EU agrees new free trade deal with Mexico

The European Union and Mexico have concluded the last remaining element of negotiations for a new trade agreement, which will replace an earlier deal first agreed in 2001. European Trade Commissioner Phil Hogan and Mexican Minister of Economy Graciela Márquez Colín – in a phone call on April 29 – agreed on the exact scope of the reciprocal opening of public procurement markets and a high level of predictability and transparency in public procurement processes. The two parties can now advance to the ratification stage of the agreement.

“While most of our efforts have been focused lately on tackling the coronavirus crisis, we have also been working to advance our open and fair trade agenda, which continues to be very important,” said Mr Hogan. “Openness, partnerships and cooperation will be even more essential as we rebuild our economies after this pandemic. I am very pleased, therefore, that together with our Mexican partners, we share similar views and that our continued work could now come to fruition. This agreement is clear evidence of our shared commitment to advance our agenda of partnership and cooperation. This agreement – once in force – will help both the EU and Mexico to support our respective economies and boost employment.”

Under the new EU-Mexico agreement, practically all trade in goods between the EU and Mexico will be duty-free. The agreement also now includes progressive rules on sustainable development, such as a commitment to effectively implementing the Paris Climate Agreement. It is also the first time that the EU has agreed with a Latin American country on issues concerning investment protection. Simpler customs procedures will further help boost exports.

Mexico is the EU’s largest trade partner in Latin America with bilateral trade in goods worth 66 billion euros and trade in services worth another 19 billion euros (2019 and 2018 data, respectively). EU goods exports exceed 39 billion euros a year. EU-Mexico trade in goods has more than tripled since the entry into force of the original agreement in 2001.

The trade agreement is part of a broader Global Agreement, which sets the framework for the EU’s relationship with Mexico and covers issues of wider shared interest that go beyond trade, including political issues, climate change and human rights. It will be the first EU trade agreement to include provisions to fight corruption, with measures to act against bribery and money laundering.

Mexico was the first country in Latin America to sign a Global Agreement with the EU in 1997. The EU and Mexico started the negotiations on this new, modernised agreement in May 2016, reaching an agreement in principle two years later, in April 2018, leaving for further discussion some outstanding technical issues.

Mexico’s largest trade partner in emerging Europe is currently Hungary, which exported 1.22 billion US dollars worth of goods to the Latin American country in 2018, mainly cars and automotive spare parts.

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