The European Union and Mexico signed a new trade agreement, part of a broader, modernised EU-Mexico global agreement. In practice, all trade in goods between the EU and Mexico will now be exempt from customs duties, including the agricultural sector.
Simplified customs procedures will continue to be beneficial for EU industry, including in sectors such as pharmaceuticals, machinery and transport equipment. The agreement also provides for progressive rules for sustainable development. Among other things, the EU and Mexico have committed themselves to effectively fulfilling their obligations under the Paris Agreement on Climate Change.
“With this agreement, Mexico joined Canada, Japan and Singapore in the growing list of partners wishing to work with the EU”, the President of the European Commission Jean-Claude Juncker said.
The agreement – once finalised and approved – will be beneficial for companies and consumers across Europe and will boost the EU’s agenda in the field of trade policy. The agreement, which was reached today, brings the EU’s trade relations with Mexico in the modern era, eliminating most of the remaining barriers to trade.
Since the entry into force of the previous EU-Mexico trade agreement in 2000, trade between the EU and Mexico has increased by about 8% per year, resulting in a total increase of 148% in the trade in goods for the period.
In the framework of this free trade area, more than 600 million Europeans and Mexicans are involved in total. Despite these positive results, there were still possibilities for improving trade relations. Both sides hoped to reach an agreement last year.
Mexico is one of the most open economies in the world – 12 free trade agreements have been signed with over 40 countries worldwide. In recent years, there has been an accelerated privatisation of the public sector – airports, roads, ports, electricity generation. In order to achieve sustained high economic growth, further modernisation of the industrial sector, improving infrastructure and labour market liberalisation will be necessary.
The conclusion of the current agreement is considered as a double signal to the US, whose President Donald Trump started a revision of NAFTA, the free trade agreement between his country, Canada and Mexico. Reaching a deal with the EU could be tactical move by Mexico to reduce its dependency from Washington DC. The country is searching for new markets, since USA is currently accounting for 80% of Mexican exports.
