B.C. and Mexico share trade agreements and a continent, but commerce between the two countries is weak and withering.
So are visits by Mexicans to Canada through B.C. entry points.
This decline in the economic relationship comes as politicians, including B.C. Premier David Eby and others across the country, are urging Canada to diversify its trading relationships as U.S. President Donald Trump threatens steep and economically significant tariffs.
Trump agreed in early February to delay by at least 30 days a 10-per-cent tariff on energy, and a 25-per-cent tariff on all other Canadian imports to the U.S.
He similarly threatened to levy a 25-per-cent tariff on Mexican imports before also putting that plan on a month-long pause.
If U.S. tariffs on its neighbours eventually take effect, the drive to increase Canada-Mexico trade will undoubtedly increase.
In B.C., only about 0.3 per cent of B.C.-origin exports, worth $164 million, went to Mexico in 2023, according to BC Stats.
What is worse is that the value of the province’s exports to Mexico is falling.
BC Stats in January said that in the first 11 months of last year, B.C.’s exports to Mexico decreased by 19.6 per cent to $113 million, compared with the same months in 2023.
That low level of trade in goods is not new.
Since 2018, Mexico has only accounted for between 0.2 per cent and 0.4 per cent of total B.C. exports. In 2017, the share of exports to Mexico was double what it was in 2023, at 0.6 per cent.
Why trade is so low between B.C. and Mexico?
Increasing trade between B.C. and Mexico is challenging for several reasons.
“The U.S. grows just about everything that we do, and they’re in a closer proximity to Mexico,” said John Anderson, CEO of the Coquitlam-based fruit and vegetable distributor Oppenheimer Group, which operates in 27 countries, has 18 offices, 400 employees and generated more than $1.5 billion in 2024 revenue.
A second reason comes from Simon Fraser University economics professor Nicolas Schmitt, who specializes in international trade.
He told BIV that he looked into Mexico’s biggest import products: electrical machinery, mineral fuels, vehicles, plastics, iron and steel.
“We don’t produce a lot of that stuff,” he said. “Manufacturing is relatively small as a sector in B.C.”
He added that export data does not capture all Mexican imports made by B.C. companies.
Vancouver-based Lululemon Athletica Inc., for example, last year operated 15 stores in Mexico, where it sold clothing mostly made in Asia and counted as Asian exports to Mexico.
Some profit from those sales likely went to finance head office operations in Vancouver, where Lululemon employs hundreds if not thousands of workers.
A third rationale for languishing B.C.-Mexico trade is that business relationships are forged by independent entrepreneurs and those entrepreneurs have tended to not see value in investing in establishing ties with Mexican customers.
Governments can encourage trade, but taking action is up to entrepreneurs.
Encouraging B.C.-Mexico trade is on the provincial government’s agenda, said B.C.’s Minister of Jobs, Economic Development and Innovation Diana Gibson.
“We did just open new trade and investment offices in Mexico, Taiwan and Vietnam,” she said. “So, we’re certainly identifying countries where there are business opportunities, or there are specific markets, for things like our wood products.”
Business associations can foster networking and stimulate trade.
Vancouver is home to the Mexican Business Association of Canada, although that organization has not held public events in years.
“We have actually started getting together again, because there is so much more interest now,” vice-president Mauricio Rojas told BIV.
International agreements fail to substantially spur trade
Mexico and Canada are co-signatories, alongside the U.S., in the Canada U.S. Mexico Agreement (CUSMA) and its predecessor North American Free Trade Agreement (NAFTA).
That has not, however, substantially increased Canada-Mexico trade.
Nor has the decision by Mexican and Canadian governments to be two of the 11 co-signatories in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which went into effect in 2018. That agreement also includes Asian, Oceanic and South American trade partners.
Among provinces, B.C. has historically punched below its weight when it comes to exports to Mexico.
International Trade Centre (ITC) data from 2019 says B.C. was responsible for only 2.6 per cent of Canadian exports to Mexico, despite having about 13.5 per cent of the country’s population.
For exports to Mexico, the ITC that year ranked B.C. sixth among provinces, ahead of only Atlantic provinces and territories.
BC Stats does not detail how much B.C. imports from Mexico because products that enter Canada via B.C. do not all stay in the province.
Similarly, imports may enter Canada in another province before getting sent to B.C.
The United Nations COMTRADE database on international trade, however, listed the biggest Canadian imports from Mexico in 2023 as:
- Vehicles other than railway, tramway;
- Machinery, nuclear reactors and boilers; and
- Electrical, electronic equipment.
Tariffs could impact food-distribution patterns
The Canadian and Mexican governments have each said that if the U.S. were to launch a tariff war, retaliatory tariffs will follow on imports from the U.S.
Anderson said this will undoubtedly alter food distribution patterns.
Take orange juice as an example.
Higher prices for Florida orange juice outside the U.S. would likely help shift sales for that juice to be higher in the U.S. domestic market.
In exchange, some Peruvian orange juice previously sold in the U.S. may make its way to Canada, he added.
That would entail shipping the Peruvian juice by freighter past Central America and then trucking the product to Canada from Mexico.
Some food products are now trucked up from Mexico to Canada on bonded trucks, which ensure seamless transport through the U.S. without incurring any U.S. customs duties.
Most produce coming to B.C. from the U.S. does not carry customs duties, and as a result, those trucks do not need to be bonded by customs authorities, Anderson said.
If tariffs were put in place, U.S. customs authorities would require that the trucks be bonded to ensure the products do not slip into the U.S. tariff-free, he said.
One risk if a tariff war gets out of control is that Trump could stop the trucks from being able to enter the U.S. without paying U.S. duties even if the produce is slated to go to Canada. Or, theoretically, he could stop the trucks from entering the U.S. altogether.
“Anything’s possible, but I would doubt it,” Anderson said.
Anderson is a past chair of the International Fresh Produce Association, which is based in Washington, D.C.
He said his intelligence from that organization’s lobbying efforts for the free flow of fruits and vegetables is that there is not a huge appetite in the U.S. government for tariffs, much less disrupting supply chains.
“There will be a renegotiation of what was the North American Free Trade Agreement,” Anderson said.
“I think their goal [at the White House] would be to start negotiating it now.”
Why Mexican travel to Canada has plummeted
B.C. is welcoming more international visitors on a year-over-year basis, but the number of visiting Mexicans has plummeted.
This is a concern for B.C.-Mexico trade because when Mexicans have less direct contact with B.C. residents, there are likely to be fewer Mexican entrepreneurs who want to do business with British Columbians.
Destination British Columbia’s latest data shows more than 4.9 million international visitors entered Canada through B.C. entry points in the first 11 months of 2024, up 6.6 per cent from the same period in 2023.
Only 147,000 of those visitors (approximately three per cent) were Mexican citizens, which is down by 18.8 per cent compared with the same 11 months in 2023.
The most likely reason for that decline is that Canada ended visa-free access for most Mexicans, starting at the end of last February.
Immigration Refugees and Citizenship Minister Marc Miller said a surge in Mexican visitors seeking asylum prompted him to halt visa-free access.
Another reason there are fewer Mexicans in B.C. is that the B.C. government has reduced the number of international students that it allows to study in the province. This change was due to the federal government providing fewer student permits, and concerns that schools were exploiting the students, according to the B.C. government.
Canadians, meanwhile, continue to travel to Mexico in droves.
Mexican government tourism data shows that most international visitors who arrived by air in 2023 were American (13.5 million). Canada was the second-largest source of international visitors by air, at nearly 2.5 million.
