Could Mexico and the US cut a side deal on CUSMA?

All your favorite CBC Podcasts are now available on YouTube. The best in award-winning true crime investigations, hilarious comedies, vibrant pop culture conversations, and even more audio series are all available on CBC Podcasts' YouTube channel. You'll also find exclusive video first episodes, YouTube shorts, and behind-the-scenes content from our hosts and producers that you can't find

anywhere else. So if YouTube is your go-to source for podcasts, just search CBC Podcasts and hit subscribe, and you'll never miss the latest update. This is a CBC Podcast. Hello, I'm Matt Galloway, and this is The Current Podcast.

The three World Cup host nation leaders met at the World Cup final yesterday. They watched Spain beat Argentina in extra time. Mexico's Claudia Sheinbaum and Prime Minister Mark Carney joined U.S. President Donald Trump in his viewing box at the stadium in New Jersey. Now, this week, two of those three leaders are meeting to discuss trade.

But when Kuzma talks start tomorrow in Mexico City, Canadian officials will not be there. Donald Trump is also threatening to tariff Canada over wildfire smoke. Now that's on top of broader ongoing frustration with Canada from U.S. officials. U.S. Trade Representative Jameson Greer has been complaining for months that Canada isn't taking trade talks seriously enough.

We just haven't seen a lot of movement. There are a couple things that Canadians have done. you know they had a digital services tax they proposed then rolled back they had an online streaming act where they wanted to force american companies to fund canadian companies that they

rolled back i'm glad they did that but they don't really get credit for doing something bad and then undoing it right that's just it's just good practice on their part earlier this month the u.s said they are not renewing kusma in its current form that triggered a clause that will have the three countries reviewing the deal every year for a decade until it expires. It all makes for more

trade uncertainty for Canada. In a moment, we'll hear from the CEO of the Business Council of Canada. But first, I'm joined by Eduardo Garcia. He is a veteran business journalist in Mexico City and host of the podcast Mex Moves. Eduardo, good morning. Hi, Rebecca. Good morning. Thanks for having me. Of course. How badly are Mexican businesses suffering right now as a result

of all of this trade uncertainty? Basically, what Mexico has suffered because of the uncertainty has been much more on the investment side of the equation than the trade side. I mean, exports, Mexican exports have been growing at a quite fast pace.

Some sectors have taken over the auto sector, which has suffered the most because of the 25 percent tariff that Trump imposed on both Canada and Mexican imported cars. But from that perspective, from a trade perspective, Mexico hasn't been hurt that badly. But on the uncertainty side that generates investment and companies moving to Mexico or expanding, that's where the most impact has been felt here in Mexico.

You know, there are some voices in Canada here that have been calling for Canada to cut Mexico out of the free trade deal altogether. Do you think there's a risk that Mexico may try to do the same thing, especially as Mexico is further ahead in negotiations than Canada is? Well, there's been that talk all around, but I don't think that's overall the case. Mexico would like to have Canada on board.

I think the two countries together can join to own efforts in trying to convince the Americans that the U.S. or Kuzma, as you call it, Tamek in Mexico. It's a good thing for the region in terms of lowering costs, integrating supply chains.

So in the Mexican case, I don't think there is any efforts to try to take Canada of the agreement on the contrary. Why is it that Mexico seems to be, as I've mentioned, sort of further ahead on negotiations than Canada is?

Mexico has dates to negotiate. Canada does not. What do you make of these two different approaches? I think the Mexican president, Claudia Sheinbaum, has been very cautious in how she deals with President Trump and has made efforts beyond probably beyond her own faculties to try to assuage the U.S. problems with the free trade agreement.

And so I think that has probably eased the way to try to get the two countries talking. Since the very beginning, since she was sworn in two years ago almost, she has had this as a priority. I mean, for both countries, the free trade agreement is crucial. But for Mexico, it's almost a live or dead situation.

So they've been put a lot of effort in trying to persuade Americans to continue negotiating. And Mexico has expressed a willingness very clearly to try to accommodate to what the U.S. concerns might be. You know, one of the key sticking points between Mexico and the U.S. has been something called transshipment and rules of origin. Just explain to us what exactly that is and why it's such a problem for the U.S.

Yeah, the concept of raw origins is to make sure that whatever gets traded between the three countries, it's produced in a large extent with North American parts and components. Now, not all industries have those rules of origin, mainly the auto industry does. And in that case, I think cars have to comply with 70% of its content and value added with North American produced parts and components or labor including. But not other industries have those rules.

So you might have, let's say, a television that gets produced in Mexico with some Canadian parts and with some other parts and gets shipped to America. And some of those other parts might be coming from China or other Asian countries. And that generates concern that Mexico might be trans-shipping Chinese goods that are obviously at a cheaper price to America or even to Canada in some cases. You know, last week, one of Trump's trade advisors, Peter Navarro, put out a video making a number of claims about the Mexican auto industry.

Have a listen to what he had to say. Here's what the fake news won't tell you.