexico out, said Nicole Vlanich, executive director of the Windsor-based Canadian Association of Moldmakers.

Vlanich explains that about 50 local companies have operations in Mexico that produce plastic injection moulds for the auto industry. The moulds are used by companies in Mexico to produce parts that are then shipped to Canada.

Without the free trade deal, Vlanich says the parts could face tariffs that would make the Mexican operations less cost effective and may even result in them being shuttered.

"I know that as an association, we've been meeting with the Mexican mould-making association and they're willing to take advice. They're looking for recommendations, what they can do to ensure that they remain part of the agreement," said Vlanich.

While Canada, the U.S. and Mexico have had a trilateral deal for decades, there's concern from Canadian and U.S. lawmakers that China is using Mexico as a back door to access the North American market, particularly for electric vehicles.

Ontario Premier Doug Ford said this week that all provincial and territorial premiers are aligned on his push for the federal government to negotiate a bilateral trade deal with the United States and negotiate a separate deal with Mexico. 

The current trade pact, the Canada-United States-Mexico Agreement (CUSMA), is up for renegotiation in 2026.

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"Ideally, I think that Mexico will step up and do their part to stop what's happening with Chinese companies using them as a back door. But if a sub-agreement needs to be reached, then I think that would be fine with everybody as well," said Vlanich, adding keeping a three-way deal would be simpler.

A number of greenhouse vegetable growers in Essex County also have partnered with entities in Mexico to grow and ship produce — such as peppers — to Canada and the U.S. in off-season periods.

The president of the Canadian Produce Marketing Association (CPMA), which represents them, says keeping Mexico in CUSMA is also important to their viability.

"To start implementing a tariff-based model or a bilateral trading framework in a very integrated system that we are in North America would be detrimental," said Ron Lemaire.

Lemaire adds that adding a layer of bureaucracy to importing the produce without a trade deal would also slow down shipments of goods, which are perishable and need to get through the U.S. quickly.

"It's going to create potential increased border delays, change our logistic routes, especially if we start looking at challenges relative to the movement of product that we would traditionally see as a bonded product through the U.S. to Canada," said Lemaire. "The need to ensure we're operating in an environment that creates an easy flow of fruit and vegetables is essential, and that flow functions in an integrated North American market," he said.

But Lemaire still favours a three-way deal, which exists now, because trying to align two separate trade deals is more complicated and difficult. 

"When looking at unilateral trade agreements that are between two countries, it creates a greater challenge when you're trying to integrate a market where you require three countries to be effective and efficient," said Lemaire, adding that the Canadian greenhouse operations in Mexico will ship to the U.S. to be packaged and then onto Canada. So, he says there needs to be a seamless process. 

Vlanich hopes the concern with goods and materials from China flowing through Mexico can be resolved with methods such as fine-tuning country-of-origin rules in the trade deal with Mexico. 

"I think what the hope is, is that there's a resolution that isn't detrimental to doing business in Mexico, but also removes the availability of Mexico as a back door access to Chinese companies," said Vlanich.

A new deal must be in place by July 1, 2026.