Carney and Sheinbaum Coordinate on CUSMA as Mexico Pulls Ahead With Washington

Prime Minister Mark Carney and Mexican President Claudia Sheinbaum spoke by telephone on April 24 in a call that the Prime Minister's Office described as covering "shared economic priorities and challenges." The two leaders agreed to work in close coordination ahead of the formal review of the Canada-United States-Mexico Agreement, the trilateral trade pact that has been the backbone of North American trade since it replaced NAFTA in 2020.

The call, which the PMO confirmed was requested by Canada, came against a backdrop in which Mexico has been moving more quickly than Canada toward formal trade talks with the United States. Mexican officials have been publicly preparing for early discussions on steel, aluminum, and automotive trade, while Canada is still finalising the structure of its own approach. The result has been a quietly competitive dynamic between two countries that, in principle, are partners on the trilateral framework.

What the leaders discussed

The PMO's published readout described the call as covering CUSMA, the broader Canada-Mexico Action Plan, and several specific issues including maritime corridors, cross-border trade, and innovation and technology cooperation. Carney also thanked Sheinbaum for Mexican government support after a Canadian was shot and killed in Mexico earlier in the week, an incident that produced consular and security cooperation between the two countries.

The CUSMA discussion was the politically significant element of the call. The text of the agreement provides that the three countries either approve a renewal of the existing pact or signal their intention to exit it by July 1. The exit option, if invoked, would trigger a multi-year process that could extend up to a decade. Most observers expect the parties to advance some form of renewal or restructured agreement, but the negotiations leading up to that decision will define the shape of North American trade for years.

Mexico's faster start

The U.S. and Mexico are set to begin official CUSMA-related talks late next month, but Canada does not yet have a similar official start date. Mexican officials, including Sheinbaum's economic team, have been visibly active in Washington, and Mexican President Sheinbaum's government has signalled its interest in reaching an early agreement on the steel, aluminum, and automotive sectors that are most affected by the U.S. tariff regime.

Mexico's earlier start with Washington has produced a quietly tense dynamic for the trilateral process. Canada's chief trade negotiator has described the Canadian approach as expecting some sector-specific bilateral conversations alongside the trilateral framework, but Canadian officials have been clear that ultimate sectoral outcomes have to be coordinated to avoid Canada being placed at a competitive disadvantage in any U.S. agreement.

Some commentators have argued that Mexico's faster pace reflects greater political urgency in Mexico City, where the cost of continuing tariff exposure is more acute for sectors that are central to the country's industrial economy. Others have suggested that the slower Canadian pace reflects the Carney government's deliberate approach to building consultation and political consensus before opening formal negotiations.

Canada's positioning

Canada's chief trade negotiator has set out three core objectives for the negotiations: securing stable and preferential access to the entire North American market, reinforcing Canada's economic sovereignty, and defending Canadian workers and businesses. Those objectives have been echoed by Carney in multiple public statements, including a recent interview with Fortune magazine in which he characterised strong U.S. economic ties as having become "a weakness that must be fixed."

Canada's new ambassador to the United States, Mark Wiseman, said the country is ready, willing, and able to begin the CUSMA review with partners in Mexico and the U.S. Wiseman's appointment as ambassador is itself a signal of the priority the Carney government has placed on the Washington file. The Canada-U.S. Advisory Committee on Economic Relations, named earlier this month and set to hold its first meeting on April 27, is the formal vehicle for organising private-sector input into the negotiations.

The advisory committee dimension

The 24-member advisory committee, chaired by Canada-U.S. trade minister Dominic LeBlanc, includes a politically diverse cross-section of figures. Former Quebec premier Jean Charest, former Conservative Party leader Erin O'Toole, and former Liberal cabinet minister Ralph Goodale all sit on the committee alongside business leaders including BMO Financial Group's Darryl White, CN Rail's Tracy Robinson, TC Energy's François Poirier, Nutrien's Ken Seitz, Automotive Parts Manufacturers' Association president Flavio Volpe, and Canadian Chamber of Commerce CEO Candace Laing.

Unifor national president Lana Payne brings the labour perspective. Former Conservative cabinet minister Lisa Raitt and former premier P.J. Akeeagok add additional cross-bench and Northern presence. The breadth of the committee's membership reflects the political importance the Carney government has placed on demonstrating that the negotiation process is not exclusively partisan or ideological.

The sectors at stake

CUSMA covers a wide range of economic sectors, but the most politically charged areas are auto manufacturing, steel and aluminum, agriculture and dairy, energy, procurement, and digital trade. Each of those sectors has different stakes for Canada, the United States, and Mexico, and each has its own ecosystem of industry associations, unions, and provincial or state governments that influence negotiating positions.

For Canadian negotiators, dairy supply management remains a politically sensitive issue. The U.S. has flagged supply management as one of its sticking points in earlier discussions. Procurement, including some provincial alcohol embargoes that the U.S. has cited as concerns, is another area where flexibility may be required. Auto-sector rules of origin, which determine what proportion of a vehicle's content must be sourced within North America to qualify for tariff-free treatment, are central for both Canada and Mexico.

Mexico-Canada cooperation specifics

The Canada-Mexico Action Plan, which the two leaders highlighted in their call, includes several substantive areas of cooperation. Maritime corridors, particularly between Mexican Pacific ports and Canadian Pacific ports, are an emerging area of focus. Cross-border trade in services and goods that do not directly compete with U.S. exports is another area where coordination is straightforward.

Innovation and technology cooperation is a longer-term project. Both countries have been investing in research and development, and both have been working to attract investment in advanced manufacturing and clean technology. Some of those investments are competitive, but others can be complementary, and the action plan provides a framework for identifying opportunities for joint work.

What the U.S. wants

The Trump administration has been clear about a number of CUSMA-related objectives, even as the specifics evolve. The administration has emphasised the rebalancing of manufacturing supply chains, particularly in autos and in critical-minerals-related sectors. The administration has also continued to push on procurement, intellectual property protections, and digital trade questions.

The U.S. position on dairy and on Canadian provincial alcohol procurement has been visible enough that Canadian negotiators are preparing for those discussions. The auto sector, where U.S. tariffs remain in place pending sectoral negotiations, is the area in which the most concrete near-term outcomes are possible.

The political timeline

The Carney government's recent move to a majority position in the Commons gives it more flexibility on trade negotiations. A minority government would have faced the prospect of every concession being subject to a confidence-vote-style scrutiny in the House of Commons. The majority position changes that calculus.

For Mexico, Sheinbaum's domestic political position is also relatively strong. Both leaders enter the negotiations with the kind of political mandate that allows them to make difficult decisions, although the costs of any specific concession will of course be felt by sectors and regions that may not have voted for either government.

What's next

The Canada-U.S. Advisory Committee on Economic Relations holds its first meeting on April 27. Canadian and Mexican negotiating teams continue to coordinate at the official level. The U.S.-Mexico bilateral talks scheduled for late next month will provide an early indicator of the U.S. negotiating posture and of how quickly substantive progress is possible.

For Canadian businesses and workers, the next several months will be a period of significant uncertainty. Investment decisions, hiring decisions, and supply-chain decisions are all affected by the trade-policy environment, and the resolution of CUSMA's uncertainty is the single most important variable shaping the next several years of Canadian economic policy. Carney and Sheinbaum's coordination is one piece of that broader puzzle.