Keynote address on the Canada-Mexico relationship and North American competitiveness
Three decades ago, Canada, Mexico, and the United States made history. With NAFTA, we three amigos established the world’s largest free-trade zone. We created millions of jobs. We enabled an extraordinary economic expansion and showed that by breaking down barriers, we could create opportunities for people. Former Canadian prime minister Brian Mulroney, who negotiated the deal, reflected back on what NAFTA has meant for Canada. The benefits have been spread over our entire economy. It helped modernize our economy and got Canadians to be much more outward thinking and self-confident that they could trade with the best in the world and win.
That’s what free and fair trade does. It opens doors. It expands horizons. It creates the best possible outcomes for people and for businesses.
And let’s be clear: it wasn’t just Canada that won. NAFTA was never a zero-sum game. It was always win, win, win. With it, we unleashed flows of goods and services between our economies to unprecedented levels. We quadrupled trade on this continent from the Pacific to the Atlantic, from the Arctic Ocean to the Gulf of Mexico. Over the past three decades our economy has changed, a lot.
We’ve gone from fax machines to smartphones in almost every pocket. That has created whole new sectors and changed the way we do business. We’ve weathered crises, booms, and busts, and, most recently, we faced a global pandemic that wrought economic turmoil on a scale not seen since the Great Depression. Entire sectors shut down virtually overnight: tourism, hospitality, culture.
The economy reoriented itself to keep people safe. People worked from home. Businesses underwent massive changes and our health care sector withstood—and continues to withstand—incredible pressure, with workers who continue to be heroes, day in and day out.
It took its toll. Whether you were a student, a worker, a business owner, or a parent. That one year, 2020, added a few years to all of our lives.
But as people pulled together, we saw the best in one another. And since then, all three of our countries have under good, strong recoveries, thanks in part to our strong trading relationships. Free and fair trade has made us resilient and continues to foster extraordinary growth on our continent.
Let me give you a few numbers. On our shared 22 million square kilometres, home to nearly half a billion people, we do over $1 trillion of trade with each other every year. Combined, NAFTA has a higher GDP than the entire European Union. Our integrated continental economy is an advantage unlike any other. We must never take that for granted.
A few years ago, you may remember, there were those who attempted to throw the certainty of our trading relationship into disarray, motivated by protectionist, isolationist, and nativist politics. They were willing to put millions of jobs at stake in each of our countries. Our historic trade deal was in peril, so we reopened it to defend it. In the negotiations, the US repeatedly tried to play off Canada and Mexico against each other. But Canada always believed that our greatest strength was in all three parties negotiating in unison.
We understood that North American free trade was about good and fair integration across the continent. Business leaders, investors, labour groups, and workers understood this, too. We all held fast to our belief that in the face of economic uncertainty, growth doesn’t come by turning inwards and putting up walls. It comes from welcoming new opportunities, opening up to workers and investors, making economic activity easier, not harder.
So, we rolled up our sleeves. We protected NAFTA and even improved it: more protections for our environment, new opportunities for small businesses, stronger standards for workers. Because trade ultimately has to be about people. It’s about a nickel miner in Sudbury, a steelworker in Pittsburgh, a car-part manufacturer in Chihuahua, who all have good jobs because our auto-making supply chains are working well.
It’s about a farmer here in Mexico having easy access to Canadian consumers and vice versa. With food prices going up around the world, it’s worth pointing out that NAFTA has helped lower food prices. Without our free trade, billions in import fees would be passed on to consumers. By integrating our economies, we’re making them more dynamic, supporting workers, creating jobs, and helping tackle the cost of living.
The goal of North American free trade was to create a fair and well-integrated economy all across the continent. In the face of economic uncertainty, Canada has always believed that you cannot achieve growth by turning inwards and building walls. Growth is achieved by welcoming new opportunities, by opening up to workers and investors, and by making economic activity easier, not harder. We protected NAFTA and we improved it, with new opportunities for small businesses, better standards for workers, better protections for our environment. These days, we are seeing the price of food increase around the world and we know that, without NAFTA, the situation would be even worse. Without our free trade, billions of dollars in import fees would be passed on to consumers. By integrating our economies, we are making them more dynamic, we are supporting workers, we are creating jobs, and we are helping to reduce the cost of living.
There’s a lot of uncertainty now and ahead of us. We’re seeing Putin’s illegal and brutal invasion of Ukraine that is worsening the global food and energy crisis. People around the world are suffering from hunger and cold right now because of it. We’re seeing the devastation of climate change and increasing costs of natural disasters. We’re seeing democracy backslide globally and the rise of authoritarian leaders. We’re seeing fears exploited and young people like those who attend this university wondering what kind of world they’re going to inherit. These are historic challenges before us, and the choices we make today will ripple across generations. So, let’s think like people did back when they signed the original NAFTA. They couldn’t know all the changes and challenges we would face, but they knew that growing our economies and deepening our ties would give us all the stability and certainty we needed to weather any storm.
Not only that, they knew that an integrated economy put us in the best possible position to grab any and all opportunities, including those they couldn’t even imagine yet. And just look at what’s happening now. Our global work to tackle climate change is bringing about the greatest economic transformation since the Industrial Revolution. That means booming new sectors and the modernization of traditional sectors. And it’s happening at an incredible pace and scale across the continent. And all of it supports and creates good jobs.
