On 28 April 2020 the European Union and Mexico finalized their negotiations on a new trade agreement. Under this agreement, practically all trade in goods between the EU and Mexico will be duty free. Also included in the agreement are 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 agrees with a Latin American country on issues concerning investment protection. Simpler customs procedures will further help boost exports.
The broader Global Agreement, of which the trade agreement is an integral part, also covers the protection of human rights, as well as chapters on political and development cooperation. It will also be the very 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 for this new, modernised agreement in May 2016. They reached an agreement in principle in April 2018, leaving for further discussion some outstanding technical issues. Those are now fully agreed.
The EU-Mexico trade and investment relationship in figures
Mexico is the EU’s number one trade partner in Latin America with bilateral trade in goods worth 66 billion EUR and trade in services worth another 19 billion EUR (respectively 2019 and 2018 data). EU goods exports exceed 39 billion EUR a year. EU-Mexico trade in goods has more than tripled since the entry into force of the original agreement in 2001. The modernised trade agreement will help boost this strong historical growth.
- Since the existing EU-Mexico trade agreement came into force in 2000, trade in goods between the EU and Mexico has risen by 148%
- The EU is Mexico’s 3rd biggest trading partner in goods
- Mexico is the EU’s 13th biggest trading partner in goods
- EU exports to Mexico (by category (goods)): machinery (36%), transport equipment (16%), chemicals (14%), base metals (7%), plastics/rubber (5%)
- 300 EU companies are exporting to Mexico
- 000 jobs in the EU are tied to exports to Mexico
Strategic benefits of the new trade agreement
1. Adapting to changing economies
Since the EU and Mexico signed their existing agreement, the EU has grown to include 13 new Member States, deepened its internal (single) market and introduced the euro. Mexico has become one of the world’s most dynamic economies.
2. Covering more aspects of trade and investment
Since the EU and Mexico signed the existing agreement, the EU has concluded trade agreements with other partners which cover trade and investment more fully. They include measures to:
- ensure governments treat overseas investors fairly (investment protection)
- protect intellectual property and stop unlawful imitations.
The new trade agreement also covers these areas.
3. Putting joint ambitions into practice
The EU and Mexico are strategic partners. The EU-Mexico Global Agreement, including the existing trade agreement, is the legal basis of this partnership. The new trade agreement will:
- create jobs which are on average higher-paying than jobs not tied to exports
- lower prices and make more products and services available for consumers
- encourage companies to innovate
The legal revision of the agreement is now (June 2020) being finalised. Once the process is concluded, the agreement will be translated into all EU languages. Following the translations, the Commission proposal will be transmitted for signature and conclusion to the Council and European Parliament.