Canada speeds up Mercosur talks, snubs U.S.

Canada’s Minister for International Trade revealed that both Ottawa and South America’s Mercosur grouping are eager to deepen negotiations toward a free‑trade accord, as the government looks to expand its exports outside the United States.

On Thursday, Sidhu told Reuters that after talking with Brazil’s foreign minister, he felt there was real interest in Mercosur talks. At the same time, Prime Minister Mark Carney’s team is working with President Trump to try to finish a deal by August 1 that would cut tariffs on Canadian goods.

Even as these talks advance, Ottawa is working to lessen its deep dependence on its bilateral commerce with the United States, which topped C$1 trillion (US$727.33 billion) in trade last year.

It intends to pursue additional trade pacts in various regions to diversify its export destinations.

Mercosur talks ongoing but no deal yet

Earlier in April, Brazil’s President Luiz Inacio Lula da Silva expressed interest in pushing forward negotiations between Canada and the four‑nation Mercosur alliance.

The southern cone trading group, made up of Brazil, Argentina, Paraguay and Uruguay, has previously engaged in multiple negotiation sessions with Canada, but a formal agreement has yet to be concluded.

Sidhu emphasized continued engagement with China, commenting, “With China, there are opportunities, there are challenges.”

He noted that officials are having open talks regarding duties applied to products such as canola, beef, pet food and additional items. He also described the recent warming of relations with India as beneficial for commercial relations.

At present, Canada maintains 15 trade agreements spanning 51 markets, opening opportunities for its companies to roughly 1.5 billion consumers around the globe.

Sidhu mentioned that the government plans to negotiate further pacts in the coming months, without naming how many additional accords he anticipates finalizing.

Within his initial two months in office, Sidhu concluded a trade agreement with Ecuador as well as an investment promotion arrangement with the United Arab Emirates.

He added that talks have been launched with ASEAN member states and several Indo‑Pacific nations, such as Indonesia and the Philippines.

Sidhu warned about Canadian firms’ over reliance on U.S. Market

Sidhu cautioned that too many Canadian firms still lean heavily on the U.S. marketplace and have seen their competitive edge eroded by increased American duties. He said, “My job is to be out there opening doors,” and noted his intention to expand both commercial partnerships and defense sourcing beyond American vendors.

Prime Minister Carney has earmarked another C$9 billion for defense this year to meet NATO’s 2% of GDP benchmark. Sidhu added, “We are working with the European Union and other partners around the world to help unlock some of those procurement opportunities in defense for our Canadian companies.”

Statistics indicate that in May, exports destined for the United States dropped to 68% of Canada’s overall shipments, compared with a 75% monthly average the previous year, the smallest U.S. portion ever recorded, as exporters pursued alternative markets.

Sidhu declined to outline specifics of a prospective Canada U.S. arrangement but emphasized that Ottawa will “work towards a deal that’s best for Canadian businesses and Canadian workers.”

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