A closer look at the new EU-Mexico trade agreement

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The new free trade agreement between the EU and Mexico is set to deliver benefits for a wide range of industries, with the agricultural sector likely to see particularly pronounced gains.

In recent months, the European Union has been stepping up its efforts to secure new free trade agreements (FTAs) with key economic partners, a commitment designed to demonstrate the EU's ongoing belief in the value of liberalized trade.

Having signed major agreements with the likes of Canada, Japan and Singapore, the union has now been able to strengthen its ties to the North American market by tying up a revamped FTA with Mexico, replacing the older deal that has been in place since 2000 with a more modern, forward-looking approach.

Once finalized and approved, it is expected to deliver widespread benefits for companies and consumers in both regions, with certain sectors expected to achieve particularly significant advantages from the new arrangements. It will also help to advance the international consensus on key issues such as climate change and business ethics.


In 2017, the EU was Mexico's second-biggest export market, after the US, and its third-largest source of imports after the US and China. The most frequently traded commodities include fuels and mining products, office and telecommunication equipment, transport equipment, chemical products and other machinery.

Mexico became the first country in Latin America to sign an economic partnership, political coordination and cooperation agreement with the EU in 1997, which paved the way for an FTA in 2000. Since this time, trade between the EU and Mexico has risen at a rate of around eight per cent annually, resulting in an overall increase of 148 per cent goods trade over the period.

However, there remained a broad perception that this trade relationship could be significantly improved, leading to a decision to explore an updated FTA in 2013. Negotiations with Mexico subsequently commenced in May 2016, with an agreement reached earlier this month.

The terms of the deal

The main purpose of the new FTA is to eliminate tariffs and duties on practically all goods traded between the EU and Mexico, a measure that will remove the vast majority of existing barriers to trade, while also simplifying and speeding up paperwork and physical checks at Mexican customs.

Agricultural exports from the EU are set to benefit the most from this, with products such as poultry, cheese, chocolate, pasta and pork receiving special consideration. It will, for example, secure preferential access for cheeses such as Gorgonzola and Roquefort; facilitate milk powder exports; allow the EU to increase pork exports to Mexico; eliminate the significant tariffs for products like chocolate and pasta; and protect 340 distinctive European foods and drink products in Mexico from imitation.

Meanwhile, the FTA includes a comprehensive trade and sustainable development chapter, setting out shared standards of labor, safety, environmental and consumer protection, and strengthening both partners' commitment to sustainable development and climate change, as laid out in the Paris Agreement. It is also the first EU trade agreement to include specific provisions to fight corruption, such as bribery and money laundering.

Other key elements of the deal include stipulations to provide businesses with equal access to government contracts in both the EU and Mexico; to protect intellectual property rights; to open up trade in services; and to deliver improved investment conditions.

Next steps

So far, the agreement in principle covers the most important elements of the agreement, meaning that technical details still need to finalized on a number of chapters. Negotiators expect to continue working to resolve these remaining technical issues and finalize the full legal text before the end of the year, at which point the European Commission will be able to legally verify and translate the agreement into all official EU languages, and submit it for approval by the European Parliament and Council of the European Union.

Once fully ratified, it will replace the 2000 agreement in law, and is broadly expected to create new business opportunities in both the EU and Mexico - as well as highlighting the continued benefits of free trade and international cooperation in an era when protectionist sentiments are on the rise in many parts of the world.

EU commissioner for trade Cecilia Malmstrom said: "In less than two years, the EU and Mexico have delivered a deal fit for the economic and political challenges of the 21st century. We now open a new chapter in our long and fruitful relationship, boosting trade and creating jobs.

"Today's agreement also sends a strong message to other partners that it is possible to modernize existing trade relations when both partners share a clear belief in the merits of openness, and of free and fair trade."