Let me give you some examples of what that means in Canada. Over the last two years, we’ve made strategic investments with partners like ArcelorMittal and Rio Tinto that will see Canada produce even more of the cleanest steel and aluminum in the world. This is creating a brighter future for our workers and for the next generations of workers. We’re investing in wind, solar, hydrogen, and carbon-capture technologies so we can produce cleaner energy. Last year, we attracted investments from around the world for electric vehicle manufacturing and critical minerals that have secured around 17,000 jobs. Just last month, GM opened Canada’s first ever full-scale electric vehicle manufacturing plant, re-energizing a community and giving our auto workers even more confidence in their future and in their kids’ futures.
And we launched a critical minerals strategy, because Canada is rich with the resources needed for electric vehicles, clean energy, and digital technology. Canada’s best-in-class resource workers are an essential part of the EV auto manufacturing supply chain here in North America.
Our natural resources workers, the best in the world, are essential. And critical minerals are not just for electric vehicles: laptops and smartphones also need batteries. Clean energy sources like hydroelectricity, solar panels, and wind turbines need critical minerals.
One thing is certain, Canada is ready to be the reliable supplier of clean energy and technology the net-zero world will need, and we’ll do it with our North American partners, both businesses and governments.
The economy of the future will also be shaped by new forefronts in technology and innovation. It’s something that I know the students and scholars at Centro are right at the centre of. They’re helping shape the innovation economy and the creative economy, and I’m sure they’ll be leaders in new sectors we haven’t even thought of yet. We need to keep building an economy that works for all North Americans, that creates good middle-class jobs of all types, and that young people can see their bright futures in.
Collaboration is key. It gives our creators, entrepreneurs, farmers, and manufacturers access to new markets. It fosters competition. Benefiting people with lower prices and more choice. It builds supply chains that are both efficient and resilient. It makes our economies more vibrant, and it creates stable economic cooperation among friends, friends who share a belief in equality, democracy, and rules-based trade.
As former Mexican president Ernesto Zedillo—who implemented NAFTA—said, trade, by being mutually beneficial, gives each party a stake in the well-being of the other. We can never underestimate just how valuable our reliable and stable trading relationships are. They give confidence to investors, to workers, and to the people who want to build big things on this continent.
Of course, like all friends, we’ll have our disagreements from time to time. But overall, things are working very well and Canadians see that. That’s because we’ve worked hard to make sure that the benefits of economic growth are felt across the economy. And that’s really important.
In periods of economic growth, we must ensure that everyone benefits from this growth. Of course, some sectors will benefit more from trade than others. That is why we need to reinvest the benefits of this growth in people. We must invest in education, in health care, in social programs that help those who are vulnerable. We must direct our prosperity toward emerging industries in order to create new jobs and opportunities. We must grow our middle class to make our economy more resilient and more stable.
We need to grow our middle class, so we can have a more resilient and stable economy. This isn’t just good for people: it’s good for businesses. When the benefits of growth are tangibly felt in our communities by the citizens who vote for the direction of their country, businesses thrive. A more stable society is one where people with good jobs trust that those good jobs are going to stick around and businesses in return benefit from the generations of workers who bring knowledge, dedication, and pride to their jobs.
Businesses are implanted within communities, and when people feel that loyalty and share in the benefits of growth, they are loyal in return. A more fair and optimistic society is one where bottom lines are stronger. But, of course, when the world is uncertain, it’s human nature to look inwards, to feel the pull of protectionist urges, to want to hunker down and let the storm blow past. But as governments and as leaders, we need to be wise enough to recognize that giving in to those voices is not the way to overcome our challenges. Putting up trade barriers is putting up barriers to growth, and that doesn’t help anyone. We three countries have all the ingredients we need to be successful, and by working together, we can continue to unleash the enormous potential in our people and in our resources.
Canada is a trading nation. This is a truism that goes back hundreds of years to the earliest interactions between Indigenous peoples and Europeans, when trappers traded food, furs for food and other goods. But it remains true today. We have free trade agreements with 51 countries and are the only G7 country to have a free trade agreement with every other G7 country.
We have investment treaties with all 28 EU member states and, simply put, Canadian businesses have preferential access to two thirds of the global economy. It’s easy to see why so many countries want to do more business in Canada. We have the most highly educated workforce in the OECD, a sound financial system, favourable tax rates, world-class universities, and a highly competitive research and development environment.
On top of that, Canada has universal health care, affordable child care, vibrant cities, and ever-increasing areas of protected nature. And, importantly, strong democratic institutions. We are a reliable partner with an abundance of talent, a very attractive investment climate, and a great quality of life. And, since 1993, trade between Canada and Mexico has increased more than ninefold.
And recent data shows that in the first three quarters of last year, Canada was the second-largest source of new foreign direct investment in Mexico, ahead of Spain. There’s huge potential for growth between our countries. So let us continue this momentum. Let us keep doing what leaders did a generation ago: hold fast to a belief in open trade and collaboration.
Having quoted both the Canadian prime minister and the Mexican president, I’ll give you one more quote from Bill Clinton, in 1993, when NAFTA legislation passed in the US. We were on the verge of a global economic expansion that is sparked by the fact that the United States, at this critical moment, decided we would compete, not retreat. Let’s keep forging ahead and pursue more growth for our economies. Growth that includes everyone. Growth that creates good jobs and strengthens the middle class. Growth that means our air and water is clean. Growth that is shared amongst friends. That makes Mexicans, Americans, and Canadians even stronger and more optimistic about the great future waiting for us.
Thank you all for being here today.