The European Union has announced the finalization of a new free trade agreement (FTA) with Mexico, representing an expansion and modernization of the existing EU-Mexico Global Agreement.

Under the terms of the new deal, tariffs will be scrapped on nearly all trade in goods between the EU and Mexico, with the agricultural sector set to benefit significantly, especially in terms of products such as poultry, cheese, chocolate, pasta, and pork.

It will provide preferential access for cheeses such as Gorgonzola and Roquefort, secure a considerable volume for milk powder exports in a key market, and protect 340 distinctive European foods and drink products from competition from imitations.

Additionally, a trade and sustainable development chapter has been included in the FTA to set out shared standards on labor, safety, environmental, consumer and intellectual property protection, with the deal also set to open up trade in services, such as financial services, transport, ecommerce and telecommunications.

Other aspects of the deal include new customs procedures to benefit sectors such as pharmaceuticals, machinery and transport equipment, as well as pledges to tackle corruption in the private and public sectors.

European Commission president Jean-Claude Juncker said: "Mexico and the EU worked together and reached a mutually beneficial outcome. We did it as partners who are willing to discuss, to defend their interests, while at the same time being willing to compromise to meet each other's expectations.

"With this agreement, Mexico joins Canada, Japan and Singapore in the growing list of partners willing to work with the EU in defending open, fair and rules-based trade."

Since the previous EU-Mexico trade agreement came into force in 2000, trade between the regions has risen at a rate of around eight per cent each year, resulting in an overall increase in trade in goods of 148 per cent. It is hoped that the new deal will accelerate this growth.