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Thursday, October 20, 2016

By Tim Johnson, McClatchy Foreign Staff

TOLUCA, Mexico — They were once dubbed the Three Amigos, but strains on their friendship cast a chill Wednesday as President Barack Obama flew to Mexico for a summit of the leaders of the world’s largest trading bloc.

A bilateral spat between Mexico and Canada and anger in Ottawa over U.S. indecision on whether to build the Keystone XL pipeline from western Canada to the U.S. Gulf Coast cooled the atmosphere of the seven-hour summit.

Obama landed in Toluca, some 40 miles west of Mexico City, at about 12:10 p.m. local time (1:10 pm. EST). He popped his head through the door of Air Force One seven minutes later and bounded down the stairs.

Before boarding the plane at Joint Base Andrews for the four-hour flight, the White House said, the president signed an executive order that’s intended to reduce bureaucratic barriers and speed up imports and exports, helping businesses strengthen supply chains across borders. The move signaled that Obama wouldn’t cede to opposition to his trade agenda at home.

The gathering in Toluca, Mexico’s fifth-largest city, coincides with the 20th anniversary of the North American Free Trade Agreement, which formed a market of 470 million people from Canada’s Yukon to the Yucatan Peninsula in Mexico. The bloc represents more than 30 percent of global economic output.

But even as manufacturing chains are more integrated among the three nations, experts say the bloc has drifted on autopilot with a lack of strategic vision.

“Twenty years later, it’s hard for us to talk to each other and reach agreement,” said Laura Macdonald, a political scientist who specializes in the region at Carleton University in Ottawa.

Rather than re-debate NAFTA, Obama is expected to press Mexican President Enrique Pena Nieto and Canadian Prime Minister Stephen Harper to speak with one voice as they negotiate the Trans-Pacific Partnership, a proposed trade bloc that includes 12 countries around the Pacific Rim.

Multiple tensions surround the summit, though, and it unfolds “at the worst moment in the trilateral relationship” since the September 11, 2001, terrorist attacks in the United States triggered concerns over border security, Macdonald said.

The bright spot is an energy revolution that’s altering the global energy map and shifting its epicenter to North America, revitalizing manufacturing.

“We are in a fundamentally different place than we were even five years ago,” said Eric Farnsworth, the vice president of the Council of the Americas, a Washington-based business group that promotes free trade, democracy and open markets in the hemisphere.

Farnsworth said bilateral issues and faltering political intentions had hindered efforts to develop the NAFTA region “in a comprehensive and strategic manner.”

“That sense of broader purpose here is missing,” he said.

Mexico is irked at Canada over visa requirements that have caused its tourism to Canada to drop by about 50 percent since 2008 to about 130,000 Mexicans per year. In contrast, 1.9 million Canadians visit Mexico annually.

Mexican diplomats say Canada requires 10 times more information from Mexican citizens to grant visas than the U.S. government requires.

Harper and Pena Nieto oversaw the signing Tuesday of an expanded air transport accord that will allow more direct flights between Canada and Mexico, but Harper made no public mention of whether Canada would ease visa requirements.

Harper is irritated with Obama for U.S. delays on deciding whether to proceed with the $5.4 billion Keystone XL pipeline, designed to carry oil made from tar sands in the province of Alberta through the U.S. Midwest to refineries along the Gulf Coast.

Macdonald said the pipeline project “is the most important foreign policy objective of the Harper government” in its quest to become an energy superpower.

“Some of the Harper government statements have had an air of petulance about them: ‘You just have to answer us now,'” Macdonald said.

Also irritating U.S.-Canada relations are delays in replacing the aged Ambassador Bridge between Detroit and Windsor, Ontario, the busiest international land border crossing in North America in terms of trade volume.

Even without coordinated policies to reinvigorate NAFTA, manufacturing supply chains increasingly bind the three nations. More than 8 million U.S. jobs depend on trade with Canada, and another 6 million on trade with Mexico.

U.S.-Mexico trade topped $500 billion last year, and components and finished products travel back and forth across the border. Vehicles built in North America are said to have their parts cross the U.S. borders eight times before they’re fully assembled.

“We design it together and we produce it together,” Farnsworth said of most goods, noting that 40 cents of each dollar’s worth of Mexican exports to the United States comes from materials and parts produced in U.S. plants.

AFP Photo/Jewel Samad