The agreement was signed during a summit in Mexico City by Mexican President Claudia Sheinbaum, European Commission President Ursula von der Leyen, and European Council President António Costa. This replaces a trade framework that had been in effect since 2000.
Also Food and Cars
According to the new arrangements, virtually all remaining import tariffs on goods between the two parties will disappear. This applies not only to industrial products but also to agricultural products. Producers of food, machinery, vehicles, and pharmaceutical products are expected to especially benefit.
The agreement also contains new rules on investments, digital trade, services, and access to public procurement. This will give European companies broader possibilities to operate in the Mexican market, including in telecom, transport, and financial services.
Promotion
Sustainability also plays an important role in the renewed agreement. Labor rights, environmental protection, and anti-corruption measures are legally binding in the new treaty. Additionally, there are agreements on digital trade and access to critical raw materials.
Looser from the USA
The timing of the agreement is remarkable. Both Mexico and the European Union are seeking to diversify their economic risks as trade tensions with the United States have increased. New American import tariffs and difficult negotiations over existing trade agreements are putting pressure on both parties.
Mexico still exports the majority of its goods to the United States. At the same time, the country is looking to expand its markets elsewhere. The European Union is also trying to broaden its trade relations with other partners.
Also South America
Trade relations between Mexico and the EU have already grown strongly in recent years. More than 45,000 European companies currently export to Mexico. According to involved organizations, the renewed agreement could significantly expand trade further in the coming years.
The agreement still needs to be fully ratified, but parts of the trade section can come into effect earlier. Both parties hope to gain benefits from the new arrangements sooner. The European Union recently did the same with a renewed trade treaty with the South American Mercosur countries.