Why did the EU update its agreement with Mexico?
In 1997, the EU and Mexico signed a partnership and cooperation agreement that included trade in goods, effective from 2000. The section on trade in services followed in 2001. Over twenty years later, it is time for an update. The new agreement includes modern provisions on intellectual property rights and sustainable development.
This agreement offers new commercial opportunities for EU exporters and investors and strengthens ties with a strategic partner. At a time of growing protectionist pressures, the agreement sends a clear signal that both economies are open to fair trade and business.
How big is the Mexican market and how much trade does the EU do with Mexico?
Mexico is the second-largest economy in Latin America and the twelfth largest in the world. The country shares similar values with the EU, such as open and fair trade based on international rules. As a dynamic emerging economy with 131 million people, Mexico offers huge opportunities for EU companies to increase their exports.
The EU and Mexico already trade significantly:
- €82 billion in goods (in 2023)
- €23 billion in services (in 2022)
The EU is Mexicos second export market and its third-largest trading partner. Mexico is the EUs second-largest trading partner in Latin America after Brazil.
What is the added value of an updated agreement?
The 2000 trade agreement has greatly benefited EU firms. However, it does not address some of the new trade and investment issues important today. The Global Agreement with Mexico aims to make it even easier to export to and invest in each others markets and further strengthen the EU-Mexico partnership by:
- lifting non-tariff barriers, such as Mexican restrictions on EU food products;
- safeguarding European intellectual property in Mexico;
- lowering tariffs on more products, mainly agricultural goods;
- protecting more Geographical Indications (GIs) - distinctive food and drink products from specific regions in the EU;
- improving cooperation and supply chains for raw materials critical for the green and digital transitions;
- opening up new markets in government procurement;
- ensuring better access to the services market;
- protecting European investments in Mexico;
- ensuring predictability and legal certainty for businesses trading electronically;
- facilitating more trade and investment by small and medium-sized enterprises (SMEs);
- creating additional export-related jobs, which are on average higher-paying;
- promoting sustainable development.
What are the main improvements under the new agreement?
- Remove tariffs
Mexico imposes high tariffs on imports from the EU, such as food and other agricultural products. Under the agreement, Mexico will remove almost all these tariffs so that European products will be more competitive in Mexico and more attractive to Mexican consumers.
- Remove non-tariff obstacles to trade
Rules and regulations that are not consistent with international agreements, standards, or established practices may create obstacles for EU exporters by imposing extra compliance costs. The agreement will eliminate unnecessary technical trade barriers, providing concrete improvements in many areas where it is currently difficult for European exporters and importers to trade with Mexico. By agreeing to more convergence with international standards, it will be easier for EU firms to export to Mexico. For example, the agreement includes a Motor Vehicles Annex which facilitates the export of car parts through the acceptance of internationally recognized test reports (UNECE) and EU certificates.