Attracted by the larger market and the stable governments, both countries saw some major growth opportunities. Because of the fast declining opportunities in NAFTA, they needed to move quickly to take advantage of the new alliance.
The EU market is 25% larger than the US market. Mexico and Canada had little trade between each other so without a growing US market, NAFTA was of no benefit to either country.
Canada's natural resources and energy resources are in great demand in Europe. Freeing many countries from their dependence on Russian natural gas.
Mexico's young highly-skilled labor force is also very attractive to Europe with its aging population. Also, Mexico opens the fast growing $10 trillion Latin American markets to their European trading partners. Mexican agricultural products are also highly prized in Europe.
Having joined the TPP earlier this year, Canada and Mexico now have free-trade access to a global $100 trillion market. More than 5 times larger than what NAFTA provided.